EX-99.1 3 a16-19432_1ex99d1.htm EX-99.1

Exhibit 99.1

 

IN THE UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

 

 

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In re:

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Chapter 11

 

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MIDSTATES PETROLEUM COMPANY, INC., et al.,(1)

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Case No. 16-32237 (DRJ)

 

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Debtors.

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(Jointly Administered)

 

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Re: Docket Nos. 389-1, 690

 

FINDINGS OF FACT, CONCLUSIONS OF LAW,
AND ORDER CONFIRMING THE FIRST AMENDED
JOINT CHAPTER 11 PLAN OF REORGANIZATION OF MIDSTATES
PETROLEUM COMPANY, INC. AND ITS DEBTOR AFFILIATE

 

The above-captioned debtors and debtors in possession (collectively, the “Debtors”) having:

 

a.                                      commenced the above-captioned chapter 11 cases (the “Chapter 11 Cases”) by filing voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) on April 30, 2016 (the “Petition Date”);

 

b.                                      continued to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code;

 

c.                                       filed, on May 14, 2016, (i) the Joint Chapter 11 Plan of Reorganization of Midstates Petroleum Company, Inc. and Its Debtor Affiliate [Docket No. 144], (ii) the Disclosure Statement for the Joint Chapter 11 Plan of Reorganization of Midstates Petroleum Company, Inc. and Its Debtor Affiliate [Docket No. 145], and (iii) the Debtors’ Motion for Entry of an Order (I) Approving the Adequacy of the Disclosure Statement, (II) Approving the Solicitation and Notice Procedures with Respect to Confirmation of the Debtors’ Proposed Joint Chapter 11 Plan of Reorganization, (III) Approving the Forms of Ballots and Notices in Connection Therewith, (IV) Scheduling Certain Dates with Respect Thereto, and (V) Granting Related Relief [Docket No. 146];

 

d.                                      filed, on July 13, 2016, (i) the Notice of Filing of Solicitation Versions of the (A) First Amended Joint Chapter 11 Plan of Reorganization of Midstates

 


(1)         The debtors in these chapter 11 cases, along with the last four digits of each debtor’s federal tax identification number, are:  Midstates Petroleum Company, Inc. (1816) and Midstates Petroleum Company LLC (2434).  The debtors’ service address is:  321 South Boston Avenue, Suite 1000, Tulsa, Oklahoma 74103.

 



 

Petroleum Company, Inc. and Its Debtor Affiliate and (B) the Disclosure Statement for the First Amended Joint Chapter 11 Plan of Reorganization of Midstates Petroleum Company, Inc. and Its Debtor Affiliate [Docket No. 389]; (ii) the First Amended Joint Chapter 11 Plan of Reorganization of Midstates Petroleum Company, Inc. and Its Debtor Affiliate [Docket No. 389-1] (as may be amended, modified, or supplemented, the “Plan”),(2) attached hereto as Exhibit A, and (iii) the Disclosure Statement for the First Amended Joint Chapter 11 Plan of Reorganization of Midstates Petroleum Company, Inc. and Its Debtor Affiliate [Docket No. 389-2] (as may be amended, modified, or supplemented, the “Disclosure Statement”);

 

e.                                       caused solicitation materials and notice of the deadline for objecting to confirmation of the Plan to be distributed by July 18, 2016, and continuing thereafter, consistent with the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and the Disclosure Statement Order (as defined herein), which Disclosure Statement Order also approved, among other things, solicitation procedures (the “Solicitation Procedures”) and related notices, forms, Ballots, and Master Ballots (collectively, the “Solicitation Packages”), as evidenced by, among other things, the Affidavit of Service of Evan Gershbein [Docket No. 413], and the Supplemental Affidavits of Service of Stephanie Delgada [Docket Nos. 434 and 446];

 

f.                                        caused notice of the Confirmation Hearing (the “Confirmation Hearing Notice”) to be published on July 18, 2016, in the USA Today (National Edition); the Houston Chronicle; the Daily Oklahoman; the Tulsa World; and the Amarillo Globe-News; and on July 25, 2016 in the Oil & Gas Journal, as evidenced by the Affidavits of Publication Re Notice of Hearing to Consider Confirmation of the Chapter 11 Plan Filed by the Debtors and Related Voting and Objection Deadlines [Docket No. 412];

 

g.                                       filed, on August 3, the Notice of Filing of Plan Supplement [Docket No. 438] (as may be modified, supplemented, or otherwise amended from time to time, the “Plan Supplement”), and with amendments and supplements to exhibits to the Plan Supplement filed thereafter [Docket Nos. 455,476, 509, 511, and 650];

 

h.                                      filed, on August 9, 2016, the Amended Notice of Hearing to Consider Confirmation of the Chapter 11 Plan Filed by the Debtors such that the Confirmation Hearing was scheduled to commence on August 29, 2016;

 

i.                                          filed, on August 15, 2016, the Certification of Jeffrey Miller With Respect to the Tabulation of Votes on the First Amended Joint Chapter 11 Plan of Reorganization of Midstates Petroleum Company, Inc. and Its Debtor Affiliate

 


(2)         Capitalized terms used herein but not otherwise defined shall have the meaning ascribed to such terms in the Plan.

 

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[Docket No. 489] (as may be amended, modified, or supplemented, the “Voting Certification”);

 

j.                                         filed, on August 18, 2016, the Second Amended Notice of Hearing to Consider Confirmation of the Chapter 11 Plan Filed by the Debtors [Docket No. 506], such that the Confirmation Hearing commenced on September 2, 2016;

 

k.                                      filed, on September 16, 2016, the Debtors’ (I) Memorandum of Law In Support of Confirmation of the First Amended Joint Chapter 11 Plan of Reorganization of Midstates Petroleum Company, Inc. and Its Debtor Affiliate and (II) Response to Certain Objections Thereto [Docket No. 614] (the “Confirmation Brief”);

 

l.                                          filed, on September 16, 2016, the Debtors’ Memorandum of Law Regarding the Validity of Prepetition Secured Parties’ Liens in Further Support of Confirmation of the Joint Plan of Reorganization and Debtors’ Objection to Committee’s Standing Motion [Docket No. 608] (the “Lien Perfection Brief”); and

 

m.                                  filed, on September 28, 2016, the Debtors filed a further modified version of the Plan reflecting the Confirmation Settlement [Docket No. 690].

 

The Court having:

 

a.                                      entered the Order (I) Approving the Adequacy of the Disclosure Statement, (II) Approving the Solicitation and Notice Procedures with Respect to Confirmation of the Debtors’ Proposed Joint Chapter 11 Plan of Reorganization, (III) Approving the Forms of Ballots and Notices in Connection Therewith, (IV) Scheduling Certain Dates with Respect Thereto, and (V) Granting Related Relief [Docket No. 394] (the “Disclosure Statement Order”);

 

b.                                      set August 10, 2016, at 4:00 p.m. prevailing Central Time, as the deadline for filing objections in opposition to the Plan (the “Plan Objection Deadline”), and upon the filing of the Continuation Notice, the Plan Objection Deadline for the Committee was set as August 22, 2016, at 11:59 p.m. prevailing Central Time;

 

c.                                       set August 10, 2016, at 4:00 p.m. prevailing Central Time, as the deadline for voting on the Plan;

 

d.                                      set September 26, 2016, at 1:30 p.m. prevailing Central Time, as the date and time for the Confirmation Hearing pursuant to Bankruptcy Rules 3017 and 3018 and sections 1126, 1128, and 1129 of the Bankruptcy Code;

 

e.                                       reviewed the Plan, the Disclosure Statement, the Confirmation Brief, the Lien Perfection Brief, the Voting Certification, and all pleadings, exhibits, statements, responses, and comments regarding Confirmation, including all objections, statements, and reservations of rights filed by parties in interest on the docket of the Chapter 11 Cases;

 

f.                                        held the Confirmation Hearing;

 

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g.                                       heard the statements, arguments, and objections made by counsel in respect of Confirmation;

 

h.                                      considered all oral representations, testimony, documents, filings, and other evidence regarding Confirmation;

 

i.                                          taken judicial notice of all pleadings and other documents filed, all orders entered, and all evidence and arguments presented in the Chapter 11 Cases; and

 

j.                                         overruled any and all objections to the Plan and to Confirmation and all statements and reservations of rights not consensually resolved or withdrawn unless otherwise indicated herein.

 

NOW, THEREFORE, the Court having found that notice of the Confirmation Hearing and the opportunity for any party in interest to object to Confirmation have been adequate and appropriate as to all parties affected or to be affected by the Plan and the transactions contemplated thereby, and the legal and factual bases set forth in the documents filed in support of Confirmation and all evidence proffered or adduced by counsel at the Confirmation Hearing and the entire record of the Chapter 11 Cases establish just cause for the relief granted herein; and after due deliberation thereon and good cause appearing therefor, the Court hereby makes and issues the following Findings of Fact and Conclusions of Law and Orders:

 

FINDINGS OF FACT AND CONCLUSIONS OF LAW

 

IT IS DETERMINED, FOUND, ADJUDGED, DECREED, AND ORDERED THAT:

 

A.                                    Findings and Conclusions.

 

1.                                      The findings and conclusions set forth herein and in the record of the Confirmation Hearing constitute the Court’s findings of fact and conclusions of law under Rule 52 of the Federal Rules of Civil Procedure, as made applicable herein by Bankruptcy Rules 7052 and 9014.  To the extent any of the following conclusions of law constitute findings of fact, or vice versa, they are adopted as such.

 

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B.                                    Jurisdiction, Venue, and Core Proceeding.

 

2.                                      The Court has jurisdiction over the Chapter 11 Cases pursuant to sections 157 and 1334 of title 28 of the United States Code.  The Court has exclusive jurisdiction to determine whether the Plan complies with the applicable provisions of the Bankruptcy Code and should be confirmed.  Venue is proper in this district pursuant to sections 1408 and 1409 of title 28 of the United States Code.  Confirmation of the Plan is a core proceeding within the meaning of section 157(b)(2) of title 28 of the United States Code.

 

C.                                    Eligibility for Relief.

 

3.                                      The Debtors were and are entities eligible for relief under section 109 of the Bankruptcy Code.

 

D.                                    Commencement and Joint Administration of these Chapter 11 Cases.

 

4.                                      On the Petition Date, each of the Debtors commenced a chapter 11 case by filing a voluntary petition for relief under chapter 11 of the Bankruptcy Code.  By prior order of the Court, the Chapter 11 Cases have been consolidated for procedural purposes only and are being jointly administered pursuant to Bankruptcy Rule 1015 [Docket No. 32].  The Debtors have operated their businesses and managed their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.  No trustee or examiner has been appointed in the Chapter 11 Cases.  On May 12, 2016, the Office of the United States Trustee for the Southern District of Texas (the “U.S. Trustee”) appointed the Committee [Docket No. 136], which was reconstituted on July 19, 2016 and August 19, 2016 [Docket Nos. 397, 513].

 

E.                                    Burden of Proof—Confirmation of the Plan.

 

5.                                      The Debtors, as proponents of the Plan, have met their burden of proving the applicable elements of sections 1129(a) and 1129(b) of the Bankruptcy Code by a preponderance of the evidence, which is the applicable evidentiary standard for Confirmation.  In addition, and

 

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to the extent applicable, the Plan is confirmable under the clear and convincing evidentiary standard.

 

F.                                     Notice and Transmittal of Solicitation Materials; Adequacy of Solicitation Notices.

 

6.                                      The Plan, the Disclosure Statement, the Disclosure Statement Order, the ballots for voting on the Plan (the “Ballots”), the Confirmation Hearing Notice, the Plan Supplement, and the other materials distributed by the Debtors in connection with Confirmation of the Plan (collectively, the “Confirmation Materials”) were transmitted and served in compliance with the Bankruptcy Rules, including Bankruptcy Rules 2002(b), 3017, 3018, and 3020(b), with the Bankruptcy Local Rules for the Southern District of Texas (the “Bankruptcy Local Rules”), and with the procedures set forth in the Disclosure Statement Order.  Notice of the Confirmation Hearing was appropriate and satisfactory based upon the circumstances of the Chapter 11 Cases.  The transmittal and service of the Confirmation Materials complied with the approved Solicitation Procedures, was appropriate and satisfactory based upon the circumstances of the Chapter 11 Cases, was conducted in good faith, and was in compliance with the provisions of the Bankruptcy Code, the Bankruptcy Rules, the Bankruptcy Local Rules, and any other applicable rules, laws, and regulations.  Because such transmittal and service were adequate and sufficient, no other or further notice is necessary or shall be required.

 

G.                                   Voting.

 

7.                                      On August 15, 2016, the Notice and Claims Agent filed the Voting Certification with the Court.  As evidenced by the Voting Certification, votes to accept or reject the Plan have been solicited and tabulated fairly, in good faith, and in a manner consistent with the Bankruptcy Code, the Bankruptcy Rules, the Solicitation Procedures, and the Bankruptcy Local Rules.

 

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H.                                   Good Faith Solicitation.

 

8.                                      Based on the record before the Court in the Chapter 11 Cases, the Debtors and their respective members, directors, officers, employees, representatives, attorneys, financial advisors, investment bankers, agents, restructuring advisors, and other professionals have acted in “good faith” within the meaning of section 1125(e) of the Bankruptcy Code and in compliance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Solicitation Procedures, and the Bankruptcy Local Rules in connection with the development of the Plan, all of their respective activities relating to the solicitation of acceptances to the Plan, their participation in the Chapter 11 Cases, and the activities described in section 1125 of the Bankruptcy Code, and are entitled to the protections afforded by section 1125(e) of the Bankruptcy Code.  The Ballots provided the opportunity for voting creditors to opt-in or opt-out of the releases.

 

I.                                        Plan Supplement.

 

9.                                      The filing and notice of the Plan Supplement was proper and in accordance with the Plan, the Bankruptcy Code, the Bankruptcy Rules, and the Disclosure Statement Order, and no other or further notice is or shall be required.  All documents included in the Plan Supplement are integral to, part of, and incorporated by reference into the Plan.  Subject to the terms of the Plan, and only consistent therewith, the Debtors reserve the right to alter, amend, update, or modify the Plan Supplement before the Effective Date.

 

J.                                      Objections.

 

10.                               To the extent that any objections, reservations of rights, statements or joinders to Confirmation have not been resolved, withdrawn, waived, or settled prior to entry of this Confirmation Order or otherwise resolved herein or as stated on the record of the Confirmation Hearing, they are hereby overruled on the merits based on the record before this Court.

 

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K.                                   Bankruptcy Rule 3016.

 

11.                               The Plan is dated and identifies the Debtors as the Plan proponents, thereby satisfying Bankruptcy Rule 3016(a).  The filing of the Disclosure Statement satisfied Bankruptcy Rule 3016(b).

 

L.                                    Compliance with Bankruptcy Code Requirements¾Section 1129(a)(1).

 

12.                               The Plan complies with all applicable provisions of the Bankruptcy Code as required by section 1129(a)(1) of the Bankruptcy Code.

 

(i)                                    Proper Classification¾Sections 1122 and 1123.

 

13.                               The Plan satisfies the requirements of sections 1122(a) and 1123(a) of the Bankruptcy Code.  Article III of the Plan provides for the separate classification of Claims and Interests into 11 Classes based on differences in the legal nature or priority of such Claims and Interests.  Valid business, factual, and legal reasons exist for the separate classification of such Classes of Claims and Interests.  The classifications reflect no improper purpose and do not unfairly discriminate between, or among, holders of Claims or Interests.  Each Class of Claims and Interests contains only Claims or Interests that are substantially similar to other Claims or Interests within that Class.

 

(ii)                                Specified Unimpaired Classes¾Section 1123(a)(2).

 

14.                               The Plan satisfies the requirements of section 1123(a)(2) of the Bankruptcy Code.  Article III of the Plan specifies that Claims, as applicable, in the following Classes (the “Unimpaired Classes”) are Unimpaired under the Plan within the meaning of section 1124 of the Bankruptcy Code:

 

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Class

 

Designation

1

 

Other Priority Claims

2

 

Other Secured Claims

3

 

Lien Trade Claims

9

 

Intercompany Claims (to the extent reinstated)

10

 

Intercompany Interests

 

15.                               Additionally, Article II of the Plan specifies that Allowed Administrative Claims, Professional Fee Claims, Priority Tax Claims, and Statutory Fees will be paid in full in accordance with the terms of the Plan, although these Claims are not classified under the Plan.

 

(iii)                            Specified Treatment of Impaired Classes¾Section 1123(a)(3).

 

16.                               The Plan satisfies the requirements of section 1123(a)(3) of the Bankruptcy Code.  Article III of the Plan specifies that Claims and Interests, as applicable, in the following Classes (the “Impaired Classes”) are Impaired under the Plan within the meaning of section 1124 of the Bankruptcy Code, and describes the treatment of such Classes:

 

Class

 

Designation

4

 

First Lien Claims

5

 

Second Lien Notes Claims

6

 

Third Lien Notes Claims

7

 

Unsecured Notes/General Unsecured Claims

8

 

Section 510(b) Claims

9

 

Intercompany Claims (to the extent cancelled)

11

 

Interests in Parent

 

(iv)                             No Discrimination¾Section 1123(a)(4).

 

17.                               The Plan satisfies the requirements of section 1123(a)(4) of the Bankruptcy Code.  Article III of the Plan provides for the same treatment by the Debtors for each Claim or Interest in each respective Class unless the holder of a particular Claim or Interest has agreed to a less favorable treatment of such Claim or Interest.

 

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(v)                                 Adequate Means for Plan Implementation¾Section 1123(a)(5).

 

18.                               The Plan and the various documents included in the Plan Supplement provide adequate and proper means for implementation of the Plan, including, without limitation:  (a) the restructuring of the Debtors’ balance sheet and other financial transactions provided for by the Plan; (b) the implementation of the New Organizational Documents; (c) the consummation of the Restructuring Transactions; (d) the issuance of the New Common Stock and New Warrants; (e) the cancellation of certain existing agreements, obligations, instruments, and Interests; (f) the entrance into the New Credit Facility; (g) the continued vesting of the assets of the Debtors’ Estates in the Reorganized Debtors; and (h) the execution, delivery, filing, or recording of all contracts, instruments, releases, and other agreements or documents in furtherance of the Plan, thereby satisfying section 1123(a)(5) of the Bankruptcy Code.

 

(vi)                             Voting Power of Equity Securities¾Section 1123(a)(6).

 

19.                               The New Organizational Documents prohibit the issuance of non-voting securities and provide an appropriate distribution of voting power among the several classes of securities possessing such power.  As such, the Plan satisfies the requirements of section 1123(a)(6) of the Bankruptcy Code.

 

(vii)                         Designation of Directors and Officers¾Section 1123(a)(7).

 

20.                               The Plan satisfies the requirements of section 1123(a)(7) of the Bankruptcy Code.  The Debtors’ initial directors and officers have been disclosed in the Plan Supplement, which is consistent with the interests of creditors and equity holders and public policy and satisfies section 1123(a)(7) of the Bankruptcy Code.

 

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(viii)                     Impairment / Unimpairment of Classes¾Section 1123(b)(1).

 

21.                               The Plan is consistent with section 1123(b)(1) of the Bankruptcy Code.  Article III of the Plan impairs or leaves Unimpaired each Class of Claims and Interests.

 

(ix)                             Assumption and Rejection of Executory Contracts and Unexpired Leases¾Section 1123(b)(2).

 

22.                               The Plan is consistent with section 1123(b)(2) of the Bankruptcy Code.  Article V of the Plan provides for the rejection of the Debtors’ Executory Contracts and Unexpired Leases as of the Effective Date, unless such Executory Contract or Unexpired Lease:  (a) was previously assumed or rejected; (b) was previously expired or terminated pursuant to its own terms; (c) is the subject of a motion or notice to assume filed on or before the Confirmation Date; or (d) is designated specifically or by category as an Executory Contract or Unexpired Lease on the Schedule of Assumed Executory Contracts and Unexpired Leases.  In addition to the foregoing, as of the Effective Date, each Debtor shall be deemed to have rejected each Executory Contract and Unexpired Lease to which it is a party that is designated specifically or by category as an Executory Contract or Unexpired Lease on the Schedule of Rejected Executory Contracts and Unexpired Leases.

 

(x)                                 Settlement, Releases, Exculpation, Injunction, and Preservation of Claims and Causes of Action¾Section 1123(b)(3).

 

23.                               The Plan is consistent with section 1123(b)(3) of the Bankruptcy Code.  In accordance with section 363 of the Bankruptcy Code and Bankruptcy Rule 9019, and in consideration of the distributions, settlements, and other benefits provided under the Plan, except as stated otherwise in the Plan, the provisions of the Plan constitute a good-faith compromise of all Claims, Interests, and controversies relating to the contractual, subordination, and other legal rights that a holder of a Claim or Interest may have with respect to any Allowed Claim or Interest, or any distribution to be made on account of such Allowed Claim or Interest, including,

 

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without limitation, the settlements and compromises provided for under the Confirmation Settlement, Second/Third Lien Plan Settlement, the Unencumbered Value Settlement, and the Intercreditor Settlement.  The compromise and settlement of such Claims and Interests embodied in the Plan and reinstatement and unimpairment of other Classes identified in the Plan are in the best interests of the Debtors, the Estates, and all holders of Claims and Interests, and are fair, equitable, and reasonable.

 

24.                               Article VIII.D of the Plan describes certain releases granted by the Debtors (the “Debtor Releases”).  The Debtors have satisfied the business judgment standard with respect to the propriety of the Debtor Releases.  Such releases are a necessary and integral element of the Plan, and are fair, reasonable, and in the best interests of the Debtors, the Estates, and holders of Claims and Interests.  Also, the Debtor Releases are:  (a) in exchange for the good and valuable consideration provided by the Released Parties; (b) a good-faith settlement and compromise of the Claims released by Article VIII.D of the Plan; (c) given, and made, after due notice and opportunity for hearing; and (d) a bar to any of the Debtors asserting any Claim or Cause of Action released by Article VIII.D of the Plan.  The Debtors Releases are consistent with established practice in this jurisdiction and others.

 

25.                               Article VIII.E of the Plan describes certain releases granted by the Releasing Parties (the “Third-Party Release”).  The Third-Party Release provides finality for the Debtors, the Reorganized Debtors, and the Released Parties regarding the parties’ respective obligations under the Plan and with respect to the Reorganized Debtors.  The Confirmation Hearing Notice sent to holders of Claims and Interests and published in the each of the USA Today (National Edition); the Houston Chronicle; the Daily Oklahoman; the Tulsa World; the Amarillo Globe-News on July 18, 2016; and the Oil & Gas Journal on July 25, 2016, and the ballots sent to all

 

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holders of Claims and Interests entitled to vote on the Plan, in each case, unambiguously stated that the Plan contains the Third-Party Release.  Such release is a necessary and integral element of the Plan, and is fair, equitable, reasonable, and in the best interests of the Debtors, the Estates, and all holders of Claims and Interests.  Also, the Third-Party Release is:  (a) in exchange for the good and valuable consideration provided by the Released Parties; (b) a good faith settlement and compromise of the claims released by the Third-Party Release; (c) in the best interests of the Debtors and all holders of Claims and Interests; (d) fair, equitable, and reasonable; (e) given and made after due notice and opportunity for hearing; and (f) a bar to any of the Releasing Parties asserting any claim or Cause of Action released pursuant to the Third-Party Release.  The Third Party Releases are consistent with established practice in this jurisdiction and others.

 

26.                               The exculpation, described in Article VIII.F of the Plan (the “Exculpation”), is appropriate under applicable law because it was proposed in good faith, was formulated following extensive good-faith, arm’s-length negotiations with key constituents, and is appropriately limited in scope.  Without limiting anything in the Exculpation, each Exculpated Party has participated in the Debtors’ restructuring and the Chapter 11 Cases in good faith and is appropriately released and exculpated from any obligation, Cause of Action, or liability for any prepetition or postpetition act taken or omitted to be taken in connection with, or relating to formulating, negotiating, preparing, disseminating, implementing, administering, confirming, or effecting the Plan (including the Plan Support Agreement) or any contract, instrument, release or other agreement or document created or entered into in connection with the Plan or any other prepetition or postpetition act taken or omitted to be taken in connection with or in contemplation of the restructuring of the Debtors, including the distribution of property under the Plan, including the New Common Stock and the New Warrants.  The Exculpation, including its

 

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carve-out for gross negligence or willful misconduct, is consistent with established practice in this jurisdiction and others.

 

27.                               The injunction provision set forth in Article VIII.G of the Plan is necessary to implement, preserve, and enforce the Debtors’ discharge, the Debtor Releases, the Third-Party Release, and the Exculpation, and is narrowly tailored to achieve this purpose.

 

28.                               Article IV.P of the Plan appropriately provides that the Reorganized Debtors will retain, and may enforce, all rights to commence and pursue, as appropriate, any and all Causes of Action except for Causes of Action that have been expressly waived, settled, or otherwise released as provided in Article VIII of the Plan, whether arising before or after the Petition Date, including any actions specifically enumerated in the Plan Supplement, in accordance with section 1123(b)(3)(B) of the Bankruptcy Code.  The provisions regarding the preservation of Causes of Action in the Plan, including the Plan Supplement, are appropriate, fair, equitable, and reasonable, and are in the best interests of the Debtors, the Estates, and holders of Claims and Interests.

 

29.                               The release and discharge of all mortgages, deeds of trust, Liens, pledges, or other security interests against any property of the Estates described in Article VIII.C of the Plan (the “Lien Release”) is necessary to implement the Plan.  The provisions of the Lien Release are appropriate, fair, equitable, and reasonable and are in the best interests of the Debtors, the Estates, and holders of Claims and Interests.

 

(xi)                             Additional Plan Provisions¾Section 1123(b)(6).

 

30.                               The other discretionary provisions of the Plan are appropriate and consistent with the applicable provisions of the Bankruptcy Code, thereby satisfying section 1123(b)(6) of the Bankruptcy Code, including, without limitation, provisions for (a) distributions to Holders of

 

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Claims and Interests, (b) resolution of Disputed Claims, (c) allowance of certain Claims, (d) Indemnification Obligations, and (e) retention of Court jurisdiction.

 

(xii)                         Cure of Defaults¾Section 1123(d)

 

31.                               Article V.C of the Plan provides for the satisfaction of cure Claims associated with each Executory Contract and Unexpired Lease to be assumed in accordance with section 365(b)(1) of the Bankruptcy Code.  The cure amounts identified in the Cure Notice and any amendments thereto, as applicable, represent the amount, if any, that the Debtors shall pay in full and complete satisfaction of such cure Claims.  Any disputed cure amounts will be determined in accordance with the procedures set forth in Article V.C of the Plan, and applicable bankruptcy and non-bankruptcy law.  As such, the Plan provides that the Debtors will cure, or provide adequate assurance that the Debtors will promptly cure, defaults with respect to assumed Executory Contracts and Unexpired Leases in compliance with section 365(b)(1) of the Bankruptcy Code.  Thus, the Plan complies with section 1123(d) of the Bankruptcy Code.

 

M.                                 Debtor Compliance with the Bankruptcy Code¾Section 1129(a)(2).

 

32.                               The Debtors have complied with the applicable provisions of the Bankruptcy Code and, thus, satisfied the requirements of section 1129(a)(2) of the Bankruptcy Code.  Specifically, each Debtor:

 

a.              is an eligible debtor under section 109, and a proper proponent of the Plan under section 1121(a), of the Bankruptcy Code;

 

b.              has complied with applicable provisions of the Bankruptcy Code, except as otherwise provided or permitted by orders of the Court; and

 

c.               complied with the applicable provisions of the Bankruptcy Code, including sections 1125 and 1126, the Bankruptcy Rules, the Bankruptcy Local Rules, any applicable non-bankruptcy law, rule and regulation, the Disclosure Statement Order, and all other applicable law, in transmitting the Confirmation Materials, and related documents and notices, and in soliciting and tabulating the votes on the Plan.

 

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N.                                    Plan Proposed in Good Faith¾Section 1129(a)(3).

 

33.                               The Plan satisfies the requirements of section 1129(a)(3) of the Bankruptcy Code.  The Debtors have proposed the Plan in good faith and not by any means forbidden by law.  In so determining, the Court has examined the totality of the circumstances surrounding the filing of the Chapter 11 Cases, the Plan, the Plan Support Agreement, the process leading to Confirmation, including the overwhelming support of holders of Claims and Interests for the Plan, and the transactions to be implemented pursuant thereto, including the Intercreditor Settlement, the Second/Third Lien Plan Settlement, and the Unencumbered Value Settlement.  The Chapter 11 Cases were filed, and the Plan was proposed, with the legitimate purpose of allowing the Debtors to implement the Restructuring Transactions, reorganize, and emerge from bankruptcy with a capital and organizational structure that will allow them to conduct their businesses and satisfy their obligations with sufficient liquidity and capital resources.

 

O.                                   Payment for Services or Costs and Expenses¾Section 1129(a)(4).

 

34.                               Any payment made or to be made by the Debtors, or by a person issuing securities or acquiring property under the Plan, for services or for costs and expenses in connection with the Chapter 11 Cases, or in connection with the Plan and incident to the Chapter 11 Cases, has been approved by, or is subject to the approval of, the Court as reasonable, thereby satisfying section 1129(a)(4) of the Bankruptcy Code.

 

P.                                     Directors, Officers, and Insiders¾Section 1129(a)(5).

 

35.                               The Debtors have satisfied the requirements of section 1129(a)(5) of the Bankruptcy Code.  Article IV.M of the Plan, in conjunction with Exhibit A to the Notice of Filing of Fourth Supplement to Plan Supplement [Docket No. 650]), disclose the identity and affiliations of the individuals proposed to serve as the initial directors and officers of the Reorganized Debtors, and the identity and nature of any compensation for any insider who will

 

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be employed or retained by the Reorganized Debtors.  The proposed directors and officers for the Reorganized Debtors are qualified, and the appointments to, or continuance in, such offices by the proposed directors and officers is consistent with the interests of the holders of Claims and Interests and with public policy.

 

Q.                                   No Rate Changes¾Section 1129(a)(6).

 

36.                               Section 1129(a)(6) of the Bankruptcy Code is not applicable to the Chapter 11 Cases.  The Plan proposes no rate change subject to the jurisdiction of any governmental regulatory commission.

 

R.                                    Best Interest of Creditors¾Section 1129(a)(7).

 

37.                               The Plan satisfies the requirements of section 1129(a)(7) of the Bankruptcy Code. Each Holder of an Impaired Claim or Interest either has accepted the Plan or will receive or retain under the Plan, on account of such Claim or Interest, property of a value, as of the Effective Date, that is not less than the amount that such Holder would receive or retain if the Debtors were liquidated under chapter 7 of the Bankruptcy Code on such date.

 

38.                               The liquidation analysis attached to the Disclosure Statement and the other evidence related thereto in support of the Plan that was proffered or adduced at or prior to the Confirmation Hearing:  (a) are reasonable, persuasive, credible, and accurate as of the dates such analyses or evidence was prepared, presented, or proffered; (b) utilize reasonable and appropriate methodologies and assumptions; (c) have not been controverted by other evidence; and (d) establish that Holders of Allowed Claims in every Class will recover as much or more under the Plan on account of such Claim or Interest, as of the Effective Date, than the amount such Holder would receive if the Debtors were liquidated under chapter 7 of the Bankruptcy Code.  Accordingly, the Plan satisfies the “best interest of creditors” test under section 1129(a)(7) of the Bankruptcy Code.

 

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S.                                      Acceptance by Certain Classes¾Section 1129(a)(8).

 

39.                               The Plan does not satisfy the requirements of section 1129(a)(8) of the Bankruptcy Code.  Classes 1, 2, 3, and 10 constitute Unimpaired Classes, each of which is conclusively presumed to have accepted the Plan in accordance with section 1126(f) of the Bankruptcy Code.  The Voting Classes 4, 5, and 6 have voted to accept the Plan.  Holders of Claims in Class 9 are Unimpaired and conclusively presumed to have accepted the Plan (to the extent reinstated) or are Impaired and deemed to reject the Plan (to the extent cancelled), and, in either event, are not entitled to vote to accept or reject the Plan.  However, holders of Claims or Interests in Classes 8 and 11 receive no recovery on account of their Claims or Interests pursuant to the Plan and are deemed to have rejected the Plan.  Notwithstanding the foregoing, the Plan is confirmable because it satisfies sections 1129(a)(10) and 1129(b) of the Bankruptcy Code.

 

T.                                    Treatment of Claims Entitled to Priority Under Section 507(a) of the Bankruptcy Code¾Section 1129(a)(9).

 

40.                               The treatment of Allowed Administrative Claims, Allowed Professional Fee Claims, Allowed Priority Tax Claims, and Statutory Fees, under Article II of the Plan, and of Allowed Other Priority Claims under Article III of the Plan, satisfies the requirements of, and complies in all respects with, section 1129(a)(9) of the Bankruptcy Code.

 

U.                                    Acceptance by At Least One Impaired Class¾Section 1129(a)(10).

 

41.                               The Plan satisfies the requirements of section 1129(a)(10) of the Bankruptcy Code.  As evidenced by the Voting Certification, the Voting Classes 4, 5, and 6, each of which is impaired, voted to accept the Plan by the requisite numbers and amounts of Claims, determined without including any acceptance of the Plan by any insider (as that term is defined in section 101(31) of the Bankruptcy Code), specified under the Bankruptcy Code.

 

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V.                                    Feasibility¾Section 1129(a)(11).

 

42.                               The Plan satisfies the requirements of section 1129(a)(11) of the Bankruptcy Code.  The financial projections attached to the Disclosure Statement and the other evidence supporting Confirmation of the Plan proffered or adduced by the Debtors at, or prior to, the Confirmation Hearing:  (a) are reasonable, persuasive, credible, and accurate as of the dates such analysis or evidence was prepared, presented, or proffered; (b) utilize reasonable and appropriate methodologies and assumptions; (c) have not been controverted by other evidence; (d) establish that the Plan is feasible and Confirmation of the Plan is not likely to be followed by the liquidation, or the need for further financial reorganization of the Reorganized Debtors or any successor to the Reorganized Debtors under the Plan, except as provided in the Plan; and (e) establish that the Reorganized Debtors will have sufficient funds available to meet their obligations under the Plan.

 

W.                                Payment of Fees¾Section 1129(a)(12).

 

43.                               The Plan satisfies the requirements of section 1129(a)(12) of the Bankruptcy Code.  Article XII.C of the Plan provides for the payment of all fees payable by the Debtors under 28 U.S.C. § 1930(a).

 

X.                                   Continuation of Employee Benefits¾Section 1129(a)(13).

 

44.                               The Plan satisfies the requirements of section 1129(a)(13) of the Bankruptcy Code.  Article IV.S of the Plan provides that from and after the Effective Date, the payment of all retiree benefits, as defined in section 1114 of the Bankruptcy Code, will continue in accordance with applicable law.

 

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Y.                                    Non-Applicability of Certain Sections¾Sections 1129(a)(14), (15), and (16).

 

45.                               Sections 1129(a)(14), 1129(a)(15), and 1129(a)(16) of the Bankruptcy Code do not apply to the Chapter 11 Cases.  The Debtors owe no domestic support obligations, are not individuals, and are not nonprofit corporations.

 

Z.                                    “Cram Down” Requirements¾Section 1129(b).

 

46.                               The Plan satisfies the requirements of section 1129(b) of the Bankruptcy Code.  Notwithstanding the fact that Voting Class 7 and the classes that are deemed to reject the Plan (collectively, the “Rejecting Classes”) have rejected or been deemed to reject the Plan, the Plan may be confirmed pursuant to section 1129(b)(1) of the Bankruptcy Code.  First, all of the requirements of section 1129(a) of the Bankruptcy Code other than section 1129(a)(8) have been met.  Second, the Plan is fair and equitable with respect to the Rejecting Classes.  The Plan has been proposed in good faith, is reasonable, and meets the requirements that (a) no Holder of any Claim or Interest that is junior to each such Class will receive or retain any property under the Plan on account of such junior Claim or Interest and (b) no Holder of a Claim in a Class senior to such Classes is receiving more than 100% on account of its Claim.  Accordingly, the Plan is fair and equitable to all holders of Claims and Interests in the Rejecting Classes. Third, the Plan does not discriminate unfairly with respect to the Rejecting Classes because similarly situated creditors will receive substantially similar treatment on account of their Claims and Interests irrespective of Class.  Furthermore, as to Holders of Unsecured Notes Claims and General Unsecured Claims, the recovery provided on account of the Third Lien Notes Claims pursuant to the Second/Third Lien Plan Settlement, which is derived from the value of the collateral securing the Debtors’ obligations to the Holders of the Second Lien Notes Claims, does not result in

 

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unfair discrimination within the meaning of section 1129(b).(3)  The Plan may therefore be confirmed despite the fact that not all Impaired Classes have voted to accept the Plan.  Section 1129(b) does not apply to the First Lien Claims, the Second Lien Second Claims, or the Third Lien Notes Claims because the Holders of such Claims have voted to accept the Plan in sufficient number and in sufficient amount to constitute an accepting class under the Bankruptcy Code.

 

AA.                           Only One Plan¾Section 1129(c).

 

47.                               The Plan satisfies the requirements of section 1129(c) of the Bankruptcy Code.  The Plan is the only chapter 11 plan filed in each of the Chapter 11 Cases.

 

BB.                           Principal Purpose of the Plan¾Section 1129(d).

 

48.                               The Plan satisfies the requirements of section 1129(d) of the Bankruptcy Code.  The principal purpose of the Plan is not the avoidance of taxes or the avoidance of the application of section 5 of the Securities Act.

 

CC.                           Not Small Business Cases¾Section 1129(e).

 

49.                               The Chapter 11 Cases are not small business cases, and accordingly section 1129(e) of the Bankruptcy Code is inapplicable in the Chapter 11 Cases.

 

DD.                           Good Faith Solicitation¾Section 1125(e).

 

50.                               The Exculpated Parties have acted in “good faith” within the meaning of section 1125(e) of the Bankruptcy Code and in compliance with the applicable provisions of the

 


(3)         See In re MCorp. Fin. Inc., 160 B.R. 941, 960 (S.D. Tex. 1993) (finding no unfair discrimination where senior creditor gave up portion of recovery to non-subordinated unsecured creditor in connection with settlement of litigation); see also In re Idearc Inc., 423 B.R. 138, 172 (Bankr. N.D. Tex. 2009), aff’d 662 F.3d 315 (5th Cir. 2011) (holding that where recovery provided to junior creditor was from lenders’ collateral, any slight discrimination that could exist does not violate the Bankruptcy Code); In re Journal Register Co., 407 B.R. 520 (Bankr. S.D.N.Y. 2009) (finding that plan did not unfairly discriminate because removing the distribution under the Plan to a certain class of creditors received on account of a compromise with a senior creditor would not change the recovery of the objecting creditors, and so the creditors that received such distribution on account of the compromise did not do so at the expense of other creditors in the same class).

 

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Bankruptcy Code and Bankruptcy Rules in connection with all of their respective activities relating to support and consummation of the Plan, including the execution, delivery, and performance of the Plan Support Agreement, the New Credit Facility, the New Credit Facility Documents, the New Organizational Documents, the New Common Stock, the New Warrants, and solicitation of acceptances of the Plan, and are entitled to the protections afforded by section 1125(e) of the Bankruptcy Code.

 

EE.                           Satisfaction of Confirmation Requirements.

 

51.                               Based on the foregoing, the Plan satisfies the requirements for Confirmation set forth in section 1129 of the Bankruptcy Code.

 

FF.                             Likelihood of Satisfaction of Conditions Precedent to the Effective Date.

 

52.                               Each of the conditions precedent to the Effective Date, as set forth in Article IX.A of the Plan, has been or is reasonably likely to be satisfied or waived in accordance with Article IX.B of the Plan.

 

GG.                         Implementation.

 

53.                               The terms of the Plan, including, without limitation, the Plan Supplement and all exhibits and schedules thereto, and all other documents filed in connection with the Plan, and/or executed or to be executed in connection with the transactions contemplated by the Plan and all amendments and modifications of any of the foregoing made pursuant to the provisions of the Plan governing such amendments and modifications (collectively, the “Plan Documents”) are incorporated by reference, are approved in all respects, and constitute an integral part of this Confirmation Order.

 

HH.                         Binding and Enforceable.

 

54.                               The Plan and the Plan Documents have been negotiated in good faith and at arm’s length and, subject to the occurrence of the Effective Date, shall bind any Holder of a Claim or

 

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Interest and such Holder’s respective successors and assigns, whether or not the Claim or Interest is Impaired under the Plan, whether or not such Holder has accepted the Plan, and whether or not such Holder is entitled to a distribution under the Plan.  The Plan and the Plan Documents constitute legal, valid, binding, and authorized obligations of the respective parties thereto and shall be enforceable in accordance with their terms.  Pursuant to section 1142(a) of the Bankruptcy Code, the Plan and the Plan Documents shall apply and be enforceable notwithstanding any otherwise applicable non-bankruptcy law.

 

II.                                   Disclosure of Facts.

 

55.                               The Debtors have disclosed all material facts regarding the Plan, including with respect to consummation of the New Credit Facility Documents and the New Organizational Documents, and the fact that each applicable Debtor will emerge from its chapter 11 case as a validly existing corporation, limited liability company, partnership, or other form, as applicable, with separate assets, liabilities, and obligations.

 

JJ.                               Good Faith.

 

56.                               The Debtors, the Exculpated Parties, the Released Parties, and the Releasing Parties have been and will be acting in good faith if they proceed to:  (a) consummate the Plan and the agreements, settlements, transactions, and transfers contemplated thereby; and (b) take the actions authorized and directed by this Confirmation Order to reorganize the Debtors’ businesses and effect the New Credit Facility Documents and the New Organizational Documents, and the other Restructuring Transactions.

 

KK.                         Vesting of Assets.

 

57.                               Except as otherwise provided in the Plan or any agreement, instrument, or other document incorporated therein, on the Effective Date, all property in each Estate, all Causes of Action, and any property acquired by any of the Debtors pursuant to the Plan shall vest in each

 

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respective Reorganized Debtor, free and clear of all Liens, Claims, charges, Causes of Action, or other encumbrances.  On and after the Effective Date, except as otherwise provided in the Plan, each Reorganized Debtor may operate its business and may use, acquire, or dispose of property and compromise or settle any Claims, Interests, or Causes of Action without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules.

 

LL.                           The New Credit Facility.

 

58.                               The New Credit Facility is an essential element of the Plan, is necessary for Confirmation and the consummation of the Plan, and is critical to the overall success and feasibility of the Plan.  Entry into the New Credit Agreement and the other New Credit Facility Documents is in the best interests of the Debtors, their Estates, and all Holders of Claims or Interests.  The Debtors have exercised reasonable business judgment in determining to enter into the New Credit Agreement and the other New Credit Facility Documents and have provided sufficient and adequate notice of the material terms of the New Credit Facility, which material terms were filed as part of the Plan and Plan Supplement.  The terms and conditions of the New Credit Facility are fair and reasonable, and the New Credit Facility was negotiated in good faith and at arm’s length.  The Debtors are authorized, without further approval of the Court or any other party, to execute and deliver all agreements, guarantees, instruments, mortgages, control agreements, certificates, and other documents relating to the New Credit Agreement and New Credit Facility Documents to perform their obligations thereunder, including, without limitation, the payment or reimbursement of any fees, expenses, losses, damages, or indemnities.

 

MM.                     Management Incentive Plan.

 

59.                               The Debtors have provided sufficient and adequate notice of the terms of the Management Incentive Plan.  The terms and conditions of the Management Incentive Plan have

 

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been negotiated in good faith and at arm’s length with the Debtors’ primary stakeholders.  The Management Incentive Plan is an essential element of the Plan, and the terms of the Management Incentive Plan and the payments contemplated therein are reasonable and comparable to the market.  The Management Incentive Plan is hereby approved in its entirety.

 

NN.                           Issuance of New Common Stock and New Warrants.

 

60.                               Pursuant to section 1145 of the Bankruptcy Code, the offering, issuance, and distribution of the New Common Stock and New Warrants and any other securities to be issued and distributed (including the distributions described in the Restructuring Transactions), whether on the Effective Date or any other date of a distribution thereafter, pursuant to the terms of the Plan and/or in accordance with this Confirmation Order comply with section 1145 of the Bankruptcy Code and shall be exempt from, among other things, the registration and prospectus delivery requirements of Section 5 of the Securities Act and any other applicable state and federal law requiring registration and/or delivery of a prospectus prior to the offering, issuance, distribution, or sale of securities.

 

61.                               In addition, under section 1145 of the Bankruptcy Code, any securities contemplated by the Plan and any and all agreements incorporated therein, including the New Common Stock and New Warrants, shall be subject to (a) the provisions of section 1145(b)(1) of the Bankruptcy Code relating to the definition of an underwriter in section 2(a)(11) of the Securities Act, (b) compliance with any rules and regulations of the Securities and Exchange Commission, if any, applicable at the time of any future transfer of such securities or instruments, (c) the restrictions, if any, on the transferability of such securities and instruments, including those set forth in the New Organizational Documents, and (d) applicable regulatory approval, if any.

 

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62.                               Each share of the New Common Stock issued and distributed pursuant to the Plan shall be uncertificated and duly authorized, validly issued, and fully paid and non-assessable.  Each distribution and issuance referred to in Article VI of the Plan shall be governed by the terms and conditions set forth in the Plan applicable to such distribution or issuance and by the terms and conditions of the instruments evidencing or relating to such distribution or issuance, which terms and conditions shall bind each Entity receiving such distribution or issuance.  The New Common Stock and New Warrants shall be issued through the facilities of the Depository Trust Company (“DTC”) and the Debtors may require recipients thereof to identify themselves through the provision of information requested by the Debtors.  The Debtors and/or Reorganized Debtors will reflect any ownership of the New Common Stock and New Warrants through the facilities of the DTC, the Reorganized Debtors need not provide any further evidence other than this Confirmation Order with respect to the treatment of the New Common Stock under applicable securities laws.  The DTC shall be required to accept and conclusively rely upon the Plan and this Confirmation Order in lieu of a legal opinion regarding whether the New Common Stock and New Warrants are exempt from registration and/or eligible for DTC book-entry delivery, settlement, and depository services.  Notwithstanding anything to the contrary in the Plan, no entity (including, for the avoidance of doubt, the DTC) may require a legal opinion regarding the validity of any transaction contemplated by the Plan, including, for the avoidance of doubt, whether the New Common Stock and New Warrants are exempt from registration and/or eligible for DTC book-entry delivery, settlement, and depository services.

 

OO.                         Executory Contracts and Unexpired Leases.

 

63.                               The Debtors have exercised sound business judgment in determining whether to assume or reject each of their Executory Contracts and Unexpired Leases pursuant to sections 365 and 1123(b)(2) of the Bankruptcy Code, Article V of the Plan, and as set forth in the

 

26



 

Plan Supplement.  Except as set forth herein and/or in separate orders entered by the Court relating to assumption of Executory Contracts or Unexpired Leases, the Debtors have cured or provided adequate assurances that the Debtors will cure defaults (if any) under or relating to each Executory Contract or Unexpired Lease assumed under the Plan.

 

64.                               Nothing in the Plan or the Confirmation Order shall prevent a party to an Executory Contract rejected pursuant to the Plan from filing a Proof of Claim based on such rejection within thirty (30) days after the effective date of rejection of such Executory Contract.  Nothing in the Plan or this Confirmation Order shall prevent a party to an Executory Contract assumed pursuant to the Plan, or otherwise, from continuing to prosecute an objection to the Cure Cost related to such assumed Executory Contract if such objection is timely filed on or before the Plan Objection Deadline but not resolved before the Effective Date.

 

PP.                             Retention of Jurisdiction.

 

65.                               Except as otherwise provided in any of the Plan Documents, the Court shall retain jurisdiction over the Chapter 11 Cases and all matters arising out of, or related to, the Chapter 11 Cases and the Plan, including the matters set forth in Article XI of the Plan.

 

ORDER

 

IT IS ORDERED, ADJUDGED, DECREED, AND DETERMINED THAT:

 

66.                               Confirmation of the Plan.  The Plan is approved in its entirety and CONFIRMED under section 1129 of the Bankruptcy Code.  The terms of the Plan, including the Plan Supplement, are incorporated by reference into and are an integral part of this Confirmation Order.

 

67.                               Standing Motion.   The Emergency Motion of the Official Committee of Unsecured Creditors for Leave, Standing, and Authority to Prosecute Claims on Behalf of the Debtors’ Estates and for Related Relief [Docket No. 493] (the “Standing Motion”) is withdrawn

 

27



 

with prejudice by the Committee, and the Committee shall file such withdrawal on the docket within three (3) days of the date of entry of this Confirmation Order.

 

68.                               Objections.  All objections and all reservations of rights pertaining to Confirmation that have not been withdrawn, waived, or settled are overruled on the merits.

 

69.                               Plan Classification Controlling.  The terms of the Plan shall solely govern the classification of Claims and Interests for purposes of the distributions to be made thereunder.  The classification set forth on the ballots tendered to or returned by the holders of Claims in connection with voting on the Plan: (a) were set forth thereon solely for purposes of voting to accept or reject the Plan; (b) do not necessarily represent, and in no even shall be deemed to modify or otherwise affect, the actual classification of Claims and Interests under the Plan for distribution purposes; (c) may not be relied upon by any Holder of a Claim or Interest as representing the actual classification of such Claim or Interest under the Plan for distribution purposes; and (d) shall not be binding on the Debtors except for voting purposes.

 

70.                               Plan Modifications.  Subsequent to filing the Plan on July 13, 2016, the Debtors made certain modifications to the Plan (the “Plan Modifications”).  The Plan Modifications comply with the requirements under the Plan Support Agreement and do not materially adversely affect the treatment of any Claim or Interest under the Plan.  After giving effect to the Plan Modifications, the Plan continues to satisfy the requirements of sections 1122 and 1123 of the Bankruptcy Code.  The filing with the Court on September 28, 2016, of the Plan Modifications and the disclosure of the Plan Modifications on the record at the Confirmation Hearing constitute due and sufficient notice thereof.  Accordingly, pursuant to section 1127(a) of the Bankruptcy Code and Bankruptcy Rule 3019, the Plan Modifications do not require additional disclosure under section 1125 of the Bankruptcy Code or re-solicitation of votes under section 1126 of the

 

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Bankruptcy Code, nor do they require that holders of Claims or Interests be afforded an opportunity to change previously cast acceptances or rejections of the Plan.

 

71.                               Deemed Acceptance of Plan.  In accordance with section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019, all holders of Claims and Interests who voted to accept the Plan or who are conclusively presumed to accept the Plan are deemed to have accepted the Plan as modified by the Plan Modifications.  No holder of a Claim or Interest shall be permitted to change its vote as a consequence of the Plan Modifications.

 

72.                               No Action Required.  Under the provisions of the Delaware General Corporation Law, including section 303 thereof, and the comparable provisions of the Delaware Limited Liability Company Act, and section 1142(b) of the Bankruptcy Code, no action of the respective directors, equity holders, managers, or members of the Debtors is required to authorize the Debtors to enter into, execute, deliver, file, adopt, amend, restate, consummate, or effectuate, as the case may be, the Plan, the Restructuring Transactions, and any contract, assignment, certificate, instrument, or other document to be executed, delivered, adopted, or amended in connection with the implementation of the Plan, including the New Credit Facility Documents and the New Organizational Documents, and the appointment and election of the members of the New Board and the officers, directors, and/or managers of each of the Reorganized Debtors.

 

73.                               Binding Effect.  On the date hereof and after entry of this Confirmation Order and subject to the occurrence of the Effective Date, the Plan and the Plan Documents shall bind any Holder of a Claim or Interest and such Holder’s respective successors and assigns, whether or not:  (a) the Claim or Interest is Impaired under the Plan, (b) such Holder has accepted the Plan, (c) such Holder has failed to vote to accept or reject the Plan or voted to reject the Plan, (d) such Holder is entitled to a distribution under the Plan, (e) such Holder will receive or retain

 

29



 

any property or interests in property under the Plan, and (f) such Holder has filed a Proof of Claim in the Chapter 11 Cases.  The Plan and the Plan Documents constitute legal, valid, binding, and authorized obligations of the respective parties thereto and shall be enforceable in accordance with their terms.  Pursuant to section 1142(a) of the Bankruptcy Code, the Plan and the Plan Documents shall apply and be enforceable notwithstanding any otherwise applicable non-bankruptcy law.

 

74.                               Vesting of Assets in the Reorganized Debtors.  Except as otherwise provided in the Plan, this Confirmation Order, or in any agreement, instrument, or other document incorporated in the Plan (including the New Credit Facility Documents and the New Organizational Documents), on the Effective Date, all property in each Estate, all Causes of Action, and any property acquired by any of the Debtors under the Plan shall vest in each respective Reorganized Debtor, free and clear of all Liens, Claims, charges, or other encumbrances.  On and after the Effective Date, except as otherwise provided in the Plan, each Reorganized Debtor may operate its business and may use, acquire, or dispose of property and compromise or settle any Claims, Interests, or Causes of Action without supervision or approval by the Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules.  To the extent that the retention by the Debtors of assets held immediately prior to emergence in accordance with the Plan is deemed, in any instance, to constitute a “transfer” of property, such transfer of property to the Debtors (a) is or shall be a legal, valid, and effective transfer of property, (b) vests or shall vest the Debtors with good title to such property, free and clear of all Liens, Claims, charges, or other encumbrances, except as expressly provided in the Plan or this Confirmation Order, (c) does not and shall not constitute an avoidable transfer under the Bankruptcy Code or under applicable non-bankruptcy law, and (d) does not and shall not subject

 

30



 

the Debtors to any liability by reason of such transfer under the Bankruptcy Code or under applicable non-bankruptcy law, including by laws affecting successor or transferee liability.

 

75.                               Effectiveness of All Actions.  All actions contemplated by the Plan, including all actions in connection with the New Credit Facility Documents, the New Organizational Documents, the New Common Stock, the New Warrants, and the Management Incentive Plan are hereby effective and authorized to be taken on, prior to, or after the Effective Date, as applicable, under this Confirmation Order, without further application to, or order of the Court, or further action by the respective officers, directors, managers, members, or equity holders of the Debtors or the Reorganized Debtors and with the effect that such actions had been taken by unanimous action of such officers, directors, managers, members, or equity holders.

 

76.                               Restructuring Transactions.  The Debtors or the Reorganized Debtors, as applicable, are authorized to enter into and effectuate the Restructuring Transactions, including the entry into and consummation of the transactions contemplated by the New Credit Facility Documents, the New Organizational Documents, and the Management Incentive Plan and may take any actions as may be necessary or appropriate to effect a corporate restructuring of their respective businesses or a corporate restructuring of the overall corporate structure of the Reorganized Debtors, as and to the extent provided in the Plan.  Any transfers of assets or equity interests effected or any obligations incurred through the Restructuring Transactions are hereby approved and shall not constitute fraudulent conveyances or fraudulent transfers or otherwise be subject to avoidance.  Except as otherwise provided in the Plan, each Reorganized Debtor, as applicable, shall continue to exist after the Effective Date as a separate corporate entity, limited liability company, partnership, or other form, as the case may be, with all the powers of a

 

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corporation, limited liability company, partnership, or other form, as the case may be, under the applicable law in the jurisdiction in which such applicable Debtor is incorporated or formed.

 

77.                               Cancellation of Notes, Instruments, Certificates, and Other Documents.  On the Effective Date, except as otherwise provided herein or in the Plan, all notes, instruments, Certificates, and other instruments or documents, directly or indirectly, evidencing any Claim or Interest shall be deemed cancelled and the obligations of the Debtors or Reorganized Debtors and any non-Debtor Affiliates thereunder or in any way related thereto shall be discharged; provided, however, that notwithstanding Confirmation or the occurrence of the Effective Date, any credit document or agreement that governs the rights of the Holder of a Claim or Interest shall continue in effect solely for purposes of (a) allowing holders of Allowed Claims to receive distributions under the Plan and (b) allowing and preserving the rights of the First Lien Agent, the Second Lien Notes Trustee, the Third Lien Notes Trustee, and the Unsecured Notes Trustees, as applicable, to make distributions on account of Allowed Claims, as provided in the Plan or this Confirmation Order.

 

78.                               Distributions.  Subject to Article VI of the Plan, all amounts and securities necessary for the Debtors (on the Effective Date) or the Reorganized Debtors to make payments or distributions pursuant hereto shall be made through distributions of the New Common Stock or the New Warrants as provided in the Plan.  Any payment in Cash to be made pursuant to the Plan shall be made at the election of the Reorganized Debtors by check or by wire transfer.

 

79.                               Preservation of Rights of Action.  Unless any Causes of Action against an Entity are expressly waived, relinquished, exculpated, released, compromised, or settled in the Plan or by a Final Order, in accordance with section 1123(b) of the Bankruptcy Code, the Reorganized Debtors retain and may enforce all rights to commence and pursue, as appropriate, any and all

 

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Causes of Action, whether arising before or after the Petition Date, including any actions specifically enumerated in the Plan Supplement, as set forth in the Plan.  The Reorganized Debtors’ rights to commence, prosecute, or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Effective Date.  For the avoidance of doubt, the Debtors’ failure to list any Causes of Action in the Disclosure Statement, the Plan, the Plan Supplement, or otherwise in no way limits the rights of the Reorganized Debtors as set forth above.  No Entity may rely on the absence of a specific reference in the Plan, the Plan Supplement, or the Disclosure Statement to any Cause of Action against it as indication that the Debtors or Reorganized Debtors, as applicable, will not pursue any and all available Causes of Action against it.  The Debtors or Reorganized Debtors, as applicable, expressly reserve all rights to prosecute any and all Causes of Action against any Entity, except as otherwise expressly provided in the Plan or this Confirmation Order.

 

80.                               Subordination.  Except as otherwise expressly provided in the Plan, this Confirmation Order, and any other order of the Court:  (a) the classification and manner of satisfying all Claims and Interests under the Plan takes into consideration all subordination rights, whether arising by contract or under general principles of equitable subordination, section 510 of the Bankruptcy Code, or otherwise; (b) all subordination rights that a holder of a Claim or Interest may have with respect to any distribution to be made under the Plan shall be discharged and terminated and all actions related to the enforcement of such subordination rights shall be enjoined permanently; and (c) the distributions under the Plan to the holders of Allowed Claims and Interests will not be subject to payment of a beneficiary of such subordination rights, or to levy, garnishment, attachment, or other legal process by a beneficiary of such terminated subordination rights.

 

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81.                               Release of Liens.  Except  as otherwise provided in the Plan, in any contract, instrument, release, or other agreement or document created pursuant to the Plan, or in the New Credit Agreement or the other New Credit Facility Documents all mortgages, deeds of trust, Liens, pledges, or other security interests against any property of the Estates (except for those mortgages, deeds of trust, Liens, pledges or other security interests against any property of the Estates granted under and in relation to the New Credit Facility Documents, including without limitation, the First Lien Credit Facility) shall be fully released and discharged, and all of the right, title, and interest of any holder of such mortgages, deeds of trust, Liens, pledges, or other security interests shall revert to the applicable Reorganized Debtor and its successors and assigns. Without limiting the foregoing, to the extent that any holder of a Secured Claim that has been satisfied or discharged pursuant to the Plan, or any agent for such holder, has filed or recorded any Liens and/or security interests to secure such holder’s Secured Claim, then as soon as practicable on or after the Effective Date, such holder (or any such agent for such holder) shall be authorized to and shall execute such documents as may be reasonably requested by the Debtors or any of the Reorganized Debtors, at the sole expense of the Debtors or the Reorganized Debtors, as applicable, that are necessary to cancel and/or extinguish such Liens and/or security interests.

 

82.                               New Credit Facility.  On the Effective Date, the Reorganized Debtors shall enter into the New Credit Facility on the terms set forth in the New Credit Facility Documents.  Upon entry of this Confirmation Order, the New Credit Facility (including the transactions contemplated thereby, and all actions to be taken, undertakings to be made, and obligations to be incurred and fees paid by the Debtors or the Reorganized Debtors in connection therewith) shall be deemed approved, to the extent not approved by the Court previously, and the Reorganized

 

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Debtors are authorized to execute and deliver those documents necessary or appropriate to obtain the New Credit Facility, including the New Credit Facility Documents, without further notice to or order of the Court, act or action under applicable law, regulation, order, or rule or vote, consent, authorization, or approval of any Person, subject to such modifications acceptable to the Requisite First Lien Lenders in all respects and reasonably acceptable to the Requisite Second Lien Noteholders as the Reorganized Debtors may deem to be necessary to consummate the New Credit Facility.  Notwithstanding anything to the contrary in this Confirmation Order or Article XI of the Plan, after the Effective Date, any disputes arising under the New Credit Facility Documents will be governed by the jurisdictional provisions therein.  The Reorganized Debtors and the secured parties under the New Credit Facility (and their designees and agents) are authorized to make all filings and recordings, and to obtain all governmental approvals and consents necessary to evidence, establish and perfect such liens and security interests in connection with the New Credit Facility under the provisions of applicable state, federal, or other law that would be applicable in the absence of the Plan and this Confirmation Order (it being understood that perfection shall occur automatically by virtue of the entry of this Confirmation Order, and any such filings, recordings, approvals, and consents shall, as a matter of law, not be required to perfect such Liens and other security interests), and shall thereafter cooperate to make all other filings and recordings that otherwise would be necessary under applicable law to give notice of such Liens and security interests to third-parties.

 

83.                               New Organizational Documents.  The terms of the New Organizational Documents included in the Plan Supplement are approved in all respects.  The obligations of the applicable Reorganized Debtors related thereto, will, upon execution, constitute legal, valid, binding, and authorized obligations of each of the Debtors or Reorganized Debtors, as

 

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applicable, enforceable in accordance with their terms and not in contravention of any state or federal law.  On the Effective Date, without any further action by the Court or the directors, officers, or equity holders of any of the Reorganized Debtors, each Reorganized Debtor, as applicable, will be and is authorized to enter into the New Organizational Documents and all related documents, to which such Reorganized Debtor is contemplated to be a party on the Effective Date.  In addition, on the Effective Date, without any further action by the Court or the directors, officers or equity holders of any of the Reorganized Debtors, each applicable Reorganized Debtor will be and is authorized to:  (a) execute, deliver, file, and record any other contracts, assignments, certificates, instruments, agreements, guaranties, or other documents executed or delivered in connection with the New Organizational Documents; (b) perform all of its obligations under the New Organizational Documents; and (c) take all such other actions as any of the responsible officers of such Reorganized Debtor may determine are necessary, appropriate or desirable in connection with the consummation of the transactions contemplated by the New Organizational Documents.

 

84.                               Filing and Recording.  This Confirmation Order is and shall be binding upon and shall govern the acts of all persons or entities including, without limitation, all filing agents, filing officers, title agents, title companies, recorders of mortgages, recorders of deeds, registrars of deeds, administrative agencies, governmental departments, secretaries of state, federal, state, and local officials, and all other persons and entities who may be required, by operation of law, the duties of their office, or contract, to accept, file, register, or otherwise record or release any document or instrument.  Each and every federal, state, and local government agency is hereby directed to accept any and all documents and instruments necessary, useful, or appropriate (including financing statements under the applicable uniform commercial code) to effectuate,

 

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implement, and consummate the transactions contemplated by the Plan and this Confirmation Order without payment of any stamp tax or similar tax imposed by state or local law.

 

85.                               Registration Rights Agreement. On the Effective Date, the Reorganized Debtors shall enter into the Registration Rights Agreement.  Upon entry of this Confirmation Order, the Registration Rights Agreement (including the transactions contemplated thereby, and all actions to be taken, undertakings to be made, and obligations to be incurred by the Debtors or the Reorganized Debtors in connection therewith) shall be deemed approved, to the extent not approved by the Court previously, and the Reorganized Debtors are authorized to execute and taken all actions necessary or appropriate to give effect to the Registration Rights Agreement, without further notice to or order of the Court, act or action under applicable law, regulation, order, or rule or vote, consent, authorization, or approval of any Person, subject to such modifications acceptable to the Reorganized Debtors and Registration Rights Beneficiaries Notwithstanding anything to the contrary in this Confirmation Order or Article XI of the Plan, after the Effective Date, any disputes arising under the Registration Rights Agreement will be governed by the jurisdictional provisions therein.

 

86.                               Management Incentive Plan. The Management Incentive Plan is hereby approved in its entirety and shall be implemented on the Effective Date by Reorganized Debtors without any further action by the New Board or the Bankruptcy Court.

 

87.                               Directors and Officers of Reorganized Debtors. The Reorganized Debtors’ initial directors and officers, to the extent known, have been disclosed prior to the Confirmation Hearing.  To the extent that any director or officer has not yet been determined, such determination will be made in accordance with the New Organizational Documents and such appointment is hereby approved.

 

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88.                               Compromise of Controversies.  In consideration for the distributions and other benefits, including releases, provided under the Plan, the provisions of the Plan constitute a good faith compromise and settlement of all Claims, Interests, and controversies resolved under the Plan and the entry of this Confirmation Order constitutes approval of such compromise and settlement under Bankruptcy Rule 9019, including the approval of the Confirmation Settlement, Intercreditor Settlement, the Second/Third Lien Plan Settlement, and the Unencumbered Value Settlement.

 

89.                               Assumption of Contracts and Leases.  On the Effective Date, each Executory Contract and Unexpired Lease shall be deemed assumed as provided in the Plan, without the need for any further notice to or action, order, or approval of the Bankruptcy Court, under section 365 of the Bankruptcy Code and the payment of Cures, if any, shall be paid in accordance with Article V.C. of the Plan.  Each assumed Executory Contract or Unexpired Lease shall include all modifications, amendments, supplements, restatements, or other agreements related thereto, and all rights related thereto, if any, including all easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal, and any other interests.  Modifications, amendments, supplements, and restatements to prepetition Executory Contracts and Unexpired Leases that have been executed by the Debtors during the Chapter 11 Cases shall not be deemed to alter the prepetition nature of the Executory Contract or Unexpired Lease or the validity, priority, or amount of any Claims that may arise in connection therewith.  Assumption of any Executory Contract or Unexpired Lease pursuant to the Plan or otherwise and full payment of any applicable Cure pursuant to Article V.C of the Plan shall result in the full release and satisfaction of any Cures, Claims, or defaults, whether monetary or nonmonetary, including defaults of provisions restricting the change in control or ownership interest composition or other

 

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bankruptcy-related defaults, arising under any assumed Executory Contract or Unexpired Lease at any time prior to the effective date of assumption.  Any and all Proofs of Claim based upon Executory Contracts or Unexpired Leases that have been assumed in the Chapter 11 Cases, including pursuant to this Confirmation Order, and for which any Cure has been fully paid pursuant to Article V.C of the Plan shall be deemed disallowed and expunged as of the Effective Date without the need for any objection thereto or any further notice to or action, order, or approval of the Bankruptcy Court.

 

90.                               Indemnification.  On and as of the Effective Date, the Indemnification Obligations will be assumed and irrevocable and will survive the effectiveness of the Plan, and the Reorganized Debtors’ governance documents will provide for the indemnification, defense, reimbursement, exculpation, and/or limitation of liability of, and advancement of fees and expenses to the Debtors’ and the Reorganized Debtors’ current and former directors, officers, employees, or agents to the fullest extent permitted by law and at least to the same extent as the organizational documents of each of the respective Debtors on the Petition Date, against any claims or Causes of Action whether direct or derivative, liquidated or unliquidated, fixed or contingent, disputed or undisputed, matured or unmatured, known or unknown, foreseen or unforeseen, asserted or unasserted, and none of the Reorganized Debtors will amend and/or restate their respective governance documents before or after the Effective Date to terminate or materially adversely affect any of the Reorganized Debtors’ obligations to provide such indemnification rights or such directors’, officers’, employees’, or agents’ indemnification rights.

 

91.                               Directors’ and Officers’ Liability Insurance. As of the Effective Date, the Reorganized Debtors shall not terminate or otherwise reduce the coverage under any D&O Liability Insurance Policy (including such tail coverage liability insurance) in effect and all

 

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members, managers, directors, and officers of the Debtors who served in such capacity at any time prior to the Effective Date of the Plan shall be entitled to the full benefits of any such policy for the full term of such policy regardless of whether such members, managers, directors, and/or officers remain in such positions after the Effective Date of the Plan.

 

92.                               Authorization to Consummate.  The Debtors are authorized to consummate the Plan and the Restructuring Transactions after the entry of this Confirmation Order subject to satisfaction or waiver (by the required parties) of the conditions precedent to Consummation set forth in Article IX of the Plan.

 

93.                               Professional Compensation.  The provisions governing Professional compensation set forth in Article II.C of the Plan are approved in their entirety; provided that (a) the aggregate amount of the Professional Fee Claims of the Committee, (b) the fees, costs and expenses of the Unsecured Notes Trustees and its advisors (including counsel), and (c) expenses of the individual members of the Committee, which aggregate amounts in the aforementioned (a)-(c) paid by the Debtors shall not exceed the lesser of either (y) $7.45 million, or (z) an amount equal to the aggregate amount of all Professional Fee Claims sought by the Committee and their Retained Professionals and those fees, costs, and expenses in the aforementioned (b)-(c) in connection with Article II of the Plan, less a seventeen percent (17%) overall reduction.  The Debtors, the Consenting Second Lien Ad Hoc Committee, the Consenting Cross-Over Ad Hoc Committee, and the First Lien Agent (in its capacity as First Lien Agent and a First Lien Lender unless otherwise directed by the required lenders under the First Lien Credit Facility), shall not object to the Committee’s Retained Professionals final requests for Professional Fee Claims.

 

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94.                               Return of Deposits. All utilities, including any Person who received a deposit or other form of “adequate assurance” of performance pursuant to section 366 of the Bankruptcy Code during the Chapter 11 Cases (collectively, the “Deposits”), whether pursuant to the Order (I) Approving the Debtors’ Proposed Adequate Assurance of Payment for Future Utility Services, (II) Prohibiting Utility Companies From Altering, Refusing, or Discontinuing Services, and (III) Approving the Debtors’ Proposed Procedures for Resolving Adequate Assurance Requests [Docket No. 72] (the “Utilities Order”) or otherwise, including, gas, electric, telephone, data, cable, trash, and sewer services, are directed to return such Deposits to the Reorganized Debtors, either by setoff against postpetition indebtedness or by Cash refund, within thirty (30) days following the Effective Date.  Additionally, the Debtors or Reorganized Debtors, as applicable, are hereby authorized to close the Adequate Assurance Account (as defined in the Utilities Order) and utilize such funds in the operation of their businesses.

 

95.                               Release, Exculpation, Discharge, and Injunction Provisions.  The following release, exculpation, discharge, and injunction provisions set forth in Article VIII of the Plan are approved and authorized in their entirety, and such provisions are effective and binding on all parties and Entities to the extent provided therein.

 

a.              Discharge of Claims and Termination of Interests.

 

96.                               Pursuant to section 1141(d) of the Bankruptcy Code, and except as otherwise specifically provided in the Plan or in any contract, instrument, or other agreement or document created pursuant to the Plan, the distributions, rights, and treatment that are provided in the Plan shall be in full and final satisfaction, settlement, discharge, and release, effective as of the Effective Date, of Claims, Interests, and Causes of Action of any nature whatsoever, including any interest accrued on Claims or Interests from and after the Petition Date, whether known or unknown, against, liabilities of, liens on, obligations

 

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of, rights against, and Interests in, the Debtors, the Reorganized Debtors, or any of their assets or properties, regardless of whether any property shall have been distributed or retained pursuant to the Plan on account of such Claims and Interests, including demands, liabilities, and Causes of Action that arose before the Effective Date, any liability (including withdrawal liability) to the extent such Claims or Interests relate to services performed by employees of the Debtors prior to the Effective Date and that arise from a termination of employment, any contingent or non-contingent liability on account of representations or warranties issued on or before the Effective Date, and all debts of the kind specified in sections 502(g), 502(h), or 502(i) of the Bankruptcy Code, in each case whether or not:  (a) a Proof of Claim or Interest based upon such debt or right is filed or deemed filed pursuant to section 501 of the Bankruptcy Code; (b) a Claim or Interest is Allowed; or (c) the holder of such a Claim or Interest has accepted the Plan.  Except as otherwise provided in the Plan, any default by the Debtors with respect to any Claim or Interest that existed immediately prior to or on account of the filing of the Chapter 11 Cases shall be deemed cured on the Effective Date.  The Confirmation Order shall be a judicial determination of the discharge of all Claims and Interests subject to the occurrence of the Effective Date, except as otherwise expressly provided in the Plan.  For the avoidance of doubt, nothing in this paragraph shall affect the rights of Holders of Claims or Interests to seek to enforce the Plan or this Confirmation Order, including the distributions to which Holders of Allowed Claims and Interests are entitled to under the Plan.

 

97.                               Pursuant to section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019 and in consideration for the distributions and other benefits provided pursuant to the Plan, the provisions of the Plan, including the Intercreditor Settlement, shall constitute a good

 

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faith compromise and settlement of all Claims, Interests, and controversies relating to the contractual, legal, and subordination rights that a Holder of a Claim or Interest may have on account of such Allowed Claim or Interest.  The entry of this Confirmation Order constitutes this Court’s approval of the compromise or settlement of all such Claims, Interests, and controversies, as well as a finding by the Court that such compromise or settlement, including the Intercreditor Settlement, is in the best interests of the Debtors, their estates, and Holders of Claims and Interests and is fair, equitable, and reasonable.  In accordance with the provisions of the Plan, pursuant to Bankruptcy Rule 9019, without any further notice to or action, order, or approval of the Court, after the Effective Date, the Reorganized Debtors may compromise and settle Claims against, and Interests in, the Debtors and their estates and causes of action against other entities.

 

b.              Releases by the Debtors.

 

98.                               Pursuant to section 1123(b) of the Bankruptcy Code, and except as otherwise specifically provided in the Plan, for good and valuable consideration, including the efforts of the Released Parties to facilitate the expeditious reorganization of the Debtors and the implementation of the restructuring contemplated by the Plan, on and after the Effective Date, each Released Party and its respective property are conclusively, absolutely, unconditionally, irrevocably, and forever deemed released, acquitted, and discharged by the Debtors, the Reorganized Debtors and the Estates from any and all Claims, debts, obligations, rights, suits, damages, debts, Causes of Action, remedies, and liabilities whatsoever, including any derivative Claims asserted or assertable on behalf of the Debtors or their Estates, whether known or unknown, foreseen or unforeseen, matured or unmatured, existing or hereinafter arising, in law, equity, contract, tort, or otherwise, by statute, violations of federal or state securities laws or otherwise that the debtors, the

 

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Reorganized Debtors, the Estates or their Affiliates would have been legally entitled to assert in their own right (whether individually or collectively) or on behalf of the Holder of any Claim or Interest or other Entity, based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Reorganized Debtors, the Chapter 11 Cases, the Debtors’ restructuring, the Prepetition Debt Documents, the purchase, sale or rescission of the purchase or sale of any Security of the Debtors or the Reorganized Debtors, the subject matter of, or the transactions or events giving rise to, any Claim or Interest that is treated in the Plan, the business or contractual arrangements between the debtors and any Released Party, the restructuring of Claims and Interests prior to or in the Chapter 11 Cases, the negotiation, formulation or preparation of the Plan, the Plan support agreement, the Plan Supplement, the Disclosure Statement, the New Credit Facility Documents and any related agreements, instruments, or other documents (including, for the avoidance of doubt, providing any legal opinion requested by any Entity regarding any transaction, contract, instrument, documents, or other agreement contemplated by the Plan or the reliance by any Released Party and/or DTC on the Plan or the Confirmation Order in lieu of such legal opinion), any other act or omission, transaction, agreement, event, or other occurrence taking place on or before the Confirmation Date.  Notwithstanding anything to the contrary in the foregoing,  the release (1) shall not apply to any express contractual or financial obligations or any right or obligations arising under or that is part of the Plan or any agreements entered into pursuant to, in connection with or contemplated by the Plan (including the Plan Support Agreement) and (2) shall have no effect on the liability of any Entity that results from any such act or omission that is determined in a Final Order to have constituted fraud, gross negligence, or willful misconduct.  For the avoidance of

 

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doubt, the Debtors and Reorganized Debtors will continue to honor all postpetition and post-Effective Date obligations under the New Credit Facility Documents and any related agreements, instruments, or other documents.

 

c.               Releases by Holders of Claims and Interests.

 

99.                               As of the Effective Date, each of the Releasing Parties (regardless of whether a Releasing Party is a Released Party) shall be deemed to have conclusively, absolutely, unconditionally, irrevocably and forever released, acquitted and discharged the Debtors, the Reorganized Debtors and the Released Parties and their respective property from any and all Claims, obligations, rights, suits, damages, debts, causes of action, remedies, and liabilities whatsoever, including any derivative Claims asserted or assertable or assertable on behalf of a Debtor, whether known or unknown, foreseen or unforeseen, matured or unmatured, existing or hereafter arising, in law, equity, contract, tort or otherwise, by statute, violations of federal or state securities laws or otherwise that such entity would have been legally entitled to assert (whether individually or collectively) or on behalf of the Holder of any Claim or Interest or other Entity, based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Reorganized Debtors, the Debtors’ restructuring, the Chapter 11 Cases, the Prepetition Debt Documents, the purchase, sale or rescission of the purchase or sale of any Security of the Debtors or the Reorganized Debtors, the subject matter of, or the transactions or events giving rise to, any Claim or Interest that is treated in the Plan, the business or contractual arrangements between the Debtors and any Released Party, the restructuring of Claims and Interests prior to or during the Chapter 11 Cases, the negotiation, formulation, or preparation of the Plan, the Disclosure Statement, the Plan Supplement, the Plan Support Agreement, the New Credit Facility Documents and any related agreements, instruments or other documents

 

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(including, for the avoidance of doubt, providing any legal opinion requested by any Entity regarding any transaction, contract, instrument, documents, or other agreement contemplated by the Plan or the reliance by any Released Party and/or DTC on the Plan or the Confirmation Order in lieu of such legal opinion), any other act or omission, transaction, agreement, event, or other occurrence taking place on or before the Confirmation Date.  Notwithstanding anything to the contrary in the foregoing, the release set forth above does not release any post-Effective Date obligations of any party or entity under the Plan or any document, instrument or agreement (including those set forth in the Plan Supplement) executed to implement the Plan (regardless of whether rights to enforce such obligations in collateral arise from instruments establishing such rights prior to the Effective Date), including the right to receive distributions from the Debtors or the Reorganized Debtors on account of an Allowed Claim against the Debtors pursuant to the Plan (which, for the avoidance of doubt, shall include obligations under or in connection with the New Credit Facility Documents and any related agreements, instruments, or other documents and the Plan Support Agreement).  Notwithstanding the foregoing, the Debtors and the Reorganized Debtors will continue to honor all postpetition and post-Effective Date obligations under any assumed Executory Contracts and Unexpired Leases in accordance with their terms regardless of whether such obligations are listed as a Cure Amount, and whether such obligation accrued prior to or after the Effective Date, and neither the payment of the Cure nor entry of the Confirmation Order Shall be deemed to release the Debtors or Reorganized Debtors from such obligations.  Notwithstanding anything to the contrary in the foregoing, the release set forth above (1) does not release the personal liability of any of the aforementioned Released Parties in Article VIII of the Plan for any

 

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statutory violation of applicable tax laws or bar any right of action asserted by a governmental taxing authority against the aforementioned Released Parties for any statutory violation of applicable tax laws and (2) shall have no effect on the liability of any Entity that results from any such act or omission that is determined in a Final Order to have constituted fraud, gross negligence, or willful misconduct.

 

d.              Exculpation.

 

100.                        Except with respect to any acts or omissions expressly set forth in and preserved by the Plan, the Plan Supplement, or related documents, the Exculpated Fiduciaries and, solely to the extent provided by section 1125(e) of the Bankruptcy Code, the Section 1125(e) Parties, shall neither have, nor incur any liability to any Entity for any prepetition or postpetition act taken or omitted to be taken in connection with, or related to formulating, negotiating, preparing, disseminating, implementing, administering, confirming, or effecting the Plan (including the Plan Support Agreement) or any contract, instrument, release or other agreement or document created or entered into in connection with the Plan (including, for the avoidance of doubt, providing any legal opinion requested by any Entity regarding any transaction, contract, instrument, documents, or other agreement contemplated by the Plan or the reliance by any Exculpated Party and/or DTC on the Plan or the Confirmation Order in lieu of such legal opinion) or any other prepetition or postpetition act taken or omitted to be taken in connection with or in contemplation of the restructuring of the Debtors; provided, that the foregoing “Exculpation” shall have no effect on the liability of any Entity that results from any such act or omission that is determined in a Final Order to have constituted fraud, gross negligence, or willful misconduct; provided, further that each Exculpated Party shall be entitled to rely upon the advice of counsel concerning his, her or its duties pursuant to, or

 

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in connection with, the Plan or any other related document, instrument, or agreement. The Exculpated Parties have, and upon confirmation, shall be deemed to have, participated in good faith and in compliance with the applicable provisions of the Bankruptcy Code, including with regard to the distributions of New Common Stock and New Warrants  pursuant to the Plan and, therefore, are not and shall not be liable at any time for the violations of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of the Plan or such distributions made pursuant to the Plan.

 

e.               Injunction.

 

101.                        Except as otherwise provided in the Plan, all entities who have held, hold, or may hold Claims, Interests, Causes of Action, or liabilities that:  (a) are subject to compromise and settlement pursuant to the terms of the Plan; (b) have been released pursuant to Article VIII.D of the Plan; (c) have been released pursuant to Article VIII.E of the Plan, (d) are subject to exculpation pursuant to Article VIII.F of the Plan (but only to the extent of the exculpation provided by Article VIII.F of the Plan), or (e) are otherwise discharged, satisfied, stayed or terminated pursuant to the terms of the Plan, are permanently enjoined and precluded, from and after the Effective Date, from commencing or continuing in any manner, any action or other proceeding, including on account of any Claims, Interests, Causes of Action, or liabilities that have been compromised or settled against the Debtors, the Reorganized Debtors, or any entity so released or exculpated (or the property or estate of any entity, directly or indirectly, so released or exculpated) on account of, or in connection with or with respect to, any discharged, released, settled, compromised, or exculpated Claims, Interests, Causes of Action, or liabilities.

 

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f.                Protection Against Discriminatory Treatment.

 

102.                        Consistent with section 525 of the Bankruptcy Code and the Supremacy Clause of the U.S. Constitution, all Entities, including Governmental Units, shall not discriminate against the Reorganized Debtors or deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to, condition such a grant to, discriminate with respect to such a grant against, the Reorganized Debtors, or another Entity with whom the Reorganized Debtors have been associated, solely because each Debtor has been a Debtor under Chapter 11 of the Bankruptcy Code, has been insolvent before the commencement of the Chapter 11 Cases (or during the Chapter 11 Cases but before the Debtors are granted or denied a discharge), or has not paid a debt that is dischargeable in the Chapter 11 Cases.

 

g.              Recoupment.

 

103.                        In no event shall any Holder of Claims or Interests be entitled to recoup any Claim against any Claim, right, or cause of action of the Debtors or the Reorganized Debtors, as applicable, unless such Holder actually has performed such recoupment and provided notice thereof in writing to the Debtors on or before the date of this Order, notwithstanding any indication in any Proof of Claim or otherwise that such Holder asserts, has, or intends to preserve any right of recoupment.

 

h.              Term of Injunctions or Stays.

 

104.                        Unless otherwise provided in the Plan or in a Final Order, all injunctions or stays arising under or entered during the Chapter 11 Cases under section 362 of the Bankruptcy Code or otherwise and in existence on the date of this Order, shall remain in full force and effect until the later of the Effective Date and the date set forth in the order providing for such injunction or stay.

 

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105.                        Senior Executive Incentive Plan.  Effective as of the Effective Date, the Senior Executive Incentive Plan (as defined in the Debtors’ Motion for Entry of an Order Authorizing and Approving the Debtors’ Senior Executive Incentive Plan and Key Employee Incentive Plan (the “Motion”) [Docket No. 321]) (the “SEIP”) is approved in its entirety, the Debtors shall take all actions necessary to implement the SEIP on the terms and conditions set forth in the Motion, and the Debtors shall pay all obligations that are due and owing under the SEIP as of the Effective Date by no later than the date that is seven (7) days after the Effective Date.

 

106.                        Plains Marketing.  Pursuant to section 365 of the Bankruptcy Code, this Confirmation Order approves the assumption of all executory contracts between the Debtors and Plains Marketing, L.P. (and its affiliates) (collectively, “PMLP”), including, but not limited to, that certain Crude Oil Purchase Contract, dated May 23, 2016; provided, however, that to the extent any contract or agreement between the Debtors and PMLP has expired, or will expire, by its own terms prior to the Effective Date, then each such expired contract or agreement will not be deemed assumed by the Debtors under Article V of the Plan.

 

107.                        Repsol E&P USA, Inc.  The Debtors and Repsol E&P USA, Inc. (“Repsol”) are parties to numerous executory contracts scheduled in the Schedule of Assumed Executory Contracts and Unexpired Leases (collectively, the “Repsol Assumed Agreements”).  The Debtors desire to assume and Repsol agrees to the Debtors’ assumption of the Repsol Agreements, subject to and conditioned upon the Debtors’ payment of an agreed cure amount (the “Agreed Cure Amount”) with respect to issues raised in the Objection of Repsol E&P USA, Inc. to Proposed Cure Amount [Docket No. 457].  Notwithstanding anything in the Plan, the Plan Supplement, or this Confirmation Order to the contrary, pursuant to section 365 of the Bankruptcy Code and subject to and conditioned upon the payment of the Agreed Cure Amount,

 

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this Confirmation Order approves the assumption of the Repsol Assumed Agreements as of the Effective Date.  The Debtors and Repsol are also parties to executory contracts scheduled in the Schedule of Rejected Executory Contracts and Unexpired Leases, and pursuant to section 365 of the Bankruptcy Code such executory contracts will be deemed rejected as of the Effective Date.

 

108.                        Le Norman Parties.  The Debtors, on the one hand, and Templar Energy LLC (“Templar”), Le Norman Operating LLC (“LNO”), and Le Norman Fund I LLC (“LNF,” and collectively with Templar and LNO, “Le Norman”), on the other hand, have consensually resolved Le Norman’s (I) Objection and Reservation of Rights to Assumption of Executory Contracts and (II) Notice of Election to Opt Out of Third Party Releases Contained in Debtors’ First Amended Chapter 11 Plan of Reorganization [Docket. No. 504] (the “Objection”) upon the terms and conditions set forth in the Stipulation Resolving Le Norman Operating LLC’s, Templar Energy LLC’s and Le Norman Fund I LLC’s (I) Objection and Reservation of Rights to Assumption of Executory Contracts and (II) Notice of Election to Opt Out of Third Party Releases Contained in Debtors’ First Amended Chapter 11 Plan of Reorganization Regarding Certain Payments [Docket No. 674] (the “Stipulation”).  Entry of this Confirmation Order consensually resolves the Objection and approves, in its entirety, the Stipulation, the terms of which are incorporated herein for all purposes.

 

109.                        Triple F Oil Field Services, LLC / Production Specialists, Inc. (d/b/a Regal Oilfield Supply).  Notwithstanding any other provision to the contrary contained in the Plan or the Plan Supplement, nothing herein shall:  (i) constitute an adjudication and/or determination of the extent, validity, or priority of any secured claims, privileges and/or mechanic’s and materialmen’s liens filed and/or asserted by Triple F Oilfield Services LLC (“Triple F”) against any property of the Debtors, asserted in any pending litigation, including Cause No. 5:15-CV-

 

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00659-C pending in the United States District Court for the Western District of Oklahoma (the “Triple F Litigation”), and/or asserted in its proof of claim 354 filed against Debtor Midstates Petroleum Company LLC (the “Triple F Claim”); (ii) constitute a consent, waiver, and/or release by Triple F to any transfer of the Debtor’s property to the Reorganized Debtor free and clear of its lien rights in any way; or (iii) constitute a waiver or release of any claims or defenses to which the Parties may be otherwise be entitled against the other Party, whether the same be in law, at equity, or otherwise.  Further, to the extent the Triple F Claim is determined to be partially Unsecured or wholly Unsecured, any portion of the Claim deemed Unsecured by a competent court or through a resolution between the parties, shall be deemed Allowed and subject to distribution as a Class 7 Claim, consistent with the terms of the Plan with all rights of Triple F under the Plan and Confirmation Order preserved as a Class 7 Claimant.

 

110.                        Notwithstanding anything in the Plan, the Plan Supplement, or this Order to the contrary, pursuant to section 365 of the Bankruptcy Code, all executory contracts between the Debtors and Triple F (the “Triple F Contracts”) shall be deemed rejected upon the occurrence of a Resolution Event (as defined below), to the extent it is determined in connection with such Resolution Event that the Triple F Contracts are capable of rejection under applicable law.  Notwithstanding the foregoing, all rights, claims, and defenses the Parties may have against the other party are fully preserved, whether or not such rights, claims, or defenses arise under, are related to the rejection of, or are independent of the Triple F Contracts, including without limitation, any rights, claims, or defenses asserted by, or that could have been asserted by, the Parties against the other party prior to commencement of the Chapter 11 Cases, including any such rights, claims, or defenses asserted by, or that could have been asserted by, the Parties in the Triple F Litigation.

 

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111.                        Notwithstanding any other provision to the contrary contained in the Plan or the Plan Supplement, nothing herein shall:  (i) constitute an adjudication and/or determination of the extent, validity or priority of any secured claims, privileges and/or mechanic’s and materialmen’s liens filed and/or asserted by against any property of the Debtor asserted by Production Specialists, Inc. d/b/a Regal Oilfield Supply (“PSI”) in any pending litigation, including Case No. CJ-2015-00017 in the District Court in and for Alfalfa County, State of Oklahoma and Case No. CJ-2015-00018 in the District Court in and for Woods County, State of Oklahoma (together, the “PSI Litigation”), and/or as asserted in its proof of claim 223 filed in Case No. 16-33237, as amended by proof of claim 183 in Case No. 16-32238 (the “PSI Claim”); (ii) constitute a consent, waiver, and/or release by PSI of any transfer of the Debtor’s property to the Reorganized Debtor free and clear of its lien rights in any way; or (iii) constitute a waiver or release of any claims or defenses to which the Parties may be otherwise be entitled against the other party, whether the same be in law, at equity, or otherwise.  Further, to the extent that the PSI Claim is determined to be partially Unsecured or wholly Unsecured, any portion of the Claim deemed Unsecured by a competent court or through a resolution between the parties, shall be deemed allowed and subject to distribution as a Class 7 Claim, consistent with the terms of the Plan with all rights of PSI under the Plan and Confirmation Order preserved as a Class 7 Claimant.

 

112.                        Notwithstanding anything in the Plan, the Plan Supplement, or this Order to the contrary, pursuant to section 365 of the Bankruptcy Code, all executory contracts between the Debtors and PSI (the “PSI Contracts”) shall be deemed rejected upon the occurrence of a Resolution Event (as defined below), to the extent it is determined in connection with such Resolution Event that the PSI Contracts are capable of rejection under applicable law.

 

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Notwithstanding the foregoing, all rights, claims, and defenses the Parties may have against the other party are fully preserved, whether or not such rights, claims, or defenses arise under, are related to the rejection of, or are independent of the PSI Contracts, including without limitation, any rights, claims, or defenses asserted by, or that could have been asserted by, the Parties in the PSI Litigation.

 

113.                        Notwithstanding Article VIII.C of the Plan, or any other provision of the Plan or this Order, any Liens allegedly securing the PSI Claim or Triple F Claim, as applicable, shall be fully preserved until such time as their claims are resolved by a court of competent jurisdiction and/or through a resolution or settlement amongst and between all necessary parties thereto (each, a “Resolution Event”); provided, however, except as required in the PSI Litigation and/or Triple F Litigation, PSI and/or Triple F may not take any action to enforce any Secured Claims, Lien, or any other Claims against the Debtor or property of the Debtor and/or Reorganized Debtor until a Resolution Event has occurred.  Upon the occurrence of a Resolution Event, the Debtors shall, as soon as reasonably practicable, satisfy the PSI Claim and/or Triple F Claim, as applicable, in accordance with the terms of the Plan and this Order with all rights of Triple F and PSI under the Plan and confirmation Order preserved as a Class 3 Claimant and upon full satisfaction any such Liens securing the PSI Claim and/or Triple F Claim, as applicable, shall be deemed forever released and discharged in accordance with Article VIII.C of the Plan and this Order.

 

114.                        Mewbourne Oil Company. The Debtors and Mewbourne Oil Company (“MOC”) are parties to numerous executory contracts (collectively, the “MOC Agreements”).  The Debtors desire to assume and MOC agrees to the Debtors’ assumption of all of the MOC Agreements, subject to and conditioned upon the Debtors’ agreement to timely comply with all

 

54



 

of the terms and conditions of the MOC Agreements, including but not limited to being current on all payments due under the MOC Agreements,(4) and further subject to and conditioned upon MOC’s right to enforce all terms, conditions, rights, and remedies of the MOC Agreements.  Notwithstanding anything in the Plan, the Plan Supplement, or this Confirmation Order to the contrary, pursuant to section 365 of the Bankruptcy Code and subject to and conditioned upon the foregoing, this Confirmation Order approves the assumption of all of the MOC Agreements as of the Effective Date; provided, however, that to the extent any contract or agreement between the Debtors and MOC has expired, or will expire, by its own terms prior to the Effective Date, then each such expired contract or agreement will not be deemed assumed by the Debtors under Article V of the Plan.

 

115.                        Seitel Data, Ltd.  Notwithstanding anything in the Plan, any Plan Supplement or this Order to the contrary, the Debtors reject the Master License Agreement dated November 29, 2012 and all supplements, amendments, schedules and attachments (the “Seitel Agreement”) with Seitel Data, Ltd. and all affiliates.  The Debtors’ agree to comply with all confidentiality provisions, destruction of data and verification of destruction of data provisions required by the Seitel Agreement.

 

116.                        A2D Technologies (d/b/a TGS Geological Products and Services).  One or more of the Debtors and A2D Technologies (d/b/a TGS Geological Products and Services) (“TGS”) are parties to that certain LOG-LINE Plus!® Operating Agreement effective September 26, 2008 (the “TGS Operating Agreement”) and that certain Subscription Addendum dated August 25, 2015 (the “TGS Subscription Addendum,” and together with the TGS Operating

 


(4)              The Debtors are authorized under the Order Authorizing Payment of Mineral Payments and Working Interest Disbursements [Docket No. 64] to make such payments prior to the Effective Date in the event such payments become due in the ordinary course in advance of the Effective Date.

 

55



 

Agreement, the “TGS Agreements”).  The Debtors desire to assume and TGS agrees to the Debtors’ assumption of the TGS Agreements, subject to and conditioned upon the Debtors’ agreement to timely comply with all of the terms and conditions of the TGS Agreements, including but not limited to payment terms as well as any and all provisions and restrictions regarding use, transfer, assignment, change of control, and termination thereof.  Notwithstanding anything in the Plan, the Plan Supplement, or this Confirmation Order to the contrary, pursuant to section 365 of the Bankruptcy Code and subject to and conditioned upon the foregoing, this Confirmation Order approves the assumption of the TGS Agreements as of the Effective Date.

 

117.                        Seismic Exchange, Inc. Debtor Midstates Petroleum Company, LLC (“MPOLLC”) and Seismic Exchange, Inc. (“SEI”) have consensually resolved disputes related to the assumption of numerous executory contracts between MPOLLC and SEI.  This resolution is embodied in that certain letter agreement between MPOLLC and SEI, dated as of September 2, 2016 (the “Letter Agreement”).  Pursuant to section 365 of the Bankruptcy Code, (a) subject to and conditioned upon the Debtors’ agreement to timely comply with all of the terms and conditions of the Letter Agreement, this Confirmation Order approves the assumption of the Letter Agreement, as well as the Assumed License and supplements related to the Assumed Data (each as defined in the Letter Agreement) as of the Effective Date, and (b) notwithstanding anything in the Plan, the Plan Supplement, or this Confirmation Order to the contrary, this Confirmation Order also approves the rejection of the Rejected Licenses (as defined in the Letter Agreement) as of the Effective Date.

 

118.                        SemGas L.P.  MPOLLC and SemGas, LP (“SemGas”) have entered into a settlement, release, and discharge agreement, dated September 23, 2016 (the “Settlement Agreement”) resolving any and all claims between them, including but not limited to, claims

 

56



 

related to the Second Amended and Restated Gas Purchase, Gathering and Processing Agreement dated April 15, 2013 including all amendments thereto (the “GPA”).  Under the Settlement Agreement, (a) SemGas, as processor, agreed to make a full settlement and release of any claims contemplated by the proof of claim filed by SemGas on July 20, 2016 (the “SemGas Claim”), and to discharge all claims which are or might have been brought with respect to the SemGas Claim; (b) MPOLLC, as supplier, agreed to make a full settlement and release of any claim that MPOLLC had raised related to the settlement of ethane under the GPA (the “LLC Claim”), and to discharge all claims which are or might have been brought with respect to the LLC Claim; (c) MPOLLC and SemGas agreed to the full settlement and mutual release of any and all claims and Causes of Action between them existing or which were incurred or arose prior to the Effective Date ((a) through (c) collectively, the “Mutual Releases”); and (d) SemGas and MPOLLC agreed to provide for certain value deductions in favor of SemGas and to amend the GPA to provide for certain other modifications to the GPA.  For the avoidance of doubt, the Mutual Releases do not release any Claims or Causes of Action arising in the ordinary course of business under the Parties’ dealings pursuant to the GPA (as modified) after the Petition Date.  By entry of this Confirmation Order, the Settlement Agreement which includes the assumption of the GPA, as so amended, with the agreed cure amounts provided therein and the Mutual Releases is approved. To the extent there are any inconsistencies between the Settlement Agreement and this Confirmation Order, the terms of the Confirmation Order shall control.

 

119.                        Governmental Agencies.  Nothing in this Confirmation Order or the Plan discharges, releases, precludes, or enjoins:  (a) any liability to any Governmental Unit that is not a Claim; (b) any Claim of a Governmental Unit arising on or after the Effective Date; (c) any police or regulatory liability to a Governmental Unit on the part of any Entity as the owner,

 

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permittee, or operator of property after the Effective Date; or (d) any liability to a Governmental Unit on the part of any Person other than the Debtors or Reorganized Debtors.  Nor shall anything in this Confirmation Order or the Plan enjoin or otherwise bar a Governmental Unit from asserting or enforcing, outside this Court, any liability described in the preceding sentence.  Nor shall anything in this Confirmation Order or the Plan divest any tribunal of any jurisdiction to interpret or adjudicate any defense based on this paragraph 119 of this Confirmation Order.  Subject to the limitations provided in section 553 of the Bankruptcy Code, nothing in this Confirmation Order or the Plan shall affect any right to exercise setoff or recoupment of the United States of America (including any agencies or subagencies thereof) that may exist, if any.

 

120.                        Claims of the Texas Comptroller. With respect to the Claims of the Texas Comptroller of Public Accounts (the “Texas Comptroller”): (1) nothing provided in the Plan or this Order shall affect or impair any statutory or common law setoff rights of the Texas Comptroller, subject to the limitations provided in section 553 of the Bankruptcy Code; and (2) nothing provided in the Plan or this Confirmation Order shall affect the ability of the Texas Comptroller to pursue any non-Debtors to the extent allowed by non-bankruptcy law for any liabilities that may be related to any Texas state tax liabilities owed by the Debtors or the Debtors’ Estates.  Notwithstanding anything in the Plan or this Order to the contrary, Administrative Claims shall include Allowed Administrative Claims that arise in the ordinary course of the Debtors’ business, including claims held by the Texas Comptroller for taxes incurred by the Debtors following the Petition Date (in accordance with section 503(b)(1)(B)-(D) of the Bankruptcy Code), which shall be paid in accordance with section 1129(a)(9)(A) or, if not due on the Effective Date, in the ordinary course of business in accordance with applicable

 

58



 

law.  In the event the Texas Comptroller’s Claim is not an Allowed Administrative Claim on the Effective Date, but subsequently it or a portion thereof becomes an Allowed Claim, to the extent the Claim is Allowed by order of the Court or agreed to by the parties, it shall be paid within 120 days of becoming an Allowed Claim together with interest at the statutory rate provided for in Texas Tax Code § 111.060 accruing from the Effective Date until paid in the full amount Allowed or agreed to by the parties in accordance with section 960 of title 28 of the United States Code and/or sections 511 and 1129 of the Bankruptcy Code for it to remain unimpaired.  The Texas Comptroller is not required to file a motion or application for payment of administrative expense claims pursuant to section 503(b)(1)(D) of the Bankruptcy Code.  The Texas Comptroller’s Allowed Priority Tax Claims shall be paid in accordance with section 1129(a)(9)(C) of the Bankruptcy Code. The Reorganized Debtors will fully comply with Texas state tax laws by timely filing all required postpetition tax returns when due or timely filing a request for extension, and will pay all debts owed to the Texas Comptroller, including any tax, interest, and penalties accrued through the date of payment in the ordinary course.

 

121.                        State and Local Taxing Authorities.  Notwithstanding Article III.B of the Plan, the tax liens, including statutory liens and privileges if any, of Harris County and the Texas Taxing Entities (together, collectively, the “Taxing Authorities”), to the extent that the Taxing Authorities are entitled to such liens, shall be expressly retained in accordance with applicable state law with respect to taxes payable under applicable state law to the Taxing Authorities in the ordinary course of business.  Furthermore, the Taxing Authorities shall not be required to submit a request for payment of an Administrative Claim with respect to the payment of taxes pursuant to Section 503(b)(1)(D) of the Bankruptcy Code.

 

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122.                        Compliance with Tax Requirements.  Each holder of an Allowed Claim or Interest that is to receive a distribution under the Plan shall have the sole and exclusive responsibility for the satisfaction and payment of any tax obligations imposed by any Governmental Unit, including income, withholding, and other tax obligations, on account of such distribution.  Any party making any distribution under the Plan has the right, but not the obligation, to not make a distribution until such holder has made arrangements reasonably satisfactory to such issuing or distributing party for payment of any such tax obligations.  The Debtors or Reorganized Debtors, as applicable, are authorized to take all actions necessary or appropriate to comply with applicable withholding and reporting requirements, including liquidating a portion of the distribution to be made under the Plan to generate sufficient funds to pay applicable withholding taxes, withholding distributions pending receipt of information necessary to facilitate such distributions, or establishing any other mechanisms they believe are reasonable and appropriate.  Except as otherwise provided in the Plan, the aggregate consideration paid to Holders with respect to their Allowed Claims shall be treated pursuant to the Plan as allocated first to the principal amount of such Allowed Claims (to the extent thereof) and, thereafter, to the interest, if any, accrued through the Effective Date.

 

123.                        Exemption from Transfer Taxes.  Pursuant to section 1146(a) of the Bankruptcy Code, any transfers (whether from a Debtor to a Reorganized Debtor or to any other Person) of property under the Plan or pursuant to:  (a) the issuance, distribution, transfer, or exchange of any debt, equity security, or other interest in the Debtors or the Reorganized Debtors; (b) the Restructuring Transactions; (c) the creation, modification, consolidation, termination, refinancing, and/or recording of any mortgage, deed of trust, or other security interest, or the securing of additional indebtedness by such or other means; (d) the making, assignment, or

 

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recording of any lease or sublease; (e) the grant of collateral as security for any or all of the New Credit Facility; or (f) the making, delivery, or recording of any deed or other instrument of transfer under, in furtherance of, or in connection with, the Plan, including any deeds, bills of sale, assignments, or other instrument of transfer executed in connection with any transaction arising out of, contemplated by, or in any way related to the Plan, shall not be subject to any document recording tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, sale or use tax, real estate transfer tax, mortgage recording tax, Uniform Commercial Code filing or recording fee, regulatory filing or recording fee, or other similar tax or governmental assessment to the fullest extent contemplated by section 1146(a) of the Bankruptcy Code, and upon entry of the Confirmation Order, the appropriate state or local governmental officials or agents shall forego the collection of any such tax or governmental assessment and accept for filing and recordation of any of the foregoing instruments or other documents without the payment of any such tax, recordation fee, or governmental assessment.

 

124.                        Documents, Mortgages, and Instruments.  Each federal, state, commonwealth, local, foreign, or other governmental agency is authorized to accept any and all documents, mortgages, and instruments necessary or appropriate to effectuate, implement, or consummate the Plan, including the Restructuring Transactions, and this Confirmation Order.

 

125.                        Continued Effect of Stays and Injunctions.  Unless otherwise provided in the Plan or this Confirmation Order, all injunctions or stays in effect in the Chapter 11 Cases under sections 105 or 362 of the Bankruptcy Code or any order of the Court that is in existence on the Confirmation Date shall remain in full force and effect until the Effective Date.  All injunctions or stays contained in the Plan or this Confirmation Order shall remain in full force and effect in accordance with their terms.

 

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126.                        Administrative Claims Bar Date. Unless otherwise provided by the Plan, this Confirmation Order, any other applicable order of the Bankruptcy Court, or agreed to by the Holder of an Allowed Administrative Claim and the Debtors, all requests for Payment of Administrative Claims must be Filed and served on the Debtors no later than the Administrative Claims Bar Date.  Holders of Administrative Claims that are required to File and serve a request for payment of such Administrative Claims that do not File and serve such a request by the Administrative Claims Bar Date shall be forever barred, estopped, and enjoined from asserting such Administrative Claims against the Debtors, or their property and such Administrative Claims shall be deemed discharged as of the Effective Date.

 

127.                        Debtors’ Actions Post-Confirmation Through the Effective Date. During the period from entry of this Confirmation Order through and until the Effective Date, each of the Debtors shall continue to operate their business as a debtor in possession, subject to the oversight of the Court as provided under the Bankruptcy Code, the Bankruptcy Rules, and this Confirmation Order and any order of the Court that is in full force and effect.

 

128.                        Nonseverability of Plan Provisions Upon Confirmation.  Each provision of the Plan is:  (a) valid and enforceable in accordance with its terms; (b) integral to the Plan and may not be deleted or modified without the Debtors’ consent (and subject to such other consents and consultation rights set forth in the Plan) in accordance with the terms set forth in the Plan; and (c) nonseverable and mutually dependent.

 

129.                        Post-Confirmation Modifications.  Without need for further order or authorization of the Court, the Debtors or the Reorganized Debtors, as applicable, are authorized and empowered to make any and all modifications to any and all documents that are necessary to effectuate the Plan that do not materially modify the terms of such documents and are consistent

 

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with the Plan (subject to any applicable consents or consultation rights set forth therein) and the Plan Support Agreement.  Subject to certain restrictions and requirements set forth in section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019 and those restrictions on modifications set forth in the Plan, the Debtors and the Reorganized Debtors expressly reserve their respective rights to revoke or withdraw, or to alter, amend, or modify materially the Plan with respect to such Debtor, one or more times after Confirmation, and, to the extent necessary, may initiate proceedings in the Court to so alter, amend, or modify the Plan, or remedy any defect or omission, or reconcile any inconsistencies in the Plan, the Disclosure Statement, or this Confirmation Order, in such manner as may be necessary to carry out the purposes and intent of the Plan.  Any such modification or supplement shall be considered a modification of the Plan and shall be made in accordance with Article X.A of the Plan.

 

130.                        Applicable Non-bankruptcy Law.  The provisions of this Confirmation Order, the Plan and related documents, or any amendments or modifications thereto, shall apply and be enforceable notwithstanding any otherwise applicable non-bankruptcy law.

 

131.                        Governmental Approvals Not Required.  This Confirmation Order shall constitute all approvals and consents required, if any, by the laws, rules, or regulations of any state, federal, or other governmental authority with respect to the implementation or consummation of the Plan, any certifications, documents, instruments or agreements, and any amendments or modifications thereto, and any other acts referred to in, or contemplated by, the Plan.

 

132.                        Exemption from Registration Requirements.  Pursuant to section 1145 of the Bankruptcy Code, the offering, issuance, and distribution of the New Common Stock and New Warrants as contemplated by the Plan, shall be exempt from the registration requirements of

 

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section 5 of the Securities Act and any other available exemption from registration under the Securities Act, as applicable. In addition, under section 1145 of the Bankruptcy Code, any securities contemplated by the Plan, including the New Common Stock and New Warrants, shall be freely transferable under the Securities Act by the recipients thereof, subject to:  (a) the provisions of section 1145(b)(1) of the Bankruptcy Code relating to the definition of an underwriter in section 2(a)(11) of the Securities Act and compliance with any applicable state or foreign securities laws, if any, and the rules and regulations of the United States Securities and Exchange Commission, if any, applicable at the time of any future transfer of such Securities or instruments; (b) applicable restrictions on any recipient that constitutes and “affiliate” within the meaning of Rule 144(a)(1) of the Securities Act; and (c) any other applicable regulatory approval.

 

133.                        Notices of Confirmation and Effective Date.  The Reorganized Debtors shall serve notice of entry of this Confirmation Order, substantially in the form attached hereto as Exhibit B (the “Confirmation Order Notice”) in accordance with Bankruptcy Rules 2002 and 3020(c) on all holders of Claims and Interests within ten Business Days after the date of entry of this Confirmation Order.  As soon as reasonably practicable after the Effective Date, the Reorganized Debtors shall file notice of the Effective Date and shall serve a copy of the same on the above-referenced parties.  The notice of the Effective Date may be included in the Confirmation Order Notice, and, for the avoidance of doubt, the Confirmation Order Notice may be modified to exclude the notice of Effective Date.  Notwithstanding the above, no notice of Confirmation or Consummation or service of any kind shall be required to be mailed or made upon any Entity to whom the Debtors mailed notice of the Confirmation Hearing, but received such notice returned marked “undeliverable as addressed,” “moved, left no forwarding address”

 

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or “forwarding order expired,” or similar reason, unless the Debtors have been informed in writing by such Entity, or are otherwise aware, of that Entity’s new address.  The above-referenced notices are adequate under the particular circumstances of the Chapter 11 Cases and no other or further notice is necessary.

 

134.                        Failure of Consummation.  If the Effective Date does not occur, then: (a) the Plan will be null and void in all respects; (b) any settlement or compromise embodied in the Plan, assumption of Executory Contracts or Unexpired Leases effected by the Plan, and any document or agreement executed pursuant to the Plan will be null and void in all respects; and (c) nothing contained in the Plan shall (i) constitute a waiver or release of any Claims, Interests, or Causes of Action, (ii) prejudice in any manner the rights of any Debtor or any other Entity, or (iii) constitute an admission, acknowledgement, offer, or undertaking of any sort by any Debtor or any other Entity.

 

135.                        Termination of the Plan Support Agreement.  On the Effective Date, the Plan Support Agreement will terminate in accordance with Section 6(a) thereof.

 

136.                        Substantial Consummation.  On the Effective Date, the Plan shall be deemed to be substantially consummated under sections 1101 and 1127 of the Bankruptcy Code.

 

137.                        Waiver of Stay.  For good cause shown, the stay of this Confirmation Order provided by any Bankruptcy Rule is waived, and this Confirmation Order shall be effective and enforceable immediately upon its entry by the Court.

 

138.                        References to and Omissions of Plan Provisions.  References to articles, sections, and provisions of the Plan are inserted for convenience of reference only and are not intended to be a part of or to affect the interpretation of the Plan.  The failure to specifically include or to refer to any particular article, section, or provision of the Plan in this Confirmation

 

65



 

Order shall not diminish or impair the effectiveness of such article, section, or provision, it being the intent of the Court that the Plan be confirmed in its entirety, except as expressly modified herein, and incorporated herein by this reference.

 

139.                        Headings.  Headings utilized herein are for convenience and reference only, and do not constitute a part of the Plan or this Confirmation Order for any other purpose.

 

140.                        Effect of Conflict.  This Confirmation Order supersedes any Court order issued prior to the Confirmation Date that may be inconsistent with this Confirmation Order.  If there is any inconsistency between the terms of the Plan and the terms of this Confirmation Order, the terms of this Confirmation Order govern and control.

 

141.                        Termination of Challenge Period. The stipulations, admissions, findings, and release contained in the Cash Collateral Order shall be binding on the Debtors’ estates and all parties in interest.

 

142.                        Final Order.  This Confirmation Order is a Final Order and the period in which an appeal must be filed shall commence upon the entry hereof.

 

143.                        Retention of Jurisdiction.  The Court may properly, and upon the Effective Date shall, to the full extent set forth in the Plan, retain jurisdiction over all matters arising out of, and related to, the Chapter 11 Cases, including the matters set forth in Article XI of the Plan and section 1142 of the Bankruptcy Code.  Notwithstanding anything to the contrary in this Confirmation Order or the Plan, the Court’s retention of jurisdiction shall not govern the enforcement of the New Credit Facility or the documents executed in connection therewith or any liens, rights, or remedies related thereto except to the extent that this Confirmation Order has been vacated or reversed, but instead, such enforcement shall be governed as set forth in the New Credit Facility Documents.

 

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Houston, Texas

 

Dated: September 28, 2016

 

 

/s/ David R. Jones

 

THE HONORABLE DAVID R. JONES

UNITED STATES BANKRUPTCY JUDGE

 

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Exhibit A

 

Plan of Reorganization

 



 

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

 

 

 

)

 

 

In re:

 

)

 

Chapter 11

 

 

)

 

 

MIDSTATES PETROLEUM COMPANY, INC., et al.,(1)

 

)

 

Case No. 16-32237 (DRJ)

 

 

)

 

 

Debtors.

 

)

 

(Jointly Administered)

 

 

)

 

 

 

FIRST AMENDED JOINT CHAPTER 11 PLAN OF REORGANIZATION OF
MIDSTATES PETROLEUM COMPANY, INC. AND ITS DEBTOR AFFILIATE

 

Edward O. Sassower, P.C. (admitted pro hac vice)

 

Patricia B. Tomasco (Texas Bar No. 01797600)

Joshua A. Sussberg, P.C. (admitted pro hac vice)

 

Matthew D. Cavenaugh (Texas Bar No. 24062656)

KIRKLAND & ELLIS LLP

 

Jennifer F. Wertz (Texas Bar No. 24072822)

KIRKLAND & ELLIS INTERNATIONAL LLP

 

JACKSON WALKER L.L.P.

601 Lexington Avenue

 

1401 McKinney Street, Suite 1900

New York, New York 10022

 

Houston, Texas 77010

Telephone:                                   (212) 446-4800

 

Telephone:                                   (713) 752-4200

Facsimile:                                         (212) 446-4900

 

Facsimile:                                         (713) 752-4221

 

 

 

-and-

 

 

 

 

 

James H.M. Sprayregen, P.C. (admitted pro hac vice)

 

 

William A. Guerrieri (admitted pro hac vice)

 

 

Jason Gott (admitted pro hac vice)

 

 

KIRKLAND & ELLIS LLP

 

 

KIRKLAND & ELLIS INTERNATIONAL LLP

 

 

300 North LaSalle

 

 

Chicago, Illinois 60654

 

 

Telephone:                                   (312) 862-2000

 

 

Facsimile:                                         (312) 862-2200

 

 

 

 

 

Co-Counsel to the Debtors and Debtors in Possession

 

 

 


(1)         The debtors in these chapter 11 cases, along with the last four digits of each debtor’s federal tax identification number, include:  Midstates Petroleum Company, Inc. (1816); and Midstates Petroleum Company LLC (2434).  The debtors’ service address is:  321 South Boston Avenue, Tulsa, Oklahoma 74103.

 



 

TABLE OF CONTENTS

 

ARTICLE I. DEFINED TERMS, RULES OF INTERPRETATION, COMPUTATION OF TIME, AND GOVERNING LAW

 

1

A.

Defined Terms

 

1

B.

Rules of Interpretation

 

17

C.

Computation of Time

 

18

D.

Governing Law

 

18

E.

Reference to Monetary Figures

 

18

F.

Reference to the Debtors or the Reorganized Debtors

 

18

G.

Controlling Document

 

18

 

 

 

 

ARTICLE II. ADMINISTRATIVE CLAIMS AND PRIORITY CLAIMS

 

18

A.

Administrative Claims

 

18

B.

Administrative Claims Bar Date

 

19

C.

Professional Compensation

 

19

D.

Priority Tax Claims

 

20

E.

Statutory Fees

 

20

 

 

 

 

ARTICLE III. CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS

 

20

A.

Summary of Classification

 

20

B.

Treatment of Claims and Interests

 

21

C.

Special Provision Governing Unimpaired Claims

 

25

D.

Confirmation Pursuant to Sections 1129(a)(10) and 1129(b) of the Bankruptcy Code

 

25

E.

Elimination of Vacant Classes

 

25

F.

Voting Classes; Presumed Acceptance by Non-Voting Classes

 

26

G.

Presumed Acceptance and Rejection of the Plan

 

26

H.

Subordinated Claims

 

26

 

 

 

 

ARTICLE IV. MEANS FOR IMPLEMENTATION OF THE PLAN

 

26

A.

The Intercreditor Settlement

 

26

B.

Restructuring Transactions

 

27

C.

Sources of Consideration for Plan Distributions

 

27

D.

The New Credit Facility and Approval of the New Credit Facility

 

27

E.

The New Common Stock and New Warrants

 

28

F.

Exemption from Registration Requirements

 

28

G.

Corporate Existence

 

30

H.

Vesting of Assets in the Reorganized Debtors

 

30

I.

Cancellation of Existing Securities

 

30

J.

Surrender of Securities Instruments

 

31

K.

Corporate Action

 

31

L.

New Organizational Documents

 

32

M.

Directors and Officers of the Reorganized Debtors

 

32

N.

Effectuating Documents; Further Transactions

 

32

O.

Exemption from Certain Taxes and Fees

 

32

P.

Preservation of Causes of Action

 

33

Q.

Director and Officer Liability Insurance

 

33

R.

Management Incentive Plan and Management Employment Agreements

 

33

S.

Employee and Retiree Benefits

 

34

T.

Payment of Fees and Expenses of the First Lien Administrative Agent

 

34

U.

Payment of Fees and Expenses of the Second Lien Notes Trustee

 

34

V.

Payment of Fees and Expenses of the Third Lien Notes Trustee

 

34

 

i



 

W.

Payment of Fees and Expenses of the Consenting Second Lien Noteholders and Consenting Cross-Over Noteholders

 

35

X.

Payment of Fees and Expenses of the Unsecured Notes Trustees

 

35

 

 

 

 

ARTICLE V. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

 

35

A.

Assumption and Rejection of Executory Contracts and Unexpired Leases

 

35

B.

Claims Based on Rejection of Executory Contracts or Unexpired Leases

 

36

C.

Cure of Defaults for Assumed Executory Contracts and Unexpired Leases

 

36

D.

Indemnification Obligations

 

37

E.

Insurance Policies

 

37

F.

Modifications, Amendments, Supplements, Restatements, or Other Agreements

 

37

G.

Reservation of Rights

 

37

H.

Nonoccurrence of Effective Date

 

37

I.

Contracts and Leases Entered into After the Effective Date

 

38

J.

Federal Oil and Gas Leases

 

38

 

 

 

 

ARTICLE VI. PROVISIONS GOVERNING DISTRIBUTIONS

 

38

A.

Timing and Calculation of Amounts to Be Distributed

 

38

B.

Delivery of Distributions and Undeliverable or Unclaimed Distributions

 

39

C.

Compliance with Tax Requirements

 

40

D.

Allocations

 

41

E.

No Postpetition Interest on Claims

 

41

F.

Setoffs and Recoupment

 

41

G.

Claims Paid or Payable by Third Parties

 

41

 

 

 

 

ARTICLE VII. PROCEDURES FOR RESOLVING CONTINGENT, UNLIQUIDATED, AND DISPUTED CLAIMS

 

42

A.

Allowance of Claims

 

42

B.

Claims and Interests Administration Responsibilities

 

42

C.

Estimation of Claims

 

42

D.

Adjustment to Claims Without Objection

 

43

E.

Time to File Objections to Claims

 

43

F.

Disallowance of Claims

 

43

G.

Amendments to Claims

 

43

H.

No Distributions Pending Allowance

 

43

I.

Distributions After Allowance

 

43

 

 

 

 

ARTICLE VIII. SETTLEMENT, RELEASE, INJUNCTION, AND RELATED PROVISIONS

 

44

A.

Discharge of Claims and Termination of Interests; Compromise and Settlement of Claims, Interests, and Controversies

 

44

B.

Term of Injunctions or Stays

 

44

C.

Release of Liens

 

44

D.

Releases by the Debtors

 

45

E.

Releases by Holders of Claims and Interests

 

45

F.

Exculpation

 

46

G.

Injunction

 

47

H.

Protection Against Discriminatory Treatment

 

47

I.

Recoupment

 

48

J.

Subordination Rights

 

48

 

 

 

 

ARTICLE IX. CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THE PLAN

 

48

A.

Conditions Precedent to the Effective Date

 

48

B.

Waiver of Conditions

 

49

C.

Substantial Consummation

 

49

D.

Effect of Non-Occurrence of Conditions to the Effective Date

 

49

 

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ARTICLE X. MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN

 

49

A.

Modification of Plan

 

49

B.

Effect of Confirmation on Modifications

 

49

C.

Revocation or Withdrawal of the Plan

 

49

 

 

 

 

ARTICLE XI. RETENTION OF JURISDICTION

 

50

 

 

 

 

ARTICLE XII. MISCELLANEOUS PROVISIONS

 

51

A.

Immediate Binding Effect

 

51

B.

Additional Documents

 

52

C.

Payment of Statutory Fees

 

52

D.

Dissolution of the Committee

 

52

E.

Reservation of Rights

 

52

F.

Successors and Assigns

 

52

G.

Service of Documents

 

52

H.

Term of Injunctions or Stays

 

53

I.

Entire Agreement

 

53

J.

Successors and Assigns

 

54

K.

Exhibits

 

54

L.

Nonseverability of Plan Provisions upon Confirmation

 

54

M.

Votes Solicited in Good Faith

 

54

N.

Further Assurances

 

54

O.

Closing of Chapter 11 Cases

 

54

 

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INTRODUCTION

 

Midstates Petroleum Company, Inc., and its wholly-owned subsidiary, Midstates Petroleum Company LLC (together, “Midstates”), as debtors and debtors in possession (each, a “Debtor” and, collectively, the “Debtors”) propose this joint plan of reorganization (together with the documents comprising the Plan Supplement, the “Plan”) for the resolution of outstanding Claims against, and Interests in, the Debtors.  Capitalized terms used and not otherwise defined shall have the meanings ascribed to such terms in Article I.A hereof.  Holders of Claims and Interests may refer to the Disclosure Statement for a discussion of the Debtors’ history, businesses, assets, results of operations, historical financial information, and projections of future operations, as well as a summary and description of the Plan.  The Debtors are the proponents of the Plan within the meaning of section 1129 of the Bankruptcy Code.

 

ALL HOLDERS OF CLAIMS AND INTERESTS, TO THE EXTENT APPLICABLE, ARE ENCOURAGED TO READ THE PLAN AND THE DISCLOSURE STATEMENT IN THEIR ENTIRETY BEFORE VOTING TO ACCEPT OR REJECT THE PLAN.

 

ARTICLE I.
DEFINED TERMS, RULES OF INTERPRETATION,
COMPUTATION OF TIME, AND GOVERNING LAW

 

A.                                    Defined Terms

 

As used in this Plan, capitalized terms have the meanings set forth below.

 

1.                                      Accrued Professional Compensation” means, at any given time, all accrued, contingent, and/or unpaid fees and expenses (including success fees) for legal, financial advisory, accounting, and other services and reimbursement of expenses that are awardable and allowable under sections 328, 330, or 331 of the Bankruptcy Code or otherwise rendered allowable before the Effective Date by any retained estate Professional in the Chapter 11 Cases, (a) all to the extent that any such fees and expenses have not been previously paid (regardless of whether a fee application has been Filed for any such amount) and (b) after applying any retainer that has been provided to such Professional.  To the extent that the Bankruptcy Court or any higher court of competent jurisdiction denies or reduces by a Final Order any amount of a Professional’s fees or expenses, then those reduced or denied amounts shall no longer constitute Accrued Professional Compensation.  For the avoidance of doubt, Accrued Professional Compensation includes unbilled fees and expenses incurred on account of services provided by Professionals that have not yet been submitted for payment, except to the extent that such fees and expenses are either denied or reduced by a Final Order by the Bankruptcy Court or any higher court of competent jurisdiction.

 

2.                                      Administrative Claim” means a Claim for costs and expenses of administration of the Debtors’ Estates pursuant to sections 503(b), 507(a)(2), 507(b), or 1114(e)(2) of the Bankruptcy Code other than a Professional Fee Claim, including:  (a) the actual and necessary costs and expenses incurred after the Petition Date and through the Effective Date of preserving the Estates and operating the businesses of the Debtors; and (b)  all Allowed requests for compensation or expense reimbursement for making a substantial contribution in the Chapter 11 Cases pursuant to sections 503(b)(3), (4), and (5) of the Bankruptcy Code.

 

3.                                      Administrative Claims Bar Date” means the first Business Day that is 30 days following the Effective Date, except as specifically set forth in the Plan or a Final Order.

 

4.                                      Affiliate” shall have the meaning set forth in section 101(2) of the Bankruptcy Code.

 

5.                                      Allowed” means with respect to any Claim, except as otherwise provided herein:  (a) a Claim that is evidenced by a Proof of Claim Filed by the Claims Bar Date (or for which Claim under the Plan, the Bankruptcy Code, or a Final Order of the Bankruptcy Court, a Proof of Claim is not or shall not be required to be Filed); (b) a Claim that is listed in the Schedules as not contingent, not unliquidated, and not disputed, and for which no Proof of Claim, as applicable, has been timely Filed; or (c) a Claim Allowed pursuant to the Plan or a Final Order of the Bankruptcy Court; provided that with respect to a Claim described in clauses (a) and (b) above, such Claim shall be

 

1



 

considered Allowed only if and to the extent that with respect to such Claim, no objection to the allowance thereof has been interposed within the applicable period of time fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules, or the Bankruptcy Court, or such an objection is so interposed and the Claim, as applicable, shall have been Allowed by a Final Order.  Any Claim that has been or is hereafter listed in the Schedules as contingent, unliquidated, or disputed, and for which no Proof of Claim is or has been timely Filed, is not considered Allowed and shall be expunged without further action by the Debtors and without further notice to any party or action, approval, or order of the Bankruptcy Court.  Notwithstanding anything to the contrary herein, no Claim of any Entity subject to section 502(d) of the Bankruptcy Code shall be deemed Allowed unless and until such Entity pays in full the amount that it owes such Debtor or Reorganized Debtor, as applicable.  For the avoidance of doubt, a Proof of Claim Filed after the Claims Bar Date shall not be Allowed for any purposes whatsoever absent entry of a Final Order Allowing such late-filed Claim.  “Allow” and “Allowing” shall have correlative meanings.

 

6.                                      Ballot” means the ballots accompanying the Disclosure Statement upon which certain Holders of Impaired Claims entitled to vote shall, among other things, indicate their acceptance or rejection of the Plan in accordance with the Plan and the procedures governing the solicitation process.

 

7.                                      Bankruptcy Code” means title 11 of the United States Code, as amended and in effect during the pendency of the Chapter 11 Cases.

 

8.                                      Bankruptcy Court” means the United States Bankruptcy Court for the Southern District of Texas having jurisdiction over the Chapter 11 Cases, and, to the extent of the withdrawal of any reference under 28 U.S.C. § 157 and/or the General Order of the District Court pursuant to section 151 of title 28 of the United States Code, the United States District Court for the Southern District of Texas.

 

9.                                      Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure, as applicable to the Chapter 11 Cases, promulgated under section 2075 of the Judicial Code, and the general, local, and chambers rules of the Bankruptcy Court.

 

10.                               Business Day” means any day, other than a Saturday, Sunday, or “legal holiday” (as defined in Bankruptcy Rule 9006(a)).

 

11.                               Cash” means the legal tender of the United States of America or the equivalent thereof.

 

12.                               Cash Collateral Order” means the interim order or the Final Order, as applicable, entered by the Bankruptcy Court on May 2, 2016, and June 30, 2016, respectively, in form and substance reasonably acceptable to the Debtors and the Requisite Creditors, authorizing the Debtors to use the Prepetition Collateral (including cash collateral) and granting adequate protection to the Prepetition Secured Parties (as applicable), including the provision of adequate protection liens on the Unencumbered Assets in favor of the Prepetition Secured Parties (as applicable).

 

13.                               Causes of Action” means any action, claim, cause of action, controversy, demand, right, action, Lien, indemnity, guaranty, suit, obligation, liability, damage, judgment, account, defense, offset, power, privilege, license, and franchise of any kind or character whatsoever, whether known, unknown, contingent or non-contingent, matured or unmatured, suspected or unsuspected, liquidated or unliquidated, disputed or undisputed, secured or unsecured, assertable directly or derivatively, whether arising before, on, or after the Petition Date, in contract or in tort, in law, or in equity or pursuant to any other theory of law.  For the avoidance of doubt, “Cause of Action” includes:  (a) any right of setoff, counterclaim, or recoupment and any claim for breach of contract or for breach of duties imposed by law or in equity; (b) the right to object to Claims or Interests; (c) any Claim pursuant to section 362 or chapter 5 of the Bankruptcy Code; (d) any claim or defense including fraud, mistake, duress, and usury, and any other defenses set forth in section 558 of the Bankruptcy Code; and (e) any state or foreign law fraudulent transfer or similar claim.

 

14.                               Certificate” means any instruments evidencing an existing security of the Debtors that is not being fully Reinstated.

 

2



 

15.                               Challenge” means (a) the Filing of any objection, limited objection, reservation of rights, other responsive pleading, or any document or (b) the raising of any argument in any hearing before the Bankruptcy Court in each case, to the extent such document or argument (y) raises a position in any way against approval of the Intercreditor Settlement, the Second/Third Lien Plan Settlement, the Unencumbered Value Settlement, and/or Confirmation of the Plan or seeks standing to assert Causes of Action against the Prepetition Secured Parties, and (z) is filed, supported, or encouraged (directly or indirectly) by the Committee, the Unsecured Notes Trustees, or any ad hoc group of Unsecured Noteholders; provided that, for the avoidance of doubt, any objections filed to the Disclosure Statement, arguments made at the hearing on the Disclosure Statement, the filing of a Continuance Notice (as such term is defined in the Disclosure Statement Order), or any statement of positions in the Disclosure Statement by the Committee (including in a letter provided in connection with solicitation of the Plan) shall not constitute a Challenge.

 

16.                               Chapter 11 Cases” means (a) when used with reference to a particular Debtor, the case pending for that Debtor under chapter 11 of the Bankruptcy Code in the Bankruptcy Court and (b) when used with reference to all of the Debtors, the procedurally consolidated and jointly administered chapter 11 cases pending for the Debtors in the Bankruptcy Court.

 

17.                               Claim” shall have the meaning set forth in section 101(5) of the Bankruptcy Code.

 

18.                               Claims Bar Date” means the date or dates to be established by the Bankruptcy Court by which Proofs of Claim must be Filed.

 

19.                               Claims Bar Date Order” means that certain order entered by the Bankruptcy Court establishing the Claims Bar Date.

 

20.                               Claims Objection Deadline” means the deadline for objecting to a Claim, which shall be on the date that is the later of (a) ninety (90) days after the Effective Date and (b) such other period of limitation as may be specifically fixed by the Debtors or the Reorganized Debtors, as applicable, or by an order of the Bankruptcy Court for objecting to such Claims.

 

21.                               Claims Register” means the official register of Claims maintained by the Notice and Claims Agent.

 

22.                               Class” means a category of Holders of Claims or Interests as set forth in Article III hereof pursuant to section 1122(a) of the Bankruptcy Code.

 

23.                               Committee” means the official committee of unsecured creditors appointed in the Chapter 11 Cases pursuant to section 1102(a) of the Bankruptcy Code.

 

24.                               Confirmation” means the entry of the Confirmation Order on the docket of the Chapter 11 Cases.

 

25.                               Confirmation Date” means the date upon which the Bankruptcy Court enters the Confirmation Order on the docket of the Chapter 11 Cases, within the meaning of Bankruptcy Rules 5003 and 9021.

 

26.                               Confirmation Hearing” means the hearing held by the Bankruptcy Court to consider Confirmation of the Plan pursuant to section 1129 of the Bankruptcy Code.

 

27.                               Confirmation Order” means a Final Order of the Bankruptcy Court confirming the Plan pursuant to section 1129 of the Bankruptcy Code.

 

28.                               Confirmation Settlement” means the settlement implemented through the Plan and announced on the record at the Confirmation Hearing resolving all claims, objections, and other disputes raised by the Committee that is reflected in, among other things, the revised treatment of Class 7 Claims.

 

3



 

29.                               Consenting Cross-Over Ad Hoc Committee” means the ad hoc committee of Consenting Cross-Over Noteholders that is represented by, inter alia, Milbank, Tweed, Hadley & McCloy LLP and Centerview Partners LLC.

 

30.                               Consenting Cross-Over Noteholders” means the beneficial Holders of Third Lien Notes Claims and Second Lien Notes Claims that are party to the Plan Support Agreement (together with their respective successors and permitted assigns) and members of the Consenting Cross-Over Ad Hoc Committee.

 

31.                               Consenting First Lien Lenders” means the beneficial Holders of First Lien Claims that are party to the Plan Support Agreement (together with their respective successors and permitted assigns).

 

32.                               Consenting Second Lien Ad Hoc Committee” means the ad hoc committee of Consenting Second Lien Noteholders that is represented by, inter alia, Davis Polk & Wardwell LLP and Houlihan Lokey Capital, Inc.

 

33.                               Consenting Second Lien Noteholders” means the beneficial Holders of Second Lien Notes Claims that are party to the Plan Support Agreement (together with their respective successors and permitted assigns) and members of the Consenting Second Lien Ad Hoc Committee.

 

34.                               Consummation” means the occurrence of the Effective Date.

 

35.                               Cure Claim” means a monetary Claim based upon the Debtors’ defaults under any Executory Contract or Unexpired Lease at the time such contract or lease is assumed by the Debtors pursuant to section 365 of the Bankruptcy Code.

 

36.                               Cure Notice” means a notice of a proposed amount of a Cure Claim in connection with an Executory Contract or Unexpired Lease to be assumed under the Plan pursuant to section 365 of the Bankruptcy Code, which notice shall include (a) procedures for objecting to proposed assumptions of Executory Contracts and Unexpired Leases, (b) Cure Claims to be paid in connection therewith and (c) procedures for resolution by the Bankruptcy Court of any related disputes.

 

37.                               D&O Liability Insurance Policies” means all insurance policies (including any “tail policy”) of any of the Debtors for current or former directors’, managers’, and officers’ liability.

 

38.                               Debtors” means Midstates Petroleum Company, Inc. and Midstates Petroleum Company LLC, the debtors and debtors in possession in the Chapter 11 Cases.

 

39.                               Deficiency Claims” means the First Lien Deficiency Claims (if any) and the Secured Notes Deficiency Claims.

 

40.                               Definitive Documents” means (a) the Plan, (b) the Plan Supplement, (c) the Disclosure Statement, (d) the motion seeking approval of the Disclosure Statement and the Disclosure Statement Order, (e) the Confirmation Order, (f) Cash Collateral Order, (g) the New Credit Facility Documents, and (h) the New Organizational Documents.

 

41.                               Definitive Document Plan Support Agreement Requirements” means that the Definitive Documents shall (a) contain terms and conditions consistent in all material respects with the Plan Support Agreement and the exhibits thereto, and (b) shall otherwise be reasonably satisfactory in all respects to the Debtors, the Requisite First Lien Lenders, the Requisite Second Lien Noteholders, and the Requisite Cross-Over Noteholders (solely with respect to any provision directly impacting the Second/Third Lien Plan Settlement, including with respect to any modifications, amendments, or supplements to such Definitive Documents at any time during the Plan Support Period (as defined in the Plan Support Agreement)); provided, however, that solely with respect to the Cash Collateral Order and New Credit Facility Documents, only the Requisite First Lien Lenders and Requisite Second Lien Noteholders shall have such consent rights, and the Cash Collateral Order and the New Credit Facility Loan Agreements, respectively, must be acceptable in all respects to the Requisite First Lien Lenders; provided further, however, that solely with respect to the New Organizational Documents, only the Requisite Second Lien

 

4



 

Noteholders shall have such consent rights; provided further, however, that solely for purposes of this Plan and determining whether the conditions to effectiveness in Article IX have been satisfied, a Definitive Document shall be deemed to satisfy the Definitive Documents Plan Support Agreement Requirements unless the Requisite First Lien Lenders, Requisite Second Lien Noteholders, or Requisite Cross-Over Noteholders, as applicable, provide written notice to the Debtors’ counsel that the Definitive Document does not satisfy the Definitive Plan Support Agreement Requirements within ten (10) Business Days after the filing or entry, as applicable, of such Definitive Document.  Notwithstanding anything herein to the contrary, the Consenting Cross-Over Ad Hoc Committee shall have the right to receive all Definitive Documents contemporaneously with the Company, the First Lien Agent, and the Consenting Second Lien Ad Hoc Committee, as applicable.

 

42.                               Diminution in Value Claims” any claims that may be asserted against the Debtors’ assets by the Prepetition Secured Parties arising under the Cash Collateral Order from any diminution in value of the Prepetition Collateral after the Petition Date through to the Effective Date, which shall be an amount as ordered by the Bankruptcy Court in connection with the Confirmation Hearing.

 

43.                               Disallowed” means, with respect to any Claim, a Claim or any portion thereof that (a) has been disallowed by a Final Order, (b) is Scheduled as zero or as contingent, disputed, or unliquidated and as to which no Proof of Claim or request for payment of an Administrative Claim has been timely filed or deemed timely filed with the Bankruptcy Court pursuant to either the Bankruptcy Code or any Final Order of the Bankruptcy Court or otherwise deemed timely filed under applicable law or this Plan, (c) is not Scheduled and as to which no Proof of Claim or request for payment of an Administrative Claim has been timely filed or deemed timely filed with the Bankruptcy Court pursuant to either the Bankruptcy Code or any Final Order of the Bankruptcy Court or otherwise deemed timely filed under applicable law or this Plan, (d) has been withdrawn by agreement of the applicable Debtor and the Holder thereof, or (e) has been withdrawn by the Holder thereof.

 

44.                               Disclosure Statement” means the Disclosure Statement for the First Amended Joint Chapter 11 Plan of Reorganization of the Midstates Petroleum Company, Inc. and Its Debtor Affiliate dated as of July 13, 2016, as may be amended from time to time, including all exhibits and schedules thereto and references therein that relate to the Plan, that is prepared and distributed in accordance with the Bankruptcy Code, the Bankruptcy Rules, and any other applicable law, and which shall be in form and substance reasonably acceptable to the Debtors and the Requisite Creditors.

 

45.                               Disclosure Statement Order” means the order of the Bankruptcy Court approving the Disclosure Statement.

 

46.                               Disputed” means a Claim that is not yet Allowed.

 

47.                               Disputed Claim Amount” means (a) if a liquidated amount is set forth in the Proof of Claim relating to a Disputed Claim:  (i) the liquidated amount set forth in the Proof of Claim relating to the Disputed Claim; (ii) an amount agreed to by the Debtors or the Reorganized Debtors, as applicable, and the Holder of such Disputed Claim; or (iii) if a request for estimation is Filed by any party, the amount at which such Disputed Claim is estimated by the Bankruptcy Court, (b) if no liquidated amount is set forth in the Proof of Claim relating to a Disputed Claim:  (i) an amount agreed to by the Debtors or the Reorganized Debtors, as applicable, and the Holder of such Disputed Claim; (ii) the amount estimated by the Bankruptcy Court with respect to such Disputed Claim, (iii) the amount estimated in good faith by the Debtors or Reorganized Debtors, as applicable, with respect to the Disputed Claim, or (c) zero, if the Disputed Claim was listed on the Schedules as unliquidated, contingent, or disputed and no Proof of Claim was Filed, or deemed to have been Filed, by the applicable Claims Bar Date and the Claim has not been resolved by written agreement of the parties or an order of the Bankruptcy Court.

 

48.                               Distribution Record Date” means the date for determining which Holders of Claims or Interests are eligible to receive distributions hereunder and shall be the Voting Deadline or such other date as designated in a Final Order of the Bankruptcy Court.  At the close of business on the Distribution Record Date, the transfer ledgers for the Second Lien Notes, the Third Lien Notes, and the Unsecured Notes shall be closed, and there shall be no further changes in the record holders of such securities.  The Reorganized Debtors shall have no obligation to recognize any transfer of any such securities occurring after the Distribution Record Date and shall be entitled

 

5



 

instead to recognize and deal for all purposes hereunder with only those record holders stated on the transfer ledgers as of the close of business on the Distribution Record Date.

 

49.                               DTC” means Depository Trust Company.

 

50.                               Effective Date” means, with respect to the Plan, the date that is a Business Day selected by the Debtors, in consultation with the Consenting First Lien Lenders, the Consenting Second Lien Noteholders, and the Consenting Cross-Over Noteholders, on which:  (a) no stay of the Confirmation Order is in effect; (b) all conditions precedent specified in Article IX.A have been satisfied or waived (in accordance with Article IX.B); and (c) the Plan is declared effective.

 

51.                               Entity” shall have the meaning set forth in section 101(15) of the Bankruptcy Code.

 

52.                               Estate” means, as to each Debtor, the estate created for the Debtor in its Chapter 11 Case pursuant to section 541 of the Bankruptcy Code.

 

53.                               Excess Cash” means Cash in an amount equal to the lesser of (i) any Cash remaining on any of the Debtors’ balance sheets as of the Effective Date, less (a) the amount of Cash to be paid to Holders of First Lien Claims on the Plan Effective Date, (b) all payments of Cash and reserves of Cash required under the Plan (other than distributions of Cash on account of Second Lien Notes Claims, including, but not limited to, payments and reserves on account of Administrative Claims, Other Priority Claims, Priority Tax Claims, expenses in connection with the Restructuring Transactions and Professional Fee Claims (including Professional Fee Reserve Amount to fund the Professional Fee Escrow Account)), and (c) $110 million, and (ii) $60 million.

 

54.                               Exculpated Fiduciary” means, collectively, each of the following in their respective capacities as such:  (a) the Debtors; (b) the Reorganized Debtors; (c) the Committee; (d) the Committee members in their capacity as members of the Committee; and (e) with respect to each of (a) through (d) to the extent they were employed in such capacity on or after the Petition Date, such Entity’s directors, officers, shareholders (regardless of whether such interests are held directly or indirectly), partners, managers, trustees, assigns, principals, members, employees, agents, affiliates, advisory board members, parents, subsidiaries, predecessors, successors, heirs, executors and assignees, attorneys, financial advisors, investment bankers, accountants, consultants and other professionals or representatives.

 

55.                               Exculpated Parties” means, collectively: (a) the Exculpated Fiduciaries and (b) the Section 1125(e) Parties.

 

56.                               Executory Contract” means a contract to which one or more of the Debtors is a party that is subject to assumption or rejection under sections 365 or 1123 of the Bankruptcy Code.

 

57.                               Federal Judgment Rate” means the federal judgment rate in effect as of the Petition Date, compounded annually.

 

58.                               Federal Lease Interests” means any interests in any federal or Indian oil and/or gas leases.

 

59.                               File,” “Filed,” or “Filing” means file, filed, or filing in the Chapter 11 Cases with the Bankruptcy Court or, with respect to the filing of a Proof of Claim or proof of Interest, the Notice and Claims Agent.

 

60.                               Final Order” means an order or judgment of the Bankruptcy Court (or any other court of competent jurisdiction) entered by the Clerk of the Bankruptcy Court (or any other court) on the docket in the Chapter 11 Cases (or the docket of such other court), which has not been reversed, stayed, modified, amended, or vacated, and as to which (a) the time to appeal, petition for certiorari, or move for a new trial, stay, reargument, or rehearing has expired and as to which no appeal, petition for certiorari, or motion for new trial, stay, reargument, or rehearing shall be pending or (b) if an appeal, writ of certiorari, new trial, stay, reargument, or rehearing thereof has been sought, such order or judgment of the Bankruptcy Court (or other court of competent jurisdiction) shall have been affirmed by the highest court to which such order was appealed, or certiorari shall have been denied, or a new

 

6



 

trial, stay, reargument, or rehearing shall have been denied or resulted in no modification of such order, and the time to take any further appeal, petition for certiorari, or move for a new trial, stay, reargument, or rehearing shall have expired, as a result of which such order shall have become final in accordance with rule 8002 of the Bankruptcy Rules; provided that the possibility that a motion under rule 60 of the Federal Rules of Civil Procedure, or any analogous rule under the Bankruptcy Rules, may be filed relating to such order, shall not cause an order not to be a Final Order.

 

61.                               First Lien Accepting Lenders” means the First Lien Lenders that (a) affirmatively vote to accept the Plan or (b) vote to reject the Plan but affirmatively elect on their respective Ballots to receive the New Credit Facility Revolving Loans pursuant to the Plan.

 

62.                               First Lien Administrative Agent” means SunTrust Bank in its capacity as administrative and collateral agent under the First Lien Credit Agreement and the other First Lien Loan Documents.

 

63.                               First Lien Claims” means all Claims against the Debtors arising under the First Lien Loan Documents.

 

64.                               First Lien Credit Agreement” means that certain Second Amended and Restated Credit Agreement, dated as of June 8, 2012, by and between the Debtors, as borrowers, the First Lien Agent, and the First Lien Lenders (as amended, restated, supplemented, or otherwise modified from time to time).

 

65.                               First Lien Credit Facility” means the credit facility under the First Lien Credit Agreement.

 

66.                               First Lien Deficiency Claims” means the portion of the First Lien Claims constituting unsecured Claims under section 506(a) of the Bankruptcy Code, which for the avoidance of doubt, shall constitute General Unsecured Claims in Class 7.  The First Lien Deficiency Claims (if any) shall be Allowed in an amount:  (a) stipulated by the Debtors and the Requisite First Lien Lenders and approved by the Bankruptcy Court, after notice and an opportunity for a hearing, which approval may be set forth in the Plan or Confirmation Order; or (b) otherwise determined by the Bankruptcy Court, including in connection with Confirmation, after notice and an opportunity for a hearing.

 

67.                               First Lien Lenders” means, collectively, the lenders from time to time party to the First Lien Credit Agreement.

 

68.                               First Lien Loan Documents” means the First Lien Credit Agreement and the other Loan Documents (as defined in the First Lien Credit Agreement), and any other document related to or evidencing the loans and obligations thereunder or executed therewith.

 

69.                               First Lien Rejecting Lenders” means the First Lien Lenders that:  (a) affirmatively vote to reject the Plan and either (i) affirmatively elect on their respective Ballots to receive the New Credit Facility Term Loans pursuant to the Plan or (ii) make no election with respect to receiving New Credit Facility Term Loans or New Credit Facility Revolving Loans pursuant to the Plan; or (b) fail to return a Ballot such that they will have not been deemed to vote in favor or have made an election to receive the New Credit Facility Revolving Loans pursuant to the Plan.

 

70.                               First Lien Secured Parties” means the First Lien Administrative Agent and the First Lien Lenders.

 

71.                               General Unsecured Claims” means the Deficiency Claims and any other Claims against any Debtor that are not otherwise paid in full during the Chapter 11 Cases pursuant to an order of the Bankruptcy Court and are not:  (a) an Administrative Claim; (b) a Priority Tax Claim; (c) an Other Priority Claim; (d) an Other Secured Claim; (e) a First Lien Claim; (f) a Second Lien Notes Claim (g) a Third Lien Notes Claim; (h) an Unsecured Notes Claims; (i) a Lien Trade Claim; (j) an Intercompany Claim; or (k) a Section 510(b) Claim.

 

72.                               General Unsecured Creditor” means the Holder of a General Unsecured Claim.

 

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73.                               Governmental Unit” shall have the meaning set forth in section 101(27) of the Bankruptcy Code.

 

74.                               Holder” means an Entity holding a Claim or Interest.

 

75.                               Impaired” means, with respect to a Class of Claims or Interests, a Class of Claims or Interests that is not Unimpaired.

 

76.                               Indemnification Obligations” means each of the Debtors’ indemnification obligations in place as of the Effective Date, whether in the bylaws, certificates of incorporation or formation, limited liability company agreements, other organizational or formation documents, board resolutions, management or indemnification agreements, or employment contracts, for the current and former directors and the officers who served in such capacity at any time after or within the 12 months prior to the Petition Date.

 

77.                               Intercompany Claim” means any Claim held by one Debtor against another Debtor.

 

78.                               Intercompany Interests” means the Interests in Midstates Petroleum Company LLC, all of which are held by Debtor Midstates Petroleum Company, Inc.

 

79.                               Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of May 21, 2015, by and among SunTrust Bank, as priority lien agent, and Wilmington Trust, N.A., as second lien collateral agent and third lien collateral agent, and acknowledged and agreed to by the Debtors.  The Intercreditor Agreement shall be construed to be part of the First Lien Loan Documents, the Second Lien Notes Documents, and the Third Lien Notes Documents.

 

80.                               Intercreditor Settlement” means the settlement evidenced by the Plan Support Agreement pursuant to which the Debtors, the Consenting First Lien Lenders, the Consenting Second Lien Noteholders, and the Consenting Cross-Over Noteholders agreed, in full and final resolution of all disputes and claims among the Debtors, the First Lien Secured Parties, the Second Lien Secured Parties, and the Third Lien Secured Parties, that: (a) the Plan shall implement the Unencumbered Value Settlement; (b) the Prepetition Secured Parties will waive recovery on account of their respective Diminution in Value Claims and the Deficiency Claims; and (c) the Plan shall implement the Second/Third Lien Plan Settlement.  For the avoidance of doubt, the Intercreditor Settlement does not implicate, compromise, or eliminate the rights and protections afforded under the Intercreditor Agreement to the parties thereto.

 

81.                               Interests” means the common stock, preferred stock, limited liability company interests, and any other equity, ownership, or profits interests of any Debtor and options, warrants, rights, or other securities or agreements to acquire the common stock, preferred stock, limited liability company interests, or other equity, ownership, or profits interests of any Debtor (whether or not arising under or in connection with any employment agreement), including any claim against the Debtors subject to subordination pursuant to section 510(b) of the Bankruptcy Code arising from or related to any of the foregoing.

 

82.                               Interim Compensation Order” means that certain order entered by the Bankruptcy Court establishing procedures for the compensation of Professionals.

 

83.                               Judicial Code” means title 28 of the United States Code, 28 U.S.C. §§ 1—4001.

 

84.                               Lien” shall have the meaning set forth in section 101(37) of the Bankruptcy Code.

 

85.                               Lien Trade Claim” means a Claim against the Debtors arising from the provision to the Debtors of goods or services, which Claims may be Secured by valid and enforceable Liens or security interests, whether pursuant to an agreement with the Debtors or applicable law.

 

86.                               Lien Trade Creditor” means a Holder of a Lien Trade Claim.

 

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87.                               Litigation Waivers” means the Second Lien Litigation Waiver and the Third Lien Litigation Waiver.

 

88.                               Management Compensation Term Sheet” means the term sheet attached hereto as Exhibit B regarding the Management Incentive Plan and certain other management compensation issues.

 

89.                               Management Incentive Plan” means that certain post-Effective Date management incentive plan, which shall be consistent with the Management Compensation Term Sheet and under which 10 percent (10%) of the New Common Stock (on a fully-diluted/fully-distributed basis) will be reserved for grants made from time to time to the officers and other management of the Reorganized Debtors, and the other terms of which shall be acceptable to the Debtors and the Requisite Second Lien Noteholders.

 

90.                               New Board” means the initial board of directors, members, or managers, as applicable, of the Reorganized Parent.  If the Plan Settlement is approved, the New Board shall be appointed by parties to the Plan Support Agreement who hold, in the aggregate, at least fifty and one-tenth percent (50.1%) in principal amount outstanding of the Second Lien Notes Claims held by all parties to the Plan Support Agreement.

 

91.                               New Common Stock” means the common equity of Reorganized Parent, which may comprise or be converted to limited liability company interests in the event Reorganized Parent is converted to a limited liability company, authorized and issued pursuant to the Plan.

 

92.                               New Credit Agreement” means that certain credit agreement, to be dated as of the Effective Date, pursuant to which the First Lien Lenders will agree to provide the New Credit Facility on the terms and conditions set forth in the New Credit Facility Term Sheet, and which shall otherwise be in form and substance reasonably acceptable to the Debtors and the Requisite Second Lien Noteholders and acceptable in all respects to the Requisite First Lien Lenders.  The New Credit Agreement will be included in the Plan Supplement.

 

93.                               New Credit Facility” means the first lien credit facility to be entered into by the Reorganized Debtors on the Effective Date pursuant to the New Credit Agreement, consisting of the New Credit Facility Revolving Loans and the New Credit Facility Term Loans.  On the Effective Date, the New Credit Facility shall consist of an aggregate commitment of $170.0 million and shall be deemed fully drawn, subject to the funding of the $40 million restricted account, which following the Effective Date, may be applied to reduce the outstanding amounts under the New Credit Facility Revolving Loans, but which shall not be available for future borrowing until after Reorganized Debtors’ receipt of a borrowing base redetermination notice on or about April 1, 2018.  The lenders under the New Credit Facility shall not be entitled to give notice of a borrowing base redetermination to the Reorganized Debtors until April 1, 2018.  The New Credit Facility shall otherwise be in form and substance (i) reasonably acceptable to the Debtors and the Requisite Second Lien Noteholders and (ii) acceptable in all respects to the Requisite First Lien Lenders.

 

94.                               New Credit Facility Documents” means, in connection with the New Credit Facility, the New Credit Agreement and other loan documents related to or evidencing the loans and obligations thereunder, each in form and substance reasonably acceptable to the Debtors and the Requisite Second Lien Noteholders and acceptable in all respects to the Requisite First Lien Lenders.

 

95.                               New Credit Facility Revolving Loans” means the first lien revolving credit facility, which shall be deemed to be extended to the Reorganized Debtors by the First Lien Accepting Lenders as of the Effective Date pursuant to the New Credit Agreement.  The New Credit Facility Revolving Loans shall consist of an aggregate commitment of $170.0 million less the amount of New Credit Facility Term Loans and shall be subject to a borrowing base equal to $170.0 million less the amount of New Credit Facility Term Loans.  The New Credit Facility Revolving Loans shall be deemed fully drawn on the Effective Date, subject to the funding of the $40 million restricted account, which following the Effective Date, may be applied to reduce the outstanding amounts under the New Credit Facility Revolving Loans, but which shall not be available for future borrowing under the New Credit Facility Revolving Loans until after Reorganized Debtors’ receipt of a borrowing base redetermination notice under the New Credit Facility on or about April 1, 2018.

 

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96.                               New Credit Facility Term Loans” means the first lien term loan credit facility, which shall be deemed to be extended to the Reorganized Debtors by the First Lien Rejecting Lenders (if any) as of the Effective Date pursuant to the New Credit Agreement, and which shall be subordinate in right of payment to the New Credit Facility Revolving Loans, except as expressly set forth within the New Credit Facility Term Sheet with respect to sales of assets and mandatory payments.  The New Credit Facility Term Loans shall be in an aggregate principal amount equal to amount of Allowed First Lien Claims held by the First Lien Rejecting Lenders divided by the total amount of Allowed First Lien Claims, with the quotient thereof multiplied by $170.0 million.

 

97.                               New Credit Facility Term Sheet” means the term sheet attached to the Plan Support Agreement and also attached hereto as Exhibit A.

 

98.                               New Organizational Documents” means the forms of the certificates or articles of incorporation, bylaws, or such other applicable formation documents of each of the Reorganized Debtors, which forms shall be included in the Plan Supplement.

 

99.                               New Warrants” means the Third Lien Warrants and the Unsecured Creditor Warrants.

 

100.                        Notice and Claims Agent” means Kurtzman Carson Consultants, LLC which was retained as the Debtors’ claims, noticing, and solicitation agent pursuant to the Order Authorizing Retention and Appointment of Kurtzman Carson Consultants, LLC as Claims, Noticing and Solicitation Agent [Docket No. 76].

 

101.                        Ordinary Course Professionals” shall mean the various attorneys, accountants, auditors, and other professionals the Debtors employ in the ordinary course of their business and retained by the Debtors pursuant to the Ordinary Course Professionals Order.

 

102.                        Ordinary Course Professionals Order” shall mean that certain order entered by the Bankruptcy Court establishing the procedures for retaining the Ordinary Course Professionals.

 

103.                        Other Priority Claim” means any allowed Claim against any Debtor entitled to priority in right of payment under section 507(a) of the Bankruptcy Code, other than:  (a) an Administrative Claim; or (b) a Priority Tax Claim, to the extent such Claim has not already been paid during the Chapter 11 Cases.

 

104.                        Other Secured Claim” means any Secured Claim against any Debtor that is not (a) a First Lien Claim, (b) a Second Lien Notes Claim, (c) a Third Lien Notes Claim, or (d) Lien Trade Claim.

 

105.                        Parent” means Midstates Petroleum Company, Inc.

 

106.                        Person” shall have the meaning set forth in section 101(41) of the Bankruptcy Code.

 

107.                        Petition Date” means April 30, 2016, the date on which the Debtors commenced the Chapter 11 Cases.

 

108.                        Plan Supplement” means the compilation of documents and forms of documents, schedules, and exhibits to the Plan, in each case, as applicable, subject to the Definitive Document Plan Support Agreement Requirements (as amended, supplemented, or modified from time to time), to be Filed by the Debtors no later than 7 days before the Voting Deadline, and additional documents or amendments to previously Filed documents, Filed before the Confirmation Date as amendments to the Plan Supplement, including the following, as applicable:  (a) the New Organizational Documents; (b) the New Credit Agreement; (c) the Schedule of Assumed Executory Contracts and Unexpired Leases; (d) a list of retained Causes of Action; (e) a document listing the members of the New Board; (f) the Registration Rights Agreement; (g) the form of the Third Lien Warrants; and (h) the Schedule of Rejected Executory Contracts and Unexpired Leases.  The Debtors shall have the right to amend the documents contained in, and exhibits to, the Plan Supplement (other than the Definitive Documents) through the Effective Date with the reasonable consent of the Requisite Creditors.

 

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109.                        Plan Support Agreement” means the Plan Support Agreement, dated as of April 30, 2016, as amended, supplemented, or otherwise modified from time to time in accordance with its terms, a copy of which is attached as Exhibit B to the Disclosure Statement.

 

110.                        Prepetition Collateral” means the Debtors’ assets as of the Petition Date that are encumbered by valid, perfected, and enforceable liens pursuant to the First Lien Loan Documents, the Second Lien Notes Documents, and the Third Lien Notes Documents.

 

111.                        Prepetition Debt Documents” means (a) the First Lien Loan Documents, (b) the Second Lien Notes Documents, (c) the Third Lien Notes Documents, and (d) the Unsecured Notes Documents.

 

112.                        Prepetition Secured Parties” means (a) the First Lien Secured Parties, (b) the Second Lien Secured Parties, and (c) the Third Lien Secured Parties.

 

113.                        Priority Claims” means Priority Tax Claims and Other Priority Claims.

 

114.                        Priority Tax Claim” means any Claim of a Governmental Unit of the kind specified in section 507(a)(8) of the Bankruptcy Code.

 

115.                        Pro Rata” means the proportion that an Allowed Claim or Allowed Interest in a particular Class bears to the aggregate amount of Allowed Claims or Allowed Interests in that respective Class, or the proportion that Allowed Claims or Allowed Interests in a particular Class bear to the aggregate amount of Allowed Claims or Allowed Interests in a particular Class and other Classes entitled to share in the same recovery as such Allowed Claim or Allowed interests under the Plan.

 

116.                        Professional” means an Entity employed pursuant to a Bankruptcy Court order in accordance with sections 327 or 1103 of the Bankruptcy Code and to be compensated for services rendered before or on the Confirmation Date, pursuant to sections 327, 328, 329, 330, or 331 of the Bankruptcy Code.

 

117.                        Professional Fee Claim” means a Claim by a Retained Professional seeking an award by the Bankruptcy Court of compensation for services rendered or reimbursement of expenses incurred through and including the Effective Date under sections 330, 331, 503(b)(2), 503(b)(3), 503(b)(4) or 503(b)(5) of the Bankruptcy Code.

 

118.                        Professional Fee Escrow Account” means an interest-bearing escrow account in an amount equal to the Professional Fee Reserve Amount funded and maintained by the Reorganized Debtors on and after the Effective Date solely for the purpose of paying all Allowed and unpaid fees and expenses of Retained Professionals in the Chapter 11 Cases.

 

119.                        Professional Fee Reserve Amount” means the aggregate Accrued Professional Compensation through the Effective Date as estimated by the Retained Professionals in accordance with Article II.C.3 hereof.

 

120.                        Proof of Claim” means a proof of Claim Filed against any of the Debtors in the Chapter 11 Cases.

 

121.                        Registration Rights Agreement” means the agreement among the Registration Rights Beneficiaries and the Reorganized Parent, which shall provide the Registration Rights Beneficiaries with certain demand registration rights (including with respect to underwritten offerings) and with piggyback registration rights.  The Registration Rights Agreement shall be in form and substance reasonably acceptable to the Debtors, the Requisite Second Lien Noteholders, and the Requisite Cross-Over Noteholders and shall be included in the Plan Supplement.

 

122.                        Registration Rights Beneficiaries” means any party that (i) receives 10% or more of the New Common Stock under the Plan or (ii) otherwise reasonably determines on the advice of counsel (which advice may be from internal or external counsel and may be oral or written) that it is an “affiliate” (as such term is defined in the

 

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Securities Act) of the Reorganized Debtors or holds “restricted” or “control” (as such terms are defined in the Securities Act) New Common Stock (including any New Common Stock issued upon exercise of the New Warrants).

 

123.                        Reinstated” or “Reinstatement” means, with respect to Claims and Interests, the treatment provided for in section 1124 of the Bankruptcy Code.

 

124.                        Released Parties” means, collectively, in each case, solely in its capacity as such, (a) the Debtors and the Debtors’ current and former officers and directors; (b) the First Lien Secured Parties; (c) the First Lien Administrative Agent, Syndication Agent, Co-Documentation Agents, Joint Bookrunners, and Lead Arranger of the First Lien Credit Facility; (d) the Second Lien Secured Parties; (e) the Third Lien Secured Parties; (f) the Consenting First Lien Lenders; (g) Consenting Second Lien Noteholders; (h) the Consenting Cross-Over Noteholders; (i) the Committee; (j) the Committee members in their capacity as members of the Committee; (k) to the extent permitted by the Bankruptcy Court in the Confirmation Order, each Holder of a Claim or Interest entitled to vote on the Plan that votes to accept the Plan; and (l) with respect to each of the Entities named in (a) through (k) above, such Entity’s directors, officers, current and former shareholders (regardless of whether such interests are held directly or indirectly), partners, managers, trustees, assigns, principals, members, employees, agents, affiliates, advisory board members, parents, subsidiaries, predecessors, successors, heirs, executors and assignees, attorneys, financial advisors, investment bankers, accountants, consultants and other professionals or representatives; provided, however, that any Holder of a Claim that, in its Ballot, “opts” out of the release provided in the Plan shall not be considered to be included in the definition of “Released Parties.”

 

125.                        Releasing Parties” means, collectively, in each case, solely in its capacity as such, (a) the Debtors and the Debtors’ current and former officers and directors; (b) the First Lien Secured Parties; (c) the Second Lien Secured Parties; (d) the Third Lien Secured Parties; (e) each Holder of a Claim entitled to vote to accept or reject the Plan that (i) votes to accept the Plan or (ii) votes to reject the Plan but does not affirmatively elect to “opt out” of being a Releasing Party; (f) to the fullest extent permitted by law, each Holder of a Claims entitled to vote to accept or reject the Plan that does not vote to accept or reject the Plan, provided that such Holder does not affirmatively elect to “opt out” of being a Releasing Party; (g) each Holder of a Claim or Interest to the maximum extent permitted by law, (h) each Holder of a Claim that is Unimpaired and presumed to accept the Plan that does not timely object to the releases set forth in Article VIII.E herein; (i) each Holder of a Claim or Interest that is deemed to reject the Plan that does not timely object to the releases set forth in Article VIII.E herein; and (j) with respect to each of the Entities named in (a) through (i) above, such Entity’s directors, officers, current and former shareholders (regardless of whether such interests are held directly or indirectly), partners, managers, officers, principals, members, employees, agents, affiliates, advisory board members, parents, subsidiaries, predecessors, successors, heirs, executors and assignees, attorneys, financial advisors, investment bankers, accountants, consultants, and other professionals or representatives.

 

126.                        Reorganized Debtors” means the Debtors, or any successors thereto, by merger, consolidation, or otherwise, on or after the Effective Date, including any new entity formed pursuant to the Restructuring Transactions to directly or indirectly acquire the assets or equity of the Debtors.

 

127.                        Reorganized Parent” means Parent, or any successors thereto, by merger, consolidation, or otherwise, on and after the Effective Date, including any new holding company formed pursuant to the Restructuring Transactions to indirectly acquire the assets or equity of the Reorganized Debtors.

 

128.                        Requisite Cross-Over Noteholders” means, as of the relevant date, Consenting Cross-Over Noteholders that are members of the Consenting Cross-Over Ad Hoc Committee that collectively hold at least a majority of the aggregate outstanding principal amount of the Third Lien Notes Claims held by all of the Consenting Cross-Over Noteholders that are members of the Consenting Cross-Over Ad Hoc Committee as of such date.

 

129.                        Requisite Creditors” means the Requisite First Lien Lenders, Requisite Second Lien Noteholders, and the Requisite Cross-Over Noteholders.

 

130.                        Requisite First Lien Lenders” means, as of the relevant date, Consenting First Lien Lenders that collectively hold at least a majority of the aggregate outstanding principal amount of the First Lien Claims.

 

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131.                        Requisite Noteholders” means the Requisite Second Lien Noteholders and Requisite Cross-Over Noteholders.

 

132.                        Requisite Second Lien Noteholders” means, as of the relevant date, Consenting Second Lien Noteholders that are members of the Consenting Second Lien Ad Hoc Committee that collectively hold at least a majority of the aggregate outstanding principal amount of the Second Lien Notes Claims held by all of the Consenting Second Lien Noteholders that are members of the Consenting Second Lien Ad Hoc Committee as of such date.

 

133.                        Restructuring Transactions” shall have the meaning set forth in Article IV.A.

 

134.                        Retained Professional” means an Entity: (a) employed in the Chapter 11 Cases pursuant to a Final Order in accordance with sections 327 and 1103 of the Bankruptcy Code and to be compensated for services rendered prior to the Effective Date, pursuant to sections 327, 328, 329, 330, or 331 of the Bankruptcy Code; or (b) for which compensation and reimbursement has been allowed by the Bankruptcy Court pursuant to section 503(b)(4) of the Bankruptcy Code.

 

135.                        Schedule of Assumed Executory Contracts and Unexpired Leases” means the schedule, in form and substance reasonably acceptable to the Debtors and the Requisite Second Lien Noteholders (including any amendments or modifications thereto), if any, of certain Executory Contracts and Unexpired Leases to be assumed by the Debtors pursuant to the Plan, as set forth in the Plan Supplement, as amended by the Debtors from time to time prior to the Confirmation Date.

 

136.                        Schedule of Rejected Executory Contracts and Unexpired Leases” means the schedule, in form and substance reasonably acceptable to the Debtors and the Requisite Second Lien Noteholders (including any amendments or modification thereto), if any, of certain Executory Contracts and Unexpired Leases to be rejected by the Debtors pursuant to the Plan, as set forth in the Plan Supplement, as amended by the Debtors from time to time prior to the Confirmation Date.

 

137.                        Schedules” means, collectively, the schedules of assets and liabilities, schedules of Executory Contracts and Unexpired Leases, and statements of financial affairs Filed by the Debtors pursuant to section 521 of the Bankruptcy Code and in substantial accordance with the Official Bankruptcy Forms, as the same may have been amended, modified, or supplemented from time to time.

 

138.                        Second Lien Indenture” means that certain Indenture, dated May 21, 2015, by and among the Debtors, as issuers, and the Second Lien Notes Trustee, as indenture trustee and collateral agent (as amended modified, or otherwise supplemented from time to time), providing for the issuance of the Second Lien Notes.

 

139.                        Second Lien Litigation Waiver” means, subject to the terms of the Plan Support Agreement, the waiver by the Second Lien Secured Parties of any and all objections or challenges to, or arguments opposing confirmation of, the Plan, and any and all claims, causes of action or other challenges against any of the Third Lien Secured Parties regardless of whether the Intercreditor Settlement is approved by the Bankruptcy Court, in full and final resolution of all disputes and claims between the Second Lien Secured Parties and the Third Lien Secured Parties, including, without limitation, valuation issues and any rights of the Second Lien Noteholders as General Unsecured Creditors.

 

140.                        Second Lien Notes” means the 10.0% second lien senior secured notes due 2020 issued under the Second Lien Indenture.

 

141.                        Second Lien Notes Claims” means all Claims against the Debtors arising under the Second Lien Notes Documents, including Second Lien Notes Secured Claims and Second Lien Notes Deficiency Claims.

 

142.                        Second Lien Notes Deficiency Claim” means the portion of the Second Lien Notes Claims constituting unsecured Claims under section 506(a) of the Bankruptcy Code, which, for the avoidance of doubt, shall constitute General Unsecured Claims in Class 7.  The Second Lien Notes Deficiency Claim shall be Allowed in an

 

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amount:  (a) stipulated by the Debtors, the Requisite Second Lien Noteholders, and the Second Lien Notes Trustee and approved by the Bankruptcy Court, after notice and an opportunity for a hearing, which approval may be set forth in the Plan or Confirmation Order; or (b) otherwise determined by the Bankruptcy Court, including in connection with Confirmation, after notice and an opportunity for a hearing.

 

143.                        Second Lien Notes Documents” means the Second Lien Indenture and the other Note Documents (as defined in the Second Lien Indenture), and any other document related to or evidencing the obligations thereunder.

 

144.                        Second Lien Notes Secured Claims” means Claims against the Debtors arising under the Second Lien Notes Documents that constitute Secured Claims under section 506(a) of the Bankruptcy Code.

 

145.                        Second Lien Notes Trustee” means Wilmington Trust, National Association, together with its successors and assigns, acting in its capacities as indenture trustee and as collateral agent under the Second Lien Indenture and all of the other Second Lien Notes Documents.

 

146.                        Second Lien Noteholders” means, collectively, the beneficial holders of the Second Lien Notes.

 

147.                        Second Lien Secured Parties” means the Second Lien Noteholders and the Second Lien Notes Trustee.

 

148.                        Second/Third Lien Plan Settlement” means the settlement among the Consenting Second Lien Noteholders and the Consenting Cross-Over Noteholders that is embodied in the Plan Support Agreement and implemented through the Plan, pursuant to which the Second Lien Secured Parties and Third Lien Secured Parties grant their respective Litigation Waivers in consideration of the Second Lien Secured Parties agreement that the Third Lien Noteholders shall receive under the Plan their Pro Rata share of two and one-half percent (2.5%) of the New Common Stock and the New Warrants.

 

149.                        Section 510(b) Claims” means any Claims arising from (a) rescission of a purchase or sale of a security of the Debtors or an Affiliate of the Debtors, (b) purchase or sale of such a security or (c) reimbursement or contribution allowed under section 502 of the Bankruptcy Code on account of such a Claim.

 

150.                        Section 1125(e) Parties” means, collectively, each of the following in their respective capacities as such (a) the First Lien Secured Parties, (b) the Second Lien Secured Parties, (c) the Third Lien Secured Parties, (d) the First Lien Consenting Lenders, (e) the Consenting Second Lien Noteholders, (f) the Consenting Cross-Over Noteholders, and (g) with respect to each of the Entities named in (a) through (f) above, such Entity’s directors, officers, current and former shareholders (regardless of whether such interests are held directly or indirectly), partners, managers, trustees, assigns, principals, members, employees, agents, affiliates, advisory board members, parents, subsidiaries, predecessors, successors, heirs, executors and assignees, attorneys, financial advisors, investment bankers, accountants, consultants and other professionals or representatives.

 

151.                        Secured” means when referring to a Claim, a Claim:  (a) secured by a Lien on property in which the applicable Estate has an interest, which Lien is valid, perfected, and enforceable pursuant to applicable law or by reason of a Bankruptcy Court order, or that is subject to setoff pursuant to section 553 of the Bankruptcy Code, to the extent of the value of the creditor’s interest in such Estate’s interest in such property or to the extent of the amount subject to setoff, as applicable, as determined pursuant to section 506(a) of the Bankruptcy Code; or (b) otherwise Allowed pursuant to the Plan as a Secured Claim.

 

152.                        Secured Notes Deficiency Claims” means the Second Lien Notes Deficiency Claims and the Third Lien Notes Deficiency Claims.

 

153.                        Secured Tax Claims” means any Secured Claim against any Debtor that, absent its Secured status, would be entitled to priority in right of payment under section 507(a)(8) of the Bankruptcy Code (determined irrespective of time limitations), including any related Secured Claim for penalties.

 

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154.                        Securities Act” means the Securities Act of 1933, 15 U.S.C. §§ 77a—77aa, as amended, or any similar federal, state or local law.

 

155.                        Securities Exchange Act” means the Securities Exchange Act of 1934, 15 U.S.C. §§ 78a—78nn, as amended.

 

156.                        Security” shall have the meaning set forth in section 101(49) of the Bankruptcy Code.

 

157.                        Settlement Termination Event” means the occurrence of either (a) any written or oral judgment by the Bankruptcy Court denying approval of the Intercreditor Settlement or any material component thereof or (b) the election by the Requisite Second Lien Noteholders pursuant to Section 6(b)(iv) of the Plan Support Agreement to terminate the Second/Third Lien Plan Settlement.

 

158.                        Suspended Funds” means amounts that are payable by the Debtors to the owners of royalty interests, working interests, and similar interest burdens in the Debtors’ oil and gas properties or oil and gas properties operated by the Debtors, but are otherwise unpayable to such owners for a variety of reasons, including incorrect contact information, unmarketable title, and ongoing disputes over ownership of the underlying interests.

 

159.                        Third Lien Indenture” means that certain Indenture, dated May 21, 2015, by and among the Debtors, as issuers, and Wilmington Trust, National Association, as initial indenture trustee and as initial collateral agent thereunder (as amended modified, or otherwise supplemented from time to time), providing for the issuance of the Third Lien Notes, under which UMB Bank, National Association is now acting as successor indenture trustee and as successor collateral agent.

 

160.                        Third Lien Litigation Waiver” means, subject to the terms of the Plan Support Agreement, the waiver by the Third Lien Secured Parties of any and all objections or challenges to, or arguments opposing confirmation of, the Plan, and any and all claims, causes of action or other challenges against any of the Second Lien Secured Parties regardless of whether the Intercreditor Settlement is approved by the Bankruptcy Court, in full and final resolution of all disputes and claims between the Third Lien Secured Parties and the Second Lien Secured Parties, including, without limitation, valuation issues and any rights of the Third Lien Noteholders as General Unsecured Creditors.

 

161.                        Third Lien Notes” means the 12.0% third lien senior secured notes due 2020 issued under the Third Lien Indenture.

 

162.                        Third Lien Notes Claims” means all Claims against the Debtors arising under the Third Lien Notes Documents, including Third Lien Notes Secured Claims and Third Lien Notes Deficiency Claims.

 

163.                        Third Lien Notes Deficiency Claims” means the portion of the Third Lien Notes Claims constituting unsecured Claims under section 506(a) of the Bankruptcy Code, which, for the avoidance of doubt, shall constitute General Unsecured Claims in Class 7.  The Third Lien Notes Deficiency Claims shall be Allowed in an amount:  (a) stipulated by the Debtors and the Requisite Cross-Over Noteholders and approved by the Bankruptcy Court, after notice and an opportunity for a hearing, which approval may be set forth in the Plan or Confirmation Order; or (b) otherwise determined by the Bankruptcy Court, including in connection with Confirmation, after notice and an opportunity for a hearing.

 

164.                        Third Lien Notes Documents” means the Third Lien Indenture and the other Note Documents (as defined in the Third Lien Indenture), and any other document related to or evidencing the obligations thereunder.

 

165.                        Third Lien Notes Secured Claims” means Claims against the Debtors arising under the Third Lien Notes Documents that constitute Secured Claims under section 506(a) of the Bankruptcy Code.

 

166.                        Third Lien Notes Trustee” means UMB Bank, National Association, in its capacities as successor indenture trustee and as successor collateral agent under the Third Lien Indenture and all of the other Third Lien Notes Documents.  For purposes of Article VIII of the Plan, the term “Third Lien Notes Trustee” shall also be

 

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deemed to include and mean Wilmington Trust, National Association, as initial indenture trustee and as initial collateral agent under the Third Lien Indenture and all of the other Third Lien Notes Documents.

 

167.                        Third Lien Noteholders” means, collectively, the beneficial holders of the Third Lien Notes.

 

168.                        Third Lien Secured Parties” means the Third Lien Noteholders and Third Lien Notes Trustee.

 

169.                        Third Lien Warrants” means the 3.5-year, out of the money, standard warrants for fifteen percent (15%) of the New Common Stock struck at a strike price of $600 million, the form of which has been included in the Plan Supplement.

 

170.                        U.S. Trustee” means the Office of the United States Trustee for the Southern District of Texas.

 

171.                        Unencumbered Assets” means any of the Debtors’ assets that are unencumbered by valid, perfected, and enforceable Liens pursuant to the First Lien Loan Documents, the Second Lien Loan Documents, or the Third Lien Loan Documents as of the Petition Date.

 

172.                        Unencumbered Distribution” means one and one-quarter percentage (1.25%) of New Common Stock (subject to dilution under the Management Incentive Plan, any other compensation arrangements under the Management Compensation Term Sheet, and New Common Stock issuable upon exercise of the New Warrants) and the Unsecured Creditor Warrants.

 

173.                        Unencumbered Value Settlement” means the settlement embodied in the Plan Support Agreement by and among the Debtors, the Consenting First Lien Lenders, the Consenting Second Lien Noteholders, and the Consenting Cross-Over Noteholders, pursuant to which the parties thereto agreed to the valuation allocation between the Prepetition Collateral and the Unencumbered Assets, as the result of which the New Common Stock shall be allocated ninety two and nine tenths percent (92.9%) on account of the Prepetition Collateral, and seven and one tenth percent (7.1%) on account of the Unencumbered Assets.

 

174.                        Unexpired Lease” means a lease of nonresidential real property to which one or more of the Debtors is a party that is subject to assumption or rejection under sections 365 or 1123 of the Bankruptcy Code.

 

175.                        Unimpaired” means, with respect to a Class of Claims or Interests, a Claim or an Interest that is unimpaired within the meaning of section 1124 of the Bankruptcy Code, including through payment in full in cash.

 

176.                        Unsecured 2020 Senior Noteholders” means the beneficial holders of the Unsecured 2020 Senior Notes.

 

177.                        Unsecured 2020 Senior Notes” means the 10.75% senior notes due 2020, issued pursuant to the Unsecured 2020 Senior Notes Indenture.

 

178.                        Unsecured 2020 Senior Notes Claims” means all Claims against the Debtors arising under the Unsecured 2020 Senior Notes Indenture.

 

179.                        Unsecured 2020 Senior Notes Indenture” means that certain Indenture, dated as of October 1, 2012, among the Debtors, as issuers, and Wells Fargo Bank, N.A., as indenture trustee (as amended, restated, supplemented, or otherwise modified from time to time), providing for the issuance of the Unsecured 2020 Senior Notes.

 

180.                        Unsecured 2020 Senior Notes Trustee” means Wells Fargo Bank, N.A., in its capacity as indenture trustee under the Unsecured 2020 Senior Notes Indenture.

 

181.                        Unsecured 2021 Senior Noteholders” means the beneficial Holders of the Unsecured 2021 Senior Notes.

 

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182.                        Unsecured 2021 Senior Notes” means the 9.25% senior notes due 2021, issued pursuant to the Unsecured 2021 Senior Notes Indenture.

 

183.                        Unsecured 2021 Senior Notes Claims” means all Claims against the Debtors arising under the Unsecured 2021 Senior Notes Indenture.

 

184.                        Unsecured 2021 Senior Notes Indenture” means that certain Indenture, dated as of May 31, 2013, among the Debtors, as issuers, and Wells Fargo Bank, N.A., as indenture trustee (as amended, restated supplemented or otherwise modified from time to time), providing for the issuance of the Unsecured 2021 Senior Notes.

 

185.                        Unsecured 2021 Senior Notes Trustee” means Wells Fargo Bank, N.A., in its capacity as indenture trustee under the Unsecured 2021 Senior Notes Indenture.

 

186.                        Unsecured Creditor Warrants” means 3.5 year, out of the money, standard warrants for seven percent (7%) of the New Common Stock struck at a strike price of $1.15 billion and otherwise identical to the Third Lien Warrants.

 

187.                        Unsecured Noteholders” means the beneficial Holders of the Unsecured Notes.

 

188.                        Unsecured Notes” mean the Unsecured 2020 Senior Notes and the Unsecured 2021 Senior Notes.

 

189.                        Unsecured Notes Claims” means all Claims against the Debtors arising under the Unsecured 2020 Senior Notes Indenture and the Unsecured 2021 Senior Notes Indenture.

 

190.                        Unsecured Notes Documents” means the Unsecured 2020 Senior Notes Indenture and the Unsecured 2021 Senior Notes Indenture, and any other documentation evidencing the obligations due under the Unsecured Notes.

 

191.                        Unsecured Notes Trustees” means the Unsecured 2020 Senior Notes Trustee and the Unsecured 2021 Senior Notes Trustee.

 

192.                        Voting Deadline” means August 10, 2016 at 4:00 p.m., prevailing Central Time.

 

B.                                    Rules of Interpretation

 

For purposes herein:  (1) in the appropriate context, each term, whether stated in the singular or the plural, shall include both the singular and the plural, and pronouns stated in the masculine, feminine, or neuter gender shall include the masculine, feminine, and the neuter gender; (2) except as otherwise provided, any reference herein to a contract, lease, instrument, release, indenture, or other agreement or document being in a particular form or on particular terms and conditions means that the referenced document shall be substantially in that form or substantially on those terms and conditions; (3) except as otherwise provided, any reference herein to an existing document or exhibit having been Filed or to be Filed shall mean that document or exhibit, as it may thereafter be amended, restated, supplemented, or otherwise modified in accordance with the terms of the Plan; (4) unless otherwise specified, all references herein to “Articles” are references to Articles of the Plan or hereto; (5) unless otherwise stated, the words “herein,” “hereof,” and “hereto” refer to the Plan in its entirety rather than to a particular portion of the Plan; (6) captions and headings to Articles are inserted for convenience of reference only and are not intended to be a part of or to affect the interpretation hereof; (7) the words “include” and “including,” and variations thereof, shall not be deemed to be terms of limitation, and shall be deemed to be followed by the words “without limitation;” (8) the rules of construction set forth in section 102 of the Bankruptcy Code shall apply; (9) any term used in capitalized form herein that is not otherwise defined but that is used in the Bankruptcy Code or the Bankruptcy Rules shall have the meaning assigned to that term in the Bankruptcy Code or the Bankruptcy Rules, as the case may be; and (10) any docket number references in the Plan shall refer to the docket number of any document Filed with the Bankruptcy Court in the Chapter 11 Cases.

 

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C.                                    Computation of Time

 

Unless otherwise specifically stated herein, the provisions of Bankruptcy Rule 9006(a) shall apply in computing any period of time prescribed or allowed herein.  If the date on which a transaction may occur pursuant to the Plan shall occur on a day that is not a Business Day, then such transaction shall instead occur on the next succeeding Business Day.

 

D.                                    Governing Law

 

Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy Code and Bankruptcy Rules) or unless otherwise specifically stated herein, the laws of the State of Delaware, without giving effect to the principles of conflict of laws, shall govern the rights, obligations, construction, and implementation of the Plan, any agreements, documents, instruments, or contracts executed or entered into in connection with the Plan (except as otherwise set forth in those agreements, in which case the governing law of such agreement shall control); provided that corporate or limited liability company governance matters relating to the Debtors or the Reorganized Debtors, as applicable, shall be governed by the laws of the state of incorporation or formation (as applicable) of the applicable Debtor or Reorganized Debtor.

 

E.                                     Reference to Monetary Figures

 

All references in the Plan to monetary figures shall refer to currency of the United States of America, unless otherwise expressly provided herein.

 

F.                                      Reference to the Debtors or the Reorganized Debtors

 

Except as otherwise specifically provided in the Plan to the contrary, references in the Plan to the Debtors or the Reorganized Debtors shall mean the Debtors and the Reorganized Debtors, as applicable, to the extent the context requires.

 

G.                                    Controlling Document

 

In the event of an inconsistency between the Plan and the Disclosure Statement, the terms of the Plan shall control in all respects.  In the event of an inconsistency between the Plan and the Plan Supplement, the terms of the relevant document in the Plan Supplement shall control (unless stated otherwise in such Plan Supplement document or in the Confirmation Order).  In the event of an inconsistency between the Confirmation Order and the Plan or the Plan Supplement, the Confirmation Order shall control.

 

ARTICLE II.
ADMINISTRATIVE CLAIMS AND PRIORITY CLAIMS

 

In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims and Priority Tax Claims have not been classified and, thus, are excluded from the Classes of Claims and Interests set forth in Article III hereof.

 

A.                                    Administrative Claims

 

Except with respect to Administrative Claims that are Professional Fee Claims and except to the extent that an Administrative Claim has already been paid during the Chapter 11 Cases or a Holder of an Allowed Administrative Claim and the applicable Debtor(s) agree to less favorable treatment, each Holder of an Allowed Administrative Claim shall be paid in full in Cash on the unpaid portion of its Allowed Administrative Claim on the latest of:  (a) on or as soon as reasonably practicable after the Effective Date if such Administrative Claim is Allowed as of the Effective Date; (b) on or as soon as reasonably practicable after the date such Administrative Claim is Allowed; and (c) the date such Allowed Administrative Claim becomes due and payable, or as soon thereafter as is reasonably practicable; provided that Allowed Administrative Claims that arise in the ordinary course of the Debtors’ businesses shall be paid in the ordinary course of business in accordance with the terms and subject

 

18



 

to the conditions of any agreements governing, instruments evidencing, or other documents relating to such transactions.  Notwithstanding the foregoing, no request for payment of an Administrative Claim need be Filed with respect to an Administrative Claim previously Allowed by Final Order.  Notwithstanding any provision of the Plan to the contrary, no Governmental Unit shall be required to file a request for the payment of an expense described in 11 U.S.C. § 503(b)(1)(B) or (C) as a condition of it being allowed as an administrative expense.

 

B.                                    Administrative Claims Bar Date

 

All requests for payment of an Administrative Claim (other than Claims derived from or based upon the First Lien Loan Documents, the Second Lien Notes Documents, and the Third Lien Notes Documents, Cure Costs, or Professional Fee Claims) that accrued on or before the Effective Date that were not accrued in the ordinary course of business must be filed with the Bankruptcy Court and served on the Debtors no later than the Administrative Claims Bar Date.  Holders of Administrative Claims that are, based on the preceding sentence, required to, but do not, file and serve a request for payment of such Administrative Claims by such date shall be forever barred, estopped, and enjoined from asserting such Administrative Claims against the Debtors or their property and such Administrative Claims shall be deemed discharged as of the Effective Date.

 

The Reorganized Debtors, in their sole and absolute discretion, may settle Administrative Claims in the ordinary course of business without further Bankruptcy Court approval.  The Debtors may also choose to object to any Administrative Claim no later than 60 days from the Administrative Claims Bar Date, subject to extensions by the Bankruptcy Court, agreement in writing of the parties, or on motion of a party in interest approved by the Bankruptcy Court.  Unless the Debtors or the Reorganized Debtors (or other party with standing) object to a timely-filed and properly served Administrative Claim, such Administrative Claim will be deemed allowed in the amount requested.  In the event that the Debtors or the Reorganized Debtors object to an Administrative Claim, the parties may confer to try to reach a settlement and, failing that, the Bankruptcy Court will determine whether such Administrative Claim should be allowed and, if so, in what amount.

 

C.                                    Professional Compensation

 

1.                                      Final Fee Applications.

 

All final requests for Professional Fee Claims shall be filed no later than 30 days after the Effective Date.  After notice and a hearing in accordance with the procedures established by the Bankruptcy Code and prior Bankruptcy Court orders, the Allowed amounts of such Professional Fee Claims shall be determined by the Bankruptcy Court.

 

2.                                      Professional Fee Escrow Account.

 

On the Effective Date, the Reorganized Debtors shall establish and fund the Professional Fee Escrow Account with Cash equal to the aggregate Professional Fee Reserve Amount for all Retained Professionals. The Professional Fee Escrow Account shall be maintained in trust solely for the Retained Professionals.  Such funds shall not be considered property of the Estates of the Debtors or the Reorganized Debtors.  The amount of Professional Fee Claims owing to the Retained Professionals shall be paid in Cash to such Retained Professionals by the Reorganized Debtors from the Professional Fee Escrow Account as soon as reasonably practicable after such Professional Fee Claims are Allowed by a Final Order.  When all such Allowed amounts owing to Retained Professionals have been paid in full, any remaining amount in the Professional Fee Escrow Account shall promptly be paid to the Reorganized Debtors without any further action or order of the Court.

 

3.                                      Professional Fee Reserve Amount.

 

To receive payment for unbilled fees and expenses incurred through the Effective Date, the Retained Professionals shall estimate their Accrued Professional Compensation prior to and as of the Effective Date and shall deliver such estimate to the Debtors on or before the Effective Date.  If a Retained Professional does not provide such estimate, the Reorganized Debtors may estimate the unbilled fees and expenses of such Retained Professional; provided that such estimate shall not be considered an admission or limitation with respect to the fees and expenses

 

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of such Retained Professional.  The total amount so estimated as of the Effective Date shall comprise the Professional Fee Reserve Amount.

 

4.                                      Post-Effective Date Fees and Expenses.

 

Except as otherwise specifically provided in the Plan, from and after the Effective Date, each Debtor and Reorganized Debtor (as applicable) shall pay in Cash the reasonable legal fees and expenses incurred by such Debtor or Reorganized Debtor (as applicable) after the Effective Date in the ordinary course of business and without any further notice to or action, order or approval of the Bankruptcy Court.  Upon the Effective Date, any requirement that Retained Professionals comply with sections 327 through 331 and 1103 of the Bankruptcy Code in seeking retention or compensation for services rendered after such date shall terminate, and each Debtor or Reorganized Debtor (as applicable) may employ and pay any Retained Professional in the ordinary course of business without any further notice to or action, order, or approval of the Bankruptcy Court.

 

5.                                      Substantial Contribution Compensation and Expenses.

 

Except as otherwise specifically provided in the Plan, any Entity that requests compensation or expense reimbursement for making a substantial contribution in the Chapter 11 Cases pursuant to sections 503(b)(3), (4), and (5) of the Bankruptcy Code must file an application and serve such application on counsel for the Debtors or Reorganized Debtors, as applicable, and as otherwise required by the Bankruptcy Court, the Bankruptcy Code, and the Bankruptcy Rules on or before the Administrative Claims Bar Date.

 

D.                                    Priority Tax Claims

 

Except to the extent that a Holder of an Allowed Priority Tax Claim agrees to a less favorable treatment, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Priority Tax Claim, each Holder of such Allowed Priority Tax Claim shall be treated in accordance with the terms set forth in section 1129(a)(9)(C) of the Bankruptcy Code.  In the event an Allowed Priority Tax Claim is also a Secured Tax Claim, such Claim shall, to the extent it is Allowed, be treated as an Other Secured Claim if such Claim is not otherwise paid in full.  The Allowed Priority Tax Claim of the IRS will be paid in full in cash on the later of (a) the Effective Date, or (b) the date on which such Priority Tax Claim becomes Allowed.

 

E.                                     Statutory Fees

 

All fees due and payable pursuant to section 1930 of Title 28 of the U.S. Code prior to the Effective Date shall be paid by the Debtors.  On and after the Effective Date, the Reorganized Debtors shall pay any and all such fees when due and payable, and shall file with the Bankruptcy Court quarterly reports in a form reasonably acceptable to the U.S. Trustee.  Each Debtor shall remain obligated to pay quarterly fees to the U.S. Trustee until the earliest of that particular Debtor’s case being closed, dismissed, or converted to a case under Chapter 7 of the Bankruptcy Code.

 

ARTICLE III.
CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS

 

A.                                    Summary of Classification

 

Claims and Interests, except for Administrative Claims, Professional Fee Claims, and Priority Tax Claims, are classified in the Classes set forth in this Article III.  A Claim or Interest is classified in a particular Class only to the extent that the Claim or Interest qualifies within the description of that Class and is classified in other Classes to the extent that any portion of the Claim or Interest qualifies within the description of such other Classes.  A Claim or Interest also is classified in a particular Class for the purpose of receiving distributions pursuant to the Plan only to the extent that such Claim is an Allowed Claim in that Class and has not been paid, released, or otherwise satisfied prior to the Effective Date.

 

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Except as provided below, the Plan constitutes a separate chapter 11 plan of reorganization for each Debtor and the classifications set forth in Classes 1 through 11 shall be deemed to apply to each Debtor, except for Class 11, which only applies to Parent.  If substantive consolidation is ordered, each Class with respect to the Debtors shall vote as set forth in Article III of the Plan.  If substantive consolidation is not ordered, each Class of Claims against or Interests in the Debtors shall be deemed to constitute separate sub-Classes of Claims against and Interests in each of the Debtors, as applicable, and each such sub-Class shall vote as a single separate Class for each of the Debtors, as applicable, and the confirmation requirements of section 1129 of the Bankruptcy Code must be satisfied separately with respect to each of the Debtors.

 

1.                                      Class Identification

 

The classification of Claims and Interests against each Debtor (as applicable) pursuant to the Plan is as follows:

 

Class

 

Claim

 

Status

 

Voting Rights

1

 

Other Priority Claims

 

Unimpaired

 

Not Entitled to Vote (Presumed to Accept)

2

 

Other Secured Claims

 

Unimpaired

 

Not Entitled to Vote (Presumed to Accept)

3

 

Lien Trade Claims

 

Unimpaired

 

Not Entitled to Vote (Presumed to Accept)

4

 

First Lien Claims

 

Impaired

 

Entitled to Vote

5

 

Second Lien Notes Claims

 

Impaired

 

Entitled to Vote

6

 

Third Lien Notes Claims

 

Impaired

 

Entitled to Vote

7

 

Unsecured Notes Claims / General Unsecured Claims

 

Impaired

 

Entitled to Vote

8

 

Section 510(b) Claims

 

Impaired

 

Not Entitled to Vote (Deemed to Reject)

9

 

Intercompany Claims

 

Unimpaired/Impaired

 

Not Entitled to Vote (Presumed to Accept/Deemed to Reject)

10

 

Intercompany Interests

 

Unimpaired

 

Not Entitled to Vote (Presumed to Accept)

11

 

Interests in Parent

 

Impaired

 

Not Entitled to Vote (Deemed to Reject)

 

B.                                    Treatment of Claims and Interests

 

1.                                      Class 1 — Other Priority Claims

 

a.                                      Classification:  Class 1 consists of Allowed Other Priority Claims.

 

b.                                      Treatment:  Except to the extent that a Holder of an Allowed Other Priority Claim agrees to a less favorable treatment, in full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for each Allowed Other Priority Claim, each such Holder shall receive payment in full, in cash, of the unpaid portion of its Allowed Other Priority Claim on the Effective Date or as soon thereafter as reasonably practicable (or, if payment is not then due, shall be paid in accordance with its terms) or pursuant to such other terms as may be agreed to by the Holder of an Allowed Other Priority Claim and the Debtors.

 

c.                                       Voting:  Class 1 is Unimpaired under the Plan.  Each Holder of an Allowed Other Priority Claim will be conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code.  Therefore, each Holder of an Allowed Other Priority Claim will not be entitled to vote to accept or reject the Plan.

 

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2.                                      Class 2 — Other Secured Claims

 

a.                                      Classification:  Class 2 consists of Allowed Other Secured Claims.

 

b.                                      Treatment:  Except to the extent that a Holder of an Allowed Other Secured Claim agrees to a less favorable treatment, in full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for each Allowed Other Secured Claim, each such Holder shall receive either (i) payment in full in cash of the unpaid portion of its Allowed Other Secured Claim, including any interest thereon required to be paid under section 506(b) of the Bankruptcy Code, on the Effective Date or as soon thereafter as reasonably practicable (or if payment is not then due, in accordance with the terms of such Allowed Other Secured Claim), (ii) reinstatement pursuant to section 1124 of the Bankruptcy Code, (iii) the collateral securing such Allowed Other Secured Claim, plus any interest thereon required to be paid under section 506(b) of the Bankruptcy Code, on the Effective Date or as soon thereafter as is reasonably practicable or (iv) such other recovery necessary to satisfy section 1129 of the Bankruptcy Code.

 

c.                                       Voting:  Class 2 is Unimpaired under the Plan.  Each Holder of an Allowed Other Secured Claim will be conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code.  Therefore, each Holder of an Allowed Other Secured Claim will not be entitled to vote to accept or reject the Plan.

 

3.                                      Class 3 — Lien Trade Claims

 

a.                                      Classification:  Class 3 consists of Allowed Lien Trade Claims.

 

b.                                      Treatment:  Except to the extent that a Holder of an Allowed Lien Trade Claim agrees to a less favorable treatment, in full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for each Allowed Lien Trade Claim, each such Holder shall receive payment in full in cash of the unpaid portion of its Allowed Lien Trade Claim, including any interest thereon required to be paid under section 506(b) of the Bankruptcy Code, on the Effective Date or as soon thereafter as reasonably practicable (or if payment is not then due, in accordance with the terms of such Allowed Lien Trade Claim).

 

c.                                       Voting:  Class 3 is Unimpaired under the Plan.  Each Holder of an Allowed Lien Trade Claim will be conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code.  Therefore, each Holder of an Allowed Lien Trade Claim will not be entitled to vote to accept or reject the Plan.

 

4.                                      Class 4 - First Lien Claims

 

a.                                      Classification:  Class 4 consists of all First Lien Claims.

 

b.                                      Allowance:  The First Lien Claims shall be Allowed in the aggregate amount equal to $252,024,575.00, plus accrued and unpaid interest, fees, costs, and expenses, including any and all reasonable and documented expenses and other obligations payable pursuant to the First Lien Loan Documents.

 

Treatment:  On the Effective Date, or as soon thereafter as reasonably practicable, except to the extent that a Holder of an Allowed First Lien Claim agrees to less favorable treatment, in full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for each Allowed First Lien Claim, each Holder of an Allowed First Lien Claim shall receive its Pro Rata share of (a) approximately $82 million in Cash or otherwise the amount necessary to reduce the outstanding obligations to the First Lien Lenders (including outstanding obligations with respect to existing letters of credit) to

 

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$170 million and (b)(i) if such Holder is a First Lien Accepting Lender, the New Credit Facility Revolving Loans, or (ii) if such Holder is a First Lien Rejecting Lender, the New Credit Facility Term Loans, in all events consistent with the terms of the New Credit Facility Term Sheet.  For the avoidance of doubt, in the event the Intercreditor Settlement is approved, then the Holders of Allowed First Lien Claims will be deemed to waive their respective rights to any distribution on account of any Diminution in Value Claims.

 

c.                                       Voting:  Class 4 is Impaired under the Plan.  Each Holder of an Allowed First Lien Claim will be will be entitled to vote to accept or reject the Plan.

 

5.                                      Class 5 - Second Lien Notes Claims

 

a.                                      Classification:  Class 5 consists of all Second Lien Notes Claims.

 

b.                                      Allowance:  The Second Lien Notes Claims shall be Allowed in the aggregate principal amount equal to $625,000,000.00, plus accrued and unpaid interest, fees, costs, and expenses, including any and all reasonable and documented expenses, other obligations, and make-whole amounts (if any) payable pursuant to the Second Lien Notes Documents.

 

c.                                       Treatment:  On the Effective Date, or as soon thereafter as reasonably practicable, except to the extent that a Holder of an Allowed Second Lien Notes Claim agrees to less favorable treatment, in full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for its Allowed Second Lien Notes Claim, each Holder of an Allowed Second Lien Notes Claim shall receive, on account of its Allowed Second Lien Notes Secured Claim, its Pro Rata share of (a) ninety six and a quarter percent (96.25%) of the New Common Stock (subject to dilution by the Management Incentive Plan, any other compensation arrangements under the Management Compensation Term Sheet, and New Common Stock issuable upon the exercise of the New Warrants) and (b) the Excess Cash; provided, however, that in the event of a Settlement Termination Event, each Holder of an Allowed Second Lien Notes Claim shall instead receive on account of its Allowed Second Lien Notes Secured Claim, its Pro Rata share of 98.75% of the New Common Stock (subject to dilution by the Management Incentive Plan, any other compensation arrangements under the Management Compensation Term Sheet, and New Common Stock issuable upon the exercise of the New Warrants) and (y) the Excess Cash.

 

d.                                      Voting:  Class 5 is Impaired under the Plan.  Each Holder of an Allowed Second Lien Notes Claim will be entitled to vote to accept or reject the Plan.

 

6.                                      Class 6 - Third Lien Notes Claims

 

a.                                      Classification:  Class 6 consists of all Third Lien Notes Claims.

 

b.                                      Allowance:  The Third Lien Notes Claims shall be Allowed in the aggregate principal amount equal to $529,653,388.00, plus accrued and unpaid interest, fees, costs, and expenses, including any and all reasonable and documented expenses, other obligations, and make-whole amounts (if any) payable pursuant to the Third Lien Notes Documents.

 

c.                                       Treatment:  On the Effective Date, or as soon thereafter as reasonably practicable, except to the extent that a Holder of an Allowed Third Lien Notes Claim agrees to less favorable treatment, in full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for each Allowed Third Lien Notes Claim, each Holder of an Allowed Third Lien Notes Claim shall receive its Pro Rata share of (i) two and one-half percent (2.5%) of the New Common Stock (subject to dilution under the Management Incentive Plan, any other compensation arrangements under the Management Compensation Term

 

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Sheet, and New Common Stock issuable upon exercise of the New Warrants) and (ii) the Third Lien Warrants; provided, however, that in the event of a Settlement Termination Event, each Holder of an Allowed Third Lien Notes Claims shall instead receive its Pro Rata share, on account of its Allowed Third Lien Notes Deficiency Claim, of the Unencumbered Distribution, which will be shared Pro Rata among all Holders of Unsecured Notes Claims and General Unsecured Claims, including the Deficiency Claims.

 

d.                                      Voting:  Class 6 is Impaired under the Plan.  Each Holder of an Allowed Third Lien Notes Claim will be entitled to vote to accept or reject the Plan.

 

7.                                      Class 7 - Unsecured Notes/General Unsecured Claims

 

a.                                      Classification:  Class 7 consists of all Allowed Unsecured Notes Claims and all Allowed General Unsecured Claims.

 

b.                                      Allowance of Unsecured Notes Claims:  The Unsecured 2020 Senior Notes Claims shall be Allowed in the aggregate principal amount of $293,626,000.00, plus accrued and unpaid interest, fees, costs, and expenses, including any and all reasonable and documented expenses and other obligations payable pursuant to the Unsecured 2020 Senior Notes Indenture, and the Unsecured 2021 Senior Notes Claims shall be Allowed in the aggregate principal amount equal to $347,651,000.00, plus accrued and unpaid interest, fees, costs, and expenses, including any and all reasonable and documented expenses and other obligations payable pursuant to the Unsecured 2021 Senior Notes Indenture.

 

c.                                       Treatment:  On the Effective Date, or as soon thereafter as reasonably practicable, except to the extent that a Holder of an Allowed Unsecured Notes Claim or an Allowed General Unsecured Claim agrees to less favorable treatment, in full and final satisfaction, compromise, settlement, release, and discharge of and in exchange for each Allowed Unsecured Notes Claim or Allowed General Unsecured Claim, each Holder of an Allowed Unsecured Notes Claim or an Allowed General Unsecured Claim shall receive its Pro Rata share of (i) one and one-quarter percent (1.25%) of the New Common Stock (which shall be subject to dilution under the Management Incentive Plan, any other compensation arrangements under the Management Compensation Term Sheet, and New Common Stock issuable upon exercise of the New Warrants) and (ii) the Unsecured Creditor Warrants; provided that in the event of a Settlement Termination Event, the Unencumbered Distribution will be shared Pro Rata among all Holders of Unsecured Notes Claims and General Unsecured Claims, including the Deficiency Claims.

 

d.                                      Voting:  Class 7 is Impaired under the Plan.  Each Holder of an Allowed Unsecured Notes Claim or an Allowed General Unsecured Claim will be entitled to vote to accept or reject the Plan.

 

8.                                      Class 8 - Section 510(b) Claims

 

a.                                      Classification:  Class 8 consists of all Section 510(b) Claims.

 

b.                                      Treatment:  On the Effective Date, each Section 510(b) Claim shall be cancelled without any distribution and such Holders of Section 510(b) Claims will receive no recovery.

 

c.                                       Voting:  Class 8 is Impaired under the Plan.  Each Holder of a 510(b) Claim will be conclusively deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code.  Therefore, each Holder of a 510(b) Claim will not be entitled to vote to accept or reject the Plan.

 

24



 

9.                                      Class 9 - Intercompany Claims

 

a.                                      Classification:  Class 9 consists of all Intercompany Claims.

 

b.                                      Treatment:  Intercompany Claims may be Reinstated as of the Effective Date or, at the Debtors’ or the Reorganized Debtors’ option, with the consent of the Requisite Second Lien Noteholders, be cancelled, and no distribution shall be made on account of such Claims.

 

c.                                       Voting:  Class 9 Intercompany Claims are either Unimpaired, and Holders of Intercompany Claims conclusively are presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code, or Impaired, and Holders of Intercompany Claims are deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code.  Therefore, each Holder of an Intercompany Claim will not be entitled to vote to accept or reject the Plan.

 

10.                               Class 10 - Intercompany Interests

 

a.                                      Classification:  Class 10 consists of all Intercompany Interests.

 

b.                                      Treatment:  Intercompany Interests will be Reinstated as of the Effective Date.

 

c.                                       Voting:  Class 10 Intercompany Interests are Unimpaired, and the Holder of the Intercompany Interests conclusively are presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code.  Therefore, the Holder of the Intercompany Interests will not be entitled to vote to accept or reject the Plan.

 

11.                               Class 11 - Interests in Parent

 

a.                                      Classification:  Class 11 consists of all Interests in the Parent.

 

b.                                      Treatment:  On the Effective Date, existing Interests in Parent shall be deemed canceled and extinguished, and shall be of no further force and effect, whether surrendered for cancelation or otherwise, and there shall be no distribution to holders of Interests in Parent on account of such Interests.

 

c.                                       Voting:  Class 11 is Impaired under the Plan.  Each holder of an Interest in Parent will be conclusively deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code.  Therefore, each Holder of an Interest in the Parent will not be entitled to vote to accept or reject the Plan.

 

C.                                    Special Provision Governing Unimpaired Claims

 

Nothing under the Plan shall affect the Debtors’ rights in respect of any Unimpaired Claims, including all rights in respect of legal and equitable defenses to or setoffs or recoupment against any such Unimpaired Claims.

 

D.                                    Confirmation Pursuant to Sections 1129(a)(10) and 1129(b) of the Bankruptcy Code

 

The Debtors reserve the right to seek Confirmation of the Plan pursuant to section 1129(b) of the Bankruptcy Code with respect to any rejecting Class of Claims or Interests.

 

E.                                     Elimination of Vacant Classes

 

Any Class of Claims or Interests that does not have a holder of an Allowed Claim or Allowed Interest or a Claim or Interest temporarily Allowed by the Bankruptcy Court as of the date of the Confirmation Hearing shall be

 

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deemed eliminated from the Plan for purposes of voting to accept or reject the Plan and for purposes of determining acceptance or rejection of the Plan by such Class pursuant to section 1129(a)(8) of the Bankruptcy Code.

 

F.                                      Voting Classes; Presumed Acceptance by Non-Voting Classes

 

If a Class contains Claims or Interests eligible to vote and no Holders of Claims or Interests eligible to vote in such Class vote to accept or reject the Plan, the Plan shall be presumed accepted by the Holders of such Claims or Interests in such Class.

 

G.                                    Presumed Acceptance and Rejection of the Plan

 

To the extent Class 9 Intercompany Claims are cancelled, each Holder of a Claim in Class 9 is deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code and is not entitled to vote to accept or reject the Plan.  To the extent Class 9 Intercompany Claims are Reinstated, each Holder of a Claim in Class 9 is presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code and is not entitled to vote to accept or reject the Plan.

 

H.                                   Subordinated Claims

 

The allowance, classification, and treatment of all Allowed Claims and Allowed Interests and the respective distributions and treatments under the Plan take into account and conform to the relative priority and rights of the Claims and Interests in each Class in connection with any contractual, legal, and equitable subordination rights relating thereto, whether arising under general principles of equitable subordination, section 510(b) of the Bankruptcy Code, or otherwise, including, without limitation, the Intercreditor Agreement.  Pursuant to section 510 of the Bankruptcy Code, the Debtors or Reorganized Debtors reserve the right to re-classify any Allowed Claim (other than any First Lien Claim, Second Lien Claim, or Third Lien Claim) or Allowed Interest in accordance with any contractual, legal, or equitable subordination relating thereto.

 

ARTICLE IV.
MEANS FOR IMPLEMENTATION OF THE PLAN

 

A.                                    The Intercreditor Settlement

 

Pursuant to section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019, the Plan incorporates and implements the Intercreditor Settlement, a compromise and settlement of numerous issues and disputes between and among the Debtors and the Prepetition Secured Parties designed to achieve a reasonable and effective resolution of the Chapter 11 Cases.  Except as otherwise expressly set forth herein, the Intercreditor Settlement constitutes a settlement of potential litigation of all issues and Claims against the Debtors and certain Prepetition Secured Parties including the treatment of Claims held by the Prepetition Secured Parties under the Plan, the valuation of the Debtors’ assets, the allocation of asset values, the determination as to which assets are encumbered and unencumbered, the validity and perfection of Liens, and certain other claims and causes of action.

 

Pursuant to section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019, and in consideration for the classification, distributions, releases, and other benefits provided under the Plan, on the Effective Date, the provisions of the Plan shall constitute a good-faith compromise and settlement of all Claims, Interests, Causes of Action, and controversies resolved pursuant to the Plan, including those resolved by the Intercreditor Settlement and the Confirmation Settlement.  Distributions made to Holders of Allowed Claims are intended to be indefeasible.

 

Pursuant to the Intercreditor Settlement, (a) the Debtors, the Consenting First Lien Lenders, the Consenting Second Lien Noteholders, and the Consenting Cross-Over Noteholders agreed to the Unencumbered Value Settlement, (b) the Consenting Second Lien Noteholders and Consenting Cross-Over Noteholders agreed to the Second/Third Lien Plan Settlement, and (c) the Prepetition Secured Parties agreed to waive any right to recover on account of their respective Diminution in Value Claims and the Deficiency Claims (as applicable) for the benefit of General Unsecured Creditors and Unsecured Noteholders.

 

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Nothing herein shall terminate or otherwise abrogate the rights of the parties under and to the Intercreditor Agreement, which rights remain valid and enforceable, subject to payments allowed pursuant to the New Credit Facility Term Sheet and the Intercreditor Settlement.

 

In addition, in the event of a Settlement Termination Event, the Prepetition Secured Parties shall not be deemed to have waived their respective rights to recover on account of their Deficiency Claims, meaning that the Unencumbered Distribution will be shared Pro Rata among all Holders of Unsecured Notes Claims and General Unsecured Claims, including the Deficiency Claims.

 

Furthermore, in the event of a Settlement Termination Event, the distributions provided for under the Plan will exclude the Second/Third Lien Plan Settlement; provided, however, that the Litigation Waivers under the Second/Third Lien Plan Settlement shall remain effective as long as the Plan Support Agreement is in full force and effect unless the Requisite Second Lien Noteholders elect to terminate the Second/Third Lien Plan Settlement pursuant to Section 6(b)(iv) of the Plan Support Agreement.

 

In the event a Settlement Termination Event occurs, the Committee shall have the right to terminate the Confirmation Settlement.  For the avoidance of doubt, if the Confirmation Settlement is terminated, then the Plan shall not be confirmed and the Effective Date will not occur.

 

B.                                    Restructuring Transactions

 

On the Effective Date, or as soon as reasonably practicable thereafter, the Reorganized Debtors may take all actions as may be necessary or appropriate to effectuate any transaction described in, approved by, contemplated by, or necessary to effectuate the Plan Support Agreement and the Plan (the “Restructuring Transactions”), including:  (1) the execution and delivery of any appropriate agreements or other documents of merger, consolidation, restructuring, conversion, disposition, transfer, dissolution, or liquidation containing terms that are consistent with the terms of the Plan, and that satisfy the requirements of applicable law and any other terms to which the applicable Entities may agree; (2) the execution and delivery of appropriate instruments of transfer, assignment, assumption, or delegation of any Interest, asset, property, right, liability, debt, or obligation on terms consistent with the terms of the Plan and having other terms for which the applicable parties agree; (3) the filing of appropriate certificates or articles of incorporation, reincorporation, merger, consolidation, conversion, or dissolution pursuant to applicable state law; (4) the execution and delivery of the New Credit Facility Documents; and (5) all other actions that the applicable Entities determine to be necessary or appropriate, including making filings or recordings that may be required by applicable law.

 

C.                                    Sources of Consideration for Plan Distributions

 

The Debtors shall fund distributions under the Plan, with: (1) Cash on hand, including cash from operations, (2) the New Credit Facility, (3) the New Common Stock, and (4) the New Warrants, as applicable.  From and after the Effective Date, the Reorganized Debtors, subject to applicable limitations set forth in any post-Effective Date agreement (including, without limitation, the New Credit Facility Documents), shall have the right and authority without further order of the Bankruptcy Court to raise additional capital and obtain additional financing as the New Board deems appropriate.

 

D.                                    The New Credit Facility and Approval of the New Credit Facility

 

Confirmation of the Plan shall be deemed to constitute approval of the New Credit Facility and the New Credit Facility Documents (including all transactions contemplated thereby, such as any supplementation or additional syndication of the New Credit Facility, and all actions to be taken, undertakings to be made and obligations to be incurred by the Reorganized Debtors in connection therewith, including the payment of all fees, indemnities and expenses provided for therein) and, subject to the occurrence of the Effective Date, authorization for the Reorganized Debtors to enter into and perform their obligations under the New Credit Facility Documents and such other documents as may be reasonably required or appropriate, in each case, in accordance with the New Credit Facility Documents.  For the avoidance of doubt, from and after the Effective Date, the First Lien Accepting

 

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Lenders will hold New Credit Facility Revolving Loans and the First Lien Rejecting Lenders will hold New Credit Facility Term Loans, in each case subject to the terms of the New Credit Facility Documents.

 

On the Effective Date, the New Credit Facility Documents shall constitute legal, valid, binding, and authorized obligations of the Reorganized Debtors, enforceable in accordance with their terms.  The financial accommodations to be extended pursuant to the New Credit Facility Documents are being extended, and shall be deemed to have been extended, in good faith, for legitimate business purposes, are reasonable, shall not be subject to avoidance, recharacterization, or subordination (including equitable subordination) for any purposes whatsoever, and shall not constitute preferential transfers, fraudulent conveyances, or other voidable transfers under the Bankruptcy Code or any other applicable non-bankruptcy law.  On the Effective Date, all of the Liens and security interests to be granted in accordance with the New Credit Facility Documents (a) shall be legal, binding, and enforceable Liens on, and security interests in, the collateral granted thereunder in accordance with the terms of the New Credit Facility Documentation, (b) shall be deemed automatically attached and perfected on the Effective Date, subject only to such Liens and security interests as may be permitted under the New Credit Facility Documents, and (c) shall not be subject to avoidance, recharacterization, or subordination (including equitable subordination) for any purposes whatsoever and shall not constitute preferential transfers, fraudulent conveyances, or other voidable transfers under the Bankruptcy Code or any applicable non-bankruptcy law.  The Reorganized Debtors and the Entities granted such Liens and security interests are authorized to make all filings and recordings, and to obtain all governmental approvals and consents necessary to establish, attach, and perfect such Liens and security interests under the provisions of the applicable state, provincial, federal, or other law (whether domestic or foreign) that would be applicable in the absence of the Plan and the Confirmation Order (it being understood that perfection shall occur automatically by virtue of the entry of the Confirmation Order, and any such filings, recordings, approvals, and consents shall not be required), and will thereafter cooperate to make all other filings and recordings that otherwise would be necessary under applicable law to give notice of such Liens and security interests to third parties.  To the extent that any Holder of a Secured Claim that has been satisfied or discharged in full pursuant to the Plan, or any agent for such Holder, has filed or recorded publicly any Liens and/or security interests to secure such Holder’s Secured Claim, then as soon as practicable on or after the Effective Date, such Holder (or the agent for such Holder) shall take any and all steps requested by the Debtors, the Reorganized Debtors or any administrative agent under the New Credit Facility Documents that are necessary to cancel and/or extinguish such Liens and/or security interests.

 

E.                                     The New Common Stock and New Warrants

 

1.                                      New Common Stock

 

On the Effective Date, the Reorganized Debtors shall issue or reserve for issuance all of the New Common Stock in accordance with the terms herein, subject to dilution on the terms described herein.  The issuance of the New Common Stock by the Reorganized Debtors for distribution pursuant to the Plan is authorized without the need for further corporate action and all of the shares of New Common Stock issued pursuant to the Plan shall be duly authorized, validly issued, fully paid, and non-assessable.  The New Common Stock issued to Holders of Claims on or about the Effective Date pursuant to the Plan shall be subject to dilution by the New Common Stock to be issued under the Management Incentive Plan, any other compensation arrangements provided under the Management Compensation Term Sheet, and New Common Stock issuable upon exercise of the New Warrants.

 

2.                                      New Warrants

 

On the Effective Date the Reorganized Debtors shall issue the New Warrants; provided, however, that the Unsecured Creditor Warrants shall be issued pursuant to Article VI.  The issuance of the New Warrants by the Reorganized Debtors for distribution pursuant to the Plan is authorized without the need for further corporate action and all of the New Warrants issued pursuant to the Plan shall be duly authorized, validly issued, fully paid, and non-assessable.

 

F.                                      Exemption from Registration Requirements

 

All shares of New Common Stock and the New Warrants (if any) issued under the Plan will be issued without registration under the Securities Act or any similar federal, state, or local law in reliance upon either

 

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(a) section 1145 of the Bankruptcy Code or (b) section 4(2) of the Securities Act or Regulation D promulgated thereunder.

 

1.                                      New Common Stock and New Warrants Issued Pursuant to Section 4(2) of the Securities Act

 

All shares of New Common Stock and New Warrants (if any) issued pursuant to the exemption from registration set forth in section 4(2) of the Securities Act or Regulation D promulgated thereunder will be considered “restricted securities” and may not be transferred except pursuant to an effective registration statement under the Securities Act or an available exemption therefrom.  Resales of such restricted securities would not be exempted by section 1145 of the Bankruptcy Code from registration under the Securities Act or other applicable law.  Holders of restricted securities would, however, be permitted to resell New Common Stock and New Warrants (if any) without registration if they are able to comply with the applicable provisions of Rule 144 or Rule 144A under the Securities Act, or if such securities are registered with the Securities and Exchange Commission.

 

2.                                      New Common Stock and New Warrants Issued Pursuant to Section 1145 of the Bankruptcy Code

 

New Common Stock and New Warrants (if any), as applicable, issued to Holders of Second Lien Notes Claims, Third Lien Notes Claims, Unsecured Notes Claims, and General Unsecured Claims pursuant to Article III.B shall be issued in reliance on section 1145 of the Bankruptcy Code.

 

The New Common Stock and New Warrants (if any) (as well as New Common Stock issuable upon the exercise of the New Warrants) issued pursuant to section 1145 of the Bankruptcy Code (a) are not “restricted securities” as defined in Rule 144(a)(3) under the Securities Act, and (b) are freely tradable and transferable by any initial recipient thereof that (i) is not an “affiliate” of the Reorganized Debtors as defined in Rule 144(a)(1) under the Securities Act, (ii) has not been such an “affiliate” within 90 days of such transfer, and (iii) is not an entity that is an “underwriter” as defined in subsection (b) of Section 1145 of Bankruptcy Code.

 

Should the Reorganized Debtors elect on or after the Effective Date to reflect any ownership of the New Common Stock or New Warrants (if any) through the facilities of the DTC, the Reorganized Debtors need not provide any further evidence other than the Plan or the Confirmation Order with respect to the treatment of the New Common Stock or New Warrants (if any) under applicable securities laws.

 

Notwithstanding anything to the contrary in the Plan, no entity (including, for the avoidance of doubt, the DTC) may require a legal opinion regarding the validity of any transaction contemplated by the Plan, including, for the avoidance of doubt, whether the New Common Stock or New Warrants (if any) are exempt from registration and/or eligible for DTC book-entry delivery, settlement, and depository services.  The DTC shall be required to accept and conclusively rely upon the Plan or Confirmation Order in lieu of a legal opinion regarding whether the New Common Stock or New Warrants (if any) are exempt from registration and/or eligible for DTC book-entry delivery, settlement, and depository services.

 

3.                                      Registration Rights Agreement

 

On the Effective Date, the Registration Rights Beneficiaries and Reorganized Parent shall enter into the Registration Rights Agreement.  The Registration Rights Agreement shall provide the Registration Rights Beneficiaries with certain demand registration rights (including with respect to underwritten offerings) and with piggyback registration rights.  The Registration Rights Agreement shall also provide that on or before the date that is ninety (90) days after the Effective Date, the Reorganized Parent shall file, and shall thereafter use its commercially reasonable efforts to cause to be declared effective as promptly as practicable, a registration statement on Form S-1 (or other appropriate form) for the offer and resale of the New Common Stock held by the Registration Rights Beneficiaries.  The Registration Rights Agreement shall contain customary terms and conditions, including, without limitation, provisions with respect to blackout periods.

 

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G.                                    Corporate Existence

 

Except as otherwise provided in the Plan or any agreement, instrument, or other document incorporated in the Plan or the Plan Supplement, on the Effective Date, each Debtor shall continue to exist after the Effective Date as a separate corporation, limited liability company, partnership, or other form of entity, as the case may be, with all the powers of a corporation, limited liability company, partnership, or other form of entity, as the case may be, pursuant to the applicable law in the jurisdiction in which each applicable Debtor is incorporated or formed and pursuant to the respective certificate of incorporation and by-laws (or other analogous formation documents) in effect before the Effective Date, except to the extent such certificate of incorporation and bylaws (or other analogous formation documents) are amended by the Plan or otherwise (including in connection with any conversion of the Reorganized Parent to a limited liability company), and to the extent such documents are amended, such documents are deemed to be amended pursuant to the Plan and require no further action or approval (other than any requisite filings required under applicable state, provincial, or federal law).

 

H.                                   Vesting of Assets in the Reorganized Debtors

 

Except as otherwise provided in the Plan Support Agreement or the Plan or any agreement, instrument, or other document incorporated in the Plan or the Plan Supplement, on the Effective Date, all property in each Estate, including all Causes of Action, and any property acquired by any of the Debtors, after the Petition Date shall vest in each respective Reorganized Debtor, free and clear of all Liens, Claims, charges, or other encumbrances.  On and after the Effective Date, except as otherwise provided in the Plan, each Reorganized Debtor may operate its business and may use, acquire, or dispose of property, and compromise or settle any Claims, Interests, or Causes of Action without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules.

 

I.                                        Cancellation of Existing Securities

 

Except as otherwise provided in the Plan (including, without limitation, Sections U and V of Article IV of the Plan) or any agreement, instrument, or other document incorporated in the Plan or the Plan Supplement, on the Effective Date:  (1) the First Lien Loan Documents, the Second Lien Notes Documents, the Third Lien Notes Documents, the Intercreditor Agreement, the Unsecured Notes Documents, and any other certificate, share, note, bond, indenture, purchase right, option, warrant, or other instrument or document, directly or indirectly, evidencing or creating any indebtedness or obligation of or ownership interest in the Debtors giving rise to any Claim or Interest (except such certificates, notes, or other instruments or documents evidencing indebtedness or obligations of the Debtors that are specifically Reinstated pursuant to the Plan) shall immediately and automatically be terminated and cancelled and neither the Reorganized Debtors, nor the First Lien Administrative Agent, nor the Second Lien Notes Trustee, nor the Third Lien Notes Trustee, nor the Unsecured Notes Trustees, nor any other indenture trustee, agent, or servicer thereunder shall have any continuing obligations thereunder; and (2) the obligations of the Debtors pursuant, relating, or pertaining to any agreements, indentures, certificates of designation, bylaws, or certificate or articles of incorporation or similar documents governing the shares, certificates, notes, bonds, purchase rights, options, warrants, or other instruments or documents evidencing or creating any indebtedness or obligation of the Debtors (except such agreements, certificates, notes, or other instruments evidencing indebtedness or obligations of the Debtors that are specifically Reinstated pursuant to the Plan) shall be released and discharged; provided, however, that notwithstanding anything to the contrary in the Plan or the occurrence of Confirmation or the Effective Date, the First Lien Loan Documents, the Second Lien Notes Documents, the Third Lien Notes Documents, the Unsecured Notes Documents, and any other indenture or agreement that governs the rights of the Holder of a Claim or Interest shall continue to remain in full force and effect solely:

 

(1)                                 for the purposes of allowing the First Lien Administrative Agent, the Second Lien Notes Trustee, the Third Lien Notes Trustee, the Unsecured Notes Trustees, and any other indenture trustee, agent, or servicer thereunder to make the distributions to be made on account of such Claims or Interests under the Plan and enabling Holders of Allowed Claims and Allowed Interests to receive distributions under the Plan as provided herein; provided that the preceding proviso shall not affect the discharge of Claims or Interests pursuant to the Bankruptcy Code, the Confirmation Order, or the Plan or result in any expense or liability to the Reorganized Debtors, except to the extent set forth in or provided for under this

 

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Plan; provided, further, that nothing in this section shall effectuate a cancellation of any New Common Stock or Intercompany Interests;

 

(2)                                 with respect to any obligations thereunder governing the relationship between the Second Lien Noteholders and the Second Lien Notes Trustee, the Third Lien Noteholders and the Third Lien Notes Trustee, and the Unsecured Noteholders and the Unsecured Notes Trustees (as applicable) (including, but not limited to, those provisions relating to the rights of the Second Lien Notes Trustee, the Third Lien Notes Trustee, or the Unsecured Notes Trustees to charging liens on account of fees, expense reimbursement, indemnification, and similar amounts) or that may survive the termination or maturity of the Second Lien Indenture, Third Lien Indenture, and the Unsecured Notes Documents in accordance with the terms thereof; and

 

(3)                                 to permit each of the First Lien Administrative Agent, the Second Lien Notes Trustee, the Third Lien Notes Trustee, and the Unsecured Notes Trustees to enforce any obligations owed to them under the Plan, or to appear in the Chapter 11 Cases or any proceeding before the Bankruptcy Court with respect thereto.

 

On and after the Effective Date, all duties and responsibilities of the First Lien Administrative Agent under the First Lien Credit Documents, the Second Lien Notes Trustee under the Second Lien Notes Documents, the Third Lien Notes Trustee under the Third Lien Notes Documents, the Unsecured 2020 Senior Notes Trustee under the Unsecured 2020 Senior Notes Indenture, and the Unsecured 2021 Senior Notes Trustee under the Unsecured 2021 Senior Notes Indenture, as applicable, shall be discharged unless otherwise specifically set forth in or provided for under the Plan or the Plan Supplement.

 

J.                                        Surrender of Securities Instruments

 

On or before the Effective Date, or as soon as reasonably practicable thereafter, each holder of a Certificate shall surrender such Certificate to the Reorganized Debtors or, with respect to indebtedness that is governed by an indenture or other agreement, the respective indenture trustee, agent, or servicer, as the case may be, and such Certificate shall be cancelled.  No distributions of property hereunder shall be made to or on behalf of any such holder unless and until such Certificate is received by the Reorganized Debtors or the respective indenture trustee, agent, or servicer, as the case may be, or the unavailability of such Certificate is reasonably established to the satisfaction of the Reorganized Debtors or the respective indenture trustee, agent, or servicer, as the case may be.  Any such holder who fails to surrender or cause to be surrendered such Certificate or fails to execute and deliver an affidavit of loss and indemnity reasonably satisfactory to the Reorganized Debtors or the respective indenture trustee, agent, or servicer, as the case may be, within six (6) months after the Effective Date, shall be deemed to have forfeited all rights, Claims, and Interests in respect of such Certificate and shall not participate in any distribution hereunder, and (1) all Cash in respect of such forfeited distribution, including interest accrued thereon, shall revert to the Reorganized Debtors, and (2) all New Common Stock in respect of such forfeited distribution shall be cancelled notwithstanding any federal or state escheat laws to the contrary.

 

K.                                    Corporate Action

 

Upon the Effective Date, or as soon thereafter as is reasonably practicable, all actions contemplated by the Plan shall be deemed authorized and approved by the Bankruptcy Court in all respects, including, as applicable:  (1) the issuance of the New Common Stock; (2) the issuance of the New Warrants, if any; (3) selection of the directors and officers for Reorganized Parent and the other Reorganized Debtors; (4) execution and delivery of the New Credit Facility Documents; (5) adoption of the Management Incentive Plan by the New Board of Reorganized Parent; (6) implementation of the Restructuring Transactions; and (7)  all other actions contemplated by the Plan (whether to occur before, on, or after the Effective Date).  Upon the Effective Date, all matters provided for in the Plan involving the corporate structure of the Reorganized Debtors, and any corporate action required by the Debtors or the Reorganized Debtors in connection with the Plan shall be deemed to have occurred and shall be in effect, without any requirement of further action by the security holders, directors, or officers of the Debtors or the Reorganized Debtors.  On or (as applicable) before the Effective Date, the appropriate officers of the Debtors or the Reorganized Debtors shall be authorized and (as applicable) directed to issue, execute, and deliver the agreements, documents, securities, and instruments contemplated by the Plan (or necessary or desirable to effect the transactions

 

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contemplated by the Plan) in the name of and on behalf of Reorganized Parent and the other Reorganized Debtors, including the New Credit Facility Documents and any and all other agreements, documents, securities, and instruments relating to the New Credit Facility, to the extent not previously authorized by the Bankruptcy Court.  The authorizations and approvals contemplated by this Article IV.K shall be effective notwithstanding any requirements under non-bankruptcy law.

 

L.                                     New Organizational Documents

 

To the extent required under the Plan or applicable non-bankruptcy law, Reorganized Parent and the other Reorganized Debtors will file their respective New Organizational Documents with the applicable Secretaries of State and/or other applicable authorities in their respective states of incorporation in accordance with the corporate laws of the respective states, provinces, or countries of incorporation.  Pursuant to section 1123(a)(6) of the Bankruptcy Code, the New Organizational Documents of the Reorganized Debtors will prohibit the issuance of non-voting equity securities.  After the Effective Date, Reorganized Parent and the other Reorganized Debtors, as applicable, may amend and restate their respective New Organizational Documents and other constituent documents as permitted by the laws of their respective states of incorporation and their respective New Organizational Documents.

 

M.                                 Directors and Officers of the Reorganized Debtors

 

As of the Effective Date, the term of the current members of the board of directors of the Parent shall expire, and the New Board, as well as the officers of each of the Reorganized Debtors, shall be appointed in accordance with the New Organizational Documents.

 

Pursuant to section 1129(a)(5) of the Bankruptcy Code, the Debtors will, to the extent practicable, disclose in advance of the Confirmation Hearing the identity and affiliations of any Person proposed to serve on the initial New Board, as well as those Persons that will serve as an officer of any of the Reorganized Debtors.  Successors will be elected in accordance with the New Organizational Documents of Reorganized Parent.  To the extent any such director or officer is an “insider” under the Bankruptcy Code, the nature of any compensation to be paid to such director or officer will also be disclosed.  Each such director and officer shall serve from and after the Effective Date pursuant to the terms of the New Organizational Documents and other constituent documents of Reorganized Parent and the Reorganized Debtors.

 

N.                                    Effectuating Documents; Further Transactions

 

On and after the Effective Date, the Reorganized Debtors, and the officers and members of the New Board thereof, are authorized to and may issue, execute, deliver, file, or record such contracts, Securities, instruments, releases, and other agreements or documents and take such actions as may be necessary or appropriate to effectuate, implement, and further evidence the terms and conditions of the Plan and the Securities issued pursuant to the Plan, including the New Common Stock, in the name of and on behalf of the Reorganized Debtors, without the need for any approvals, authorization, or consents except those expressly required pursuant to the Plan.

 

O.                                    Exemption from Certain Taxes and Fees

 

Pursuant to section 1146(a) of the Bankruptcy Code, any issuance, transfer or exchange of a security (including, without limitation, the New Common Stock and the New Warrants, if any) or transfers of property pursuant hereto shall not be subject to any document recording tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, stamp act, real estate transfer tax, sale or use tax, mortgage recording tax, or other similar tax or governmental assessment, and upon entry of the Confirmation Order, the appropriate state or local governmental officials or agents shall forgo the collection of any such tax or governmental assessment and accept for filing and recordation any of the foregoing instruments or other documents pursuant to such transfers of property without the payment of any such tax, recordation fee, or governmental assessment.

 

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P.                                      Preservation of Causes of Action

 

In accordance with section 1123(b) of the Bankruptcy Code, but subject in all respects to Article VIII hereof, and except as otherwise set forth in the Plan Support Agreement, the Reorganized Debtors shall retain and may enforce all rights to commence and pursue, as appropriate, any and all Causes of Action, whether arising before or after the Petition Date, including any actions specifically enumerated in the Plan Supplement, and such rights to commence, prosecute, or settle such Causes of Action shall be preserved notwithstanding the occurrence of the Effective Date. The Reorganized Debtors may pursue such Causes of Action, as appropriate, in accordance with the best interests of the Reorganized Debtors.  No Entity may rely on the absence of a specific reference in the Plan, the Plan Supplement, or the Disclosure Statement to any Causes of Action against it as any indication that the Debtors or the Reorganized Debtors will not pursue any and all available Causes of Action against it.  The Debtors or the Reorganized Debtors, as applicable, expressly reserve all rights to prosecute any and all Causes of Action against any Entity, except as otherwise expressly provided in the Plan.  Unless any Causes of Action against an Entity are expressly waived, relinquished, exculpated, released, compromised, or settled in the Plan Support Agreement or the Plan or a Bankruptcy Court order, the Debtors or Reorganized Debtors, as applicable, expressly reserve all Causes of Action, for later adjudication, and, therefore, no preclusion doctrine, including the doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, equitable, or otherwise), or laches, shall apply to such Causes of Action upon, after, or as a consequence of the Confirmation or consummation of the Plan.

 

In accordance with section 1123(b)(3) of the Bankruptcy Code, except as otherwise provided herein, any Causes of Action that a Debtor may hold against any Entity shall vest in the Reorganized Debtors.  The applicable Reorganized Debtors, through their authorized agents or representatives, shall retain and may exclusively enforce any and all such Causes of Action.  The Reorganized Debtors shall have the exclusive right, authority, and discretion to determine and to initiate, file, prosecute, enforce, abandon, settle, compromise, release, withdraw, or litigate to judgment any such Causes of Action, and to decline to do any of the foregoing without the consent or approval of any third party or further notice to or action, order, or approval of the Bankruptcy Court.

 

Q.                                    Director and Officer Liability Insurance

 

To the extent that the D&O Liability Insurance Policies are considered to be Executory Contracts, notwithstanding anything in the Plan to the contrary, effective as of the Effective Date, the Reorganized Debtors shall be deemed to have assumed all unexpired D&O Liability Insurance Policies with respect to the Debtors’ directors, managers, officers, and employees serving on or prior to the Petition Date pursuant to section 365(a) of the Bankruptcy Code.  Entry of the Confirmation Order will constitute the Bankruptcy Court’s approval of the Reorganized Debtors’ assumption of each of the unexpired D&O Liability Insurance Policies.  Notwithstanding anything to the contrary contained in the Plan, Confirmation of the Plan shall not discharge, impair, or otherwise modify any indemnity obligations assumed by the foregoing assumption of the D&O Liability Insurance Policies, and each such indemnity obligation will be deemed and treated as an Executory Contract that has been assumed by the Reorganized Debtors under the Plan as to which no Proof of Claim need be filed.

 

After the Effective Date, the Reorganized Debtors shall not terminate or otherwise reduce the coverage under any D&O Liability Insurance Policy (including such tail coverage liability insurance) in effect and all members, managers, directors, and officers of the Debtors who served in such capacity at any time prior to the Effective Date of the Plan shall be entitled to the full benefits of any such policy for the full term of such policy regardless of whether such members, managers, directors, and/or officers remain in such positions after the Effective Date of the Plan.

 

R.                                    Management Incentive Plan and Management Employment Agreements

 

The Management Incentive Plan is hereby approved in its entirety and shall be implemented on the Effective Date by the Reorganized Debtors without any further action by the New Board or the Bankruptcy Court.  Additionally, the Debtors’ existing management employment agreements shall be assumed and/or amended and assumed pursuant to section 365(a) of the Bankruptcy Code on the terms set forth in the Management Compensation Term Sheet and otherwise acceptable to management and the Requisite Second Lien Noteholders.

 

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S.                                      Employee and Retiree Benefits

 

As set forth in the Schedule of Assumed Executory Contracts and Unexpired Leases included in the Plan Supplement, all employment, severance, retirement, indemnification, and other similar employee-related agreements or arrangements in place as of the Effective Date with the Debtors, including retirement income plans and welfare benefit plans, or discretionary bonus plans or variable incentive plans regarding payment of a percentage of annual salary based on performance goals and financial targets for certain employees, shall be assumed by the Reorganized Debtors and shall remain in place after the Effective Date, as may be amended by agreement between the beneficiaries of such agreements, plans, or arrangements, on the one hand, and the Debtors, on the other hand, or, after the Effective Date, by agreement with the Reorganized Debtors, and the Reorganized Debtors will continue to honor such agreements, arrangements, programs, and plans; provided that the foregoing shall not apply to any equity-based compensation, agreement, or arrangement existing as of the Effective Date.  Nothing in the Plan shall limit, diminish, or otherwise alter the Reorganized Debtors’ defenses, claims, Causes of Action, or other rights with respect to any such contracts, agreements, policies, programs, and plans.  Notwithstanding the foregoing, pursuant to section 1129(a)(13) of the Bankruptcy Code, on and after the Effective Date, all retiree benefits (as that term is defined in section 1114 of the Bankruptcy Code), if any, shall continue to be paid in accordance with applicable law.

 

T.                                     Payment of Fees and Expenses of the First Lien Administrative Agent

 

Prior to the Effective Date (and thereafter with respect to fees and expenses relating to post-Effective Date services), the Debtors shall pay in Cash all reasonable and documented unpaid fees and expenses of the First Lien Administrative Agent, the other First Lien Secured Parties, and their advisors, including counsel, without application to or approval of the Bankruptcy Court. For the avoidance of doubt, nothing herein affects the First Lien Administrative Agent’s right to exercise any charging lien arising under and in accordance with the First Lien Loan Document to obtain payments of its fees and expenses and the fees and expense of its professionals.

 

U.                                    Payment of Fees and Expenses of the Second Lien Notes Trustee

 

Prior to the Effective Date (and thereafter with respect to fees and expenses relating to post-Effective Date services), the Debtors or the Reorganized Debtors, as the case may be, shall pay, without a reduction to the recoveries of the Holders of the Second Lien Notes, in Cash:

 

(1)                                 all reasonable and documented unpaid prepetition and postpetition fees, costs, and expenses of the Second Lien Notes Trustee and its advisors, including counsel, for which the Debtors are obligated to pay to or otherwise reimburse the Second Lien Notes Trustee under the Second Lien Indenture without application to or approval of the Bankruptcy Court of such fees and expenses; and

 

(2)                                 in the event that the Second Lien Notes Trustee provides any services in connection with the Confirmation and Consummation of the Plan (including any such services with respect to distributions to be made pursuant to the Plan), upon presentation of invoices in customary form providing reasonable supporting detail, reasonable compensation for such services and reimbursement of reasonable expenses (including attorneys’ and agents’ fees and expenses) incurred in connection with such services.

 

Notwithstanding anything in the Plan to the contrary, and for the avoidance of doubt, nothing in the Plan shall modify, reduce, cancel, terminate, discharge, impair, or otherwise affect in any way the right of the Second Lien Notes Trustee to exercise its charging lien or security interest arising under and in accordance with the Second Lien Indenture to obtain payments of its fees and expenses and the fees and expense of its professionals.

 

V.                                    Payment of Fees and Expenses of the Third Lien Notes Trustee

 

Prior to the Effective Date (and thereafter with respect to fees and expenses relating to post-Effective Date services), the Debtors or the Reorganized Debtors, as the case may be, shall pay, without a reduction to the recoveries of the Holders of the Third Lien Notes, in Cash:

 

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(1)                                 all reasonable and documented unpaid prepetition and postpetition fees, costs, and expenses of the Third Lien Notes Trustee and its advisors, including counsel, for which the Debtors are obligated to pay to or otherwise reimburse the Third Lien Notes Trustee under the Third Lien Indenture without application to or approval of the Bankruptcy Court of such fees and expenses; and

 

(2)                                 in the event that the Third Lien Notes Trustee provides any services in connection with the Confirmation and Consummation of the Plan (including any such services with respect to distributions to be made pursuant to the Plan), upon presentation of invoices in customary form providing reasonable supporting detail, reasonable compensation for such services and reimbursement of reasonable expenses (including attorneys’ and agents’ fees and expenses) incurred in connection with such services.

 

Notwithstanding anything in the Plan to the contrary, and for the avoidance of doubt, nothing in the Plan shall modify, reduce, cancel, terminate, discharge, impair, or otherwise affect in any way the right of the Third Lien Notes Trustee to exercise its charging lien or security interest arising under and in accordance with the Third Lien Indenture to obtain payments of its fees and expenses and the fees and expenses of its professionals.

 

W.                                 Payment of Fees and Expenses of the Consenting Second Lien Noteholders and Consenting Cross-Over Noteholders

 

Prior to the Effective Date (and thereafter with respect to fees and expenses relating to post-Effective Date services), the Debtors shall pay in cash all reasonable and documented fees and expenses of the Consenting Second Lien Noteholders and Consenting Cross-Over Noteholders and each of their advisors, including counsel, without application to or approval of the Bankruptcy Court and in accordance with, and subject to, the terms of the Plan Support Agreement.

 

X.                                    Payment of Fees and Expenses of the Unsecured Notes Trustees

 

On the Effective Date, the Debtors or the Reorganized Debtors, as the case may be, shall pay in Cash, unpaid prepetition and postpetition fees, costs, and expenses of the Unsecured Notes Trustees and its advisors, including counsel, as provided under the Confirmation Order.

 

ARTICLE V.
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

 

A.                                    Assumption and Rejection of Executory Contracts and Unexpired Leases

 

Except as otherwise provided herein, as of the Effective Date, each Debtor shall be deemed to have rejected each Executory Contract and Unexpired Lease to which it is a party, unless such Executory Contract or Unexpired Lease:  (1) was previously assumed or rejected; (2) was previously expired or terminated pursuant to its own terms; (3) is the subject of a motion or notice to assume filed on or before the Confirmation Date; or (4) is designated specifically or by category as an Executory Contract or Unexpired Lease on the Schedule of Assumed Executory Contracts and Unexpired Leases.  In addition to the foregoing, as of the Effective Date, each Debtor shall deemed to have rejected each Executory Contract and Unexpired Lease to which it is a party that is designated specifically or by category as an Executory Contract or Unexpired Lease on the Schedule of Rejected Executory Contracts and Unexpired Leases.  For the avoidance of doubt, any Executory Contract or Unexpired Lease that (y) does not appear on the Schedule of Assumed Executory Contracts and Unexpired Leases, and (z) is not subject to one of the conditions for assumption of Executory Contracts and Unexpired Leases listed in this paragraph shall be deemed rejected.  Notwithstanding anything in the Plan to the contrary, each Executory Contract and Unexpired Lease that appears on the Schedule of Rejected Executory Contracts and Unexpired Leases shall be deemed rejected.

 

Entry of the Confirmation Order shall constitute a Bankruptcy Court order approving the assumptions, assumptions and assignments, or rejections of such Executory Contracts or Unexpired Leases as set forth in the Plan or the Schedule of Assumed Executory Contracts and Unexpired Leases, pursuant to sections 365(a) and 1123 of the Bankruptcy Code.  Unless otherwise indicated, assumptions or rejections of Executory Contracts and Unexpired Leases pursuant to the Plan are effective as of the Effective Date.  Each Executory Contract or Unexpired Lease

 

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assumed pursuant to the Plan or by Bankruptcy Court order but not assigned to a third party before the Effective Date shall re-vest in and be fully enforceable by the applicable contracting Reorganized Debtor in accordance with its terms, except as such terms may have been modified by the provisions of the Plan or any order of the Bankruptcy Court authorizing and providing for its assumption under applicable federal law.  Any motions to assume Executory Contracts or Unexpired Leases pending on the Effective Date shall be subject to approval by a Final Order of the Bankruptcy Court on or after the Effective Date.

 

B.                                    Claims Based on Rejection of Executory Contracts or Unexpired Leases

 

Proofs of Claim with respect to Claims arising from the rejection of Executory Contracts or Unexpired Leases, if any, must be filed with the Bankruptcy Court within thirty (30) days after the date of entry of an order of the Bankruptcy Court (including the Confirmation Order) approving such rejection.  Any Claims arising from the rejection of an Executory Contract or Unexpired Lease not Filed within such time will be automatically Disallowed, forever barred from assertion, and shall not be enforceable against, as applicable, the Debtors, the Reorganized Debtors, the Estates, or property of the foregoing parties, without the need for any objection by the Debtors or the Reorganized Debtors, as applicable, or further notice to, or action, order, or approval of the Bankruptcy Court or any other Entity, and any Claim arising out of the rejection of the Executory Contract or Unexpired Lease shall be deemed fully satisfied, released, and discharged, notwithstanding anything in the Schedules or a Proof of Claim to the contrary.  Claims arising from the rejection of the Debtors’ Executory Contracts or Unexpired Leases shall be classified as General Unsecured Claims and shall be treated in accordance with Article III.B.7 of the Plan, as applicable.

 

C.                                    Cure of Defaults for Assumed Executory Contracts and Unexpired Leases

 

Any monetary defaults under an Executory Contract or Unexpired Lease, as reflected on the Cure Notice, shall be satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code, by payment of the default amount in Cash on the Effective Date or as soon as reasonably practicable thereafter, subject to the limitations described below, or on such other terms as the parties to such Executory Contracts or Unexpired Leases may otherwise agree in writing.  In the event of a dispute regarding (1) the amount of any payments to cure such a default, (2) the ability of the Reorganized Debtors or any assignee to provide “adequate assurance of future performance” (within the meaning of section 365 of the Bankruptcy Code) under the Executory Contract or Unexpired Lease to be assumed, or (3) any other matter pertaining to assumption, the cure payments required by section 365(b)(1) of the Bankruptcy Code shall be made following the entry of a Final Order or orders resolving the dispute and approving the assumption, which, for the avoidance of doubt, may occur after the date of Confirmation.

 

In connection with filing the Plan Supplement, the Debtors shall distribute, or cause to be distributed, Cure Notices of proposed assumption and proposed amounts of Cure Claims to the applicable third parties.  Any objection by a counterparty to an Executory Contract or Unexpired Lease to a proposed assumption or related cure amount must be Filed, served and actually received by the Debtors at least seven (7) days before the Confirmation Hearing.  Any counterparty to an Executory Contract or Unexpired Lease that fails to object timely to the proposed assumption or cure amount will be deemed to have assented to such assumption or cure amount.  Notwithstanding anything herein to the contrary, in the event that any Executory Contract or Unexpired Lease is added to the Schedule of Assumed Executory Contracts and Unexpired Leases after such 14-day deadline, a Cure Notice of proposed assumption and proposed amounts of Cure Claims with respect to such Executory Contract or Unexpired Lease will be sent promptly to the counterparty thereof and a noticed hearing set to consider whether such Executory Contract or Unexpired Lease can be assumed.

 

In any case, if the Bankruptcy Court determines that the Allowed Cure Claim with respect to any Executory Contract or Unexpired Lease is greater than the amount set forth in the applicable Cure Notice, the Debtors or Reorganized Debtors, as applicable, will have the right to remove such Executory Contract or Unexpired Lease from the Schedule of Assumed Executory Contracts and Unexpired Leases in which case such Executory Contract or Unexpired Lease will be deemed to have been rejected as of the Effective Date.

 

Assumption of any Executory Contract or Unexpired Lease pursuant to the Plan or otherwise shall result in the full release and satisfaction of any Claims or defaults, whether monetary or nonmonetary, including defaults of provisions restricting the change in control or ownership interest composition or other bankruptcy-related defaults,

 

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arising under any assumed Executory Contract or Unexpired Lease at any time before the date that the Debtors assume such Executory Contract or Unexpired Lease.  Any Proofs of Claim Filed with respect to an Executory Contract or Unexpired Lease that has been assumed shall be deemed Disallowed and expunged, without further notice to or action, order, or approval of the Bankruptcy Court.

 

D.                                    Indemnification Obligations

 

The Debtors and Reorganized Debtors shall assume the Indemnification Obligations for the current and former directors and the officers who served in such capacity, in their capacities as such, and such Indemnification Obligations shall not be modified, reduced, discharged, impaired, or otherwise affected in any way.  Notwithstanding the foregoing, nothing shall impair the ability of Reorganized Debtors to modify indemnification obligations (whether in the bylaws, certificates or incorporation or formation, limited liability company agreements, other organizational or formation documents, board resolutions, indemnification agreements, employment contracts, or otherwise) arising after the Effective Date; provided that none of the Reorganized Debtors shall amend and/or restate any New Organizational Documents after the Effective Date to terminate or adversely affect any of the Reorganized Debtors’ Indemnification Obligations

 

E.                                     Insurance Policies

 

Without limiting Article IV.Q, all of the Debtors’ insurance policies and any agreements, documents, or instruments relating thereto, are treated as and deemed to be Executory Contracts under the Plan.  On the Effective Date, the Debtors shall be deemed to have assumed all insurance policies and any agreements, documents, and instruments related thereto.

 

F.                                      Modifications, Amendments, Supplements, Restatements, or Other Agreements

 

Unless otherwise provided in the Plan, each Executory Contract or Unexpired Lease that is assumed shall include all modifications, amendments, supplements, restatements, or other agreements that in any manner affect such Executory Contract or Unexpired Lease, and Executory Contracts and Unexpired Leases related thereto, if any, including easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal, and any other interests, unless any of the foregoing agreements has been previously rejected or repudiated or is rejected or repudiated under the Plan.

 

Modifications, amendments, supplements, and restatements to prepetition Executory Contracts and Unexpired Leases that have been executed by the Debtors during the Chapter 11 Cases shall not be deemed to alter the prepetition nature of the Executory Contract or Unexpired Lease, or the validity, priority, or amount of any Claims that may arise in connection therewith.

 

G.                                    Reservation of Rights

 

Neither the exclusion nor inclusion of any Executory Contract or Unexpired Lease on the Schedule of Assumed Executory Contracts and Unexpired Leases, nor anything contained in the Plan, shall constitute an admission by the Debtors that any such contract or lease is in fact an Executory Contract or Unexpired Lease or that any Reorganized Debtor has any liability thereunder.  If there is a dispute regarding whether a contract or lease is or was executory or unexpired at the time of assumption or rejection, the Debtors, or, after the Effective Date, the Reorganized Debtors shall have thirty (30) days following entry of a Final Order resolving such dispute to alter their treatment of such contract or lease.

 

H.                                   Nonoccurrence of Effective Date

 

In the event that the Effective Date does not occur, the Bankruptcy Court shall retain jurisdiction with respect to any request to extend the deadline for assuming or rejecting Unexpired Leases pursuant to section 365(d)(4) of the Bankruptcy Code.

 

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I.                                        Contracts and Leases Entered into After the Effective Date

 

Contracts and leases entered into after the Petition Date by any Debtor, including any Executory Contracts and Unexpired Leases assumed by such Debtor, will be performed by the applicable Debtor or Reorganized Debtor liable thereunder in the ordinary course of its business. Accordingly, such contracts and leases (including any assumed Executory Contracts and Unexpired Leases) that have not been rejected as of the date of Confirmation will survive and remain unaffected by entry of the Confirmation Order.

 

J.                                        Federal Oil and Gas Leases

 

Notwithstanding anything in the Plan to the contrary, (1) the Debtors shall not abandon or otherwise reject any Federal Lease Interests, (2) any purported assumption and/or assignment of the Federal Lease Interests pursuant to the Plan shall be subject to the consent of the United States, and (3) the Reorganized Debtors shall assume all plugging and abandonment obligations in connection with the Federal Lease Interests assumed pursuant to the Plan and the United States’ consent.  Any amounts owed to the United States under any Federal Lease Interests shall be paid in full when due in the ordinary course and nothing in this Plan or any document implementing the Plan shall be interpreted to set cure amounts or require the United States to approve of and consent to the assumption and/or assignment of any of the Federal Lease Interests except pursuant to existing regulatory requirements and applicable law.  Notwithstanding anything in the Plan or any document implementing the Plan to the contrary, the United States shall retain the right to perform any audit and/or compliance review on the Federal Lease Interests, and if appropriate, collect from the Reorganized Debtors any additional monies owed by the Debtors on the Federal Lease Interests without those rights being adversely affected by these Chapter 11 Cases.  Such rights shall be preserved in full.  The Reorganized Debtors will retain all defenses, other than defenses arising as a consequence of these Chapter 11 Cases; provided, however, that any challenge based on a defense must be raised in the United States’ administrative review process.

 

ARTICLE VI.
PROVISIONS GOVERNING DISTRIBUTIONS

 

A.                                    Timing and Calculation of Amounts to Be Distributed

 

Unless otherwise provided in the Plan, on the Effective Date or as soon as reasonably practicable thereafter (or, if a Claim is not an Allowed Claim on the Effective Date, on the date that such Claim becomes Allowed or as soon as reasonably practicable thereafter), each Holder of an Allowed Claim (or such Holder’s designee) shall receive the full amount of the distributions that the Plan provides for such Holder; provided that distributions to Holders of Allowed First Lien Claims and Allowed Second Lien Notes Claims shall occur on the Effective Date, and if the Intercreditor Settlement is approved in connection with Confirmation of the Plan, distributions to Holders of Allowed Third Lien Notes Claims shall occur on the Effective Date; provided, further, for the avoidance of doubt, any distributions of the Unencumbered Distribution will not occur until the completion of the claims reconciliation process or until the Bankruptcy Court enters an order approving interim distribution procedures, provided, further, that the Debtors agree to seek approval of interim distribution procedures within seven (7) days of the Confirmation Date.  In the event that any payment or act under the Plan is required to be made or performed on a date that is not a Business Day, then the making of such payment or the performance of such act may be completed on the next succeeding Business Day, but shall be deemed to have been completed as of the required date.  If and to the extent that there are Disputed Claims, distributions on account of any such Disputed Claims shall be made pursuant to the provisions set forth in Article VII of the Plan.  Except as otherwise provided in the Plan, Holders of Claims shall not be entitled to interest, dividends, or accruals on the distributions provided for in the Plan, regardless of whether such distributions are delivered on or at any time after the Effective Date.

 

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B.                                    Delivery of Distributions and Undeliverable or Unclaimed Distributions

 

1.                                      Delivery of Distributions

 

a.                                      Delivery of Distributions to First Lien Administrative Agent

 

Except as otherwise provided in the Plan, all distributions to Holders of First Lien Claims shall be governed by the First Lien Credit Agreement and shall be deemed completed when made to the First Lien Administrative Agent, which shall be deemed to be the Holder of all First Lien Claims for purposes of distributions to be made hereunder.  The First Lien Administrative Agent shall hold or direct such distributions for the benefit of the Holders of Allowed First Lien Claims, as applicable.  As soon as practicable in accordance with the requirements set forth in this Article VI, the First Lien Administrative Agent shall arrange to deliver such distributions to or on behalf of such Holders of Allowed First Lien Claims.

 

b.                                      Delivery of Distributions to Second Lien Notes Trustee

 

Except as otherwise provided in the Plan, all distributions to Holders of Second Lien Notes Claims shall be governed by the Second Lien Indenture and shall be deemed completed when made to the Second Lien Notes Trustee, which shall be deemed to be the sole Holder of all Second Lien Notes Claims for purposes of distributions to be made hereunder, and shall receive such distributions for the benefit of the beneficial owners of Second Lien Notes Claims. As soon as practicable in accordance with the requirements set forth in this Article VI, the Second Lien Notes Trustee shall arrange to deliver such distributions to or on behalf of such Holders of Allowed Second Lien Notes Claims.  All reasonable and documented fees and expenses of the Second Lien Notes Trustee for services rendered by the Second Lien Notes Trustee in connection with the Confirmation and Consummation of the Plan, including, without limitation, with respect to distributions to be made to Holders of Second Lien Notes Claims hereunder, which remain unpaid as of the Effective Date (or accrue thereafter) shall be reasonably promptly paid by the Reorganized Debtors upon presentation to the Reorganized Debtors of invoices, in customary form and with reasonable supporting detail, for such services and reimbursement of such reasonable expenses.

 

c.                                       Delivery of Distributions to Third Lien Notes Trustee

 

Except as otherwise provided in the Plan, all distributions to Holders of Third Lien Notes Claims shall be governed by the Third Lien Indenture and shall be deemed completed when made to the Third Lien Notes Trustee, which shall be deemed to be the sole Holder of all Third Lien Notes Claims for purposes of distributions to be made hereunder, and shall receive such distributions for the benefit of the beneficial owners of Third Lien Notes Claims. As soon as practicable in accordance with the requirements set forth in this Article VI, the Third Lien Notes Trustee shall arrange to deliver such distributions to or on behalf of such Holders of Allowed Third Lien Notes Claims.  All reasonable and documented fees and expenses of the Third Lien Notes Trustee for services rendered by the Third Lien Notes Trustee in connection with the Confirmation and Consummation of the Plan, including, without limitation, with respect to distributions to be made to Holders of Third Lien Notes Claims hereunder, which remain unpaid as of the Effective Date (or accrue thereafter) shall be reasonably promptly paid by the Reorganized Debtors upon presentation to the Reorganized Debtors of invoices, in customary form and with reasonable supporting detail, for such services and reimbursement of such reasonable expenses.

 

d.                                      Delivery of Distributions to Unsecured 2020 Senior Notes Trustee

 

Except as otherwise provided in the Plan or reasonably requested by the Unsecured 2020 Senior Notes Trustee, all distributions to Holders of Unsecured 2020 Senior Notes Claims shall be deemed completed when made to the Unsecured 2020 Senior Notes Trustee, which shall be deemed to be the sole Holder of all Unsecured 2020 Senior Notes Claims for purposes of distributions to be made hereunder, and shall receive such distributions for the beneficial owners of Allowed Unsecured 2020 Senior Notes Claims.  As soon as practicable in accordance with the requirements set forth in this Article VI, the Unsecured 2020 Senior Notes Indenture Trustee shall arrange to deliver such distributions to or on behalf of such Holders of Allowed Unsecured 2020 Senior Notes Claims.

 

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e.                                       Delivery of Distributions to the Unsecured 2021 Senior Notes Trustee

 

Except as otherwise provided in the Plan or reasonably requested by the Unsecured 2021 Senior Notes Trustee, all distributions to Holders of Unsecured 2021 Senior Notes Claims shall be deemed completed when made to the Unsecured 2021 Senior Notes Trustee, which shall be deemed to be the sole Holder of all Unsecured 2021 Senior Notes Claims for purposes of distributions to be made hereunder, and shall receive such distributions for the beneficial owners of Allowed Unsecured 2021 Senior Notes Claims.  As soon as practicable in accordance with the requirements set forth in this Article VI, the Unsecured 2021 Senior Notes Indenture Trustee shall arrange to deliver such distributions to or on behalf of such Holders of Allowed Unsecured 2021 Senior Notes Claims.

 

f.                                        Delivery of Distributions in General

 

Except as otherwise provided in the Plan, distributions to Holders of Allowed Claims (other than Holders of First Lien Claims, Second Lien Notes Claims, Third Lien Notes Claims, and Unsecured Notes Claims) or Interests shall be made to Holders of record as of the Distribution Record Date by the Reorganized Debtors:  (1) to the signatory set forth on any of the Proofs of Claim Filed by such Holder or other representative identified therein (or at the last known addresses of such Holder if no Proof of Claim is Filed or if the Debtors have been notified in writing of a change of address); (2) at the addresses set forth in any written notices of address changes delivered to the Reorganized Debtors after the date of any related Proof of Claim; (3) at the addresses reflected in the Schedules if no Proof of Claim has been Filed and the Reorganized Debtors have not received a written notice of a change of address; or (4) on any counsel that has appeared in the Chapter 11 Cases on the Holder’s behalf.  Subject to this Article VI, distributions under the Plan on account of Allowed Claims shall not be subject to levy, garnishment, attachment, or like legal process, so that each Holder of an Allowed Claim shall have and receive the benefit of the distributions in the manner set forth in the Plan.  The Debtors and the Reorganized Debtors shall not incur any liability whatsoever on account of any distributions under the Plan except for gross negligence or willful misconduct.

 

2.                                      Minimum Distributions

 

No fractional shares of New Common Stock shall be distributed, and no Cash shall be distributed in lieu of such fractional amounts.  When any distribution pursuant to the Plan on account of an Allowed Claim would otherwise result in the issuance of a number of shares of New Common Stock that is not a whole number, the actual distribution of shares of New Common Stock shall be rounded as follows: (a) fractions of one-half or greater shall be rounded to the next higher whole number and (b) fractions of less than one-half shall be rounded to the next lower whole number with no further payment therefore.  The total number of authorized shares of New Common Stock to be distributed pursuant to the Plan shall be adjusted as necessary to account for the foregoing rounding.

 

3.                                      Undeliverable Distributions and Unclaimed Property

 

In the event that any distribution to any Holder is returned as undeliverable, no distribution to such Holder shall be made unless and until the Reorganized Debtors have determined the then-current address of such Holder, at which time such distribution shall be made to such Holder without interest; provided that such distributions shall be deemed unclaimed property under section 347(b) of the Bankruptcy Code at the expiration of four months after the date that such distribution was made.  After such date, all unclaimed property or interests in property shall revert to the Reorganized Debtors without need for a further order by the Bankruptcy Court (notwithstanding any applicable federal, provincial, or state escheat, abandoned, or unclaimed property laws to the contrary), and the Claim of any Holder to such property or Interest in property shall be discharged and forever barred; provided, however, that this Article VI.B.3 shall not apply to the Suspended Funds held by the Debtors, and such Suspended Funds shall remain subject to any applicable federal, provincial, or state escheat, abandoned, or unclaimed property laws.

 

C.                                    Compliance with Tax Requirements

 

In connection with the Plan, to the extent applicable, Reorganized Parent and the Reorganized Debtors shall comply with all tax withholding and reporting requirements imposed on them by any Governmental Unit, and all distributions pursuant to the Plan shall be subject to such withholding and reporting requirements.  Notwithstanding

 

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any provision in the Plan to the contrary, the Reorganized Debtors shall be authorized to take all actions necessary or appropriate to comply with such withholding and reporting requirements, including liquidating a portion of the distribution to be made under the Plan to generate sufficient funds to pay applicable withholding taxes, withholding distributions pending receipt of information necessary to facilitate such distributions or establishing any other mechanisms they believe are reasonable and appropriate.  The Reorganized Debtors reserve the right to allocate all distributions made under the Plan in compliance with applicable wage garnishments, alimony, child support, and other spousal awards, liens, and encumbrances.

 

D.                                    Allocations

 

Distributions in respect of Allowed Claims shall be allocated first to the principal amount of such Claims (as determined for federal income tax purposes) and then, to the extent the consideration exceeds the principal amount of the Claims, to any portion of such Claims for accrued but unpaid interest as Allowed herein.

 

E.                                     No Postpetition Interest on Claims

 

Unless otherwise specifically provided for in an order of the Bankruptcy Court, the Plan, or the Confirmation Order, or required by applicable bankruptcy law, postpetition interest shall not accrue or be paid on any Claims or Interests and no Holder of a Claim or Interest shall be entitled to interest accruing on or after the Petition Date on any such Claim.

 

F.                                      Setoffs and Recoupment

 

The Debtors or the Reorganized Debtors, as applicable, may, but shall not be required to, setoff against or recoup from any Claims of any nature whatsoever that the Debtors or the Reorganized Debtors may have against the claimant, but neither the failure to do so nor the allowance of any Claim hereunder shall constitute a waiver or release by the Debtors or the Reorganized Debtors of any such Claim it may have against the Holder of such Claim.

 

G.                                    Claims Paid or Payable by Third Parties

 

1.                                      Claims Paid by Insurance Providers

 

The Debtors or the Reorganized Debtors, as applicable, shall reduce in full a Claim, and such Claim shall be Disallowed without a Claim objection having to be Filed and without any further notice to or action, order, or approval of the Bankruptcy Court, to the extent that the Holder of such Claim receives payment in full on account of such Claim from a party that is not a Debtor or Reorganized Debtor; provided that the Debtors shall provide 21 days’ notice to the Holder prior to any disallowance of such Claim during which period the Holder may object to such disallowance, and if the parties cannot reach an agreed resolution, the matter shall be decided by the Bankruptcy Court.  Subject to the last sentence of this paragraph, to the extent a Holder of a Claim receives a distribution on account of such Claim and receives payment from a party that is not a Debtor or a Reorganized Debtor on account of such Claim, such Holder shall, within fourteen days of receipt thereof, repay or return the distribution to the Reorganized Debtors to the extent the Holder’s total recovery on account of such Claim from the third party and under the Plan exceeds the amount of such Claim as of the date of any such distribution under the Plan.  The failure of such Holder to timely repay or return such distribution shall result in the Holder owing the Reorganized Debtors annualized interest at the Federal Judgment Rate on such amount owed for each Business Day after the fourteen-day grace period specified above until the amount is repaid.

 

2.                                      Claims Payable by Third Parties

 

No distributions under the Plan shall be made on account of an Allowed Claim that is payable pursuant to one of the Debtors’ insurance policies until the Holder of such Allowed Claim has exhausted all remedies with respect to such insurance policy.  To the extent that one or more of the Debtors’ insurers agrees to satisfy in full or in part a Claim (if and to the extent adjudicated by a court of competent jurisdiction), then immediately upon such insurers’ agreement, the applicable portion of such Claim may be expunged without a Claim objection having to be Filed and without any further notice to or action, order, or approval of the Bankruptcy Court; provided that the

 

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Debtors shall provide 21 days’ notice to the Holder of such Claim prior to any disallowance of such Claim during which period the Holder may object to such disallowance, and if the parties cannot reach an agreed resolution, the matter shall be decided by the Bankruptcy Court.

 

3.                                      Applicability of Insurance Policies

 

Except as otherwise provided in the Plan, distributions to Holders of Allowed Claims shall be in accordance with the provisions of any applicable insurance policy.  Notwithstanding anything to the contrary contained (including Article VIII), nothing contained in the Plan shall constitute or be deemed a release, settlement, satisfaction, compromise, or waiver of any Cause of Action that the Debtors or any other Entity may hold against any other Entity, including insurers, under any policies of insurance or applicable indemnity, nor shall anything contained herein constitute or be deemed a waiver by such insurers of any defenses, including coverage defenses, held by such insurers.

 

ARTICLE VII.
PROCEDURES FOR RESOLVING CONTINGENT,
UNLIQUIDATED, AND DISPUTED CLAIMS

 

A.                                    Allowance of Claims

 

After the Effective Date, each of the Debtors or the Reorganized Debtors shall have and retain any and all rights and defenses such Debtor had with respect to any Claim immediately before the Effective Date.  Except as expressly provided in the Plan or in any order entered in the Chapter 11 Cases before the Effective Date (including the Confirmation Order), no Claim shall become an Allowed Claim unless and until such Claim is deemed Allowed under the Plan or the Bankruptcy Code, or the Bankruptcy Court has entered a Final Order, including the Confirmation Order (when it becomes a Final Order), in the Chapter 11 Cases allowing such Claim.

 

B.                                    Claims and Interests Administration Responsibilities

 

Except as otherwise specifically provided in the Plan and notwithstanding any requirements that may be imposed pursuant to Bankruptcy Rule 9019, after the Effective Date, the Reorganized Debtors, by order of the Bankruptcy Court, shall have the sole authority: (1) to File, withdraw, or litigate to judgment objections to Claims; (2) to settle or compromise any Disputed Claim without any further notice to or action, order, or approval by the Court; and (3) to administer and adjust the Claims Register to reflect any such settlements or compromises without any further notice to or action, order, or approval by the Bankruptcy Court.

 

C.                                    Estimation of Claims

 

Before or after the Effective Date, the Debtors or the Reorganized Debtors may (but are not required to) at any time request that the Court estimate any Disputed Claim or Disputed Interest that is contingent or unliquidated pursuant to section 502(c) of the Bankruptcy Code for any reason, regardless of whether any party previously has objected to such Claim or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court shall retain jurisdiction to estimate any such Claim, including during the litigation of any objection to any Claim or during the appeal relating to such objection.  Notwithstanding any provision otherwise in the Plan, a Claim that has been expunged from the Claims Register, but that either is subject to appeal or has not been the subject of a Final Order, shall be deemed to be estimated at zero dollars, unless otherwise ordered by the Bankruptcy Court.  In the event that the Bankruptcy Court estimates any Disputed, contingent, or unliquidated Claim, that estimated amount shall constitute a maximum limitation on such Claim for all purposes under the Plan (including for purposes of distributions), and the relevant Debtor may elect to pursue any supplemental proceedings to object to any ultimate distribution on such Claim.  If the estimated amount constitutes a maximum limitation on such Claim, the Debtors or the Reorganized Debtors, as applicable, may elect to pursue any supplemental proceedings to object to any ultimate distribution on account of such Claim.  Notwithstanding section 502(j) of the Bankruptcy Code, in no event shall any Holder of a Claim that has been estimated pursuant to section 502(c) of the Bankruptcy Code or otherwise be entitled to seek reconsideration of such estimation unless such Holder has Filed a motion requesting the right to seek such reconsideration on or before 21 days after the date on which such Claim is estimated.  All of the

 

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aforementioned Claims and objection, estimation, and resolution procedures are cumulative and not exclusive of one another.  Claims may be estimated and subsequently compromised, settled, withdrawn, or resolved by any mechanism approved by the Bankruptcy Court.

 

D.                                    Adjustment to Claims Without Objection

 

Any Claim that has been paid or satisfied, or any Claim that has been amended or superseded, may be adjusted or expunged on the Claims Register by the Debtors or the Reorganized Debtors without a Claims objection having to be Filed and without any further notice to or action, order, or approval of the Bankruptcy Court.

 

E.                                     Time to File Objections to Claims

 

Any objections to Claims shall be Filed on or before the Claims Objection Deadline.

 

F.                                      Disallowance of Claims

 

Any Claims held by Entities from which property is recoverable under section 542, 543, 550, or 553 of the Bankruptcy Code or that is a transferee of a transfer avoidable under section 522(f), 522(h), 544, 545, 547, 548, 549, or 724(a) of the Bankruptcy Code, shall be deemed Disallowed pursuant to section 502(d) of the Bankruptcy Code, and Holders of such Claims may not receive any distributions on account of such Claims until such time as such Causes of Action against that Entity have been settled or a Bankruptcy Court order with respect thereto has been entered and all sums due, if any, to the Debtors by that Entity have been turned over or paid to the Debtors or the Reorganized Debtors.  All Proofs of Claim Filed on account of an indemnification obligation to a director, officer, or employee shall be deemed satisfied and expunged from the Claims Register as of the Effective Date to the extent such indemnification obligation is assumed (or honored or reaffirmed, as the case may be) pursuant to the Plan, without any further notice to or action, order, or approval of the Bankruptcy Court.

 

Except as provided herein or otherwise agreed, any and all Proofs of Claim filed after the Claims Bar Date shall be deemed Disallowed and expunged as of the Effective Date without any further notice to or action, order, or approval of the Bankruptcy Court, and Holders of such Claims may not receive any distributions on account of such Claims, unless on or before the Confirmation Hearing such late Filed Claim has been deemed timely Filed by a Final Order.

 

G.                                    Amendments to Claims

 

On or after the Effective Date, except as provided in the Plan or the Confirmation Order, a Claim may not be Filed or amended without the prior authorization of the Bankruptcy Court and the Reorganized Debtors and any such new or amended Claim Filed shall be deemed Disallowed in full and expunged without any further action, order, or approval of the Bankruptcy Court.  The provisions of this Article VII.G shall not apply to the IRS.

 

H.                                   No Distributions Pending Allowance

 

If an objection to a Claim or portion thereof is Filed as set forth in Article VII, no payment or distribution provided under the Plan shall be made on account of such Claim or portion thereof unless and until such Disputed Claim becomes an Allowed Claim.

 

I.                                        Distributions After Allowance

 

To the extent that a Disputed Claim ultimately becomes an Allowed Claim, distributions (if any) shall be made to the Holder of such Allowed Claim in accordance with the provisions of the Plan.  As soon as reasonably practicable after the date that the order or judgment of the Bankruptcy Court allowing any Disputed Claim becomes a Final Order, the Reorganized Debtors shall provide to the Holder of such Claim the distribution (if any) to which such Holder is entitled under the Plan as of the Effective Date, less any previous distribution (if any) that was made on account of the undisputed portion of such Claim, without any interest, dividends, or accruals to be paid on account of such Claim unless required under applicable bankruptcy law or as otherwise provided in Article III.B.

 

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ARTICLE VIII.
SETTLEMENT, RELEASE, INJUNCTION, AND RELATED PROVISIONS

 

A.                                    Discharge of Claims and Termination of Interests; Compromise and Settlement of Claims, Interests, and Controversies

 

Pursuant to and to the fullest extent permitted by section 1141(d) of the Bankruptcy Code, and except as otherwise specifically provided in the Plan, the distributions, rights, and treatment that are provided in the Plan shall be in full and final satisfaction, settlement, release, and discharge, effective as of the Effective Date, of all Interests and Claims of any nature whatsoever, including any interest accrued on Claims from and after the Petition Date, whether known or unknown, against, liabilities of, Liens on, obligations of, rights against the Debtors, the Reorganized Debtors or any of their assets or properties, regardless of whether any property shall have been distributed or retained pursuant to the Plan on account of such Claims, including demands, liabilities, and Causes of Action that arose before the Effective Date, any contingent or non-contingent liability on account of representations or warranties issued on or before the Effective Date, and all debts of the kind specified in sections 502(g), 502(h), or 502(i) of the Bankruptcy Code, in each case whether or not:  (1) a Proof of Claim or Interest is filed or deemed filed pursuant to section 501 of the Bankruptcy Code; (2) a Claim or Interest is Allowed; or (3) the Holder of such Claim or Interest has accepted the Plan.  Except as otherwise provided herein, any default by the Debtors with respect to any Claim or Interest that existed immediately prior to or on account of the filing of the Chapter 11 Cases shall be deemed cured on the Effective Date.  The Confirmation Order shall be a judicial determination of the discharge of all Claims and Interests subject to the Effective Date occurring, except as otherwise expressly provided in the Plan.  For the avoidance of doubt, nothing in this Article VIII.A shall affect the rights of Holders of Claims and Interests to seek to enforce the Plan, including the distributions to which Holders of Allowed Claims and Interests are entitled under the Plan.

 

Pursuant to section 1123 of the Bankruptcy Code and Bankruptcy Rule 9019 and in consideration for the distributions and other benefits provided pursuant to the Plan, the provisions of the Plan, including the Intercreditor Settlement, shall constitute a good faith compromise and settlement of all Claims, Interests, and controversies relating to the contractual, legal, and subordination rights that a Holder of a Claim or Interest may have on account of such Allowed Claim or Interest.  The entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval of the compromise or settlement of all such Claims, Interests, and controversies, as well as a finding by the Bankruptcy Court that such compromise or settlement, including the Intercreditor Settlement, is in the best interests of the Debtors, their Estates, and Holders of Claims and Interests and is fair, equitable, and reasonable.  In accordance with the provisions of the Plan, pursuant to Bankruptcy Rule 9019, without any further notice to or action, order, or approval of the Bankruptcy Court, after the Effective Date, the Reorganized Debtors may compromise and settle Claims against, and Interests in, the Debtors and their Estates and Causes of Action against other Entities.

 

B.                                    Term of Injunctions or Stays

 

Unless otherwise provided herein or in a Final Order, all injunctions or stays arising under or entered during the Chapter 11 Cases under section 362 of the Bankruptcy Code or otherwise and in existence on the Confirmation Date, shall remain in full force and effect until the later of the Effective Date and the date set forth in the order providing for such injunction or stay.

 

C.                                    Release of Liens

 

Except as otherwise provided herein or in any contract, instrument, release, or other agreement or document created pursuant to the Plan, on the Effective Date and concurrently with the applicable distributions made pursuant to the Plan, all mortgages, deeds of trust, Liens, pledges, or other security interests against any property of the Estates (except for those mortgages, deeds of trust, Liens, pledges or other security interests against any property of the Estates granted under and in relation to the First Lien Credit Agreement) shall be fully released and discharged, and all of the right, title, and interest of any Holder of such mortgages, deeds of trust, Liens, pledges, or other security interests shall revert to the applicable Reorganized Debtor and its successors and assigns.

 

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D.                                    Releases by the Debtors

 

PURSUANT TO SECTION 1123(b) OF THE BANKRUPTCY CODE, AND EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THE PLAN, FOR GOOD AND VALUABLE CONSIDERATION, INCLUDING THE EFFORTS OF THE RELEASED PARTIES TO FACILITATE THE EXPEDITIOUS REORGANIZATION OF THE DEBTORS AND THE IMPLEMENTATION OF THE RESTRUCTURING CONTEMPLATED BY THE PLAN, PURSUANT TO THE CONFIRMATION ORDER AND ON AND AFTER THE EFFECTIVE DATE, THE RELEASED PARTIES AND THEIR RESPECTIVE PROPERTIES ARE CONCLUSIVELY, ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY, AND FOREVER DEEMED RELEASED, ACQUITTED AND DISCHARGED BY THE DEBTORS, THE REORGANIZED DEBTORS AND THE ESTATES FROM ANY AND ALL CLAIMS, DEBTS, OBLIGATIONS, RIGHTS, SUITS, DAMAGES, DEBTS, CAUSES OF ACTION, REMEDIES, AND LIABILITIES WHATSOEVER, INCLUDING ANY DERIVATIVE CLAIMS ASSERTED OR ASSERTABLE ON BEHALF OF THE DEBTORS OR THEIR ESTATES, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, MATURED OR UNMATURED, EXISTING OR HEREINAFTER ARISING, IN LAW, EQUITY, CONTRACT, TORT, OR OTHERWISE, BY STATUTE, VIOLATIONS OF FEDERAL OR STATE SECURITIES LAWS OR OTHERWISE THAT THE DEBTORS, THE REORGANIZED DEBTORS, THE ESTATES OR THEIR AFFILIATES WOULD HAVE BEEN LEGALLY ENTITLED TO ASSERT IN THEIR OWN RIGHT (WHETHER INDIVIDUALLY OR COLLECTIVELY) OR ON BEHALF OF THE HOLDER OF ANY CLAIM OR EQUITY INTEREST OR OTHER ENTITY, BASED ON OR RELATING TO, OR IN ANY MANNER ARISING FROM, IN WHOLE OR IN PART, THE DEBTORS, THE REORGANIZED DEBTORS, THE CHAPTER 11 CASES, THE DEBTORS’ RESTRUCTURING, THE PREPETITION DEBT DOCUMENTS, THE PURCHASE, SALE OR RESCISSION OF THE PURCHASE OR SALE OF ANY SECURITY OF THE DEBTORS OR THE REORGANIZED DEBTORS, THE SUBJECT MATTER OF, OR THE TRANSACTIONS OR EVENTS GIVING RISE TO, ANY CLAIM OR INTEREST THAT IS TREATED IN THE PLAN, THE BUSINESS OR CONTRACTUAL ARRANGEMENTS BETWEEN THE DEBTORS AND ANY RELEASED PARTY, THE RESTRUCTURING OF CLAIMS AND INTERESTS PRIOR TO OR IN THE CHAPTER 11 CASES, THE NEGOTIATION, FORMULATION OR PREPARATION OF THE PLAN, THE PLAN SUPPORT AGREEMENT, THE PLAN SUPPLEMENT, THE DISCLOSURE STATEMENT, THE NEW CREDIT FACILITY DOCUMENTS AND ANY RELATED AGREEMENTS, INSTRUMENTS, OR OTHER DOCUMENTS, ANY OTHER ACT OR OMISSION, TRANSACTION, AGREEMENT, EVENT, OR OTHER OCCURRENCE TAKING PLACE ON OR BEFORE THE CONFIRMATION DATE.

 

THE FOREGOING RELEASE (1) SHALL NOT APPLY TO ANY EXPRESS CONTRACTUAL OR FINANCIAL OBLIGATIONS OR ANY RIGHT OR OBLIGATIONS ARISING UNDER OR THAT IS PART OF THE PLAN OR ANY AGREEMENTS ENTERED INTO PURSUANT TO, IN CONNECTION WITH OR CONTEMPLATED BY THE PLAN (INCLUDING THE PLAN SUPPORT AGREEMENT) AND (2) SHALL HAVE NO EFFECT ON THE LIABILITY OF ANY ENTITY THAT RESULTS FROM ANY SUCH ACT OR OMISSION THAT IS DETERMINED IN A FINAL ORDER TO HAVE CONSTITUTED FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT.  FOR THE AVOIDANCE OF DOUBT, THE DEBTORS AND REORGANIZED DEBTORS WILL CONTINUE TO HONOR ALL POSTPETITION AND POST-EFFECTIVE DATE OBLIGATIONS UNDER THE NEW CREDIT FACILITY DOCUMENTS AND ANY RELATED AGREEMENTS, INSTRUMENTS, OR OTHER DOCUMENTS.

 

E.                                     Releases by Holders of Claims and Interests

 

AS OF THE EFFECTIVE DATE, EACH OF THE RELEASING PARTIES (REGARDLESS OF WHETHER A RELEASING PARTY IS A RELEASED PARTY) SHALL BE DEEMED TO HAVE CONCLUSIVELY, ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND FOREVER RELEASED, ACQUITTED AND DISCHARGED THE DEBTORS, THE REORGANIZED DEBTORS AND THE RELEASED PARTIES AND THEIR RESPECTIVE PROPERTY FROM ANY AND ALL CLAIMS, OBLIGATIONS, RIGHTS, SUITS, DAMAGES, DEBTS, CAUSES OF ACTION, REMEDIES, AND LIABILITIES WHATSOEVER, INCLUDING ANY DERIVATIVE CLAIMS ASSERTED OR ASSERTABLE OR ASSERTABLE ON BEHALF OF A DEBTOR, WHETHER KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, MATURED OR UNMATURED, EXISTING OR HEREAFTER

 

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ARISING, IN LAW, EQUITY, CONTRACT, TORT OR OTHERWISE, BY STATUTE, VIOLATIONS OF FEDERAL OR STATE SECURITIES LAWS OR OTHERWISE THAT SUCH ENTITY WOULD HAVE BEEN LEGALLY ENTITLED TO ASSERT (WHETHER INDIVIDUALLY OR COLLECTIVELY) OR ON BEHALF OF THE HOLDER OF ANY CLAIM OR EQUITY INTEREST OR OTHER ENTITY, BASED ON OR RELATING TO, OR IN ANY MANNER ARISING FROM, IN WHOLE OR IN PART, THE DEBTORS, THE REORGANIZED DEBTORS, THE DEBTORS’ RESTRUCTURING, THE CHAPTER 11 CASES, THE PREPETITION DEBT DOCUMENTS, THE PURCHASE, SALE OR RESCISSION OF THE PURCHASE OR SALE OF ANY SECURITY OF THE DEBTORS OR THE REORGANIZED DEBTORS, THE SUBJECT MATTER OF, OR THE TRANSACTIONS OR EVENTS GIVING RISE TO, ANY CLAIM OR INTEREST THAT IS TREATED IN THE PLAN, THE BUSINESS OR CONTRACTUAL ARRANGEMENTS BETWEEN THE DEBTORS AND ANY RELEASED PARTY, THE RESTRUCTURING OF CLAIMS AND INTERESTS PRIOR TO OR DURING THE CHAPTER 11 CASES, THE NEGOTIATION, FORMULATION, OR PREPARATION OF THE PLAN, THE DISCLOSURE STATEMENT, THE PLAN SUPPLEMENT, THE PLAN SUPPORT AGREEMENT, THE NEW CREDIT FACILITY DOCUMENTS AND ANY RELATED AGREEMENTS, INSTRUMENTS OR OTHER DOCUMENTS, ANY OTHER ACT OR OMISSION, TRANSACTION, AGREEMENT, EVENT, OR OTHER OCCURRENCE TAKING PLACE ON OR BEFORE THE CONFIRMATION DATE.

 

NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, THE RELEASE SET FORTH ABOVE DOES NOT RELEASE ANY POST-EFFECTIVE DATE OBLIGATIONS OF ANY PARTY OR ENTITY UNDER THE PLAN OR ANY DOCUMENT, INSTRUMENT OR AGREEMENT (INCLUDING THOSE SET FORTH IN THE PLAN SUPPLEMENT) EXECUTED TO IMPLEMENT THE PLAN (REGARDLESS OF WHETHER RIGHTS TO ENFORCE SUCH OBLIGATIONS IN COLLATERAL ARISE FROM INSTRUMENTS ESTABLISHING SUCH RIGHTS PRIOR TO THE EFFECTIVE DATE), INCLUDING THE RIGHT TO RECEIVE DISTRIBUTIONS FROM THE DEBTORS OR THE REORGANIZED DEBTORS ON ACCOUNT OF AN ALLOWED CLAIM AGAINST THE DEBTORS PURSUANT TO THIS PLAN (WHICH, FOR THE AVOIDANCE OF DOUBT, SHALL INCLUDE OBLIGATIONS UNDER OR IN CONNECTION WITH THE NEW CREDIT FACILITY DOCUMENTS AND ANY RELATED AGREEMENTS, INSTRUMENTS, OR OTHER DOCUMENTS AND THE PLAN SUPPORT AGREEMENT).  NOTWITHSTANDING THE FOREGOING, THE DEBTORS AND THE REORGANIZED DEBTORS WILL CONTINUE TO HONOR ALL POSTPETITION AND POST-EFFECTIVE DATE OBLIGATIONS UNDER ANY ASSUMED EXECUTORY CONTRACTS AND UNEXPIRED LEASES IN ACCORDANCE WITH THEIR TERMS REGARDLESS OF WHETHER SUCH OBLIGATIONS ARE LISTED AS A CURE AMOUNT, AND WHETHER SUCH OBLIGATIONS ACCRUED PRIOR TO OR AFTER THE EFFECTIVE DATE, AND NEITHER THE PAYMENT OF CURE NOR ENTRY OF THE CONFIRMATION ORDER SHALL BE DEEMED TO RELEASE THE DEBTORS OR THE REORGANIZED DEBTORS FROM SUCH OBLIGATIONS.  NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE FOREGOING, THE RELEASE SET FORTH ABOVE (1) DOES NOT RELEASE THE PERSONAL LIABILITY OF ANY OF THE AFOREMENTIONED RELEASED PARTIES IN THIS ARTICLE VIII FOR ANY STATUTORY VIOLATION OF APPLICABLE TAX LAWS OR BAR ANY RIGHT OF ACTION ASSERTED BY A GOVERNMENTAL TAXING AUTHORITY AGAINST THE AFOREMENTIONED RELEASED PARTIES FOR ANY STATUTORY VIOLATION OF APPLICABLE TAX LAWS AND (2) SHALL HAVE NO EFFECT ON THE LIABILITY OF ANY ENTITY THAT RESULTS FROM ANY SUCH ACT OR OMISSION THAT IS DETERMINED IN A FINAL ORDER TO HAVE CONSTITUTED FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT.

 

F.                                      Exculpation

 

UPON AND EFFECTIVE AS OF THE EFFECTIVE DATE, THE DEBTORS AND THEIR DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS, INVESTMENT BANKERS, FINANCIAL ADVISORS, RESTRUCTURING CONSULTANTS AND OTHER PROFESSIONAL ADVISORS AND AGENTS WILL BE DEEMED TO HAVE SOLICITED ACCEPTANCES OF THIS PLAN IN GOOD FAITH AND IN COMPLIANCE WITH THE APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE, INCLUDING SECTION 1125(E) OF THE BANKRUPTCY CODE.

 

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EXCEPT WITH RESPECT TO ANY ACTS OR OMISSIONS EXPRESSLY SET FORTH IN AND PRESERVED BY THE PLAN, THE PLAN SUPPLEMENT, OR RELATED DOCUMENTS, THE EXCULPATED FIDUCIARIES AND, SOLELY TO THE EXTENT PROVIDED BY SECTION 1125(E) OF THE BANKRUPTCY CODE, THE SECTION 1125(E) PARTIES, SHALL NEITHER HAVE, NOR INCUR ANY LIABILITY TO ANY ENTITY FOR ANY PREPETITION OR POSTPETITION ACT TAKEN OR OMITTED TO BE TAKEN IN CONNECTION WITH, OR RELATED TO FORMULATING, NEGOTIATING, PREPARING, DISSEMINATING, IMPLEMENTING, ADMINISTERING, CONFIRMING, OR EFFECTING THE PLAN (INCLUDING THE PLAN SUPPORT AGREEMENT) OR ANY CONTRACT, INSTRUMENT, RELEASE OR OTHER AGREEMENT OR DOCUMENT CREATED OR ENTERED INTO IN CONNECTION WITH THE PLAN OR ANY OTHER PREPETITION OR POSTPETITION ACT TAKEN OR OMITTED TO BE TAKEN IN CONNECTION WITH OR IN CONTEMPLATION OF THE RESTRUCTURING OF THE DEBTORS; PROVIDED, THAT THE FOREGOING “EXCULPATION” SHALL HAVE NO EFFECT ON THE LIABILITY OF ANY ENTITY THAT RESULTS FROM ANY SUCH ACT OR OMISSION THAT IS DETERMINED IN A FINAL ORDER TO HAVE CONSTITUTED FRAUD, GROSS NEGLIGENCE, OR WILLFUL MISCONDUCT; PROVIDED, FURTHER THAT EACH EXCULPATED PARTY SHALL BE ENTITLED TO RELY UPON THE ADVICE OF COUNSEL CONCERNING HIS, HER OR ITS DUTIES PURSUANT TO, OR IN CONNECTION WITH, THE PLAN OR ANY OTHER RELATED DOCUMENT, INSTRUMENT, OR AGREEMENT.

 

THE EXCULPATED PARTIES HAVE, AND UPON CONFIRMATION, SHALL BE DEEMED TO HAVE, PARTICIPATED IN GOOD FAITH AND IN COMPLIANCE WITH THE APPLICABLE PROVISIONS OF THE BANKRUPTCY CODE, INCLUDING WITH REGARD TO THE DISTRIBUTIONS OF NEW COMMON STOCK AND NEW WARRANTS (IF ANY) PURSUANT TO THE PLAN AND, THEREFORE, ARE NOT AND SHALL NOT BE LIABLE AT ANY TIME FOR THE VIOLATIONS OF ANY APPLICABLE LAW, RULE, OR REGULATION GOVERNING THE SOLICITATION OF ACCEPTANCES OR REJECTIONS OF THE PLAN OR SUCH DISTRIBUTIONS MADE PURSUANT TO THE PLAN.

 

G.                                    Injunction

 

EXCEPT AS OTHERWISE PROVIDED IN THE PLAN OR THE CONFIRMATION ORDER, ALL ENTITIES WHO HAVE HELD, HOLD, OR MAY HOLD CLAIMS, INTERESTS, CAUSES OF ACTION, OR LIABILITIES THAT:  (A) ARE SUBJECT TO COMPROMISE AND SETTLEMENT PURSUANT TO THE TERMS OF THE PLAN; (B) HAVE BEEN RELEASED PURSUANT TO ARTICLE VIII.D HEREOF; (C) HAVE BEEN RELEASED PURSUANT TO ARTICLE VIII.E HEREOF, (D) ARE SUBJECT TO EXCULPATION PURSUANT TO ARTICLE VIII.F HEREOF (BUT ONLY TO THE EXTENT OF THE EXCULPATION PROVIDED IN ARTICLE VIII.F HEREIN), OR (E) ARE OTHERWISE DISCHARGED, SATISFIED, STAYED OR TERMINATED PURSUANT TO THE TERMS OF THE PLAN, ARE PERMANENTLY ENJOINED AND PRECLUDED, FROM AND AFTER THE EFFECTIVE DATE, FROM COMMENCING OR CONTINUING IN ANY MANNER, ANY ACTION OR OTHER PROCEEDING, INCLUDING ON ACCOUNT OF ANY CLAIMS, INTERESTS, CAUSES OF ACTION, OR LIABILITIES THAT HAVE BEEN COMPROMISED OR SETTLED AGAINST THE DEBTORS, THE REORGANIZED DEBTORS, OR ANY ENTITY SO RELEASED OR EXCULPATED (OR THE PROPERTY OR ESTATE OF ANY ENTITY, DIRECTLY OR INDIRECTLY, SO RELEASED OR EXCULPATED) ON ACCOUNT OF, OR IN CONNECTION WITH OR WITH RESPECT TO, ANY DISCHARGED, RELEASED, SETTLED, COMPROMISED, OR EXCULPATED CLAIMS, INTERESTS, CAUSES OF ACTION, OR LIABILITIES.

 

H.                                   Protection Against Discriminatory Treatment

 

Consistent with section 525 of the Bankruptcy Code and the Supremacy Clause of the U.S. Constitution, all Entities, including Governmental Units, shall not discriminate against the Reorganized Debtors or deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to, condition such a grant to, discriminate with respect to such a grant against, the Reorganized Debtors, or another Entity with whom the Reorganized Debtors have been associated, solely because each Debtor has been a debtor under chapter 11 of the

 

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Bankruptcy Code, has been insolvent before the commencement of the Chapter 11 Cases (or during the Chapter 11 Cases but before the Debtors are granted or denied a discharge), or has not paid a debt that is dischargeable in the Chapter 11 Cases.

 

I.                                        Recoupment

 

In no event shall any Holder of Claims or Interests be entitled to recoup any Claim against any claim, right, or Cause of Action of the Debtors or the Reorganized Debtors, as applicable, unless such Holder actually has performed such recoupment and provided notice thereof in writing to the Debtors on or before the Confirmation Date, notwithstanding any indication in any Proof of Claim or otherwise that such Holder asserts, has, or intends to preserve any right of recoupment.

 

J.                                        Subordination Rights.

 

Any distributions under the Plan to Holders shall be received and retained free from any obligations to hold or transfer the same to any other Holder and shall not be subject to levy, garnishment, attachment, or other legal process by any Holder by reason of claimed contractual subordination rights.  Any such subordination rights shall be waived, and the Confirmation Order shall constitute an injunction enjoining any Entity from enforcing or attempting to enforce any contractual, legal, or equitable subordination rights to property distributed under the Plan, in each case other than as provided in the Plan.

 

ARTICLE IX.
CONDITIONS PRECEDENT TO CONFIRMATION
AND CONSUMMATION OF THE PLAN

 

A.                                    Conditions Precedent to the Effective Date

 

It shall be a condition to Consummation of the Plan that the following conditions shall have been satisfied (or waived pursuant to the provisions of Article IX.B hereof):

 

1.                                      The Bankruptcy Court shall have approved the Disclosure Statement as containing adequate information with respect to the Plan within the meaning of section 1125 of the Bankruptcy Code;

 

2.                                      The Definitive Documents shall satisfy the Definitive Document Plan Support Agreement Requirements;

 

3.                                      The Confirmation Order shall have been entered, shall be in full force and effect, and shall not be subject to any stay;

 

4.                                      All documents and agreements necessary to implement the Plan, including, without limitation, the New Credit Facility Documents shall have been executed and tendered for delivery.  All conditions precedent to the effectiveness of such documents and agreements shall have been satisfied or waived pursuant to the terms thereof (or will be satisfied and waived substantially concurrently with the occurrence of the Effective Date);

 

5.                                      All documents, certificates, and agreements necessary to implement this Plan shall have been executed and delivered to the required parties and, to the extent required, filed with the applicable Governmental Units in accordance with applicable laws, and all other requisite actions in connection with the foregoing shall have been performed.

 

6.                                      All governmental and material third party approvals and consents, including Bankruptcy Court approval, necessary in connection with the transactions contemplated by this Plan shall have been obtained, not be subject to unfulfilled conditions, and be in full force and effect, and all applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that would restrain, prevent, or otherwise impose materially adverse conditions on such transactions;

 

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7.                                      The Professional Fee Escrow Account shall have been established and funded.

 

8.                                      The percentage of Unencumbered Distribution received by Holders of Unsecured Notes Claims and General Unsecured Claims (excluding Deficiency Claims) shall in no event exceed three and seven tenths percent (3.7%) of the New Common Stock (which shall be subject to dilution under the Management Incentive Plan, any other compensation arrangements under the Management Compensation Term Sheet, and New Common Stock issuable upon exercise of the New Warrants).

 

B.                                    Waiver of Conditions

 

The conditions to Confirmation of the Plan and to the Effective Date of the Plan set forth in this Article IX may be waived only by consent of the Debtors, the Requisite First Lien Lenders, and the Second Lien Noteholders without notice, leave, or order of the Bankruptcy Court or any formal action other than proceedings to confirm or consummate the Plan; provided, however, the condition in Article IX.A.6 may be waived with respect to a particular Definitive Document only to the extent that every party that maintains a consent right over the subject Definitive Document agrees to waive such condition with respect to the subject Definitive Document.

 

C.                                    Substantial Consummation

 

“Substantial Consummation” of the Plan, as defined in 11 U.S.C. § 1101(2), shall be deemed to occur on the Effective Date.

 

D.                                    Effect of Non-Occurrence of Conditions to the Effective Date

 

If the Effective Date does not occur, the Plan shall be null and void in all respects and nothing contained in the Plan or the Disclosure Statement shall:  (1) constitute a waiver or release of any Claims by or Claims against or Interests in the Debtors; (2) prejudice in any manner the rights of the Debtors, any Holders of a Claim or Interest or any other Entity; or (3) constitute an admission, acknowledgment, offer, or undertaking by the Debtors, any Holders, or any other Entity in any respect; provided that the Litigation Waivers shall remain in full force and effect so long as the Plan Support Agreement is in full force and effect.

 

ARTICLE X.
MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN

 

A.                                    Modification of Plan

 

Subject to the limitations contained in the Plan, the Debtors reserve the right, in accordance with the Bankruptcy Code, the Bankruptcy Rules, and the Plan Support Agreement, and with the prior consent of the Requisite Creditors and the Second Lien Notes Trustee: (1) to amend or modify the Plan prior to the entry of the Confirmation Order, including amendments or modifications to satisfy section 1129(b) of the Bankruptcy Code; and (2) after the entry of the Confirmation Order, the Debtors or the Reorganized Debtors, as the case may be, may, upon order of the Bankruptcy Court, amend or modify the Plan, in accordance with section 1127(b) of the Bankruptcy Code and the Plan Support Agreement, or remedy any defect or omission or reconcile any inconsistency in the Plan in such manner as may be necessary to carry out the purpose and intent of the Plan.

 

B.                                    Effect of Confirmation on Modifications

 

Entry of the Confirmation Order shall mean that all modifications or amendments to the Plan occurring after the solicitation thereof are approved pursuant to section 1127(a) of the Bankruptcy Code and do not require additional disclosure or resolicitation under Bankruptcy Rule 3019.

 

C.                                    Revocation or Withdrawal of the Plan

 

Subject to the terms of the Plan Support Agreement, the Debtors reserve the right to revoke or withdraw the Plan prior to the Confirmation Date.  If the Debtors revoke or withdraw the Plan, or if Confirmation and

 

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consummation of the Plan does not occur, then:  (1) the Plan shall be null and void in all respects; (2) any settlement or compromise embodied in the Plan (including the fixing or limiting to an amount certain of any Claim or Interest or Class of Claims or Interests), assumption or rejection of Executory Contracts or Unexpired Leases effected by the Plan, and any document or agreement executed pursuant to the Plan, shall be deemed null and void; and (3) nothing contained in the Plan shall:  (a) constitute a waiver or release of any Claims or Interests; (b) prejudice in any manner the rights of the Debtors or any other Entity, including the Holders of Claims; or (c) constitute an admission, acknowledgement, offer, or undertaking of any sort by the Debtors or any other Entity.

 

ARTICLE XI.
RETENTION OF JURISDICTION

 

Notwithstanding the entry of the Confirmation Order and the occurrence of the Effective Date, on and after the Effective Date, the Bankruptcy Court shall retain jurisdiction over the Chapter 11 Cases and all matters, arising out of, or related to, the Chapter 11 Cases and the Plan, including jurisdiction to:

 

1.                                      Allow, Disallow, determine, liquidate, classify, estimate, or establish the priority, Secured or unsecured status, or amount of any Claim or Interest, including the resolution of any request for payment of any Administrative Claim and the resolution of any and all objections to the Secured or unsecured status, priority, amount, or allowance of Claims or Interests;

 

2.                                      decide and resolve all matters related to the granting and denying, in whole or in part, any applications for allowance of compensation or reimbursement of expenses to Professionals authorized pursuant to the Bankruptcy Code or the Plan;

 

3.                                      resolve any matters related to:  (a) the assumption and assignment or rejection of any Executory Contract or Unexpired Lease to which a Debtor is a party or with respect to which a Debtor may be liable in any manner and to hear, determine, and, if necessary, liquidate, any Claims arising therefrom, including Claims related to the rejection of an Executory Contract or Unexpired Lease, Cure Costs pursuant to section 365 of the Bankruptcy Code, or any other matter related to such Executory Contract or Unexpired Lease; (b) the Reorganized Debtors amending, modifying, or supplementing, after the Confirmation Date, pursuant to Article V hereof, any Executory Contracts or Unexpired Leases to the list of Executory Contracts and Unexpired Leases to be assumed and assigned or rejected or otherwise; and (c) any dispute regarding whether a contract or lease is or was executory or expired;

 

4.                                      ensure that distributions to Holders of Allowed Claims and Interests are accomplished pursuant to the provisions of the Plan;

 

5.                                      adjudicate, decide, or resolve any motions, adversary proceedings, contested, or litigated matters, and any other matters, and grant or deny any applications involving a Debtor that may be pending on the Effective Date;

 

6.                                      adjudicate, decide, or resolve any and all matters related to Causes of Action;

 

7.                                      adjudicate, decide, or resolve any and all matters related to section 1141 of the Bankruptcy Code;

 

8.                                      enter and implement such orders as may be necessary or appropriate to execute, implement, or consummate the provisions of the Plan and all contracts, instruments, releases, indentures, and other agreements or documents created in connection with the Plan or the Disclosure Statement;

 

9.                                      enter and enforce any order for the sale of property pursuant to sections 363, 1123, or 1146(a) of the Bankruptcy Code;

 

10.                               resolve any cases, controversies, suits, disputes, or Causes of Action that may arise in connection with the Consummation, interpretation, or enforcement of the Plan or any Entity’s obligations incurred in connection with the Plan;

 

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11.                               issue injunctions, enter and implement other orders, or take such other actions as may be necessary or appropriate to restrain interference by any Entity with consummation or enforcement of the Plan;

 

12.                               resolve any cases, controversies, suits, disputes, or Causes of Action with respect to the settlements, compromises, discharges, releases, injunctions, exculpations, and other provisions contained in Article VIII hereof and enter such orders as may be necessary or appropriate to implement such releases, injunctions, and other provisions;

 

13.                               resolve any cases, controversies, suits, disputes, or Causes of Action with respect to the repayment or return of distributions and the recovery of additional amounts owed by the Holder of a Claim or Interest for amounts not timely repaid pursuant to Article VI.G.1 hereof;

 

14.                               enter and implement such orders as are necessary or appropriate if the Confirmation Order is for any reason modified, stayed, reversed, revoked, or vacated;

 

15.                               determine any other matters that may arise in connection with or relate to the Plan, the Disclosure Statement, the Confirmation Order, or the Plan Supplement;

 

16.                               adjudicate any and all disputes arising from or relating to distributions under the Plan or any transactions contemplated therein;

 

17.                               consider any modifications of the Plan, to cure any defect or omission, or to reconcile any inconsistency in any Bankruptcy Court order, including the Confirmation Order;

 

18.                               determine requests for the payment of Claims and Interests entitled to priority pursuant to section 507 of the Bankruptcy Code;

 

19.                               hear and determine matters concerning state, local, and federal taxes in accordance with sections 346, 505, and 1146 of the Bankruptcy Code;

 

20.                               hear and determine all disputes involving the existence, nature, or scope of the release provisions set forth in the Plan, including any dispute relating to any liability arising out of the termination of employment or the termination of any employee or retiree benefit program, regardless of whether such termination occurred prior to or after the Effective Date;

 

21.                               enforce all orders previously entered by the Bankruptcy Court;

 

22.                               hear any other matter not inconsistent with the Bankruptcy Code;

 

23.                               enter an order concluding or closing the Chapter 11 Cases; and

 

24.                               enforce the injunction, release, and exculpation provisions set forth in Article VIII hereof, as well as the Litigation Waivers.

 

As of the Effective Date, notwithstanding anything in this Article XI to the contrary, the New Credit Facility Documents shall be governed by the respective jurisdictional provisions therein.  Notwithstanding anything in the Plan to the contrary, the IRS may pursue ordinary course collection remedies after the Effective Date.

 

ARTICLE XII.
MISCELLANEOUS PROVISIONS

 

A.                                    Immediate Binding Effect

 

Subject to Article IX.A hereof and notwithstanding Bankruptcy Rules 3020(e), 6004(h), or 7062 or otherwise, upon the occurrence of the Effective Date, the terms of the Plan, the final versions of the documents

 

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contained in the Plan Supplement, and the Confirmation Order shall be immediately effective and enforceable and deemed binding upon the Debtors or the Reorganized Debtors, as applicable, and any and all Holders of Claims or Interests (regardless of whether such Claims or Interests are deemed to have accepted or rejected the Plan), all Entities that are parties to or are subject to the settlements, compromises, releases, and injunctions described in the Plan, each Entity acquiring property under the Plan or the Confirmation Order, and any and all non-Debtor parties to Executory Contracts and Unexpired Leases with the Debtors.  All Claims and debts shall be as fixed, adjusted, or compromised, as applicable, pursuant to the Plan regardless of whether any Holder of a Claim or debt has voted on the Plan.

 

B.                                    Additional Documents

 

On or before the Effective Date, the Debtors may File with the Bankruptcy Court such agreements and other documents as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the Plan.  The Debtors and all Holders of Claims or Interests receiving distributions pursuant to the Plan and all other parties in interest shall, from time to time, prepare, execute, and deliver any agreements or documents and take any other actions as may be necessary or advisable to effectuate the provisions and intent of the Plan.

 

C.                                    Payment of Statutory Fees

 

All fees payable pursuant to section 1930(a) of the Judicial Code, as determined by the Bankruptcy Court at a hearing pursuant to section 1128 of the Bankruptcy Code or as agreed to by the United States Trustee and Reorganized Debtors, shall be paid for each quarter (including any fraction thereof) until the Chapter 11 Cases are converted, dismissed or closed, whichever occurs first.

 

D.                                    Dissolution of the Committee

 

The Committee shall dissolve, and the members thereof shall be released and discharged from all rights and duties arising from, or related to, the Chapter 11 Cases on the Effective Date; provided, that such official committee shall be deemed to remain in existence solely with respect to, and shall not be heard on any issue except, applications filed by the Professionals pursuant to sections 330 and 331 of the Bankruptcy Code.  The Reorganized Debtors shall not be responsible for paying any fees or expenses incurred by the members of or advisors to the Committee after the Effective Date.

 

E.                                     Reservation of Rights

 

The Plan shall have no force or effect unless and until the Bankruptcy Court enters the Confirmation Order.  None of the filing of the Plan, any statement or provision contained in the Plan, or the taking of any action by any Debtor with respect to the Plan, the Disclosure Statement, or the Plan Supplement shall be or shall be deemed to be an admission or waiver of any rights of any Debtor with respect to the Holders of Claims or Interests prior to the Effective Date.

 

F.                                      Successors and Assigns

 

The rights, benefits, and obligations of any Entity named or referred to in the Plan or the Confirmation Order shall be binding on, and shall inure to the benefit of any heir, executor, administrator, successor or assign, affiliate, officer, director, manager, agent, representative, attorney, beneficiaries, or guardian, if any, of each Entity.

 

G.                                    Service of Documents

 

Any pleading, notice, or other document required by the Plan to be served on or delivered to the Debtors or Reorganized Debtors shall be served on:

 

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the Debtors:

 

Midstates Petroleum Company

321 South Boston Avenue, Suite 1000

Tulsa, Oklahoma 74103

Attn.:                 Scott C. Weatherholt

Nelson M. Haight

 

with copies to:

 

Kirkland & Ellis LLP

Kirkland & Ellis International LLP

601 Lexington Avenue

New York, New York 10022

Attn.:                 Edward O. Sassower, P.C.

Joshua A. Sussberg, P.C.

 

Kirkland & Ellis LLP

Kirkland & Ellis International LLP

300 North LaSalle Drive

Chicago, Illinois 60654

Attn.:                 James H.M. Sprayregen

William A. Guerrieri

Jason Gott

 

After the Effective Date, the Debtors have authority to send a notice to Entities that to continue to receive documents pursuant to Bankruptcy Rule 2002, they must file a renewed request to receive documents pursuant to Bankruptcy Rule 2002.  After the Effective Date, the Debtors are authorized to limit the list of Entities receiving documents pursuant to Bankruptcy Rule 2002 to those Entities who have filed such renewed requests.

 

In accordance with Bankruptcy Rules 2002 and 3020(c), within ten (10) Business Days of the date of entry of the Confirmation Order, the Debtors shall serve the Notice of Confirmation by United States mail, first class postage prepaid, by hand, or by overnight courier service to all parties served with the Confirmation Hearing Notice; provided that no notice or service of any kind shall be required to be mailed or made upon any Entity to whom the Debtors mailed a Confirmation Hearing Notice, but received such notice returned marked “undeliverable as addressed,” “moved, left no forwarding address” or “forwarding order expired,” or similar reason, unless the Debtors have been informed in writing by such Entity, or are otherwise aware, of that Entity’s new address. To supplement the notice described in the preceding sentence, within twenty days of the date of the Confirmation Order the Debtors shall publish the Notice of Confirmation once in The Wall Street Journal (national edition).  Mailing and publication of the Notice of Confirmation in the time and manner set forth in the this paragraph shall be good and sufficient notice under the particular circumstances and in accordance with the requirements of Bankruptcy Rules 2002 and 3020(c), and no further notice is necessary.

 

H.                                   Term of Injunctions or Stays

 

Unless otherwise provided in the Plan or in the Confirmation Order, all injunctions or stays in effect in the Chapter 11 Cases pursuant to sections 105 or 362 of the Bankruptcy Code or any order of the Bankruptcy Court, and extant on the Confirmation Date (excluding any injunctions or stays contained in the Plan or the Confirmation Order) shall remain in full force and effect until the Effective Date.  All injunctions or stays contained in the Plan or the Confirmation Order shall remain in full force and effect in accordance with their terms.

 

I.                                        Entire Agreement

 

Except as otherwise indicated, the Plan, the Confirmation Order, the Plan Supplement, and the New Credit Facility Documents supersede all previous and contemporaneous negotiations, promises, covenants, agreements, understandings, and representations on such subjects, all of which have become merged and integrated into the Plan.

 

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J.                                        Successors and Assigns

 

The rights, benefits, and obligations of any Entity named or referred to in the Plan shall be binding on, and shall inure to the benefit of any heir, executor, administrator, successor or assign, affiliate, officer, director, agent, representative, attorney, beneficiaries or guardian, if any, of each Entity.

 

K.                                    Exhibits

 

All exhibits and documents included in the Plan Supplement are incorporated into and are a part of the Plan as if set forth in full in the Plan.  After the exhibits and documents are Filed, copies of such exhibits and documents shall be available upon written request to the Debtors’ counsel at the address above or by downloading such exhibits and documents from the Debtors’ restructuring website at http://www.kccllc.net/midstates or the Bankruptcy Court’s website at www.txs.uscourts.gov/bankruptcy.  To the extent any exhibit or document is inconsistent with the terms of the Plan, unless otherwise ordered by the Bankruptcy Court, the non-exhibit or non-document portion of the Plan shall control.

 

L.                                     Nonseverability of Plan Provisions upon Confirmation

 

If, prior to Confirmation, any term or provision of the Plan is held by the Bankruptcy Court to be invalid, void, or unenforceable, the Bankruptcy Court shall be prohibited from altering or interpreting such term or provision to make it valid or enforceable, provided that at the request of the Debtors, the Bankruptcy Court shall have the power to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void, or unenforceable, and such terms or provision shall then be applicable as altered or interpreted provided that any such alteration or interpretation shall be reasonably acceptable to the Debtors and the Requisite Creditors and fully in compliance with the Plan Support Agreement.  The Confirmation Order shall constitute a judicial determination and shall provide that each term and provision of the Plan, as it may have been altered or interpreted in accordance with the foregoing, is: (1) valid and enforceable pursuant to its terms; (2) integral to the Plan and may not be deleted or modified without the Debtors’ consent; and (3) nonseverable and mutually dependent.

 

M.                                 Votes Solicited in Good Faith

 

Upon entry of the Confirmation Order, the Debtors will be deemed to have solicited votes on the Plan in good faith and in compliance with the Bankruptcy Code, and pursuant to section 1125(e) of the Bankruptcy Code, the Debtors and each of their respective Affiliates, agents, representatives, members, principals, shareholders, officers, directors, employees, advisors, and attorneys will be deemed to have participated in good faith and in compliance with the Bankruptcy Code in the offer, issuance, sale, and purchase of Securities offered and sold under the Plan and any previous plan, and, therefore, neither any of such parties or individuals or the Reorganized Debtors will have any liability for the violation of any applicable law, rule, or regulation governing the solicitation of votes on the Plan or the offer, issuance, sale, or purchase of the Securities offered and sold under the Plan and any previous plan.

 

N.                                    Further Assurances

 

The Debtors, Reorganized Debtors, all Holders of Claims receiving distributions hereunder and all other parties-in-interest shall, from time to time, prepare, execute and deliver any agreements or documents and take any other actions as may be necessary or advisable to effectuate the provisions and intent of the Plan or the Confirmation Order.

 

O.                                    Closing of Chapter 11 Cases

 

The Reorganized Debtors shall, promptly after the full administration of the Chapter 11 Cases, File with the Bankruptcy Court all documents required by Bankruptcy Rule 3022 and any applicable order of the Bankruptcy Court to close the Chapter 11 Cases.

 

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Respectfully submitted,

 

Date: September 28, 2016

Midstates Petroleum Company, Inc. and
Midstates Petroleum Company, LLC

 

 

 

 

By:

/s/ Nelson M. Haight

 

Name:

Nelson M. Haight

 

Title:

Executive Vice President & Chief Financial Officer

 

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Exhibit A

 

New Credit Facility Term Sheet

 



 

MIDSTATES PETROLEUM COMPANY

 

RESTRUCTURING OF DEBT FACILITIES

 

Summary of Terms and Conditions

 

This Term Sheet sets forth the summary of contemplated terms and conditions with respect to a new credit facility that the Agent (as defined below) would be willing to propose to the Lenders (as defined below) as an exit facility, under the Credit Agreement (as defined below) in connection with a restructuring of the obligations of the Obligors (as defined below).  We understand that the restructuring shall be consummated through cases to be filed under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas and, once fully negotiated and agreed upon by the necessary lenders, shall be reflected in the terms of a plan of reorganization (the “Plan of Reorganization”).  This Term Sheet is intended only to summarize terms of a proposed agreement and is not a comprehensive recitation of all terms and conditions.  This Term Sheet does not represent a commitment, obligation or understanding on the part of the Agent or any Lender to restructure or otherwise provide any financing on the terms outlined herein.  Further, this Term Sheet is not intended to suggest or reflect that the Lenders holding the necessary percentages of obligations under the Credit Agreement have consented or agreed to each of the terms set forth herein.  No such party shall be so obligated unless and until all internal credit approvals are sought and obtained, all definitive documentation is negotiated and executed and all conditions precedent are satisfied or waived.  The definitive documentation may contain terms which vary from the terms described herein.  Unless otherwise defined herein, capitalized terms used herein shall have the definition ascribed to such terms in the Credit Agreement (as defined below).

 

1.  Existing Obligations

 

Credit Facility

 

Credit Agreement:                                                                                             Second Amended and Restated Credit Agreement dated as of June 8, 2012 (as amended, restated, amended and restated, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement) among Midstates Petroleum Company, Inc., as guarantor (the “Parent”), Midstates Petroleum Company LLC, as borrower (the “Borrower”; together with the Parent, the “Obligors”), the financial institutions party thereto (the “Lenders”) and SunTrust Bank, as Administrative Agent (in its capacity as administrative agent, the “Agent”), Lender and Issuing Bank.

 

Obligations:                                                                                                                               The Borrower is indebted to the Lenders in an aggregate amount equal to the principal amount outstanding under the Credit Agreement in the amount of approximately $249,183,640.00, plus accrued but unpaid interest, fees, costs and expenses, and has reimbursement obligations in respect of letters of credit that are outstanding in the aggregate face amount of approximately $2,840,935.00 (the “Existing Letters of Credit”; collectively, the “First Lien Obligations”).

 



 

Second Lien Notes

 

Issuers:                                                                                                                                                       The Obligors.

 

Second Lien Indenture:                                                                 Indenture dated May 21, 2015 (the “Second Lien Indenture”), among the Parent, the Borrower and Wilmington Trust, National Association, as trustee (in such capacity, “Wilmington Trust”).  Holders of outstanding notes under the Second Lien Indenture are referred to as the “Second Lien Noteholders.”

 

Obligations:                                                                                                                               The Obligors are indebted to the Second Lien Noteholders in an aggregate principal amount equal to approximately $625 million plus accrued but unpaid interest, fees, costs and expenses.

 

Third Lien Notes

 

Issuers:                                                                                                                                                       The Obligors.

 

Third Lien Indenture:                                                                            Indenture dated May 21, 2015 (the “Third Lien Indenture”), among the Parent, the Borrower and Wilmington Trust, as trustee.   Holders of outstanding notes under the Third Lien Indenture are referred to as the “Third Lien Noteholders.”

 

Obligations:                                                                                                                               The Obligors are indebted to the Third Lien Noteholders in an aggregate principal amount equal to approximately $529.7 million plus accrued but unpaid interest, fees, costs and expenses.

 

Unsecured Notes

 

Issuers:                                                                                                                                                       The Obligors.

 

Indentures:                                                                                                                                  (i)  10.75% Senior Notes due 2020  issued pursuant to the Indenture dated as of October 1, 2012 (the “10.75% Notes”) and (ii) 9.25%  Senior Notes due 2021  issued pursuant to the Indenture dated as of May 31, 2013 (the “9.25%  Notes”), in each case, with Wells Fargo Bank, N.A., as trustee.

 

Obligations:                                                                                                                               The Obligors are indebted to the holders of the 10.75% Notes and the 9.25% Notes (collectively, the “Unsecured Noteholders”) as follows:  (i) approximately $293.6 million principal amount outstanding under the 10.75% Notes and (ii) approximately $347.7 million principal amount outstanding under the 9.25% Notes.

 

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2.  Restructure of First Lien Obligations

 

The First Lien Obligations, which shall be paid in full, shall be restructured in conjunction with a Plan of Reorganization that eliminates all debt for borrowed money junior to the First Lien Obligations (which junior obligations may be exchanged for equity as appropriate and negotiated by such parties) as follows:

 

Cash Payments

 

Generally:                                                                                                                                        On the effective date of the Plan of Reorganization (the “Plan Effective Date”), the Lenders shall receive a payment in cash of an amount not less than $82,024,575 (the “Plan Effective Date Payment”), which shall be allocated among the Lenders on a pro rata basis in accordance with their respective share of the outstanding principal amount of the Obligations.

 

Following the cash payment to the Lenders on the Plan Effective Date, the Obligors (as reorganized pursuant to the Plan of Reorganization, “Reorganized Midstates”) shall hold not less than $110,000,000 in “cash on hand” on the Plan Effective Date, of which $40,000,000 shall be allocated to fund the Cash Collateral Account (as defined below) on the Plan Effective Date.  In the event that Reorganized Midstates shall have cash in excess of $70,000,000 (after deducting for the funding of the Cash Collateral Account and the payment of all claims and expenses due and payable on the Plan Effective Date) on the Plan Effective Date, the Lenders shall consent to the payment in cash on the Plan Effective Date of such excess cash and cash equivalents up to a total amount, not to exceed, of $60,000,000 to the Second Lien Noteholders.

 

New Credit Facility

 

Amount:                                                                                                                                               $170,000,000.

 

Facility:                                                                                                                                                    Revolving Loans.  On the Plan Effective Date, those Lenders that shall have voted to accept the Plan (the “Accepting Lenders” or “RBL Lenders”) shall be deemed to have extended a reserve based revolving credit facility (the “RBL Facility”; the loans made thereunder, the “Revolving Loans”) to Reorganized Midstates in a principal amount outstanding, and having a commitment amount, of (i) $170,000,000 less (ii) the aggregate principal amount of the Term Loan (as defined below) (the “Commitment”).  The initial conforming borrowing base shall be equal to $170,000,000 (the “Initial Borrowing Base”).

 

Term Loans. On the Plan Effective Date, those Lenders that shall have voted to reject the Plan, if any (the “Rejecting Lenders” or “Term Lenders”) shall elect either to participate in the RBL Facility or the Term Loan.  If any Rejecting Lender either fails to make an election, elects to participate in the Term Loan, or otherwise fails to return a ballot such that they will have not been deemed to vote in favor or have made an election to participate in the RBL Facility, such Rejecting Lender will be deemed to have extended a term loan (a “Term Loan”) to Reorganized Midstates in a principal amount equal to (i) such Rejecting Lender’s pro rata share of  the First Lien Obligations, less (ii) such Rejecting Lender’s

 

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pro rata share of the Effective Date Cash Payment. Notwithstanding any other provisions herein, the Commitment and Initial Borrowing Base shall be lowered by the pro rata share of each such Rejecting Lender’s loans which become the Term Loan.(1)  The Obligations in respect of the Term Loan shall be subordinated to those in respect of the RBL Facility. Upon exercise of remedies or maturity, the Term Loan shall be a last-out loan, which shall be paid only following indefeasible payment in full of the Obligations in respect of the Revolver Loans.

 

For the avoidance of doubt, Reorganized Midstates shall not be permitted to convert Revolving Loans to Term Loans.

 

Fees.  Reorganized Midstates will pay to the Agent, for the ratable benefit of each RBL Lender (excluding defaulting lenders), the following fees:  (i) on the Plan Effective Date, a non-refundable upfront fee in an aggregate amount equal to 0.50% of the Commitment on the Plan Effective Date, and (ii) quarterly in arrears on the first day of each calendar quarter, a commitment fee calculated on the average daily amount of the Availability at a per annum rate equal to 0.50%.

 

Letter of Credit.  In connection with the RBL Facility, SunTrust (in such capacity, the “Issuing Lender”) will make available to Reorganized Midstates a letter of credit sub-facility of up to $10,000,000 (the “Sub-Facility Capacity”) subject to customary notice requirements and Availability.  Letters of credit issued under the RBL Facility (the “Letters of Credit”) will be used for general corporate purposes and shall expire not later than the earlier of (i) 12 months after its date of issuance or such longer period of time as may be agreed by the applicable Issuing Lender and (ii) the fifth business day prior to the Commitment Termination Date (as defined below); provided that any Letter of Credit may provide for automatic renewal thereof for additional periods of up to 12 months or such longer period of time as may be agreed by the Issuing Lender (which in no event shall extend beyond the date referred to in clause (ii) above, except to the extent cash collateralized or backstopped pursuant to arrangements reasonably acceptable to the Issuing Lender).

 

The Existing Letters of Credit shall be “rolled over” and deemed Letters of Credit under the RBL Facility and shall count towards its Sub-Facility Capacity.(2)

 

Reorganized Midstates will pay a fee equal to the Applicable Margin (as defined below) then in effect for LIBOR borrowings, which fee will accrue on the aggregate face amount of outstanding Letters of Credit, payable in arrears at the end of each quarter and upon the termination of

 


(1)  NTD: Each Rejecting Lender would have the option of being treated as an Accepting Lender by giving irrevocable notice of such decision to Reorganized Midstates and the Agent not less than three (3) business days before the Plan Effective Date.

 

(2)  NTD: Note that no new Letters of Credit would be available after the Plan Effective Date absent repayment of loans or expiry or termination of Existing Letters of Credit.

 

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the RBL Facility, in each case for the actual number of days elapsed over a 360-day year.  Such fees shall be distributed to the RBL Lenders pro rata in accordance with the amount of each such RBL Lender’s Commitment.  In addition, Reorganized Midstates shall pay to the Issuing Lender, for its own account, (i) a fronting fee equal to a 0.125% of the aggregate face amount of outstanding Letters of Credit, payable in arrears at the end of each quarter and upon the termination of the RBL Facility, calculated based upon the actual number of days elapsed over a 360-day year and (ii) customary issuance and administration fees to be mutually agreed.

 

Administrative Agent:                                                                         SunTrust Bank (the “Agent”).

 

Maturity:                                                                                                                                            The RBL Facility shall terminate, and all amounts outstanding shall be due and payable, on the earlier of (i) the four-year anniversary of the Plan Effective Date or (ii) September 30, 2020 (such earlier date, the “Commitment Termination Date”).

 

The Term Loans shall mature, and all amounts outstanding shall be payable, on the Commitment Termination Date.

 

Guarantors:                                                                                                                               All obligations of Reorganized Midstates (collectively, the “Obligations”) under (i) the RBL Facility, (ii) the Term Loans, (iii) interest rate protection, commodity trading or hedging, currency exchange or other hedging or swap arrangements entered into with any person that was then a Lender or any affiliate thereof (the “Hedging Arrangements”) and (iv) treasury management arrangements entered into with any person that was then a Lender or any affiliate thereof (“Treasury Arrangements”) will be unconditionally guaranteed jointly and severally on a pari passu senior secured basis (the “Guarantees”) by any direct or indirect subsidiary of Reorganized Midstates (the “Guarantors”; together with Reorganized Midstates, the “Credit Parties”).

 

RBL Availability:                                                                                                So long as the Total Outstandings (as defined below) do not exceed the Revolving Loan Limit (as defined below): (i) Revolving Loans will be available at any time on same day notice in the case of ABR loans prior to the Commitment Termination Date, in minimum principal amounts of $500,000 and increments of $100,000 in excess thereof, (ii) Letters of Credit will be issued as described below and (iii) amounts repaid under the RBL Facility may be reborrowed.

 

Total Outstandings” means, at any time, the aggregate principal amount of Revolving Loans then outstanding plus the aggregate stated amount of all issued Letters of Credit and, without duplication, all unreimbursed disbursements on any Letter of Credit as of such date (unless cash collateralized or backstopped pursuant to arrangements acceptable to the Issuing Lender).

 

Revolving Loan Limit” means, at any time, the lesser of (i) the Commitment and (ii) the Borrowing Base.  For purposes hereof,

 

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Availability” shall mean an amount (if positive) equal to the Revolving Loan Limit less Total Outstandings, and “Liquidity” shall mean at any time an amount (if positive) equal to Availability plus unrestricted cash and cash equivalents at the Credit Parties at such time minus the amount of any Borrowing Base Deficiency (as defined below) at such time.

 

Borrowing Base:                                                                                                      Subject to the Borrowing Base Redetermination Holiday (as defined below), the borrowing base for the RBL Facility shall be based on the loan value of the proved oil and gas reserves included in a Reserve Report (as defined below) and other oil and gas properties of Reorganized Midstates located within the geographic boundaries of the United States or the outer continental shelf adjacent to the United States, determined in accordance with the Credit Agreement, subject to adjustments in accordance with the terms set forth below (the “Borrowing Base”).

 

The Borrowing Base shall be re-determined semi-annually on or about April 1 and October 1 of each year, based upon a reserve report prepared as of the immediately preceding December