Exhibit 10.1

 

EXECUTION VERSION

 

RESTRUCTURING SUPPORT AGREEMENT

 

This Restructuring Support Agreement, dated as of March 17, 2016 (this
“Agreement”), is among:

 

(i)            Venoco, Inc. (“Venoco”), Denver Parent Corporation (“HoldCo”),
Ellwood Pipeline, Inc., TexCal Energy (LP) LLC, Whittier Pipeline Corporation,
TexCal Energy (GP) LLC and TexCal Energy South Texas, L.P. (each, a “Debtor”
and, collectively, the “Debtors”);

 

(ii)           each of the beneficial holders identified on the signature
pages hereto or that becomes a party to this Agreement by executing and
delivering a Transferee Joinder (as defined below) (in such capacity, the
“Consenting First Lien Noteholders”) of outstanding notes issued pursuant to the
Indenture, dated as of April 2, 2015 (the “First Lien Notes Indenture”), for the
issuance of 12.00% Senior Notes due 2019 among Venoco, as issuer, the other
Guarantors party thereto, and U.S. Bank National Association (“U.S. Bank”), as
indenture trustee (the “First Lien Notes”); and

 

(iii)          each of the beneficial holders identified on the signature
pages hereto or that becomes a party to this Agreement by executing and
delivering a Transferee Joinder (in such capacity, the “Consenting Second Lien
Noteholders” and, together with the Consenting First Lien Noteholders, the
“Restructuring Support Parties”) of outstanding notes issued pursuant to the
Indenture, dated as of April 2, 2015 (the “Second Lien Notes Indenture”), for
the issuance of 8.875% Senior Notes due 2019 among Venoco, as issuer, the other
Guarantors party thereto, and U.S. Bank, as indenture trustee (the “Second Lien
Notes” and, together with the First Lien Notes, the “Notes”). This Agreement
collectively refers to the Debtors and the Restructuring Support Parties as the
“Parties” and each individually as a “Party”.

 

RECITALS

 

A.            The Parties have agreed to implement a chapter 11 restructuring
transaction for the Debtors pursuant to the chapter 11 plan attached hereto as
Exhibit A (as it may be amended or modified in accordance with Section 25
hereof, the “Plan”) and the divestment letter agreement attached hereto as
Exhibit B (as it may be amended or modified in accordance with Section 25
hereof, the “Divestment Letter Agreement”), and subject to the terms and
conditions set forth in this Agreement, the Plan and the Divestment Letter
Agreement (such restructuring transaction, the “Restructuring Transaction”).

 

B.            The Plan and the Divestment Letter Agreement, which are expressly
incorporated herein by reference and made part of this Agreement as if fully set
forth herein, are the product of arm’s-length, good faith negotiations among the
Parties and their respective professionals. In the event of any inconsistency
between the terms of this Agreement, the Divestment Letter Agreement and the
Plan, the Plan shall control and govern.

 

C.            The Debtors have agreed to commence voluntary reorganization cases
under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101—1532
(as amended, the “Bankruptcy Code”) for the Debtors (the “Chapter 11 Cases”) in
the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy
Court”) to effectuate the

 

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Restructuring Transaction, which will be implemented pursuant the Definitive
Documentation (as defined below).

 

THEREFORE, each of the Parties hereby agrees as follows:

 

AGREEMENT

 

1.             RSA Effective Date; Time of the Essence. This Agreement shall
become effective, and the obligations contained herein shall become binding upon
the Parties, upon the first date (such date, the “RSA Effective Date”) that this
Agreement has been executed by all of the following: (a) each Debtor;
(b) Consenting First Lien Noteholders holding, in aggregate, at least two-thirds
(66.67%) in principal amount outstanding of the First Lien Notes; and
(c) Consenting Second Lien Noteholders holding, in aggregate, at least
two-thirds (66.67%) in principal amount outstanding of the Second Lien Notes.
Notwithstanding any proposed deadlines in relation to the Restructuring
Transaction, the Parties (i) acknowledge and agree that time is of the essence
and (ii) intend to complete the Restructuring Transaction as expeditiously as
possible.

 

2.             Definitive Documentation. The definitive documents and agreements
(the “Definitive Documentation”) governing the Restructuring Transaction shall
include every order entered by the Bankruptcy Court, and every pleading, motion,
proposed order, or document filed by the Debtors, for so long as this Agreement
has not been terminated in accordance with the terms hereof, related to the
Restructuring Transaction including, without limitation:

 

(a)                                 the motion authorizing the assumption of or
the Debtors’ entry into this Agreement (the “RSA Approval Motion”);

 

(b)                                 the order of the Bankruptcy Court approving
the RSA Approval Motion (the “RSA Approval Order”);

 

(c)                                  any “first day” motions (the “First Day
Motions”);

 

(d)                                 the order approving the DIP Motion (as
defined below) on an interim basis (the “Interim DIP Order”) and on a final
basis (the “Final DIP Order” and, together with the Interim DIP Order, the “DIP
Orders”) approving the DIP Loan Documentation (as defined in the Plan) and/or
regarding the use of cash collateral;

 

(e)                                  the Plan (including all exhibits,
schedules, supplements, appendices, annexes and attachments thereto) and the
confirmation order with respect to the Plan (the “Confirmation Order”);

 

(f)                                   the disclosure statement for the Plan
prepared and distributed in accordance with, among other things, sections 1125,
1126(b), and 1145 of the Bankruptcy Code, Rule 3018 of the Federal Rules of
Bankruptcy Procedure (the “Bankruptcy Rules”) and other applicable law, and all
exhibits, schedules, supplements, modifications and amendments thereto (the
“Disclosure Statement”);

 

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(g)                                  the order of the Bankruptcy Court approving
the Disclosure Statement and the solicitation of votes in connection with the
Plan pursuant to sections 1125 and 1126 of the Bankruptcy Code (the “Disclosure
Statement Order”);

 

(h)                                 the solicitation materials with respect to
the Plan (collectively, the “Solicitation Materials”);

 

(i)                                     any documents or agreements in
connection with any exit facility (if any);

 

(j)                                    any documents or agreements in connection
with the governance of HoldCo following the conclusion of the Chapter 11 Cases
(“Reorganized HoldCo”), including any shareholders’ agreements and certificates
of incorporation;

 

(k)                                 the Divestment Letter Agreement and any
other documents or agreements related to the LLA Override (as defined in the
Plan);

 

(l)                                     any documents or agreements related to
the Management Incentive Plan (as defined in the Plan).

 

(m)                             any documents or agreements related to the New
Warrants (as defined in the Plan);

 

(n)                                 any documents or agreements related to the
New Common Stock (as defined in the Plan); and

 

(o)                                 any documents or agreements related to the
Employment Agreement (as defined in the Plan) and the ongoing employment of
Timothy M. Marquez by Reorganized HoldCo.

 

Certain of the Definitive Documentation identified in this Section 2 remains
subject to negotiation and shall, upon completion, contain terms, conditions,
representations, warranties, and covenants consistent with the terms of this
Agreement. Any document that is included within the definition of “Definitive
Documentation,” including any amendment, supplement, or modification thereof,
shall be in form and substance acceptable to the Debtors and the Requisite
Majority Consenting Noteholders (as defined below); provided that the economic
and adequate protection provisions of the DIP Orders shall be in form and
substance acceptable to the Debtors and the Restructuring Support Parties
identified on the signature pages hereto as of the date hereof (the “Initial
Restructuring Support Parties”) for so long as such Initial Restructuring
Support Parties hold at least 85% of the First Lien Notes and at least 85% of
the Second Lien Notes. Venoco acknowledges and agrees that it will provide
advance draft copies of all Definitive Documentation, as soon as reasonably
practicable prior to filing, to counsel to the Restructuring Support Parties
identified in Section 23 hereof.

 

3.             Requisite Majority Consenting Noteholders. Unless expressly
provided otherwise, with respect to all terms and provisions of this Agreement
and/or the Definitive Documentation,

 

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such terms and provisions, including any amendment, supplement, or modification
thereof, shall be in form and substance acceptable to:

 

(a)                                 the Consenting First Lien Noteholders
holding a majority of the First Lien Notes held in the aggregate by the
Consenting First Lien Noteholders as of the RSA Effective Date (the “Requisite
Majority Consenting First Lien Noteholders”); and

 

(b)                                 the Consenting Second Lien Noteholders
holding a majority of the Second Lien Notes held in the aggregate by the
Consenting Second Lien Noteholders as of the RSA Effective Date (the “Requisite
Majority Consenting Second Lien Noteholders” and, together with the Requisite
Majority Consenting First Lien Noteholders, the “Requisite Majority Consenting
Noteholders”).

 

4.             Milestones. The following milestones (the “Milestones”) shall
apply to this Agreement:

 

(a)                                 no later than 7 days after the Petition
Date, the Bankruptcy Court shall have entered the Interim DIP Order, in the form
attached hereto as Exhibit C, with only such modifications as have been
otherwise consented to in writing by the Debtors and the Restructuring Support
Parties;

 

(b)                                 no later than 45 days after the Petition
Date, the Bankruptcy Court shall have entered the Final DIP Order (as defined in
the Plan);

 

(c)                                  no later than 60 days after the Petition
Date, the Bankruptcy Court shall have entered the RSA Approval Order;

 

(d)                                 no later than 90 days after the Petition
Date, the Bankruptcy Court shall have entered the Disclosure Statement Order;

 

(e)                                  no later than 150 days after the Petition
Date, the Bankruptcy Court shall have entered the Confirmation Order (the date
of entry of the Confirmation Order, the “Confirmation Date”); and

 

(f)                                   no later than 14 days following the
Confirmation Date, the Effective Date (as defined in the Plan) shall have
occurred.

 

The Debtors may extend a Milestone with the express prior written consent of the
Requisite Majority Consenting Noteholders.

 

5.             Agreements of the Restructuring Support Parties.

 

(a)                                 Support of Restructuring Transaction. Each
Restructuring Support Party (severally and not jointly), as the legal owner,
beneficial owner, and/or investment advisor or manager of or with power and/or
authority to bind

 

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any claims held by it, from the RSA Effective Date and for so long as this
Agreement has not been terminated in accordance with the terms hereof by or as
to a Restructuring Support Party, unless otherwise consented to in writing by
the Debtors and the Requisite Majority Consenting Noteholders, shall:

 

(i)                                     (A) vote all of its claims against the
Debtors now or hereafter owned by such Restructuring Support Party (or for which
such Restructuring Support Party now or hereafter has voting control over) to
accept the Plan in accordance with the applicable procedures set forth in the
Disclosure Statement and the Solicitation Materials, upon receipt of the
Disclosure Statement and Solicitation Materials approved by the Bankruptcy
Court; (B) timely return a duly-executed ballot in connection therewith; and
(C) not “opt out” of any releases under the Plan;

 

(ii)                                  not withdraw, amend, or revoke (or cause
to be withdrawn, amended, or revoked) its tender, consent, or vote with respect
to the Plan; provided, however, that such vote may be revoked (and, upon such
revocation, deemed void ab initio) by such Restructuring Support Party at any
time if this Agreement is terminated with respect to such Restructuring Support
Party (it being understood by the Parties that any modification of the Plan that
results in a termination of this Agreement pursuant to Section 7 hereof shall
entitle such Restructuring Support Party an opportunity to change its vote in
accordance with section 1127(d) of the Bankruptcy Code, and the Solicitation
Materials with respect to the Plan shall be consistent with this proviso);

 

(iii)                               not object to, delay, impede, or take any
other action to interfere with the Restructuring Transaction, or propose, file,
support, or vote for any restructuring, workout, or chapter 11 plan for the
Debtors other than the Restructuring Transaction and the Plan; and

 

(iv)                              not take any other action that is materially
inconsistent with its obligations under this Agreement.

 

(b)                                 Rights of Restructuring Support Parties
Unaffected. Nothing contained herein shall limit (i) the rights of the
Restructuring Support Parties to take or not take, or direct U.S. Bank under the
First Lien Notes Indenture or the Second Lien Notes Indenture, as applicable, to
take or not take, any action relating to the maintenance, protection or
preservation of their security interests in and liens on collateral under the
First Lien Notes Indenture and related security documents or the Second Lien
Notes Indenture and related security documents, as applicable; (ii) the rights
of a Restructuring Support Party under any applicable bankruptcy, insolvency,
foreclosure or similar proceeding, including, without limitation, appearing as a
party in

 

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interest in any matter to be adjudicated in order to be heard concerning any
matter arising in the Chapter 11 Cases, in each case, so long as the exercise of
any such right is not inconsistent with such Restructuring Support Party’s
obligations hereunder; (iii) the ability of a Restructuring Support Party to
purchase, sell or enter into any transactions in connection with the Notes,
subject to the terms hereof; (iv) any right of any Restructuring Support Party
under (x) the First Lien Notes Indenture or the Second Lien Notes Indenture, or
constitute a waiver or amendment of any provision of the First Lien Notes
Indenture or the Second Lien Notes Indenture, as applicable, and (y) any other
applicable agreement, instrument or document that gives rise to a Restructuring
Support Party’s claims or interests, or constitute a waiver or amendment of any
provision of any such agreement, instrument or document; (v) the ability of a
Restructuring Support Party to consult with other Restructuring Support Parties
or the Debtors; or (vi) the ability of a Restructuring Support Party to enforce
any right, remedy, condition, consent or approval requirement under this
Agreement or any of the Definitive Documentation.

 

(c)                                  Transfers of Notes. Each Restructuring
Support Party shall not, from the RSA Effective Date and for so long as this
Agreement has not been terminated in accordance with the terms hereof, (i) sell,
transfer, assign, pledge, grant a participation interest in, or otherwise
dispose of, directly or indirectly, its right, title, or interest in respect of
any Notes, in whole or in part, or (ii) deposit any such Notes into a voting
trust, or grant any proxies, or enter into a voting agreement with respect to
any such claims or interests (the actions described in clauses (i) and (ii) are
collectively referred to herein as a “Transfer” and the Restructuring Support
Party making such Transfer is referred to herein as the “Transferor”), unless
such Transfer is to another Restructuring Support Party or any other entity that
first agrees in writing to be bound by the terms of this Agreement (the
“Transferee”) by executing and delivering to Venoco and its counsel a Transferee
Joinder substantially in the form attached hereto as Exhibit D (the “Transferee
Joinder”). Upon consummation of a Transfer in accordance herewith, a transferee
is deemed to make all of the representations, warranties, and covenants of a
Restructuring Support Party, as applicable, set forth in this Agreement. Upon
compliance with the foregoing, the Transferor shall be deemed to relinquish its
rights (and be released from its obligations, except for any claim for breach of
this Agreement that occurs prior to such Transfer) under this Agreement to the
extent of such transferred rights and obligations. Any Transfer made in
violation of this Section 5(c) shall be deemed null and void ab initio and of no
force or effect, regardless of any prior notice provided to the Debtors and/or
any Restructuring Support Party, and shall not create any obligation or
liability of any Debtor or any other Restructuring Support Party to the
purported transferee. Notwithstanding the foregoing, the restrictions on
Transfer set forth in this Section 5(c) shall not apply to the grant of any
liens or encumbrances on any claims and interests in favor of a bank or

 

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broker-dealer holding custody of such claims and interests in the ordinary
course of business and which lien or encumbrance is released upon the Transfer
of such claims and interests.

 

(d)                                 Qualified Market Maker. Notwithstanding
anything herein to the contrary, any Restructuring Support Party may Transfer
any of its claims and interests to an entity that is acting in its capacity as a
Qualified Marketmaker (as defined below) without the requirement that the
Qualified Marketmaker be or become a Restructuring Support Party; provided,
however, that the Qualified Marketmaker subsequently Transfers all right, title
and interest in such claims and interests to a Transferee that is or becomes a
Restructuring Support Party as provided above, and the Transfer documentation
between the transferring Restructuring Support Party and such Qualified
Marketmaker shall contain a requirement that provides as such (the transferring
Restructuring Support Party shall use commercially reasonable efforts to allow
the Debtors to be an explicit third party beneficiary of such requirement).
Notwithstanding the foregoing, if, at the time of the proposed Transfer of such
claims and interests to the Qualified Marketmaker, such claims and interests
(x) may be voted on the Plan, the proposed transferor Restructuring Support
Party must first vote such claims and interests in accordance with the
requirements of Section 5(a), or (y) have not yet been and may not yet be voted
on the Plan and such Qualified Marketmaker does not Transfer such claims and
interests to a subsequent Transferee prior to the fifth (5th) business day prior
to the expiration of the voting deadline (such date, the “Qualified Marketmaker
Joinder Date”), such Qualified Marketmaker shall be required to (and the
Transfer documentation to the Qualified Marketmaker shall have provided that it
shall), on the first business day immediately following the Qualified
Marketmaker Joinder Date, become a Restructuring Support Party with respect to
such claims and interests in accordance with the terms hereof (provided that the
Qualified Marketmaker shall automatically, and without further notice or action,
no longer be a Restructuring Support Party with respect to such claims and
interests at such time that the Transferee of such claims and interests becomes
a Restructuring Support Party with respect to such claims and interests). For
these purposes, “Qualified Marketmaker” means an entity that (X) holds itself
out to the market as standing ready in the ordinary course of business to
purchase from and sell to customers claims and interests, or enter with
customers into long and/or short positions in claims and interests, in its
capacity as a dealer or market maker in such claims and interests; and (Y) is in
fact regularly in the business of making a market in claims, interests and/or
securities of issuers or borrowers.

 

6.             Commitment of the Debtors. Each Debtor, jointly and severally,
agrees, from the RSA Effective Date and for so long as this Agreement has not
been terminated in accordance with the terms hereof, unless otherwise consented
to in writing by the Requisite Majority Consenting Noteholders, that the Debtors
shall:

 

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(a)                                 (i) do all things necessary and proper to
seek approval of the Plan and to complete the Restructuring Transaction,
(ii) prosecute and defend any appeals relating to the Confirmation Order,
(iii) negotiate in good faith all Definitive Documentation and take any and all
necessary and appropriate actions in furtherance of this Agreement, and
(iv) comply with each Milestone set forth in this Agreement;

 

(b)                                 not seek to amend or modify, or file a
pleading seeking authority to amend or modify, the Definitive Documentation in a
manner that is inconsistent with this Agreement;

 

(c)                                  not file or seek authority to file any
pleading inconsistent with the Restructuring Transaction or the terms of this
Agreement;

 

(d)                                 timely file a formal objection to any motion
filed with the Bankruptcy Court by any individual, a partnership, a joint
venture, a limited liability company, a corporation, a trust, an unincorporated
organization, a group, a governmental or regulatory authority, or any legal
entity or association (each, a “Person”) seeking the entry of an order
(1) directing the appointment of an examiner with expanded powers or a trustee,
(2) converting the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy
Code, (3) dismissing the Chapter 11 Cases or (4) for relief that (x) is
inconsistent with this Agreement in any material respect or (y) would, or would
reasonably be expected to, frustrate the purposes of this Agreement, including
by preventing the consummation of the Restructuring Transaction;

 

(e)                                  timely file a formal objection to any
motion filed with the Bankruptcy Court by any Person seeking the entry of an
order modifying or terminating the Debtors’ exclusive right to file and/or
solicit acceptances of a plan of reorganization;

 

(f)                                   timely file a formal written response in
opposition to any objection filed with the Bankruptcy Court by any Person with
respect to the DIP Loan Documents (or motion filed by such Person that seeks to
interfere with the DIP Loan Documents) or the use of cash collateral or with
respect to any of the adequate protection granted to the Restructuring Support
Parties pursuant to the DIP Orders or otherwise;

 

(g)                                  conduct their business only in the ordinary
course in a manner that is consistent with past practices, and use commercially
reasonable efforts to preserve intact their business organization and (subject
to such modifications and changes as may be made by the Debtor in its reasonable
and prudent business judgment that do not have an adverse effect in any material
respect on the Debtor) relationships with third parties (including lessors,
licensors, suppliers, distributors and customers) and employees;

 

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(h)                                 provide to the Restructuring Support
Parties’ advisors, and direct their employees, officers, advisors and other
representatives to provide the Restructuring Support Parties’ advisors,
(1) reasonable access (without any material disruption to the conduct of the
Debtors’ businesses) during normal business hours to the Debtors’ books, records
and facilities, (2) reasonable access to the management and advisors of the
Debtors for the purposes of evaluating the Debtors’ assets, liabilities,
operations, businesses, finances, strategies, prospects and affairs, (3) timely
and reasonable responses to all reasonable diligence requests, and
(4) information with respect to all material executory contracts and unexpired
leases of the Debtors;

 

(i)                                     pay the reasonable and documented fees
and expenses of the DIP Lenders and the Restructuring Support Parties in the
manner, and to the extent, provided for in the DIP Orders;

 

(j)                                    comply in all material respects with the
covenants and other obligations of the Debtors contained in the DIP Loan
Documents (subject to any amendments and/or waivers to such covenants and other
obligations that may be provided by the requisite DIP Lenders (as defined in the
Plan)) and with the obligations of the Debtors contained in the DIP Orders,
including, without limitation, the obligation to make adequate protection
payments to the Prepetition Secured Parties (as defined in the DIP Orders);

 

(k)                                 promptly notify the Restructuring Support
Parties of any governmental or third party complaints, litigations,
investigations or hearings (or communications indicating that the same may be
contemplated or threatened); and

 

(l)                                     use commercially reasonable efforts to
obtain any and all required governmental, regulatory and/or third party
approvals necessary or required for the implementation or consummation of the
Restructuring Transaction or the approval by the Bankruptcy Court of the
Definitive Documentation.

 

7.             Restructuring Support Party Termination Events. The Restructuring
Support Parties shall have the right, but not the obligation, upon five
(5) business days advance written notice to the other Parties, to terminate the
obligations of the affected Restructuring Support Parties under this Agreement
upon the occurrence of any of the following events unless (i) to the extent
curable, such event has been cured by the applicable Debtor(s) during such five
business day notice period, or (ii) such event is waived, in writing, by the
Requisite Majority Consenting Noteholders on a prospective or retroactive basis
(each, a “Restructuring Support Party Termination Event”):

 

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(a)                                 the failure to meet any of the Milestones
unless such Milestone is extended by the Requisite Majority Consenting
Noteholders in accordance with Section 4 hereof;

 

(b)                                 the failure by the Debtors to comply with
the DIP Orders, including, without limitation, failure to make adequate
protection payments to the Prepetition Secured Parties when due;

 

(c)                                  the conversion of one or more of the
Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code;

 

(d)                                 any Debtor moves for conversion of one or
more of the Chapter 11 cases to a case under chapter 7 of the Bankruptcy Code;

 

(e)                                  the appointment of a trustee, receiver, or
examiner with expanded powers beyond those set forth in section 1106(a)(3) and
(4) of the Bankruptcy Code in one or more of the Chapter 11 Cases;

 

(f)                                   any Debtor moves for the appointment of a
trustee, receiver, or examiner with expanded powers beyond those set forth in
section 1106(a)(3) and (4) of the Bankruptcy Code in one or more of the Chapter
11 Cases;

 

(g)                                  any Debtor amends or modifies, or files a
pleading seeking authority to amend or modify, the Definitive Documentation in a
manner that is inconsistent with this Agreement;

 

(h)                                 any Debtor files or announces that it will
file or joins in or supports any plan of reorganization other than the Plan,
without the prior written consent of the Requisite Majority Consenting
Noteholders;

 

(i)                                     any Debtor files any motion or
application seeking authority to sell all or a material portion of its assets,
without the prior written consent of the Requisite Majority Consenting
Noteholders;

 

(j)                                    the issuance by any governmental
authority, including the Bankruptcy Court, any regulatory authority, or any
other court of competent jurisdiction, of any ruling or order that (A) is
inconsistent with this Agreement in any material respect or (B) would, or would
reasonably be expected to, frustrate the purpose of this Agreement; provided,
however, that the Debtors shall have five (5) business days after issuance of
such ruling or order to seek relief that would allow consummation of the
Restructuring Transaction in a manner that (i) does not prevent or diminish in
any way compliance with the terms of this Agreement and (ii) is acceptable to
the Requisite Majority Consenting Noteholders;

 

(k)                                 any Debtor files any motion seeking
authority to use cash collateral or authority to enter into post-petition
financing that is not in the form of the Final DIP Order or any other order of
the Bankruptcy Court regarding the

 

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use of cash collateral, without the prior written consent of the Requisite
Majority Consenting Noteholders;

 

(l)                                     a breach by any Debtor of any
representation, warranty, or covenant of such Debtor set forth in this Agreement
(it being understood and agreed that any actions required to be taken by the
Debtors that are included in the Plan but not in this Agreement are to be
considered “covenants” of the Debtors, and therefore covenants of this
Agreement, notwithstanding the failure of any specific provision in the Plan to
be re-copied in this Agreement);

 

(m)                             any Debtor terminates its obligations under and
in accordance with this Agreement;

 

(n)                                 the Bankruptcy Court enters an order in the
Chapter 11 Cases terminating the Debtors’ exclusive right to file a plan or
plans of reorganization pursuant to section 1121 of the Bankruptcy Code;

 

(o)                                 the Bankruptcy Court denies entry of the RSA
Approval Order;

 

(p)                                 the failure of any “Definitive
Documentation” to comply with Section 2 hereof;

 

(q)                                 the occurrence of (1) an “Event of Default”
under the DIP Loan Documents (that is not otherwise cured or waived in
accordance with the terms thereof) or (2) an acceleration of the obligations or
termination of commitments under the DIP Loan Documents;

 

(r)                                    the Bankruptcy Court enters an order
vacating, amending, terminating, extending or modifying any interim or final
order regarding the use of cash collateral without the consent of the
Restructuring Support Parties;

 

(s)                                   the Bankruptcy Court grants relief
terminating, annulling, or modifying the automatic stay (as set forth in section
362 of the Bankruptcy Code) with regard to any assets of the Debtors having an
aggregate fair market value in excess of $1,000,000;

 

(t)                                    the Bankruptcy Court enters an order
disallowing, subordinating or recharacterizing claims or interests held by any
Restructuring Support Party arising under the First Lien Notes Indenture or the
Second Lien Notes Indenture or in respect of the Notes; or

 

(u)                                 the occurrence of any other material breach
of this Agreement or the Plan not otherwise covered in this Section 7 by any
Debtor.

 

8.             The Debtors’ Termination Events. Each Debtor shall have the
right, but not the obligation, upon five (5) business days advance written
notice to the Restructuring Support Parties, to terminate its obligations under
this Agreement upon the occurrence of any of the

 

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following events unless (i) to the extent curable, such event has been cured by
the applicable Restructuring Support Party during such five business day notice
period, or (ii) such event is waived, in writing, by the Debtors on a
prospective or retroactive basis (each a “Debtor Termination Event,” and
together with the Restructuring Support Party Termination Events, the
“Termination Events”):

 

(a)                                 a breach by a Restructuring Support Party of
any representation, warranty, or covenant of such Restructuring Support Party
set forth in this Agreement (including the Plan and/or the Divestment Letter)
that could reasonably be expected to have a material adverse impact on the
Restructuring Transaction or the consummation of the Restructuring Transaction;

 

(b)                                 the occurrence of a breach of this Agreement
by any Restructuring Support Party that has the effect of materially impairing
the Debtors’ ability to effectuate the Restructuring Transaction;

 

(c)                                  the issuance by any governmental authority,
including the Bankruptcy Court, any regulatory authority, or any other court of
competent jurisdiction, of any ruling or order enjoining the substantial
consummation of the Restructuring Transaction; provided, however, that the
Debtors have made commercially reasonable, good faith efforts to cure, vacate,
or have overruled such ruling or order prior to terminating this Agreement; or

 

(d)                                 the Restructuring Support Parties terminate
their obligations under and in accordance with Section 7 hereof.

 

9.             Mutual Termination; Automatic Termination. This Agreement and the
obligations of all Parties hereunder may be terminated by mutual written
agreement among each Debtor and the Requisite Majority Consenting Noteholders.
Notwithstanding anything in this Agreement to the contrary, this Agreement shall
terminate automatically (i) upon the occurrence of the Effective Date or (ii) on
the date twelve (12) months after the Petition Date (the “Outside Date”).

 

10.          Effect of Termination. Upon the termination of this Agreement in
accordance with Sections 7, 8 or 9 and except as provided in Section 14 herein,
this Agreement shall forthwith become void and of no further force or effect and
each Party shall, except as otherwise expressly provided in this Agreement, be
immediately released from its liabilities, obligations, commitments,
undertakings and agreements under or related to this Agreement and shall have
all the rights and remedies that it would have had and shall be entitled to take
all actions, whether with respect to the Restructuring Transaction or otherwise,
that it would have been entitled to take had it not entered into this Agreement,
including all rights and remedies available to it under applicable law, the
Indenture and any ancillary documents or agreements thereto; provided, however,
that in no event shall any such termination relieve a Party hereto from
(i) liability for its breach or non-performance of its obligations hereunder
prior to the date of such termination and (ii) obligations under this Agreement
which by their terms expressly survive termination of this Agreement.
Notwithstanding anything to the contrary herein, any of the Termination Events
may

 

12

--------------------------------------------------------------------------------

 

be waived in accordance with the procedures established in this Agreement  in
which case the Termination Event so waived shall be deemed not to have occurred,
this Agreement shall be deemed to continue in full force and effect, and the
rights and obligations of the Parties hereto shall be restored, subject to any
modification set forth in such waiver. If this Agreement has been terminated in
accordance with this Agreement at a time when permission of the Bankruptcy Court
shall be required for a Party to change or withdraw (or cause to change or
withdraw) its vote to accept the Plan, the Debtors shall not oppose any attempt
by such Party to change or withdraw (or cause to change or withdraw) such vote
at such time.

 

11.          No Violation of Automatic Stay. The Requisite Majority Consenting
Noteholders are authorized to take any steps necessary to effectuate the
termination of this Agreement, as applicable, including the sending of any
applicable notices to the Debtors, notwithstanding section 362 of the Bankruptcy
Code or any other applicable law (and the Debtors hereby waive, to the greatest
extent possible, the applicability of the automatic stay to the giving of such
notice), and no cure period contained in this Agreement shall be extended
pursuant to sections 108 or 365 of the Bankruptcy Code or any other applicable
law without the prior written consent of the Requisite Majority Consenting
Noteholders.

 

12.          Consents and Acknowledgments. Each Party irrevocably acknowledges
and agrees that this Agreement is not and shall not be deemed to be a
solicitation for consents to the Plan. The acceptance of the Plan by each of the
Restructuring Support Parties will not be solicited until such Parties have
received the Disclosure Statement and related ballots in accordance with
applicable law, and will be subject to sections 1125, 1126, and 1127 of the
Bankruptcy Code.

 

13.          Representations and Warranties.

 

(a)                                 Each Restructuring Support Party hereby
represents and warrants on a several and not joint basis for itself and not any
other person or entity that as of the date hereof:

 

(i)                                     it has the requisite organizational
power and authority to enter into this Agreement and to carry out the
transactions contemplated by, and perform its respective obligations under, this
Agreement;

 

(ii)                                  the execution and delivery of this
Agreement and the performance of its obligations hereunder have been duly
authorized by all necessary corporate or other organizational action on its
part;

 

(iii)                               the execution, delivery and performance by
it of this Agreement does not violate any provision of law, rule, or regulation
applicable to it, or its certificate of incorporation, or bylaws, or other
organizational documents;

 

(iv)                              it is an “accredited investor” within the
meaning of Rule 501 of Regulation D promulgated under the Securities Act of
1933, as amended, with sufficient knowledge and experience to evaluate properly
the terms and conditions of this Agreement and to consult

 

13

--------------------------------------------------------------------------------

 

with its legal and financial advisors with respect to its investment decision to
execute this Agreement, and it has made its own analysis and decision to enter
into this Agreement;

 

(v)                                 it either (1) is the sole legal owner,
beneficial owner, and/or investment advisor or manager of or with power and/or
authority to bind the claims and interests identified below its name on its
signature page hereof and in the amounts set forth therein, or (2) has all
necessary investment or voting discretion with respect to the principal amount
of claims and interests identified below its name on its signature page hereof,
and has the power and authority to bind the owner(s) of such claims and
interests to the terms of this Agreement; and

 

(vi)                              to the best of its knowledge (without
requiring any diligence or further investigation), it has no agreement,
understanding, or other arrangement (whether oral, written, or otherwise) with
any other Restructuring Support Party regarding the transfer or sale of all or a
material portion of the Debtors’ consolidated assets to any party whatsoever.

 

(b)                                 Each Debtor hereby represents and warrants
on a joint and several basis as of the date hereof:

 

(i)                                     it has the requisite corporate or other
organizational power and authority to enter into this Agreement and to carry out
the transactions contemplated by, and perform its respective obligations under,
this Agreement;

 

(ii)                                  the execution and delivery of this
Agreement and the performance of its obligations hereunder have been duly
authorized by all necessary corporate or other organizational action on its
part, including approval of each of the independent director(s) or manager(s),
as applicable, of each Debtor;

 

(iii)                               the execution and delivery by it of this
Agreement does not (A) violate its certificates of incorporation, or bylaws, or
other organizational documents, or those of any of its affiliates, or (B) result
in a breach of, or constitute (with due notice or lapse of time or both) a
default (other than, for the avoidance of doubt, a breach or default that would
be triggered as a result of the Chapter 11 Cases or any Debtor’s undertaking to
implement the Restructuring Transaction through the Chapter 11 Cases) under any
material contractual obligation to which it or any of its affiliates is a party;

 

14

--------------------------------------------------------------------------------

 

(iv)                              the execution and delivery by it of this
Agreement does not require any registration or filing with, the consent or
approval of, notice to, or any other action with any federal, state, or other
governmental authority or regulatory body, other than, for the avoidance of
doubt, the actions with governmental authorities or regulatory bodies required
in connection with implementation of the Restructuring Transaction;

 

(v)                                 subject to the provisions of sections 1125
and 1126 of the Bankruptcy Code and, to the extent applicable, approval by the
Bankruptcy Court, this Agreement is the legally valid and binding obligation of
it, enforceable against it in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium, or other
similar laws relating to or limiting creditors’ rights generally, or by
equitable principles relating to enforceability; and

 

(vi)                              it has sufficient knowledge and experience to
evaluate properly the terms and conditions of this Agreement and the Plan, and
has been afforded the opportunity to consult with its legal and financial
advisors with respect to its decision to execute this Agreement, and it has made
its own analysis and decision to enter into this Agreement and otherwise
investigated this matter to its full satisfaction.

 

14.          Survival of Agreement. Notwithstanding the termination of this
Agreement pursuant to Sections 7, 8 or 9 hereof, the agreements and obligations
of the Parties in this Section 14 and Sections 10, 11, 15, 16, 17, 18, 19, 20,
21, 22, 23, 24, 25, 26 and 28 hereof (and any defined terms used in any such
Sections) shall survive such termination and shall continue in full force and
effect for the benefit of the Parties in accordance with the terms hereof;
provided, however, that any liability of a Party for failure to comply with the
terms of this Agreement shall survive such termination.

 

15.          Fiduciary Duties. Notwithstanding anything to the contrary herein,
(i) nothing in this Agreement shall require the Debtors or any directors or
officers of the Debtors to take any action, or to refrain from taking any
action, that would breach, or be inconsistent with, its or their fiduciary
obligations under applicable law, and (ii) to the extent that such fiduciary
obligations require the Debtors or any directors or officers of the Debtors to
take any such action, or refrain from taking any such action, they may do so
without incurring any liability to any Party under this Agreement; provided,
however, that it is agreed that any such action that results in a termination of
this Agreement in accordance with the terms hereof shall be subject to the
provisions set forth in Sections 7, 8, and 9 hereof.

 

Notwithstanding anything to the contrary herein, nothing in this Agreement shall
create any additional fiduciary obligations on the part of the Debtors or any
directors or officers of the Debtors.

 

15

--------------------------------------------------------------------------------

 

16.          Relationship Among Parties. Notwithstanding anything herein to the
contrary, the duties and obligations of the Restructuring Support Parties under
this Agreement shall be several, not joint. No Party shall have any
responsibility by virtue of this Agreement for any trading by any other entity.
No prior history, pattern, or practice of sharing confidences among or between
the Parties shall in any way affect or negate this Agreement.

 

17.          Specific Performance. It is understood and agreed by the Parties
that money damages may be an insufficient remedy for any breach of this
Agreement by any Party and each non-breaching Party shall be entitled to seek
specific performance and injunctive or other equitable relief as a remedy of any
such breach of this Agreement, including, without limitation, an order of the
Bankruptcy Court or other court of competent jurisdiction requiring any Party to
comply promptly with any of its obligations hereunder.

 

18.          Governing Law & Jurisdiction. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York, without
regard to such state’s choice of law provisions which would require the
application of the law of any other jurisdiction. By its execution and delivery
of this Agreement, each Party irrevocably and unconditionally agrees for itself
that any legal action, suit, or proceeding against it with respect to any matter
arising under or arising out of or in connection with this Agreement or for
recognition or enforcement of any judgment rendered in any such action, suit, or
proceeding, may be brought in the United States District Court for the District
of Delaware, and by executing and delivering this Agreement, each of the Parties
irrevocably accepts and submits itself to the exclusive jurisdiction of such
court, generally and unconditionally, with respect to any such action, suit or
proceeding. Notwithstanding the foregoing consent to jurisdiction, each Party
agrees that the Bankruptcy Court shall have exclusive jurisdiction of all
matters arising out of or in connection with this Agreement. By executing and
delivering this Agreement each of the Parties irrevocably and unconditionally
submits to the personal jurisdiction of the Bankruptcy Court solely for purposes
of any action, suit, proceeding, or other contested matter arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment
rendered or order entered in any such action, suit, proceeding, or other
contested matter.

 

19.          Representation by Counsel. Each Party acknowledges that it has been
represented by, or provided a reasonable period of time to obtain access to and
advice by, counsel with this Agreement and the Restructuring Transaction
contemplated herein. Accordingly, any rule of law or any legal decision that
would provide any Party with a defense to the enforcement of the terms of this
Agreement against such Party based upon lack of legal counsel shall have no
application and is expressly waived.

 

20.          Waiver of Right to Trial by Jury. Each of the Parties waive any
right to have a jury participate in resolving any dispute, whether sounding in
contract, tort or otherwise, between any of the Parties arising out of,
connected with, relating to, or incidental to the relationship established
between any of them in connection with this Agreement. Instead, any disputes
resolved in court shall be resolved in a bench trial without a jury.

 

21.          Successors and Assigns. Except as otherwise provided in this
Agreement, this Agreement is intended to bind and inure to the benefit of each
of the Parties and each of their respective permitted successors, assigns,
heirs, executors, administrators, and representatives.

 

16

--------------------------------------------------------------------------------

 

22.          No Third-Party Beneficiaries. Unless expressly stated herein, this
Agreement shall be solely for the benefit of the Parties and no other person or
entity shall be a third-party beneficiary of this Agreement.

 

23.          Notices. All notices (including, without limitation, any notice of
termination or breach) and other communications from any Party hereunder shall
be in writing and shall be deemed to have been duly given if personally
delivered by courier service, messenger, email, or facsimile to the other
Parties at the applicable addresses below, or such other addresses as may be
furnished hereafter by notice in writing. Any notice of termination or breach
shall be delivered to all other Parties.

 

(a)                                 If to any Debtor:

 

Venoco, Inc.

Attn: Brian E. Donovan, General Counsel

370 17th Street, Suite 3900

Denver, Colorado 80202-1370

Facsimile: (303) 626-8315

Email: be.donovan@venocoinc.com

 

With a copy to:

 

Bracewell LLP

Attn: Robert G. Burns, Robin J. Miles

1251 Avenue of Americas, 49th Floor

New York, New York 10020-1104

Facsimile: (800) 404-3970

Robert.Burns@bracewelllaw.com

Robin.Miles@bracewelllaw.com

 

(b)                                 If to the Consenting First Lien Noteholders:

 

Davis Polk & Wardwell LLP

Attn: Damian S. Schaible, Darren S. Klein

450 Lexington Avenue

New York, NY 10017

Fax: (212) 701-5580

Email: damian.schaible@davispolk.com

Email: darren.klein@davispolk.com

 

(c)                                  If to the Consenting Second Lien
Noteholders:

 

Davis Polk & Wardwell LLP

Attn: Damian S. Schaible, Darren S. Klein

450 Lexington Avenue

New York, NY 10017

 

17

--------------------------------------------------------------------------------

 

Fax: (212) 701-5580

Email: damian.schaible@davispolk.com

Email: darren.klein@davispolk.com

 

24.          Entire Agreement. This Agreement (including the exhibits hereto)
constitutes the entire agreement of the Parties with respect to the subject
matter of this Agreement, and supersedes all prior negotiations, agreements, and
understandings, whether written or oral, among the Parties with respect to the
subject matter of this Agreement.

 

25.          Amendments. This Agreement, the Plan and the other Definitive
Documents may not be modified, amended, or supplemented without the prior
written consent of the Debtors and the Requisite Majority Consenting
Noteholders; provided that (i) the economic and adequate protection provisions
of the DIP Orders may not be modified, amended, or supplemented without the
prior written consent of the Initial Restructuring Support Parties for so long
as such Initial Restructuring Support Parties hold at least 85% of the First
Lien Notes and at least 85% of the Second Lien Notes and (ii) any modification
of, or amendment or supplement to, this Section 25 or the definitions of
Consenting First Lien Noteholders, Consenting Second Lien Noteholders,
Restructuring Support Parties, Initial Restructuring Support Parties, Requisite
Majority Consenting First Lien Noteholders, Requisite Majority Consenting Second
Lien Noteholders, or Requisite Majority Consenting Noteholders shall require the
written consent of all of the Parties.

 

26.          Reservation of Rights.

 

(a)                                 Except as expressly provided in this
Agreement or the Plan, nothing herein is intended to, or does, in any manner
waive, limit, impair, or restrict the ability of any Party to protect and
preserve its rights, remedies and interests, including without limitation, its
claims against any of the other Parties.

 

(b)                                 If the Plan is not consummated in the manner
set forth, and on the timeline set forth in this Agreement and the Plan, or if
this Agreement is terminated for any reason, nothing shall be construed herein
as a waiver by any Party of any or all of such Party’s rights, remedies, claims,
and defenses and the Parties expressly reserve any and all of their respective
rights, remedies, claims and defenses. This Agreement, the Plan, and any related
document shall in no event be construed as or be deemed to be evidence of an
admission or concession on the part of any Party of any claim or fault or
liability or damages whatsoever. Each of the Parties denies any and all
wrongdoing or liability of any kind and does not concede any infirmity in the
claims or defenses which it has asserted or could assert.

 

(c)                                  The Parties acknowledge that this
Agreement, the Plan, and all negotiations relating hereto are part of a proposed
settlement of matters that could otherwise be the subject of litigation.
Pursuant to Rule 408 of the Federal Rules of Evidence, any applicable state
rules of evidence and any other applicable law, foreign or domestic, the Plan,
this Agreement, the Plan, any related documents, and all negotiations relating
thereto shall

 

18

--------------------------------------------------------------------------------

 

not be admissible into evidence in any proceeding, or used by any party for any
reason whatsoever, including in any proceeding, other than a proceeding to
enforce its terms.

 

27.          Counterparts. This Agreement may be executed in one or more
counterparts, each of which, when so executed, shall constitute the same
instrument, and the counterparts may be delivered by facsimile transmission or
by electronic mail in portable document format (.pdf).

 

28.          Public Disclosure. This Agreement, as well as its terms, its
existence, and the existence of the negotiation of its terms are expressly
subject to any existing confidentiality agreements executed by and among any of
the Parties as of the date hereof; provided, however, that in connection with
the Chapter 11 Cases, the Parties may disclose the existence of, or the terms
of, this Agreement or any other material term of the transaction contemplated
herein without the express written consent of the other Parties but may not
disclose, and shall redact the holdings information of every Party to this
Agreement as of the date hereof and at any time hereafter. In addition, each
Party to this Agreement shall have the right, at any time, to know the
identities and holdings information of every other Party to this Agreement, but
must keep such information confidential and may not disclose such information to
any person except as may be compelled by a court of competent jurisdiction.

 

29.          Headings. The section headings of this Agreement are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Agreement.

 

30.          Interpretation. This Agreement is the product of negotiations among
the Parties, and the enforcement or interpretation hereof, is to be interpreted
in a neutral manner, and any presumption with regard to interpretation for or
against any Party by reason of that Party having drafted or caused to be drafted
this Agreement or any portion hereof, shall not be effective in regard to the
interpretation hereof.

 

[Signatures and exhibits follow.]

 

19

--------------------------------------------------------------------------------

 

Debtor Signature Page

 

VENOCO, INC.

DENVER PARENT CORPORATION

ELLWOOD PIPELINE, INC.

WHITTIER PIPELINE CORPORATION

TEXCAL ENERGY (GP) LLC

 

By:

/s/ Mark A. DePuy

 

Name:

Mark A. DePuy

 

Title:

Chief Executive Officer

 

 

TEXCAL ENERGY (LP) LLC

 

 

By: VENOCO, INC., its Manager

 

 

 

By:

/s/ Mark A. DePuy

 

Name:

Mark A. DePuy

 

Title:

Chief Executive Officer

 

 

TEXCAL ENERGY SOUTH TEXAS, L.P.

 

By: TEXCAL ENERGY (GP) LLC, as general partner

 

By:

/s/ Mark A. DePuy

 

Name:

Mark A. DePuy

 

Title:

Chief Executive Officer

 

 

[DEBTOR SIGNATURE PAGE TO RESTRUCTURING SUPPORT AGREEMENT]

 

--------------------------------------------------------------------------------

 

Consenting Noteholder Signature Page

 

 

[Name of Noteholder]

 

 

 

By:

/s/ Adam Kleinman

 

Name:

Adam Kleinman

 

Title:

Authorized Signatory

 

 

 

 

 

Holdings: $                  of First Lien Notes

 

 

 

Holdings: $                  of Second Lien Notes

 

 

 

Holdings: $                  of Other Debt

 

[CONSENTING NOTEHOLDER SIGNATURE PAGE TO RESTRUCTURING SUPPORT AGREEMENT]

 

--------------------------------------------------------------------------------

 

Exhibit A

 

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

 

In re

Venoco, Inc., et al.,

Debtors.(1)

 

Chapter 11

Case No. 16-[        ] (    )

(Joint Administration Requested)

 

JOINT PLAN OF REORGANIZATION
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE

 

BRACEWELL LLP

Robert G. Burns (pro hac vice pending)
Robin J. Miles (pro hac vice pending)
1251 Avenue of Americas, 49th Floor
New York, New York 10020-1104
Telephone: (212) 508-6100
Facsimile: (800) 404-3970
Robert.Burns@bracewelllaw.com
Robin.Miles@bracewelllaw.com

-and-

Mark E. Dendinger (pro hac vice pending)
CityPlace I, 34th Floor
185 Asylum Street
Hartford, Connecticut 06103
Telephone: (860) 947-9000
Facsimile: (800) 404-3970
Mark.Dendinger@bracewelllaw.com

 

MORRIS, NICHOLS, ARSHT & TUNNELL LLP

Robert J. Dehney (No. 3578)
Andrew R. Remming (No. 5120)
Erin R. Fay (No. 5268)
1201 North Market Street, 16th Floor
P.O. Box 1347
Wilmington, Delaware 19899
Telephone: (302) 658-9200
Facsimile: (302) 658-3989
rdehney@mnat.com
aremming@mnat.com
efay@mnat.com

 

Proposed Counsel for Debtors and Debtors in Possession

 

Dated: March 17, 2016

 

--------------------------------------------------------------------------------

(1)  The Debtors in these chapter 11 cases, along with the last four digits of
each Debtors’ federal tax identification number, are: Venoco, Inc. (5555);
Denver Parent Corporation (1005); TexCal Energy (LP) LLC (0806); Whittier
Pipeline Corporation (1560); TexCal Energy (GP) LLC (0808); Ellwood
Pipeline, Inc. (5631); and TexCal Energy South Texas, L.P. (0812). The Debtors’
main corporate and mailing address for purposes of these chapter 11 cases is:
Venoco, Inc., 370 17th Street, Suite 3900, Denver, CO 80202-1370.

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I DEFINED TERMS, RULES OF INTERPRETATION, 

 

 

COMPUTATION OF TIME, GOVERNING LAW AND OTHER REFERENCES

 

1

 

 

 

Section 1.01. Defined Terms

 

1

Section 1.02. Rules of Interpretation

 

14

Section 1.03. Computation of Time

 

14

Section 1.04. Governing Law

 

15

Section 1.05. Reference to Monetary Figures

 

15

Section 1.06. Severability of Plan Provisions

 

15

Section 1.07. No Substantive Consolidation

 

15

 

 

 

ARTICLE II TREATMENT OF UNCLASSIFIED CLAIMS

 

15

 

 

 

Section 2.01. Administrative Claims

 

16

Section 2.02. Priority Tax Claims

 

18

 

 

 

ARTICLE III CLASSIFICATION AND TREATMENT OF CLAIMS AND

 

 

EQUITY INTERESTS

 

18

 

 

 

Section 3.01. Classification

 

18

Section 3.02. Claims Against and Equity Interests in DPC

 

19

Section 3.03. Claims Against and Equity Interests in Venoco and Venoco Subs

 

22

 

 

 

ARTICLE IV ACCEPTANCE OR REJECTION OF THE PLAN

 

25

 

 

 

Section 4.01. Acceptance by an Impaired Class

 

25

Section 4.02. Nonconsensual Confirmation

 

25

 

 

 

ARTICLE V IMPLEMENTATION OF THE PLAN

 

26

 

 

 

Section 5.01. Operations between Confirmation Date and Effective Date

 

26

Section 5.02. [Exit Facility

 

26

Section 5.03. LLA Override

 

26

Section 5.04. Sources of Cash for Plan Distributions

 

26

Section 5.05. Issuance of New Common Stock and New Warrants

 

26

Section 5.06. Organizational Documents

 

27

Section 5.07. Intercompany Equity Interests

 

27

Section 5.08. Dissolution of DPC

 

27

Section 5.09. Continued Corporate Existence and Vesting of Assets

 

27

Section 5.10. Management of the Reorganized Debtors

 

28

Section 5.11. [Existing Benefits Agreements and Retiree Benefits

 

28

Section 5.12. Management Incentive Plan

 

28

Section 5.13. Employment Agreements

 

29

Section 5.14. Causes of Action

 

29

Section 5.15. Restructuring Transactions

 

29

Section 5.16. Determination of Tax Filings and Taxes of the DPC Group

 

30

 

 

 

ARTICLE VI TREATMENT OF EXECUTORY CONTRACTS AND LEASES

 

31

 

 

 

Section 6.01. Treatment of Executory Contracts and Unexpired Leases

 

31

 

i

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TABLE OF CONTENTS (CONT’D)

 

 

 

Page

 

 

 

Section 6.02. Cure Costs

 

32

Section 6.03. Assumed Executory Contracts and Unexpired Leases

 

33

Section 6.04. [Insurance Policies

 

33

Section 6.05. [Officers’ and Directors’ Indemnification Rights

 

34

Section 6.06. Claims Based on Rejection of Executory Contracts and Unexpired
Leases

 

34

Section 6.07. Reservation of Rights

 

34

Section 6.08. Assignment

 

35

Section 6.09. Nonoccurence of the Effective Date

 

35

 

 

 

ARTICLE VII PROVISIONS GOVERNING DISTRIBUTIONS

 

35

 

 

 

Section 7.01. Amount of Distributions

 

35

Section 7.02. Method of Distributions

 

35

Section 7.03. Delivery of Distributions

 

36

Section 7.04. No Fractional or De Minimis Distributions

 

36

Section 7.05. Undeliverable Distributions

 

36

Section 7.06. Tax Withholding From Distributions

 

37

Section 7.07. Allocations

 

37

Section 7.08. Time Bar to Cash Payments

 

38

Section 7.09. Means of Cash Payments

 

38

Section 7.10. Foreign Currency Exchange Rates

 

38

Section 7.11. Setoffs

 

38

Section 7.12. Claims Paid or Payable by Third Parties

 

38

 

 

 

ARTICLE VIII PROCEDURES FOR RESOLVING DISPUTED CLAIMS

 

39

 

 

 

Section 8.01. Prosecution of Objections to Claims

 

39

Section 8.02. Estimation of Claims

 

39

Section 8.03. No Distributions on Disputed Claims

 

39

 

 

 

ARTICLE IX CONDITIONS PRECEDENT TO CONFIRMATION AND

 

 

CONSUMMATION OF THIS PLAN

 

40

 

 

 

Section 9.01. Conditions Precedent to Confirmation

 

40

Section 9.02. Conditions Precedent to the Effective Date

 

40

Section 9.03. Effect of Non-Occurrence of Conditions to Confirmation or

 

 

Conditions Precedent to the Effective Date

 

40

Section 9.04. Waiver of Conditions Precedent

 

41

 

 

 

ARTICLE X EFFECT OF CONFIRMATION OF THIS PLAN

 

41

 

 

 

Section 10.01. Discharge of Claims Against and Equity Interests in the Debtors

 

41

Section 10.02. Certain Releases by the Debtors

 

41

Section 10.03. Certain Voluntary Releases by Holders of Claims and Equity
Interests

 

43

Section 10.04. Exculpation

 

44

Section 10.05. Injunction

 

45

Section 10.06. Protection Against Discriminatory Treatment

 

45

 

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TABLE OF CONTENTS (CONT’D)

 

 

 

Page

 

 

 

Section 10.07. Release of Liens

 

45

Section 10.08. Cancellation of Securities and Notes Against the Debtors

 

45

 

 

 

ARTICLE XI MODIFICATION, REVOCATION OR WITHDRAWAL OF THIS PLAN

 

46

 

 

 

Section 11.01. Modification of the Plan

 

46

Section 11.02. Revocation or Withdrawal of the Plan

 

46

 

 

 

ARTICLE XII RETENTION OF JURISDICTION

 

46

ARTICLE XIII MISCELLANEOUS PROVISIONS

 

48

 

 

 

Section 13.01. General Settlement of Claims

 

48

Section 13.02. Preservation of Causes of Action Not Expressly Released

 

48

Section 13.03. Section 1146(a) Exemption

 

49

Section 13.04. Elimination of Vacant Classes

 

50

Section 13.05. Intercompany Claims

 

50

Section 13.06. Additional Documents

 

50

Section 13.07. Successors and Assigns

 

50

Section 13.08. Reservation of Rights

 

50

Section 13.09. Notices

 

51

Section 13.10. Term of Injunctions or Stay

 

51

Section 13.11. Entire Agreement

 

51

Section 13.12. Plan Supplement Exhibits

 

51

Section 13.13. Severability

 

52

Section 13.14. Substantial Consummation

 

52

 

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Venoco, Inc., Denver Parent Corporation, TexCal Energy (LP) LLC, Whittier
Pipeline Corporation, TexCal Energy (GP) LLC, Ellwood Pipeline, Inc., and TexCal
Energy South Texas, L.P. (each a “Debtor” and collectively, the “Debtors”)
hereby respectfully propose the following joint plan of reorganization.
Reference is made to the Disclosure Statement for a discussion of the Debtors’
history, business, properties and operations, projections, risk factors, a
summary and analysis of this Plan, and certain related matters. There are other
agreements and documents, which have been or will be filed with the Bankruptcy
Court that are referenced in this Plan or the Disclosure Statement as exhibits,
the Plan Supplement or otherwise. All such agreements, documents, exhibits and
the Plan Supplement are incorporated into and are made a part herein as if fully
set forth herein.

 

ALL HOLDERS OF CLAIMS ARE ENCOURAGED TO READ THIS PLAN AND THE DISCLOSURE
STATEMENT CAREFULLY AND IN THEIR ENTIRETY BEFORE VOTING ON THIS PLAN.

 

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

 

Section 1.01.        Defined Terms

 

Unless the context otherwise requires, the following terms shall have the
following meanings when used in capitalized form in this Plan:

 

“8.875% Senior Notes” means those 8.875% senior unsecured notes due in
February 2019 issued by Venoco under the indenture dated as of February 15,
2011, among Venoco, the Guarantors, and Wilmington Savings Fund Society, FSB, as
replacement trustee.

 

“Administrative Claim” means a Claim under section 503(b) of the Bankruptcy
Code, and referred to in section 507(a)(2) of the Bankruptcy Code, including,
without limitation, (a) Claim(s) under section 503(b)(9) of the Bankruptcy Code,
(b) any actual and necessary costs and expenses of preserving the Estate(s),
(c) any actual and necessary costs and expenses of operating the Debtors’
businesses after the Petition Date, (d) all Professional Claims, (e) any fees or
charges assessed against the Estates under section 1930 of chapter 123 of title
28 of the United States Code, (f) all postpetition taxes of the Debtors, (g) the
DIP Facility Claims, (h) the DIP Backstop Fee Claims and (i) all other
Claim(s) entitled to administrative expense status pursuant to a Final Order of
the Bankruptcy Court, including any claims under section 507(b) of the
Bankruptcy Code, in each case relating to the period from the Petition Date
through and including the Effective Date but not beyond (but excluding any
Intercompany Claims); provided, however, that the DIP Facility Claims and the
DIP Backstop Fee Claims are superpriority administrative claims under the Final
DIP Order pursuant to section 364(c)(1) of the Bankruptcy Code.

 

“Administrative Claims Bar Date” means the first Business Day that is thirty
(30) days after the Effective Date (or such date(s) otherwise ordered by the
Bankruptcy Court) for Administrative Claims arising on the Petition Date through
and including the Effective Date. For

 

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the avoidance of doubt, holders of the DIP Facility Claims, DIP Backstop Fee
Claims and Professional Claims shall not be subject to the Administrative Claims
Bar Date.

 

“Affiliate” (and, with a correlative meaning “affiliated”) means, with respect
to any Person, any Person who would be an “affiliate” pursuant to section
101(2) of the Bankruptcy Code, as well as any direct or indirect subsidiary of
such Person, and any other Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by or is under common control
with such first Person. As used in this definition, “control” (including with
correlative meanings, “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person (whether through
ownership of securities or partnership or other ownership interests, by contract
or otherwise).

 

“Allowed” means, a Claim or Equity Interest, or applicable portion thereof,
(a) that has been listed in the Schedules (and thereafter continues to be listed
in any subsequently filed amended versions of such Schedules) as liquidated in
amount and not Disputed or contingent and for which no contrary Proof of Claim
or proof of Equity Interest has been filed, (b) where a Proof of Claim or proof
of Equity Interest was timely and properly filed by the applicable deadline
under the Bar Date Order as to which (i) such Claim or Equity Interest is not
Disputed, or (ii) an objection has been interposed and such Claim or Equity
Interest has been allowed, in whole or in part, by a Final Order and/or by the
agreement of the holder of such Claim or Equity Interest, on the one hand, and
the Debtors or the Reorganized Debtors, as applicable, on the other, or (c) that
has been allowed under the Final DIP Order, any other Final Order, or the Plan
whether or not such Claim or Equity Interest was scheduled or is the subject of
a filed Proof of Claim or proof of Equity Interest; provided, however, that any
Claims allowed solely for the purpose of voting to accept or reject this Plan
pursuant to an order of the Bankruptcy Court shall not be considered “Allowed”
hereunder. Unless otherwise specified herein or pursuant to a Final Order of the
Bankruptcy Court, “Allowed” shall not include interest, fees, or charges for the
period on and after the Petition Date. When used in this Plan or Disclosure
Statement with respect to the timing of distributions, “Allowed” means on the
date a Claim or Equity Interest has been allowed or as soon as reasonably
practicable thereafter.

 

“Assets” means all tangible and intangible assets of every kind and nature of
the Debtors and their respective Estates, including, without limitation, all
Causes of Action (except those released by this Plan, the Final DIP Order, the
Confirmation Order or other Final Order) and all proceeds thereof, existing as
of the Effective Date.

 

“Assumed Contract Schedule” is defined in Section 6.01 of this Plan.

 

“Assumption Dispute” is defined in Section 6.02 of this Plan.

 

“Avoidance Actions” means any and all Causes of Action that may be brought by or
on behalf of the Debtors or their Estates or other authorized parties in
interest under Chapter 5 of the Bankruptcy Code, including under sections 502,
510, 542, 544, 545, and 547 through and including 553 of the Bankruptcy Code, or
similar avoidance or fraudulent transfer actions under applicable non-bankruptcy
law.

 

2

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“Backstoppers” means those certain DIP Lenders that have agreed to backstop the
loans available to the Debtors pursuant to, and in accordance with, the DIP
Credit Agreement up to their respective commitment amounts.  For the avoidance
of doubt, unless expressly specified otherwise, the term “DIP Lenders” shall
include the Backstoppers.

 

“Ballot” means each of the ballots distributed to each holder of an Impaired
Claim that is entitled to vote to accept or reject Plan and on which such holder
is to indicate, among other things, acceptance or rejection of the Plan.

 

“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, as codified in title
11 of the United States Code, 11 U.S.C. §§ 101-1532, as in effect on the
Petition Date, together with all amendments and modifications thereto that are
subsequently made applicable to the Chapter 11 Cases.

 

“Bankruptcy Court” means the United States Bankruptcy Court for the District of
Delaware or such other court having jurisdiction over the Chapter 11 Cases.

 

“Bankruptcy Rules” means: (a) the Federal Rules of Bankruptcy Procedure and the
Official Bankruptcy Forms, as amended and promulgated under section 2075 of
title 28 of the United States Code; (b) the applicable Local Rules of Bankruptcy
Practice and Procedure of the Bankruptcy Court; and (c) any general or specific
chamber rules or procedures, or standing orders governing practice and procedure
issued by the Bankruptcy Court, each as in effect on the Petition Date, and each
of the foregoing together with all amendments and modifications thereto that are
subsequently made and as applicable to the Chapter 11 Cases or proceedings
therein, as the case may be.

 

“Bar Date(s)” means the applicable date(s) designated by the Bankruptcy Court as
the last date for filing Proofs of Claims in these Chapter 11 Cases

 

“Bar Date Order” means that order entered [·], 2016 setting the applicable Bar
Dates for: (a) Claims that arose against the Debtors prior to the Petition Date;
(b) Claims of governmental units that arose against the Debtors prior to the
Petition Date; (c) Claims related to orders rejecting certain executory
contracts and unexpired leases; and (d) Claims arising from amendments (if any)
to the Debtors’ Schedules.

 

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

 

“Cash” means the legal tender of the U.S. or the equivalent thereof, including
bank deposits and checks.

 

“Causes of Action” means any and all claims, actions, causes of action, suits,
debts, damages, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, judgments, remedies, rights of set-off, third-party
claims, subrogation claims, contribution claims, reimbursement claims, indemnity
claims, counterclaims, and crossclaims of the Debtors and their Estates, whether
known or unknown, liquidated or unliquidated, fixed or contingent, matured or
unmatured, Disputed or undisputed, against any Entity, based in law or equity,
including under the

 

3

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Bankruptcy Code, whether direct, indirect, derivative, or otherwise and whether
asserted or unasserted as of the date of entry of the Confirmation Order, unless
otherwise waived or released pursuant to this Plan, the Confirmation Order, the
Final DIP Order, any other Final Order or by the Debtors. For the avoidance of
doubt, on the Effective Date of the Plan any and all Avoidance Actions relating
to the Debtors shall be deemed waived and released pursuant to Section 5.10 5.14
of this Plan.

 

“Certificate” means any instrument evidencing a Claim or an Equity Interest.

 

“Chapter 11 Case(s)” means the chapter 11 cases of the Debtors pending before
the Bankruptcy Court as Case Nos. [·], jointly administered for procedural
purposes only under the lead Case No. [·].

 

“Claim” means any “claim” against the Debtors as set forth in section 101(5) of
the Bankruptcy Code.

 

“Claims and Solicitation Agent” means BMC Group.

 

“Claims Objection Deadline” means the last day for filing objections to Claims,
other than Administrative Claims and Professional Claims, which day shall be:
(a) the later of (i) ninety (90) days after the Effective Date or (ii) ninety
(90) days after the filing of a Proof of Claim for, or request for payment of,
such Claim; or (b) such other date as the Bankruptcy Court may order. The filing
of a motion to extend the Claims Objection Deadline shall automatically extend
the Claims Objection Deadline until a Final Order is entered on such motion. In
the event that such motion to extend the Claims Objection Deadline is denied,
the Claims Objection Deadline shall be the later of the then-current Claims
Objection Deadline (as previously extended, if applicable) or thirty (30) days
after the Bankruptcy Court’s entry of an order denying the motion to extend the
Claims Objection Deadline.

 

“Claims Register” means the official register of Claims maintained by the Claims
and Solicitation Agent.

 

“Class” means a category of holders of Claims or Equity Interests under section
1122(a) of the Bankruptcy Code.

 

“Collateral” means any property or interest in property of the Estate subject to
a Lien, not otherwise subject to avoidance under the Bankruptcy Code, to secure
the payment or performance of a Claim.

 

“Confirmation” or “Confirmation Date” means the date on 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.

 

“Confirmation Hearing” means the hearing(s) before the Bankruptcy Court,
regarding the Confirmation of this Plan, under section 1128 of the Bankruptcy
Code, as it may be adjourned or continued from time to time.

 

4

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“Confirmation Order” means the order of the Bankruptcy Court confirming the Plan
pursuant to section 1129 of the Bankruptcy Code in form and substance acceptable
to the Requisite Majority Consenting Noteholders.

 

“Consummation” means the occurrence of the Effective Date.

 

“Creditor” has the meaning set forth in section 101(10) of the Bankruptcy Code.

 

“Cure Cost Objection Deadline” is defined in Section 6.02 of this Plan.

 

“Cure Costs” means any and all amounts, costs or expenses that must be paid or
actions that must be performed pursuant to sections 365 and 1123 of the
Bankruptcy Code in connection with the assumption and/or assignment of each of
the Executory Contracts and Unexpired Leases pursuant to the Confirmation Order.

 

“Debtors” means, collectively, DPC, Venoco, Ellwood Pipeline and the Guarantors.

 

“Delaware Litigation” means all claims alleged in the matter “In re Venoco, Inc.
Shareholder Litigation” Consolidated Case C.A. 6825-VCG, currently pending
before the Court of Chancery for the State of Delaware.

 

“Delaware Litigation Settlement Agreement” means the Settlement Agreement dated
[·] between the parties to the Delaware Litigation.

 

“DIP Agent” means Wilmington Trust Company.

 

“DIP Backstop Fee” means the irrevocable fee granted to the Backstoppers under
the DIP Loan Documents and the DIP Orders in the aggregate amount of 10% of the
New Common Stock issued on the Effective Date.  The DIP Backstop Fee is an
Allowed Administrative Claim.

 

“DIP Backstop Fee Claims” means the Allowed Administrative Claims held by each
Backstopper arising under or related to the DIP Credit Agreement on account of
the DIP Backstop Fee.

 

“DIP Credit Agreement” means that certain $35,000,000 Superpriority Secured
Debtor-in-Possession Credit Agreement dated as of [•], 2016 by and among Venoco,
the guarantors party thereto, the DIP Lenders and the DIP Agent.

 

“DIP Facility” means that certain $35.0 million postpetition debtor in
possession loan facility provided pursuant to the DIP Loan Documents and the DIP
Orders.

 

“DIP Facility Claims” means any and all of the first-priority senior secured,
superpriority Administrative Claims, pursuant to sections 364(c) and (d) of the
Bankruptcy Code, held by the DIP Agent and the DIP Lenders arising under or in
connection with the DIP Facility, but excluding the DIP Backstop Fee Claims.

 

5

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“DIP Guaranty Agreement” means that certain Guaranty Agreement dated as of
March [ ], 2016 by and among Whittier Pipeline Corporation, TexCal Energy (LP)
LLC, TexCal Energy (GP) LLC and TexCal Energy South Texas L.P.

 

“DIP Lenders” means the lenders under the DIP Facility.

 

“DIP Loan Documents” means the (a) DIP Credit Agreement, (b) DIP Security
Agreement and (c) DIP Guaranty Agreement (such agreements, collectively,
together with such ancillary documents contemplated thereunder), as may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms therein or the DIP Orders.

 

“DIP Orders” means, together, the Interim DIP Order and the Final DIP Order.

 

“DIP Security Agreement” means that certain Security Agreement dated as of
March [ ], 2016 by and among Venoco, the DIP Agent and each grantor party
thereto.

 

“Disclosure Statement” means the Debtors’ Disclosure Statement for the Joint
Plan of Reorganization Under Chapter 11 of the Bankruptcy Code, dated [•],
including all exhibits and schedules thereto, as the same may be altered,
amended, modified or supplemented from time to time, as approved by the
Bankruptcy Court pursuant to section 1125 of the Bankruptcy Code.

 

“Disclosure Statement Order” means the Order (A) Approving the Disclosure
Statement, (B) Approving the Solicitation Procedures, (C) Approving the Form of
Ballots and Notices in Connection Therewith, (D) Establishing the Plan
Confirmation Schedule and (E) Granting Related Relief, entered by the Bankruptcy
Court on [·].

 

“Disputed” means any Claim, or any portion thereof, that: (a) is listed on the
Schedules as unliquidated, Disputed, or contingent, which dispute has not been
withdrawn, resolved or overruled by a Final Order; (b) is the subject of an
objection or request for estimation filed in the Bankruptcy Court and which
objection or request for estimation has not been withdrawn, resolved or
overruled by a Final Order of the Bankruptcy Court; or (c) is otherwise Disputed
by the Debtors or the Reorganized Debtors, as applicable, in accordance with
applicable law; provided, however, that for purposes of determining the status
(i.e., Allowed or Disputed) of a particular Claim prior to the Claims Objection
Deadline, any such Claim that has not been previously allowed or disallowed by
Final Order of the Bankruptcy Court or the Plan shall be deemed a Disputed Claim
unless such Claim is specifically identified by the Debtors or the Reorganized
Debtors, as applicable, as being an Allowed Claim.

 

“Distribution Agent” means the Reorganized Debtors, as applicable, or any
Entity(ies) chosen by the Reorganized Debtors, as applicable, which Entity(ies)
may include the Claims and Solicitation Agent, to make or to facilitate
distributions required by the Plan.

 

“Distribution Record Date” means the record date for purposes of making
distributions under this Plan on account of Allowed Claims, which date shall be
the Confirmation Date or such other date designated in the Confirmation Order.

 

“Divestment Letter Agreement” means the Divestment Letter Agreement, including
all exhibits, substantially in the form attached as Exhibit B to the RSA.

 

6

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“DPC” means Denver Parent Corporation, a Delaware corporation.

 

“DPC Residual Value” means the value that would be available for distribution to
Classes D3 and D4 after all Claims in Classes D1 and D2 had been satisfied in
full from the assets of DPC as of the Effective Date in the amounts Allowed
pursuant to this Plan.

 

“Effective Date” means the date on which all conditions precedent to the
occurrence of the Effective Date set forth in Section 9.02 of this Plan have
been satisfied or waived in accordance with Section 9.03 of this Plan. When used
in this Plan or Disclosure Statement with respect to the timing of
distributions, “Effective Date” means “on the Effective Date or as soon as
reasonably practicable thereafter.”

 

“Ellwood Pipeline” means Ellwood Pipeline, Inc., a Delaware corporation.

 

“Employee Stock Ownership Plan” means [·].

 

“Employment Agreement” means the contract between the Reorganized Debtors and
TMM governing the terms and conditions of employment, which shall be in form and
substance acceptable to the Requisite Majority Consenting Noteholders,
substantially in the form included in the Plan Supplement.

 

“Entity” means a natural person, corporation, limited liability company,
association, partnership (whether general or limited), joint venture,
proprietorship, estate, trust, Governmental Unit or any other individual or
entity, whether acting in an individual, fiduciary, representative or other
capacity, including the U.S. Trustee, within the meaning of section 101(15) of
the Bankruptcy Code.

 

“Equity Interest” means all issued, unissued, authorized, or outstanding shares
of stock, membership interests, and other ownership interests of an Entity,
together with any warrants, options, or contract rights to purchase or acquire
such interests at any time.

 

“Estate(s)” means the bankruptcy estate(s) of the Debtors created under sections
301 and 541 of the Bankruptcy Code on the Petition Date.

 

“Exit Facility” means that certain financing arrangement to be entered into by
Reorganized Venoco on the Effective Date, which shall be in form and substance
acceptable to the Debtors and the Requisite Majority Consenting Noteholders.

 

“Exit Facility Documentation” means, collectively, the Exit Facility and each
other agreement, security agreement, pledge agreement, collateral assignment,
mortgage, control agreement, guarantee, certificate, document or instrument
executed and/or delivered in connection with the foregoing, whether or not
specifically mentioned herein or therein, as the same may be modified,
supplemented or replaced from time to time, and which shall be in form and
substance acceptable to the Debtors and the Requisite Majority Consenting
Noteholders.

 

“Exit Facility Lenders” means any lenders party to the Exit Facility on the
Effective Date.

 

7

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“Exculpated Claim” means a Claim arising out of or related to any act or
omission in connection with or relating to: (a) the formulation, preparation,
solicitation, dissemination, negotiation, or filing of this Plan, the Plan
Supplement, the Disclosure Statement, the New Warrants, the New Common Stock, or
any contract, instrument, release, or other agreement or document created or
entered into in connection with any of the foregoing; (b) the Chapter 11 Cases;
(c) the pursuit of Confirmation of a Plan; (d) the pursuit of Consummation of a
Plan; (e) the administration and implementation of a Plan; (f) the distribution
of property under a Plan; and/or (g) any other prepetition or postpetition act
taken or omitted to be taken in connection with or in contemplation of the
restructuring of the Debtors.

 

“Exculpated Parties” means the Released Parties.

 

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

 

“Existing Benefits Agreement” means with the exception of the existing
employment agreement with TMM, all employment, retirement, severance,
indemnification, and similar or related agreements, and policies with the
members of the Debtors’ management team or directors as of the Petition Date.

 

“Final Decree” means the decree contemplated under Bankruptcy Rule 3022.

 

“Final DIP Order” means the Final Order (I) Authorizing Debtors (A) to Obtain
Postpetition Financing Pursuant to 11 U.S.C. §§ 105, 361, 362, 363(b),
364(c)(1), 364(c)(2), 364(c)(3), 364(d)(1) and 364(e) and (B) to Utilize Cash
Collateral Pursuant to 11 U.S.C. § 363, and (II) Granting Adequate Protection to
Prepetition Secured Parties Pursuant to 11 U.S.C. §§ 361, 362, 363, 364 and
507(b), entered by the Bankruptcy Court, and any amendment, modification or
supplement of such order in form and substance acceptable to the Debtors, the
DIP Lenders and the Restructuring Support Parties and approved by the Bankruptcy
Court.

 

“Final Order” means an order or judgment of the Bankruptcy Court, or other court
of competent jurisdiction, which has been entered on the docket, and that has
not been stayed, reversed, modified or amended and as to which the time to file
an appeal, a motion for re-hearing, re-argument or reconsideration or a petition
for writ of certiorari has expired or been waived by the Debtors or the
Reorganized Debtors, as applicable, and as to which no appeal, petition for
certiorari, or other proceedings for re-argument, reconsideration or re-hearing
are then pending or as to which an appeal, petition for certiorari, or a motion
for re-argument, reconsideration or rehearing has been filed or sought and such
order shall not have been stayed; provided, however, that the possibility that a
motion under Rule 60 of the Federal Rules of Civil Procedure, or analogous
rule under the Bankruptcy Rules, may be filed with respect to such order shall
not preclude such order from being or becoming a Final Order.”

 

“First Lien Notes” or “First Lien Notes Claim” means those 12.00% first lien
senior secured notes issued by Venoco pursuant to the First Lien Notes
Indenture, and all Claims related thereto, including, without limitation, all
principal, accrued but unpaid interest and all prepayment premium and make-whole
amounts, which Claims shall be deemed Allowed for purposes of the Plan in the
amount set forth in Section 3.03(c).

 

8

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“First Lien Notes Indenture” means the indenture dated as of April 2, 2015,
among Venoco, the Guarantors and the First Lien Notes Trustee.

 

“First Lien Notes Trustee” means U.S. Bank National Association, in its capacity
as indenture trustee under the First Lien Notes Indenture.

 

“General Unsecured Claim” means a Claim that is not an Administrative Claim,
Other Priority Claim, Priority Tax Claim, Secured Claim, Senior PIK Toggle Note
Claim, Subordinated Securities Claim or 8.875% Senior Note Claim. For the
avoidance of doubt, General Unsecured Claims include any deficiency claims of
the Prepetition Secured Parties.

 

“Governmental Unit” has the meaning set forth in section 101(27) of the
Bankruptcy Code.

 

“Guarantors” means TexCal Energy (LP) LLC; Whittier Pipeline Corporation; TexCal
Energy (GP) LLC, and TexCal Energy South Texas, L.P.

 

“Impaired” means, with respect to any Class of Claims or Equity Interests, a
Claim or an Equity Interest that is “impaired” within the meaning of section
1124 of the Bankruptcy Code.

 

“Intercompany Claim” means any Claim(s) held by a Debtor against any other
Debtor.

 

“Intercompany Equity Interests” means the Equity Interests of the Debtors, other
than the Equity Interests of DPC.

 

“Interim DIP Order” means the Interim Order (I) Authorizing Debtors (A) to
Obtain Postpetition Financing Pursuant to 11 U.S.C. §§ 105, 361, 362, 363(b),
364(c)(1), 364(c)(2), 364(c)(3), 364(d)(1) and 364(e) and (B) to Utilize Cash
Collateral Pursuant to 11 U.S.C. § 363, (II) Granting Adequate Protection to
Prepetition Secured Parties Pursuant to 11 U.S.C. §§ 361, 362, 363, 364 and
507(b) and (III) Scheduling Final Hearing Pursuant to Bankruptcy
Rules 4001(b) and (c), entered by the Bankruptcy Court, and any amendment,
modification or supplement of such order in form and substance acceptable to the
Debtors, DIP Lenders and the Restructuring Support Parties and approved by the
Bankruptcy Court.

 

“Lien” has the meaning set forth in section 101(37) of the Bankruptcy Code.

 

“LLA” means the portion of California State Lease PRC 3242.1 which is expanded
pursuant to the South Ellwood Lease Line Adjustment.

 

“LLA Override” means an overriding royalty interest in and to the oil, gas and
other minerals produced and saved from the LLA, the amount of which and other
attributes, limitations, terms and conditions of which are more particularly
described in the Form of Assignment of Overriding Royalty Interest attached to
the Divestment Letter Agreement.

 

“Management Incentive Plan” means the management incentive plan to be adopted by
Reorganized Venoco pursuant to Section 5.12 on or after the Effective Date of
the Plan.

 

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“New Common Stock” means the shares of common stock in Reorganized Venoco
authorized and issued pursuant to this Plan and Reorganized Venoco’s certificate
of incorporation (including, without limitation, any shares issuable upon
exercise of the New Warrants).

 

“New Shareholders Agreement” means the shareholder agreement governing the terms
of the New Common Stock, which shall be substantially the form included in the
Plan Supplement.

 

“New DPC Warrants” means the 2% warrants at a strike price of $691,411,000 on
the terms and conditions set forth in the New Warrant Agreement.

 

“New OpCo Warrants” means the 10% warrants at a strike price of $367,080,000 on
the terms and conditions set forth in the New Warrant Agreement.

 

“New MIP Warrants” means the 5% warrants on the terms and conditions set forth
in the New Warrant Agreement.

 

“New Second Lien Warrants” means 10% warrants at a strike price of $195,183,000
on the terms and conditions set forth in the New Warrant Agreement.

 

“New Warrants” means, collectively, the New DPC Warrants, the New OpCo Warrants,
the New MIP Warrants and the New Second Lien Warrants.

 

“New Warrant Agreement” means the warrant agreement governing the terms of the
New Warrants, which shall be in substantially the form included in the Plan
Supplement.

 

“Organizational Documents” means the new company governance documents related to
the Reorganized Debtors, including, but not limited to, articles of
organization, limited liability company agreements, operating agreements,
shareholder agreements, or other organizational documents, which shall be
consistent with the provisions of this Plan, the RSA and the Bankruptcy Code,
and shall include, among other things (and only to the extent required by
section 1123(a)(6) of the Bankruptcy Code), provisions prohibiting the issuance
of non-voting equity securities. The Organizational Documents shall be in
substantially the form included in the Plan Supplement and shall be in form and
substance acceptable to the Requisite Majority Consenting Noteholders.

 

“Other Priority Claim” means a Claim entitled to priority in right of payment
under section 507(a) of the Bankruptcy Code (other than an Administrative Claim
or a Priority Tax Claim).

 

“Other Secured Claim” means a Secured Claim other than a DIP Facility Claim,
First Lien Notes Claim or Second Lien Notes Claim.

 

“Person” has the meaning set forth in section 101(41) of the Bankruptcy Code.

 

“Petition Date” means [·].

 

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“Plan” means this Joint Plan of Reorganization Under Chapter 11 of the
Bankruptcy Code (as it may be altered, amended, modified or supplemented from
time to time with the consent of the Requisite Majority Consenting Noteholders).

 

“Plan Supplement” means the compilation of documents and forms of documents,
agreements, schedules, and exhibits to this Plan, which shall be in form and
substance acceptable to the Requisite Majority Consenting Noteholders, and which
shall be filed in the Chapter 11 Cases no later than ten (10) days prior to the
Voting Deadline or such later date as may be approved by the Bankruptcy Court on
notice to parties in interest, as may be amended or supplemented by additional
documents filed in the Chapter 11 Cases prior to the Effective Date as
amendments to the Plan Supplement.

 

“Prepetition Secured Parties” means, collectively, the First Lien Notes Trustee,
the holders of the First Lien Notes, the Second Lien Notes Trustee and the
holders of the Second Lien Notes, and additionally any successor-in-interest to
either of the foregoing.

 

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

 

“Pro Rata” means, unless indicated otherwise, the proportion that an Allowed
Claim in a particular Class bears to the aggregate amount of Allowed Claims in
that respective Class, or the proportion that Allowed Claims in a particular
Class bear to the aggregate amount of Allowed Claims in a particular Class and
other Classes entitled to share in the same recovery as such Allowed Claim under
the Plan.  The definition of Pro Rata shall apply to Allowed DIP Backstop Fee
Claims to the same extent and in the same manner as if DIP Backstop Fee Claims
were classified in a Class under the Plan.

 

“Professional” means a professional Person, as that term is used in sections 327
and 1103 of the Bankruptcy Code.

 

“Professional Claim” means a Claim by a Professional seeking an award by the
Bankruptcy Court of compensation and reimbursement of expenses incurred from the
Petition Date through and including the Effective Date, under sections 327, 328,
330, 331, 503(b) (other than 503(b)(4)), 1103 or 1129(a)(4) of the Bankruptcy
Code.

 

“Proof of Claim” means a proof of Claim filed in the Chapter 11 Cases in a
manner consistent with the Bar Date Order.

 

“Reinstatement” means, with respect to an Allowed Claim, (a) in accordance with
section 1124(1) of the Bankruptcy Code, being treated such that the legal,
equitable, and contractual rights to which such Claim entitles its holder are
left unaltered, or (b) if applicable under section 1124 of the Bankruptcy Code:
(i) having all prepetition and postpetition defaults with respect thereto other
than defaults relating to the insolvency or financial condition of the Debtors
or their status as debtors under the Bankruptcy Code cured, (ii) having its
maturity date reinstated, (iii) compensating the holder of such Claim for
damages incurred as a result of its reasonable reliance on a provision allowing
the Claim’s acceleration, and (iv) not otherwise altering the legal, equitable
and contractual rights to which the Claim entitles the holder thereof.

 

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“Rejected Contract Schedule” is defined in Section 6.01 of this Plan.

 

“Rejection Damages Claim” means a Claim for damages arising from the rejection
by any Debtor of any Executory Contract or Unexpired Lease pursuant to sections
365 or 1123 of the Bankruptcy Code.

 

“Released Parties” means each of: (a) the Debtors and Reorganized Debtors;
(b) the DIP Agent; (c) the DIP Lenders; (d) the Restructuring Support Parties;
(e) the Prepetition Secured Parties; (f) with respect to each of the foregoing
Entities in clauses (a) through (e), such Entity’s predecessors, successors and
assigns, affiliates, subsidiaries, funds, portfolio companies, management
companies, and (g) with respect to each of the foregoing Entities in clauses
(a) through (f) each of their respective current and former directors, officers,
members, employees, partners, managers, independent contractors, agents,
representatives, principals, Professionals, consultants, financial advisors,
attorneys, accountants, investment bankers, and other professional advisors
(with respect to clause (g), each solely in their capacity as such).

 

“Releasing Parties” means each holder of a Claim against or Equity Interest in
the Debtors that (a) is Unimpaired pursuant to the Plan and therefore is deemed
to accept the Plan pursuant to section 1126(f) of the Bankruptcy Code,
(b) holders of the Subordinated Securities Claims who provide a written
consensual release in favor of the Released Parties that is identical in
substance to the releases set forth herein, or (c) any Person that receives and
returns a Ballot indicating that such Person elects not to opt out of the Plan
releases provided in in Section 10.03 of this Plan.

 

“Reorganized Debtors” means, on and after the Effective Date, collectively, all
of the Debtors that are reorganized under and pursuant to the Plan.

 

“Reorganized Venoco” means DPC or any successor thereto by merger,
consolidation, or otherwise, on and after the Effective Date.

 

“Requisite Majority Consenting Noteholders” has the meaning set forth in the
RSA.

 

“Restructuring Support Parties” means the beneficial holders of First Lien Notes
and Second Lien Notes identified on the signature pages of the RSA, or that
becomes a party to the RSA by executing and delivering a Transferee Joinder (as
defined in the RSA) thereto.

 

“Restructuring Transactions” means one or more transactions pursuant to section
1123(a)(5)(D) of the Bankruptcy Code to occur on or before the Effective Date or
as soon as reasonably practicable thereafter, that may be necessary or
appropriate to effect any transaction described in, approved by, contemplated
by, or necessary to effectuate this Plan, as further described in Section 5.15
of this Plan.

 

“RSA” means the Restructuring Support Agreement dated March 18, 2016, between
the Restructuring Support Parties and the Debtors, which incorporates by
reference this Plan and certain related agreements among the Debtors and the
Restructuring Support Parties.

 

“RSA Approval Order” means the Order Authorizing the Debtors to Assume the
Restructuring Support Agreement, entered by the Bankruptcy Court on [·].

 

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“Schedules” means, collectively, the schedules of assets and liabilities, the
list of holders of Equity Interests and the statements of financial affairs and
such other documents filed by the Debtors under section 521 of the Bankruptcy
Code and Bankruptcy Rule 1007, and all amendments pursuant to Bankruptcy
Rule 1009 and modifications thereto through the Confirmation Date.

 

“Second Lien Notes” or “Second Lien Notes Claim” means those 8.875% second lien
senior secured notes issued by Venoco pursuant to the Second Lien Notes
Indenture, and all Claims related thereto, including, without limitation, all
principal, accrued but unpaid interest and all prepayment premium and make-whole
amounts, which Claims shall be deemed Allowed for purposes of the Plan in the
amount specified in Section 3.03(d).

 

“Second Lien Notes Indenture” means the indenture dated as of April 2, 2015,
among Venoco, the Guarantors and U.S. Bank National Association as trustee.

 

“Second Lien Notes Trustee” means U.S. Bank National Association, in its
capacity as indenture trustee under the Second Lien Notes Indenture.

 

“Secured Claim” means a Claim: (a) secured by a Lien on property of an Estate to
the extent of the value of such property; or (b) subject to a valid right of
setoff to the extent of the amount subject to valid setoff pursuant to section
553 of the Bankruptcy Code.

 

“Senior PIK Toggle Notes” means those 12.25%/13.00% senior unsecured PIK toggle
notes due August 2018 issued by DPC under the indenture dated as of August 15,
2013 between DPC and U.S. Bank National Association, as trustee.

 

“Subordinated Securities Claims” means any claims or causes of action, whether
asserted or not, against any Debtor subordinated pursuant to Section 510(b) of
the Bankruptcy Code, arising from the purchase or sale of any equity security or
damages arising from the purchase or sale of an equity security. Subordinated
Securities Claims includes but is not limited to claims brought in the Delaware
Litigation.

 

“TMM” means Timothy M. Marquez.

 

“U.S.” means the United States of America.

 

“U.S. Trustee” means the United States Trustee for the District of Delaware.

 

“Undeliverable Distribution” means any distribution under this Plan on account
of an Allowed Claim to a holder that has not: (a) accepted a particular
distribution or, in the case of distributions made by check, negotiated such
check; (b) given notice to the Distribution Agent of an intent to accept a
particular distribution; (c) responded to the Distribution Agent’s requests for
information necessary to facilitate a particular distribution; or (d) taken any
other action necessary to facilitate such distribution.

 

“Unexpired Lease” means an unexpired lease 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.

 

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“Unimpaired” means a Class of Claims or Equity Interests in a Debtor that is not
impaired within the meaning of section 1124 of the Bankruptcy Code.

 

“V6 Cash” means Cash in the amount of $[3,300,000].

 

“Venoco” means Venoco, Inc., a Delaware corporation.

 

“Venoco Residual Value” means the value that would be available for distribution
to Classes V5 and V6 after all Claims Classes V1, V2, V3 and V4 had been
satisfied in full from the assets of Venoco or each Venoco Sub, as applicable,
(not including the V6 Cash) as of the Effective Date in the amounts Allowed
pursuant to this Plan.

 

“Venoco Subs” means TexCal Energy (LP) LLC; Whittier Pipeline Corporation;
TexCal Energy (GP) LLC; Ellwood Pipeline; and TexCal Energy South Texas, L.P.

 

“Voting Deadline” means [•] at 4:00 p.m. ET, or such other date approved by the
Bankruptcy Court.

 

Section 1.02.                         Rules of Interpretation

 

For purposes herein, the following rules of interpretation apply: (a) 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; (b) unless otherwise specified, 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 such
document shall be substantially in such form or substantially on such terms and
conditions; (c) unless otherwise specified, any reference herein to an existing
document, schedule, or exhibit, shall mean such document, schedule, or exhibit,
as it may have been or may be amended, modified, or supplemented; (d) unless
otherwise specified, all references herein to “Articles” and “Sections” are
references to Articles and Sections herein or hereto; (e) the words “herein” and
“hereto” refer to this Plan in its entirety rather than to any particular
portion of this Plan; (f) captions and headings to Articles and Sections are
inserted for convenience of reference only and are not intended to be a part of,
or to affect, the interpretation herein; (g) unless otherwise specified herein,
the rules of construction set forth in section 102 of the Bankruptcy Code shall
apply; and (h) any term used in capitalized form herein that is not otherwise
defined but that is defined in the Bankruptcy Code or the Bankruptcy Rules shall
have the meaning assigned to such term in the Bankruptcy Code or the Bankruptcy
Rules, as applicable.

 

Section 1.03.                         Computation of Time

 

Bankruptcy Rule 9006(a) applies in computing any period of time prescribed or
allowed herein. If the date on which a transaction may occur, or be required to
be done, shall occur on a day that is not a Business Day, then such transaction
shall instead occur on the next succeeding Business Day.

 

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Section 1.04.                         Governing Law

 

Except to the extent the Bankruptcy Code or Bankruptcy Rules apply, and subject
to the provisions of any contract, lease, instrument, release, indenture, or
other agreement or document entered into expressly in connection herewith, the
rights and obligations arising hereunder shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York, without giving
effect to conflict-of-laws principles; provided that the corporate, limited or
general partnership, or limited liability company governance matters shall be
governed by the laws of the state of incorporation or formation of the
applicable Entity.

 

Section 1.05.                         Reference to Monetary Figures

 

All references in this Plan to monetary figures refer to currency of the U.S.,
unless otherwise expressly provided.

 

Section 1.06.                         Severability of Plan Provisions

 

Although styled as a “joint” plan, this Plan consists of separate plans for each
of the Debtors, and each Debtor is a proponent herein within the meaning of
section 1129 of the Bankruptcy Code in its respective Chapter 11 Case. If any
plan is not confirmed, then the Debtors reserve the right to either (a) request
that the other plans be confirmed or (b) withdraw one or more of the plans. The
Debtors’ inability to confirm, or election to withdraw, any plan shall not
impair the Confirmation of the other plans.

 

Section 1.07.                         No Substantive Consolidation

 

The Estates of the Debtors have not been substantively consolidated for
administrative purposes. Nothing in this Plan shall constitute or be deemed to
constitute an admission that one Debtor is subject to or liable for any Claim
against any other Debtor. Claims against the Debtors will be treated as separate
Claims with respect to each applicable Debtor’s Estate for all purposes
(including, but not limited to, distributions and voting), and such Claims shall
be administered as provided in this Plan; provided, however, that no Creditor
shall be entitled to recover more than 100% of the value of its Allowed Claim.

 

ARTICLE II
TREATMENT OF UNCLASSIFIED CLAIMS

 

In accordance with section 1123(a)(l) of the Bankruptcy Code, DIP Facility
Claims, DIP Backstop Fee Claims, Administrative Claims (including Professional
Claims) and Priority Tax Claims have not been classified and thus are excluded
from the Classes of Claims set forth in ARTICLE III of this Plan. The following
designation and treatment of unclassified Claims applies:

 

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Section 2.01.                         Administrative Claims

 

(a)                                 Administrative Claims Other than DIP
Facility Claims, DIP Backstop Fee Claims, Professional Claims or U.S. Trustee
Fees

 

Each holder of an Administrative Claim must file with the Bankruptcy Court and
serve on the Debtors or Reorganized Debtors (as the case may be), the Claims and
Noticing Agent, and the U.S. Trustee proof of such Administrative Claims, except
for the following Administrative Claims (if any): (i) a DIP Facility Claim;
(ii) a DIP Backstop Fee Claim; (iii) a Professional Fee Claim; (iv) any Claims
for fees payable to the clerk of the Bankruptcy Court; (v) any fees payable to
the U.S. Trustee under 28 U.S.C. § 1930(a)(6) or accrued interest thereon
arising under 31 U.S.C. § 3717; (vi) an Administrative Claim that has been
Allowed on or before the Effective Date; (vii) an Administrative Claim of a
governmental unit (as defined in section 101(27) of the Bankruptcy Code) not
required to be filed pursuant to section 503(b)(1)(D) of the Bankruptcy Code;
(viii) an Administrative Claim on account of fees and expenses incurred on or
after the Petition Date by ordinary course professionals retained by the Debtors
pursuant to an order of the Bankruptcy Court; (ix) an Administrative Claim
arising, in the ordinary course of business, out of the employment by one or
more Debtors of an individual from and after the Petition Date, but only to the
extent that such Administrative Claim is solely for outstanding wages,
commissions, or reimbursement of business expenses; (x) an Administrative Claim
that (x) has been previously paid by any Debtor in the ordinary course of
business or otherwise, or (y) have otherwise been satisfied; or (xi) an
Administrative Claim previously filed with the Claims and Solicitation Agent or
the Bankruptcy Court. Such proof of Administrative Claim must include at a
minimum: (A) the name of the applicable Debtor that is purported to be liable
for the Administrative Claim and if the Administrative Claim is asserted against
more than one Debtor, the exact amount asserted to be owed by each such Debtor;
(B) the name of the holder of the Administrative Claim; (C) the amount of the
Administrative Claim; (D) the basis of the Administrative Claim; and
(E) supporting documentation for the Administrative Claim. FAILURE TO FILE AND
SERVE SUCH PROOF OF ADMINISTRATIVE CLAIM TIMELY AND PROPERLY SHALL RESULT IN THE
ADMINISTRATIVE CLAIM BEING FOREVER BARRED AND DISCHARGED WITHOUT THE NEED FOR
FURTHER ACTION, ORDER OR APPROVAL OF, OR NOTICE TO, THE BANKRUPTCY COURT.

 

Each holder of an Allowed Administrative Claim (other than an Administrative
Claim that is a DIP Facility Claim, DIP Backstop Fee Claim or Professional Fee
Claim) as of the Effective Date shall receive, in full and final satisfaction,
settlement, release, and discharge of, and in exchange for, such Administrative
Claim, (i) Cash in an amount equal to the amount of such Allowed Administrative
Claim as soon as reasonably practicable after either (a) the Effective Date, if
such Administrative Claim is Allowed as of the Effective Date, (b) thirty days
after the date such Administrative Claim becomes an Allowed Administrative
Claim, if such Administrative Claim is Disputed as of, or following, the
Effective Date, or (c) the date such Allowed Administrative Claim becomes due
and payable in the ordinary course of business in accordance with the terms, and
subject to the conditions, of any agreements governing, instruments evidencing,
or other documents relating to, the applicable transaction giving rise to such
Allowed Administrative Claim, if such Allowed Administrative Claim is based on
liabilities incurred by the Debtors in the ordinary course of their business; or
(ii) such other treatment as the Debtors or the Reorganized Debtors and such
holder shall have agreed in writing.

 

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(b)                                 DIP Facility Claims and DIP Backstop Fee
Claims

 

Consistent with the DIP Orders, all DIP Facility Claims are and shall be deemed
Allowed Claims against each Debtor. On the Effective Date, the holders of the
Allowed DIP Facility Claims shall receive, in full and final satisfaction of
such Claims, an amount of Cash equal to the amount of such Claims (including,
without limitation, all outstanding principal and accrued but unpaid interest,
costs, fees and expenses owing as of the Effective Date, or any other amounts
due and owing under the DIP Facility) to the extent not previously paid during
the Chapter 11 Cases.

 

Consistent with the DIP Orders, all DIP Backstop Fee Claims are and shall be
deemed Allowed against each Debtor.  On the Effective Date, each holder of an
Allowed DIP Backstop Fee Claim shall receive, in full and final satisfaction of
such Claim, its Pro Rata share of the DIP Backstop Fee.

 

(c)                                  Professional Claims

 

The Bankruptcy Court shall determine the Allowed amounts of Professional Claims
after notice and a hearing in accordance with the procedures established by the
Bankruptcy Code. The Reorganized Debtors shall pay Professional Claims in Cash
in the amount Allowed by the Bankruptcy Court. Holders of Professional Claims
shall file and serve on the Reorganized Debtors any request for allowance and
payment of such Professional Claims no later than forty-five (45) days after the
Effective Date, unless otherwise agreed by the Reorganized Debtors, or otherwise
be forever barred, estopped, and enjoined from asserting such Claims against the
Debtors or the Reorganized Debtors (as applicable), their respective Estates and
property, a Distribution Agent, or otherwise, and such Professional Claims shall
be deemed discharged as of the Effective Date. Objections to any Professional
Claims must be filed and served on the Reorganized Debtors, counsel to the
Reorganized Debtors, and the requesting party no later than thirty (30) days
after the filing of the final applications for compensation or reimbursement
(unless otherwise agreed by the party requesting compensation of a Professional
Claim). If no objections are timely filed and properly served as to a given
request, or all timely objections are subsequently resolved, such Professionals
shall submit to the Bankruptcy Court for consideration a proposed order
approving the Professional Claim as an Allowed Administrative Claim in the
amount requested (or otherwise agreed), and the order may be entered without a
hearing or further notice to any party. The Allowed amounts of any Professional
Claims subject to unresolved timely objections shall be determined by the
Bankruptcy Court at a hearing to be held no later than thirty (30) days after
the objection deadline. Distributions on account of Allowed Professional Claims
shall be made as soon as reasonably practicable after such Professional Claims
become Allowed or in accordance with any other Order.

 

From and after the Effective Date, the Reorganized Debtors shall pay in Cash the
legal fees and expenses incurred by the Reorganized Debtors’ professionals
incurred in the ordinary course of business and without any further notice to or
action, order or approval of, the Bankruptcy Court. For the avoidance of doubt,
following the Effective Date any requirement that a professional comply with
sections 327 through 331 of the Bankruptcy Code in seeking compensation for
services rendered after such date shall terminate.

 

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(d)                                 U.S. Trustee Fees

 

All fees payable pursuant to 28 U.S.C. § 1930(a) shall be paid by the applicable
Debtor or Reorganized Debtor, as applicable, for each quarter (including any
fraction therein) until the Chapter 11 Cases are converted, dismissed, or a
Final Decree is issued, whichever occurs first.

 

Section 2.02.                         Priority Tax Claims

 

To the extent not previously paid during the Chapter 11 Cases, each holder of an
Allowed Priority Tax Claim, on or as soon as practicable after the Effective
Date, shall receive from their respective Debtor, in full satisfaction, release,
and discharge thereof, (i) payment in full in Cash, (ii) other treatment
consistent with sections 1129(a)(9)(C) or 1129(a)(9)(D) of the Bankruptcy Code,
or (iii) such other terms as agreed to among the Debtors and the holders
thereof.

 

ARTICLE III
CLASSIFICATION AND TREATMENT OF CLAIMS AND EQUITY INTERESTS

 

Notwithstanding any other provision of this Plan, for obligations on which the
Debtors are jointly and severally liable, a distribution on account of any
Allowed Claim by a Debtor shall not operate as a discharge, release and/or
satisfaction of such Allowed Claim asserted against any other Debtor(s) unless
and until such time that such Allowed Claim is paid in full. In the event no
holder of a Claim with respect to a specific Class for a particular Debtor
timely submits a Ballot that complies with the Disclosure Statement Order
indicating acceptance or rejection of this Plan, such Class will be deemed to
have accepted this Plan (including for purposes of satisfying section
1129(a)(10) of the Bankruptcy Code).

 

Section 3.01.                         Classification

 

This Plan constitutes a separate plan with respect to each Debtor. The
categories of Claims and Equity Interests listed below classify Claims and
Equity Interests for all purposes, including voting, confirmation and
distribution pursuant to each plan and pursuant to sections 1122 and
1123(a)(1) of the Bankruptcy Code. A Claim or Equity Interest shall be deemed
classified in a particular Class only to the extent that the Claim or Equity
Interest qualifies within the description of that Class and shall be deemed
classified in a different Class to the extent that any remainder of such Claim
or Equity Interest qualifies within the description of such different Class. A
Claim or Equity Interest is in a particular Class only to the extent that such
Claim or Equity Interest is Allowed in that Class and has not been paid or
otherwise settled prior to the Effective Date.

 

Claims (other than those listed in ARTICLE II of this Plan, which are not
required to be classified pursuant to section 1123(a)(1) of the Bankruptcy Code)
and Equity Interests in each of the Debtors are classified as follows:

 

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(a)                                 DPC

 

Class

 

Claim or Equity Interest

 

Status

 

Voting Rights

D1

 

Other Priority Claims

 

Unimpaired

 

Deemed to Accept

D2

 

Other Secured Claims

 

Unimpaired

 

Deemed to Accept

D3

 

Senior PIK Toggle Note Claims

 

Impaired

 

Entitled to Vote

D4

 

General Unsecured Claims

 

Impaired

 

Entitled to Vote

D5

 

Subordinated Securities Claims

 

Impaired

 

Deemed to Reject

D6

 

Equity Interests

 

Impaired

 

Deemed to Reject

 

(b)                                 Venoco and Venoco Subs

 

Class

 

Claim or Equity Interest

 

Status

 

Voting Rights

V1

 

Other Priority Claims

 

Unimpaired

 

Deemed to Accept

V2

 

Other Secured Claims

 

Unimpaired

 

Deemed to Accept

V3

 

First Lien Notes Claims

 

Impaired

 

Entitled to Vote

V4

 

Second Lien Notes Claims

 

Impaired

 

Entitled to Vote

V5

 

8.875% Senior Note Claims

 

Impaired

 

Entitled to Vote

V6

 

General Unsecured Claims

 

Impaired

 

Entitled to Vote

V7

 

Subordinated Securities Claims

 

Impaired

 

Deemed to Reject

V8

 

Equity Interests in Venoco

 

Impaired

 

Deemed to Reject

V9

 

Equity Interests in Each Venoco Sub

 

Unimpaired

 

Deemed to Accept

 

All Claims against Venoco and each Venoco Sub are placed in classes (as
designated by subclasses for Venoco and each Venoco Sub, as applicable), as
follows: Venoco (subclass a), TexCal Energy (LP) LLC (subclass b); Whittier
Pipeline Corporation (subclass c); TexCal Energy (GP) LLC (subclass d); Ellwood
Pipeline (subclass e); and TexCal Energy South Texas, L.P. (subclass f).

 

Section 3.02.                         Claims Against and Equity Interests in DPC

 

(a)                                 Class D1—Other Priority Claims

 

(i)                                     Treatment: Unless the holder agrees to a
different treatment, each holder of an Allowed Class D1 Other Priority Claim
against DPC shall receive, in full and final satisfaction, release, settlement
and discharge of, and in exchange for, its Allowed Claim, Cash equal to the
amount of such Allowed Claim plus interest thereon, on or as soon as practicable
after the later of: (x) the Effective Date; or (y) the date such Claim becomes
due and Allowed or as otherwise ordered by the Bankruptcy Court.

 

(ii)                                  Voting: Class D1 is Unimpaired. The
holders of Class D1 Other Priority Claims against DPC are conclusively deemed to
accept the Plan pursuant to section 1126(f) of the Bankruptcy Code, and are not
entitled to vote to accept or reject the Plan.

 

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(b)                                 Class D2—Other Secured Claims

 

(i)                                     Treatment: Unless the holder agrees to a
different treatment, each holder of an Allowed Class D2 Other Secured Claim
shall receive, in DPC’s sole discretion and in full and final satisfaction,
release, settlement and discharge of, and in exchange for, such holder’s Allowed
Other Secured  Claim against DPC, on or as soon as practicable after the later
of: (x) the Effective Date; or (y) the date such Claim becomes due and Allowed
or as otherwise ordered by the Bankruptcy Court:

 

a.              Cash equal to the amount of such Allowed Other Secured Claim
plus interest required to be paid under section 506(b) of the Bankruptcy Code
(if any);

 

b.              Reinstatement of the legal, equitable and contractual rights of
the holder of such Allowed Other Secured Claim, subject to the provisions of
this Plan; or

 

c.               such other treatment as necessary to satisfy the requirements
of section 1124(2) of the Bankruptcy Code for such Allowed Other Secured Claim
to be rendered Unimpaired.

 

(ii)                                  Voting: Class D2 is Unimpaired. The
holders of Class D2 Other Secured Claims against DPC are conclusively deemed to
accept the Plan pursuant to section 1126(f) of the Bankruptcy Code, and are not
entitled to vote to accept or reject the Plan.

 

(c)                                  Class D3—Senior PIK Toggle Note Claims

 

(i)                                     Treatment:

 

a.              If the holders of Class D3 Senior PIK Toggle Note Claims vote as
a Class to accept the Plan, unless the holder agrees to a different treatment,
each holder of an Allowed Class D3 Senior PIK Toggle Note Claim against DPC
shall receive, in full and final satisfaction, release, settlement and discharge
of, and in exchange for, its Allowed Claim its Pro Rata share of (i) the New DPC
Warrants and (ii) DPC Residual Value.

 

b.              If the holders of Class D3 Senior PIK Toggle Note Claims vote as
a Class to reject the Plan, each holder of an Allowed Class D3 Senior PIK Toggle
Note Claim against DPC shall receive its Pro Rata share of DPC Residual Value.

 

(ii)                                  Voting: Class D3 is Impaired. The holders
of Class D3 Claims against DPC are entitled to vote to accept or reject the
Plan.

 

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(d)                                 Class D4—General Unsecured Claims

 

(i)                                     Treatment:

 

a.              Claim consideration: If the holders of Class D4 General
Unsecured Claims vote as a Class to accept the Plan, unless the holder agrees to
a different treatment, each holder of an Allowed Class D4 General Unsecured
Claim against DPC shall receive, in full and final satisfaction, release,
settlement and discharge of, and in exchange for, its Allowed Claim, its Pro
Rata share of (i) the New DPC Warrants and (ii) DPC Residual Value.

 

b.              If the holders of Class D4 General Unsecured Claims vote as a
Class to reject the Plan, each holder of an Allowed Class D4 General Unsecured
Claim against DPC shall receive its Pro Rata share of DPC Residual Value.

 

(ii)                                  Voting: Class D4 is Impaired. The holders
of Class D4 Claims against DPC are entitled to vote to accept or reject the
Plan.

 

(e)                                  Class D5—Subordinated Securities Claims

 

(i)                                     Treatment: On the Effective Date, all
Subordinated Securities Claims against DPC shall be subordinated in payment to
all other Allowed General Unsecured Claims under section 510(b) of the
Bankruptcy Code, and each holder of an Allowed Class D5 Subordinated Securities
Claim against DPC: (x) shall be enjoined from pursuing any Class D5 Subordinated
Securities Claim against any of the Debtors; and (y) shall not receive or retain
any distribution on account of its Class D5 Subordinated Securities Claim
against DPC.

 

(ii)                                  Voting: Class D5 is Impaired. The holders
of Class D5 Subordinated Securities Claims against DPC are conclusively deemed
to reject the Plan pursuant to section 1126(g) of the Bankruptcy Code, and are
not entitled to vote to accept or reject the Plan.

 

(f)                                   Class D6—Equity Interests

 

(i)                                     Treatment: On the Effective Date, all
existing Equity Interests of DPC shall be cancelled, extinguished and
discharged, and the owners thereof shall receive no distribution on account of
such Equity Interests.

 

(ii)                                  Voting: Class D6 is Impaired. The holders
of Class D6 Equity Interests in DPC are conclusively deemed to reject the Plan
pursuant to section 1126(g) of the Bankruptcy Code, and are not entitled to vote
to accept or reject the Plan.

 

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Section 3.03.                         Claims Against and Equity Interests in
Venoco and Venoco Subs

 

(a)                                 Class V1—Other Priority Claims

 

(i)                                     Treatment: Unless the holder agrees to a
different treatment, each holder of an Allowed Class V1 Other Priority Claim
against Venoco and each Venoco Sub shall receive, in full and final
satisfaction, release, settlement and discharge of, and in exchange for, its
Allowed Claim, Cash equal to the amount of such Allowed Claim plus interest
thereon, on or as soon as practicable after the later of: (x) the Effective
Date; or (y) the date such Claim becomes due and Allowed or as otherwise ordered
by the Bankruptcy Court.

 

(ii)                                  Voting: Class V1 is Unimpaired. The
holders of Class V1 Other Priority Claims against Venoco and each Venoco Sub are
conclusively deemed to accept the Plan pursuant to section 1126(f) of the
Bankruptcy Code, and are not entitled to vote to accept or reject the Plan.

 

(b)                                 Class V2—Other Secured Claims

 

(i)                                     Treatment: Unless the holder agrees to a
different treatment, each holder of an Allowed Class V2 Other Secured Claim
shall receive, in Venoco’s and each Venoco Sub’s sole discretion and in full and
final satisfaction, release, settlement and discharge of, and in exchange for,
such holder’s Allowed Other Secured Claim against Venoco and each Venoco Sub, on
or as soon as practicable after the later of: (x) the Effective Date; or (y) the
date such Claim becomes due and Allowed or as otherwise ordered by the
Bankruptcy Court:

 

a.              Cash equal to the amount of such Allowed Other Secured Claim
plus interest required to be paid under section 506(b) of the Bankruptcy Code
(if any);

 

b.              Reinstatement of the legal, equitable and contractual rights of
the holder of such Allowed Other Secured Claim, subject to the provisions of
this Plan; or

 

c.               such other treatment as necessary to satisfy the requirements
of section 1124(2) of the Bankruptcy Code for such Allowed Other Secured Claim
to be rendered Unimpaired.

 

(ii)                                  Voting: Class V2 is Unimpaired. The
holders of Class V2 Other Secured Claims against Venoco and each Venoco Sub are
conclusively deemed to accept the Plan pursuant to section 1126(f) of the
Bankruptcy Code, and are not entitled to vote to accept or reject the Plan.

 

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(c)                                  Class V3—First Lien Notes Claims

 

(i)                                     Allowance: The First Lien Notes Claims
against Venoco and each Guarantor shall be deemed Allowed in the amount of
$195,183,333.33 million under the First Lien Notes Indenture.

 

(ii)                                  Treatment: Unless the holder agrees to a
different treatment, each holder of an Allowed Class V3 First Lien Notes Claim
against Venoco and each Guarantor shall receive, in full and final satisfaction,
release, settlement and discharge of, and in exchange for, its Allowed First
Lien Notes Claim, its Pro Rata share of 90% of New Common Stock issued on the
Effective Date.

 

(iii)                               Voting: Class V3 is Impaired. The holders of
First Lien Notes Claims in Class V3 are entitled to vote to accept or reject the
Plan.

 

(d)                                 Class V4—Second Lien Notes Claims

 

(i)                                     Allowance: The Second Lien Notes Claims
against Venoco and each Guarantor shall be deemed Allowed in the amount of
$171,897,136.56 million due under the Second Lien Notes Indenture.

 

(ii)                                  Treatment: Unless the holder agrees to a
different treatment, each holder of an Allowed Second Lien Secured Claim in
Class V4 shall receive, in full and final satisfaction, release, settlement and
discharge of, and in exchange for, its Allowed Claim, its Pro Rata share of the
New Second Lien Warrants.

 

(iii)                               Voting: Class V4 is Impaired. The holders of
Second Lien Notes Claims in Class V4 are entitled to vote to accept or reject
the Plan.

 

(e)                                  Class V5—8.875% Senior Note Claims

 

(i)                                     Treatment:

 

a.              If the holders of Class V5 8.875% Senior Note Claims vote as a
Class to accept the Plan, each holder of an Allowed Class V5 8.875% Senior Note
Claim shall receive, in full and final satisfaction, release, settlement and
discharge of, and in exchange for, such holder’s Allowed Claim, its Pro Rata
share of (i) the New OpCo Warrants and (ii) Venoco Residual Value, if any.

 

b.              If the holders of Class V5 8.875% Senior Note Claims vote as a
Class to reject the Plan, the holders of Allowed Class V5 8.875% Senior Note
Claims shall receive its Pro Rata share of Venoco Residual Value, if any.

 

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(ii)                                  Voting. Class V5 is Impaired. The holders
of Allowed 8.875% Claims in Class V5 are entitled to vote to accept or reject
the Plan.

 

(f)                                   Class V6—General Unsecured Claims

 

a.              Claim consideration: If the holders of Class V6 General
Unsecured Claims vote as a Class to accept the Plan, unless the holder agrees to
a different treatment, each holder of an Allowed Class V6 General Unsecured
Claim against Venoco or any Venoco Sub shall receive, in full and final
satisfaction, release, settlement and discharge of, and in exchange for, its
Allowed Claim, its Pro Rata share of the (i) V6 Cash and (ii) to the extent the
Class V6 General Unsecured Claims are not satisfied in full by such V6 Cash, the
Venoco Residual Value, if any.

 

b.              If the holders of Class V6 General Unsecured Claims vote as a
Class to reject the Plan, each holder of an Allowed Class V6 General Unsecured
Claim against Venoco or any Venoco Sub shall receive its Pro Rata share of
Venoco Residual Value, if any.

 

c.               The Prepetition Secured Parties shall be entitled to vote in
Class V6 to the extent of their deficiency claims, but shall not be entitled to
any distribution under this Section 3.03 on account of such claims.

 

(ii)                                  Voting: Class V6 is Impaired. The holders
of Class V6 Claims against Venoco or any Venoco Sub are entitled to vote to
accept or reject the Plan.

 

(g)                                  Class V7—Subordinated Securities Claims

 

(i)                                     Treatment: On the Effective Date, all
Subordinated Securities Claims against Venoco and each Venoco Sub shall be
subordinated in payment to all other Allowed General Unsecured Claims under
section 510(b) of the Bankruptcy Code, and each holder of an Class V7
Subordinated Securities Claim against Venoco and each Venoco Sub: (x) shall be
enjoined from pursuing any Class V7 Subordinated Securities Claim against any of
the Debtors; and (y) shall not receive or retain any distribution on account of
its Class V7 Subordinated Securities Claim against Venoco and each Venoco Sub.

 

(ii)                                  Voting: Class V7 is Impaired. The holders
of Class V7 Subordinated Securities Claims against Venoco and each Venoco Sub
are conclusively deemed to reject the Plan pursuant to section 1126(g) of the
Bankruptcy Code, and are not entitled to vote to accept or reject the Plan.

 

(h)                                 Class V8—Equity Interests in Venoco

 

(i)                                     Treatment: On the Effective Date, all
existing Equity Interests of Venoco shall be cancelled, extinguished and
discharged, and the owners thereof shall receive no distribution on account of
such Equity Interests.

 

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(ii)                                  Voting: Class V8 is Impaired. The holders
of Class V8 Equity Interests in Venoco are conclusively deemed to reject the
Plan pursuant to section 1126(g) of the Bankruptcy Code, and are not entitled to
vote to accept or reject the Plan.

 

(i)                                     Class V9—Equity Interests in each Venoco
Sub

 

(i)                                     Treatment: On the Effective Date, all
existing Equity Interests in each Venoco Sub shall be reinstated and rendered
Unimpaired in accordance with section 1124 of the Bankruptcy Code.

 

(ii)                                  Voting: Class V9 is Unimpaired. The
holders of Class V9 Equity Interests in each Venoco Sub are conclusively deemed
to accept the Plan pursuant to section 1126(f) of the Bankruptcy Code, and are
not entitled to vote to accept or reject the Plan.

 

ARTICLE IV
ACCEPTANCE OR REJECTION OF THE PLAN

 

Section 4.01.                         Acceptance by an Impaired Class

 

(a)                                 In accordance with section 1126(c) of the
Bankruptcy Code and except as provided in section 1126(e) of the Bankruptcy
Code, Impaired Classes entitled to vote under this Plan shall have accepted the
Plan if it is accepted by the holders of at least two-thirds (2/3) in dollar
amount and more than one-half (1/2) in number of the Allowed Claims that have
timely and properly voted to accept or reject the Plan or if no holder of a
Claim with respect to a specific Class for a particular Debtor timely submits a
Ballot that complies with the Disclosure Statement Order indicating acceptance
or rejection of this Plan.

 

(b)                                 Except for holders of Claims in Classes that
are deemed or presumed to have accepted or rejected this Plan pursuant to the
terms of this Plan other than this Section 4.01(b), if holders of Claims in a
particular Impaired Class of Claims were given the opportunity to vote to accept
or reject this Plan and notified that a failure of any holders of Claims in such
Impaired Class of Claims to vote to accept or reject this Plan would result in
such Impaired Class of Claims being deemed to have accepted this Plan, but no
holders of Claims in such Impaired Class of Claims voted to accept or reject
this Plan, then such Class of Claims shall be deemed to have accepted this Plan.

 

Section 4.02.                         Nonconsensual Confirmation

 

The Debtors may request confirmation under section 1129(b) of the Bankruptcy
Code with respect to (a) any Impaired Class of Claims and Equity Interests that
have not accepted the Plan in accordance with sections 1126 and 1129(a)(8) of
the Bankruptcy Code and (b) any Class that is deemed to reject the Plan pursuant
to section 1126(g) of the Bankruptcy Code or the terms of the Plan or otherwise.
The Debtors reserve the right to amend or modify the Plan in accordance with
Section 11.01 of this Plan to the extent, if any, that Confirmation of the Plan
pursuant to section 1129(b) of the Bankruptcy Code requires such amendment or
modification.

 

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ARTICLE V
IMPLEMENTATION OF THE PLAN

 

The transactions required to implement the Plan shall be implemented in
accordance with this ARTICLE V.

 

Section 5.01.                         Operations between Confirmation Date and
Effective Date

 

During the period from the Confirmation Date through and until the Effective
Date, the Debtors may continue to operate their businesses as debtors in
possession, subject to all applicable orders of the Bankruptcy Court, the
Bankruptcy Code, and any limitations set forth herein, in the RSA or in the
Confirmation Order.

 

Section 5.02.                         [Exit Facility

 

On or before the Effective Date, the Reorganized Debtors shall enter into the
Exit Credit Facilities, and, subject to the satisfaction of the DIP Facility
Claims and the DIP Backstop Fee Claims in accordance herewith, grant the Liens
and security interests provided for therein. The Reorganized Debtors that are
the guarantors under the Exit Credit Facilities shall issue the guarantees and
grant the Liens and security interests as provided therein. The Exit Credit
Facilities shall be on terms and conditions substantially as set forth in the
Plan Supplement.]

 

Section 5.03.                         LLA Override

 

Reorganized Venoco will, upon LLA approval, transfer the LLA Override to TMM
pursuant to the Divestment Letter Agreement.

 

Section 5.04.                         Sources of Cash for Plan Distributions

 

Except as otherwise specifically provided herein or in the Confirmation Order,
all Cash required for the payments to be made hereunder shall be obtained from
the Reorganized Debtors, the capital investment from each LLA Override holder
for its share of capital expenditures, [or the Exit Facility, as applicable].

 

Section 5.05.                         Issuance of New Common Stock and New
Warrants

 

(a)                                 Issuance of Securities. On the Effective
Date: (i) the existing Equity Interests in DPC and Venoco will be cancelled,
extinguished and discharged; and (ii) the New Common Stock and New Warrants will
be issued and, as soon as practicable thereafter, distributed, as provided for
in ARTICLE II and ARTICLE III of this Plan, as provided in the Reorganized
Venoco Organizational Documents. The issuance by Reorganized Venoco of the New
Common Stock and the New Warrants, and the issuance of shares pursuant to the
exercise of the New Warrants, is authorized without the need for any further
corporate action and without any further action by any holder of a Claim or
Equity Interest.

 

(b)                                 Exemption from Registration. The offering of
the New Common Stock and New Warrants under ARTICLE V of the Plan shall be
exempt from the registration requirements of section 5 of the Securities Act and
other applicable law under section 4(a)(2) of the Securities

 

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Act or another available exemption from registration under the Securities Act.
The issuance and distribution of the New Common Stock and the New Warrants under
ARTICLE V of the Plan, and the New Common Stock issuable upon exercise of the
New Warrants shall be exempt from the registration requirements of section 5 of
the Securities Act and any other applicable law requiring registration of an
offer or sale of securities under section 1145(a) of the Bankruptcy Code.

 

(c)                                  SEC Reporting Requirements. As of the
Effective Date, neither Reorganized Venoco nor any other Reorganized Debtor will
be a reporting company under the Securities and Exchange Act of 1934, as
amended.

 

Section 5.06.                         Organizational Documents

 

On the Effective Date, the Organizational Documents of the Debtors shall be
deemed amended and restated in substantially the form set forth in the Plan
Supplement, without any further action by the managers, directors, or equity
holders of the Debtors or the Reorganized Debtors. The amended and restated
Organizational Documents will, among other things, contain appropriate
provisions prohibiting the issuance of nonvoting equity securities to the extent
required by section 1123(a)(6) of the Bankruptcy Code. On the Effective Date, or
as soon as practicable thereafter, the Debtors or the Reorganized Debtors will,
if required by applicable state law, file with the Secretary of State of the
appropriate jurisdiction the amended and restated Organizational Documents.

 

Section 5.07.                         Intercompany Equity Interests

 

In order to preserve corporate structure, the Intercompany Equity Interests
shall be retained and the legal, equitable, and contractual rights to which the
holder of such Intercompany Equity Interests is entitled shall remain unaltered.

 

Section 5.08.                         Dissolution of DPC

 

On the Effective Date, the Equity Interests of DPC shall be deemed cancelled and
of no further force and effect, and deemed extinguished without any further
corporate action. Any officers and directors of DPC shall be deemed to have been
removed, and DPC shall be deemed dissolved for all purposes without any further
corporate action.

 

Section 5.09.                         Continued Corporate Existence and Vesting
of Assets

 

With the exception of DPC, which will be dissolved pursuant to Section 5.08 of
this Plan: (i) each Debtor will, as a Reorganized Debtor, continue to exist
after the Effective Date as a separate legal entity, with all of the powers of
such a legal entity under applicable law and without prejudice to any right to
alter or terminate such existence (whether by merger, dissolution or otherwise)
under applicable law; and (ii) on the Effective Date, all property of each
Debtor’s Estate, and any property acquired by each Debtor or Reorganized Debtor
under the Plan, will vest in such Reorganized Debtor free and clear of all
Claims, Liens, charges and other encumbrances. On and after the Effective Date,
each Reorganized Debtor may operate its business and may use, acquire, and
dispose of property and compromise or settle any claims without supervision or
approval by the Court and free of any restrictions of the Bankruptcy Code

 

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or Bankruptcy Rules, subject only to those restrictions expressly imposed by the
Plan or the Confirmation Order as well as the documents and instruments executed
and delivered in connection therewith, including the documents, exhibits,
instruments, and other materials comprising the Plan Supplement. Without
limiting the foregoing, the Reorganized Debtors may pay the charges that they
incur from and after the Effective Date for professional fees, disbursements,
expenses, or related support services (including fees relating to the
preparation of Professional fee applications) without application to, or the
approval of, the Bankruptcy Court.

 

Section 5.10.                         Management of the Reorganized Debtors

 

As of the Effective Date, the term of current members of the boards of directors
for Venoco shall expire without further action by any Person. The initial
directors of the board of Reorganized Venoco nominated by the Requisite Majority
Consenting Noteholders shall be identified in the Plan Supplement.

 

From and after the Effective Date, the officers identified in the Plan
Supplement shall manage Reorganized Venoco. The officers of Reorganized Venoco
shall have the power to enter into or execute any documents or agreements that
they deem reasonable and appropriate to effectuate the terms of the Plan.

 

Section 5.11.                         [Existing Benefits Agreements and Retiree
Benefits

 

(a)                                 Except as such benefits may be otherwise
terminated by the Debtors in a manner permissible under applicable law, the
Existing Benefits Agreements shall be deemed assumed as of the Effective Date,
subject to the consent of the Requisite Majority Consenting Noteholders.
Notwithstanding anything to the contrary contained herein, pursuant to section
1129(a)(13) of the Bankruptcy Code, on and after the Effective Date, all retiree
benefits (as such term is defined in section 1114 of the Bankruptcy Code), if
any, shall continue to be paid in accordance with applicable law.]

 

(b)                                 On the Effective Date, the Employee Stock
Ownership Plan shall be terminated. Reorganized Venoco shall take all actions
necessary or appropriate to terminate the Employee Stock Ownership Plan in
accordance with the provisions of applicable law.

 

Section 5.12.                         Management Incentive Plan

 

On or after the Effective Date, Reorganized Venoco shall adopt the Management
Incentive Program, which shall provide for the distribution, and the reservation
for future issuance, as applicable, of (i) the New MIP Warrants and (ii) an LLA
Override to participating officers, directors and employees of the Reorganized
Debtors as determined by the newly appointed board of directors of Reorganized
Venoco under the terms set forth in the Management Incentive Plan agreement
included in the Plan Supplement. For the avoidance of doubt, the Management
Incentive Plan is an entirely post-Effective Date compensation plan and awards
thereunder, to the extent earned, shall be paid by the Reorganized Debtors. For
the avoidance of doubt, the Bankruptcy Court’s confirmation of the Plan shall
not be deemed to be an approval or authorization of the specific terms of the
Management Incentive Plan.

 

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Section 5.13.                         Employment Agreements

 

On or after the Effective Date, Reorganized Venoco shall enter into the
Employment Agreement, which shall provide for the ongoing employment of TMM.

 

Section 5.14.                         Causes of Action

 

(a)                                 Preservation of Causes of Action Other Than
Avoidance Actions

 

In accordance with section 1123(b) of the Bankruptcy Code or any corresponding
provision of federal or state laws, and except as expressly released by this
Plan, Final DIP Order, Confirmation Order or other Final Order: (i) on the
Effective Date, all Causes of Action of the Debtors shall be transferred to and
vest in the Reorganized Debtors; and (ii) on and after the Effective Date, all
such Causes of Action for the Debtors shall be retained by the Reorganized
Debtors, which may enforce, sue on, settle, or compromise (or decline to do any
of the foregoing) any or all of such Causes of Action on behalf of the Debtors;
provided, however, that as of the Effective Date, all Avoidance Actions of the
Debtors shall be deemed to be waived and released. For the avoidance of doubt,
the Debtors and the Reorganized Debtors, as applicable, shall not retain any
Causes of Action against the Released Parties.

 

(b)                                 No Waiver

 

Except as otherwise provided in Section 5.14(a) or Section 10.02 of this Plan,
or as released by the Final DIP Order, the Confirmation Order or other Final
Order, nothing in this Plan shall be deemed to be a waiver or relinquishment of
any Claim, Cause of Action, account receivable, right of setoff, or other legal
or equitable right or defense that the Reorganized Debtors may have or choose to
assert on behalf of the Debtors or their respective Estates under any provision
of the Bankruptcy Code or any applicable non-bankruptcy law. No Entity may rely
on the absence of a specific reference in this Plan to any Cause of Action or
account receivable against it as an indication that the Reorganized Debtors will
not pursue any and all available Causes of Action or accounts receivable against
it, and all such rights to prosecute or pursue any and all Causes of Action or
accounts receivable against any Entity are expressly reserved for later
adjudication and, therefore, no preclusion doctrine, including, without
limitation, the doctrines of res judicata, collateral estoppel, estoppel
(judicial, equitable or otherwise) or laches, shall apply to such Causes of
Action or accounts receivable upon or after the Confirmation or Consummation of
the Plan.

 

Section 5.15.                         Restructuring Transactions

 

On or before the Effective Date or as soon as reasonably practicable thereafter
and with the consent of the Requisite Majority Consenting Noteholders, the
Debtors or the Reorganized Debtors (as applicable) are authorized, without
further order of the Bankruptcy Court, to take all actions as may be necessary
or appropriate to effect any transaction described in, approved by, contemplated
by or necessary to effectuate the Restructuring Transactions under and in
connection with this Plan, including, without limitation: (a) the execution and
delivery of all appropriate agreements or other documents of merger,
consolidation, restructuring, conversion, disposition, transfer, dissolution or
liquidation containing terms that are consistent with the terms of this Plan,
and that satisfy the requirements of applicable law and any other terms to which
the

 

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applicable Entities may agree; (b) the execution and delivery of appropriate
instruments of transfer, assignment, assumption or delegation of any asset,
property, right, liability, debt or obligation on terms consistent with the
terms of this Plan and having other terms for which the applicable parties
agree; (c) rejection or assumption, as applicable, of Executory Contracts and
Unexpired Leases; (d) selection of the board of directors (or equivalent) of the
Reorganized Debtors; (e) the filing and/or execution of appropriate limited
liability company agreements, certificates or articles of incorporation or
organization, reincorporation, merger, consolidation, conversion or dissolution
pursuant to applicable state law; (f) the consummation of the transactions
contemplated by any post-effective date financing and the execution thereof;
(g) the issuance of the New Common Stock and the New Warrants, and the execution
of all documents related thereto; and (h) 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.

 

Section 5.16.                         Determination of Tax Filings and Taxes of
the DPC Group

 

For all taxable periods ending on or prior to, or including, the Effective Date,
Venoco shall prepare and file (or cause to be prepared and filed) all tax
returns, reports, certificates, forms or similar statements or documents
(collectively, “Group Tax Returns”) on behalf of the consolidated, unitary,
combined or any similar tax group the parent of which is DPC that includes
Venoco and/or any subsidiary thereof (the “DPC Group”) as well as all separate
tax returns of DPC required to be filed or that Venoco otherwise deems
appropriate, including the filing of amended Group Tax Returns or requests for
refunds.  DPC shall not file or amend any tax returns for DPC itself or the DPC
Group for any taxable periods (or portions thereof) without Venoco’s prior
written consent.

 

Accordingly, Venoco is hereby appointed pursuant to section 1123(b)(3)(B) of the
Bankruptcy Code to handle tax matters, including without limitation, the filing
of all tax returns, and the handling of tax audits and proceedings, of the DPC
Group. Without limiting the generality of the foregoing, if requested by Venoco,
DPC shall promptly execute or cause to be executed and filed any tax returns or
other tax filings of DPC or the DPC Group submitted by Venoco to DPC for
execution or filing.  Moreover, DPC shall execute on or prior to the Effective
Date a power of attorney authorizing Venoco to correspond, sign, collect,
negotiate, settle and administer tax payments and Group Tax Returns.

 

Each of the Debtors shall cooperate fully with each other regarding the
implementation of this Section 5.16 (including the execution of appropriate
powers of attorney) and shall make available to the other as reasonably
requested all information, records and documents relating to taxes governed by
this Section 5.16 until the expiration of the applicable statute of limitations
or extension thereof or at the conclusion of all audits, appeals or litigation
with respect to such taxes.

 

Venoco shall have the right to request an expedited determination of the tax
liability, if any, of the Reorganized Debtors (including Venoco or DPC) under
section 505(b) of the Bankruptcy Code with respect to any tax returns filed, or
to be filed, for any and all taxable periods ending after the Commencement Date
through the Effective Date.

 

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If DPC receives written notice from a taxing authority of any pending
examination, claim, settlement, proposed adjustment or related matters with
respect to taxes, it shall promptly notify Venoco in writing.  Venoco shall have
the sole right, at its expense, to control, conduct, compromise and settle any
tax contest, audit or administrative or court proceeding relating to any
liability for taxes of DPC and the DPC Group.  With respect to any such
proceeding and with respect to the preparation and filing of any tax returns of
DPC or the DPC Group, Venoco may act in its own self-interest and in the
interest of its subsidiaries and affiliates, without regard to any adverse
consequences to DPC.

 

To the extent permitted by law, DPC shall designate Venoco as the “agent” or
“substitute agent” (within the meaning of Treasury Regulation sections 1.1502-77
and 1.1502-77B, respectively) for the Venoco Group in accordance with Treasury
Regulation sections 1.1502-77 and 1.1502-77B, as amended or supplemented, and
any comparable provision under state or local law, with respect to all taxable
periods ending on or before, or including, the Effective Date.

 

Venoco shall be entitled to the entire amount of any refunds and credits
(including interest thereon) with respect to or otherwise relating to any taxes
of the DPC Group, including for any taxable period ending on or prior to, or
including, the Effective Date.  DPC shall promptly notify Venoco of the receipt
of any such refunds or credits and shall transfer any such refunds to Venoco by
wire transfer or otherwise in accordance with written instructions provided by
Venoco.

 

ARTICLE VI
TREATMENT OF EXECUTORY CONTRACTS AND LEASES

 

Section 6.01.                         Treatment of Executory Contracts and
Unexpired Leases

 

All executory contracts and unexpired leases not expressly rejected shall be
deemed assumed pursuant to the Plan. The Plan Supplement shall contain (a) a
schedule of executory contracts and unexpired leases to be assumed by the
Debtors, including proposed Cure Costs (the “Assumed Contract Schedule”); and
(b) a schedule of executory contracts and unexpired leases to be rejected by the
Debtors as of the Effective Date (the “Rejected Contract Schedule”), determined
by the Debtors in consultation with the Requisite Majority Consenting
Noteholders. On the fourteenth (14th) day after the Effective Date, and to the
extent permitted by applicable law, all of the Debtors’ executory contracts and
unexpired leases that are not listed on the Rejected Contract Schedule will be
assumed irrespective of whether they are listed on the Assumed Contract
Schedule. All executory contracts and unexpired leases identified on the
Rejected Contract Schedule shall be deemed rejected as of the Effective Date.

 

The Debtors shall notify all counterparties to contracts on the Assumed Contract
Schedule and the Rejected Contract Schedule of the filing of such Schedules and
shall provide notice of such Schedules on the Debtors’ restructuring website
available at [•], and such notice shall be deemed good and sufficient notice for
the purposes of section 365 of the Bankruptcy Code and otherwise.

 

Notwithstanding the foregoing, the Debtors may, with the consent of the
Requisite Majority Consenting Noteholders, alter, amend, modify or supplement
the list of executory

 

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contracts or unexpired leases identified in the Assumed Contract Schedule and/or
the Rejected Contract Schedule at any time prior to the Effective Date by filing
a revised Assumed Contract Schedule and/or Rejected Contract Schedule with the
Bankruptcy Court.

 

Section 6.02.                         Cure Costs

 

The monetary amounts by which each of the executory contracts and unexpired
leases is in default and shall be satisfied, pursuant to section 365(b)(1) of
the Bankruptcy Code, shall be the Cure Costs identified on the Assumed Contract
Schedule; provided, however, if a counterparty to any of the executory contracts
or unexpired leases identified on the Assumed Contract Schedule files with the
Bankruptcy Court, and serves on the Debtors and their counsel, a written
objection to the proposed Cure Cost prior to the Cure Cost Objection Deadline
(as defined below), then the Cure Cost associated with such executory contract
or unexpired lease will be determined as set forth below.

 

Counterparties to the contracts on the Assumed Contract Schedule shall have
until the fourteenth (14th) day after the Effective Date (the “Cure Cost
Objection Deadline”) to file an objection with the Bankruptcy Court with respect
to the proposed Cure Costs or be forever barred from seeking any amounts
exceeding the proposed Cure Costs on the Assumed Contract Schedule from the
Debtors or the Reorganized Debtors and from filing any statutory lien against
the Reorganized Debtors or their properties for such amounts. Unless there is a
dispute as to Cure Costs, on the fourteenth (14th) day after the Effective Date,
the executory contracts and unexpired leases identified in the Assumed Contract
Schedule shall be assumed by the Debtors and vest in and be fully enforceable by
the Reorganized Debtors or an Affiliate of the Reorganized Debtors, as
designated by the Reorganized Debtors.

 

If an objection to a Cure Cost is timely filed with the Bankruptcy Court, then
the Debtors or the Reorganized Debtors shall in good faith attempt to resolve
the Cure Cost dispute. If the parties are unable to agree on a Cure Cost within
ten (10) days after the filing of an objection, then the Debtors or the
Reorganized Debtors, as applicable, may request that the Bankruptcy Court
establish the applicable Cure Cost.

 

The Debtors shall satisfy the Cure Costs of assumed executory contracts and
unexpired leases in Cash by the latest of (i) the Effective Date (or as soon
thereafter as is practicable), (ii) in the event of a dispute regarding the Cure
Cost, within thirty (30) days of the entry of an order of the Bankruptcy Court
establishing such Cure Cost, or (iii) on such other terms as the parties to such
executory contracts and unexpired leases and the Requisite Majority Consenting
Noteholders may otherwise agree.

 

Notwithstanding the foregoing, in the event of a dispute regarding: (1) the
ability of the Reorganized Debtors to provide “adequate assurance of future
performance” (within the meaning of section 365 of the Bankruptcy Code) under
the contract or lease to be assumed or (2) any other matter pertaining to
assumption (each, an “Assumption Dispute”), the Cure Costs required by section
365(b)(1) of the Bankruptcy Code shall be made following the entry of a Final
Order resolving the Assumption Dispute and approving the assumption; provided,
however, that in the event the Debtors or the Reorganized Debtors and the
applicable non-Debtor party involved in any Assumption Dispute or any dispute
regarding Cure Costs cannot otherwise consensually

 

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resolve such dispute, the Debtors or the Reorganized Debtors, as applicable, may
reject the executory contract at issue pursuant to section 365 of the Bankruptcy
Code rather than paying the disputed Cure Cost, by presenting a proposed order
to the Bankruptcy Court for such rejection, without any other or further notice.
In the event any executory contract is so rejected, the non-Debtor party thereto
shall be entitled to file a Proof of Claim in accordance with the Bar Date
Order, which Claim shall be classified pursuant to the Plan, but shall not be
entitled to any other or further Claim or relief from either the Debtors or the
Reorganized Debtors.

 

Section 6.03.                         Assumed Executory Contracts and Unexpired
Leases

 

Each executory contract and unexpired lease that is assumed will include (a) all
amendments, modifications, supplements, restatements, or other agreements made
directly or indirectly by any agreement, instrument, or other document that in
any manner affect such executory contract or unexpired lease; and (b) all
executory contracts or unexpired leases and other rights appurtenant to the
property, including all easements, licenses, permits, rights, privileges,
immunities, options, rights of first refusal, powers, uses, reciprocal easement
agreements, vaults, tunnel or bridge agreements or franchises, and any other
interests in real estate or rights in rem related to such premises, unless any
of the foregoing agreements have been rejected pursuant to an order of the
Bankruptcy Court or are the subject of a motion to reject filed on or before the
Confirmation Date.

 

Amendments, modifications, supplements, and restatements to prepetition
executory contracts and unexpired leases that have been executed by the Debtors
during these 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.

 

Section 6.04.                         [Insurance Policies

 

Notwithstanding anything in this Plan to the contrary, 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 and subject to the consent of the Requisite Majority
Consenting Noteholders, the Debtors shall assume all insurance policies and any
agreements, documents, and instruments related thereto, except to the extent
insurance policies and any agreements, documents, and instruments related
thereto have previously been rejected pursuant to section 365 of the Bankruptcy
Code. Unless otherwise determined by the Bankruptcy Court prior to the Effective
Date, or agreed to by the parties thereto prior to the Effective Date, no
payments shall be required to cure any defaults (if any) of the Debtors existing
as of the Effective Date with respect to each such insurance policy or
agreement, and to the extent that the Bankruptcy Court determines otherwise as
to any such insurance policy or agreement, the Debtors’ right to seek the
rejection of such insurance policy or agreement or other available relief within
thirty (30) days of such determination are fully reserved; provided, however,
that the rights of any party that issues an insurance policy or agreement to
object to such proposed rejection on any and all grounds are fully reserved.
Nothing in the Plan, the Plan Documents, the Plan Supplement or the Confirmation
Order, (a) alters, modifies or otherwise amends the terms and conditions of (or
the coverage provided by) any of the insurance policies or agreements,
(b) limits the Reorganized Debtors from asserting a right or claim to the
proceeds of any insurance policy or agreement that insures any Debtor, was

 

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issued to any Debtor or was assumed by the Reorganized Debtors by operation of
the Plan or (c) impairs, alters, waives, releases, modifies or amends any of the
Debtors’ or Reorganized Debtors’ legal, equitable or contractual rights,
remedies, claims, counterclaims, defenses or Causes of Action in connection with
any of such insurance policies or agreements.]

 

Section 6.05.                         [Officers’ and Directors’ Indemnification
Rights

 

On the Effective Date and subject to the consent of the Requisite Majority
Consenting Noteholders, the Debtors shall assume each indemnification obligation
to a director, officer, manager or employee who was employed by any of the
Debtors on the Effective Date in such capacity shall be deemed assumed effective
as of the Effective Date. Each indemnification obligation that is deemed assumed
pursuant to the Plan shall (i) remain in full force and effect, (ii) not be
modified, reduced, discharged, impaired or otherwise affected in any way,
(iii) be deemed and treated as an executory contract pursuant to sections 365
and 1123 of the Bankruptcy Code regardless of whether or not Proofs of Claim
have been filed with respect to such obligations and (iv) survive Unimpaired and
unaffected irrespective of whether such indemnification is owed for an act or
event occurring before or after the Petition Date.]

 

Section 6.06.                         Claims Based on Rejection of Executory
Contracts and Unexpired Leases

 

Unless otherwise provided by a Bankruptcy Court order, any Proofs of Claim
asserting Claims arising from the rejection of the Debtors’ executory contracts
and unexpired leases pursuant to this Plan or otherwise must be filed no later
than fourteen (14) days after the Confirmation Order is entered granting the
rejection. Any Proofs of Claim arising from the rejection of the Debtors’
executory contracts or unexpired leases that are not timely filed shall be
disallowed automatically, forever barred from assertion, and shall not be
enforceable against the Debtors or the Reorganized Debtors without the need for
any objection by any Person or further notice to or action, order, or approval
of the Bankruptcy Court, 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 Bankruptcy Schedules or a Proof
of Claim to the contrary. All Allowed Claims arising from the rejection of the
Debtors’ executory contracts and unexpired leases shall be classified as General
Unsecured Claims and shall be treated in accordance with the particular
provisions of this Plan for such Claims; provided, however, that if the Holder
of an Allowed Claim for rejection damages has an unavoidable security interest
in any Collateral to secure obligations under such rejected executory contract
or unexpired lease, the Allowed Claim for rejection damages shall be treated as
an Other Secured Claim to the extent of the value of such Holder’s interest in
the Collateral, with the deficiency, if any, treated as a General Unsecured
Claim.

 

Section 6.07.                         Reservation of Rights

 

Nothing contained in this Plan shall constitute an admission by the Debtors that
any particular contract is in fact an executory contract or unexpired lease or
that the Debtors have 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 the Reorganized Debtors, as applicable,
shall have thirty (30) days following entry of a Final Order resolving such
dispute to alter and to provide appropriate treatment of such contract or lease.

 

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Section 6.08.                         Assignment

 

Any Executory Contract or Unexpired Lease to be held by any of the Debtors or
the Reorganized Debtors and assumed hereunder or otherwise in these Chapter 11
Cases, if not expressly assigned to a third party previously in these Chapter 11
Cases, will be deemed assigned to the applicable Reorganized Debtor pursuant to
section 365 of the Bankruptcy Code. If an objection to a proposed assumption,
assumption and assignment, or Cure Claim is not resolved in favor of the Debtors
before the Effective Date, the applicable Executory Contract may be designated
by the Debtors (with the consent of the Requisite Majority Consenting Secured
Lenders) or the Reorganized Debtors for rejection within five (5) days of the
entry of the order of the Court resolving the matter against the Debtors. Such
rejection shall be deemed effective as of the Effective Date.

 

Section 6.09.                         Nonoccurence of the Effective Date

 

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

 

ARTICLE VII
PROVISIONS GOVERNING DISTRIBUTIONS

 

Section 7.01.                         Amount of Distributions

 

Notwithstanding anything to the contrary herein, no holder of an Allowed Claim
shall, on account of such Allowed Claim, receive a distribution in excess of the
Allowed amount of such Claim to the extent payable in accordance with this Plan.

 

Section 7.02.                         Method of Distributions

 

The Reorganized Debtors shall have the authority, in their sole discretion, to
enter into agreements with a third-party Distribution Agent to facilitate the
distributions required hereunder. To the extent the Reorganized Debtors do
determine to utilize a third-party Distribution Agent to facilitate the
distributions under the Plan to holders of Allowed Claims, any such Distribution
Agent would first be required to: (a) affirm its obligation to facilitate the
prompt distribution of any documents; (b) affirm its obligation to facilitate
the prompt distribution of any recoveries or distributions required under the
Plan; (c) waive any right or ability to setoff, deduct from or assert any lien
or encumbrance against the distributions required under the Plan to be
distributed by such Distribution Agent; and (d) post a bond, obtain or surety or
provide some other form of security for the performance of its duties, the costs
and expenses of procuring which shall be borne by the Reorganized Debtors. In no
case shall the Reorganized Debtors, acting as the Distribution Agent, be
required to post a bond or other form of security for the performance of their
duties.

 

The Debtors or the Reorganized Debtors, as applicable, shall be authorized, but
not directed, to pay to any third-party Distribution Agent all reasonable and
documented fees and expenses of such Distribution Agent without the need for any
approvals, authorizations, actions,

 

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or consents. The Distribution Agent shall be authorized, but not directed, to
submit detailed invoices to the Debtors or the Reorganized Debtors, as
applicable, for all fees and expenses for which the Distribution Agent seeks
reimbursement and the Debtors or the Reorganized Debtors, as applicable, shall
pay those amounts that they, in their sole discretion, deem reasonable, and
shall object in writing to those fees and expenses, if any, that the Debtors or
the Reorganized Debtors, as applicable, deem to be unreasonable. In the event
that the Debtors or the Reorganized Debtors, as applicable, object to all or any
portion of the amounts requested to be reimbursed in a Distribution Agent’s
invoice, the Debtors or the Reorganized Debtors, as applicable, and such
Distribution Agent shall endeavor, in good faith, to reach mutual agreement on
the amount of the appropriate payment of such Disputed fees and/or expenses. In
the event that the Debtors or the Reorganized Debtors, as applicable, and a
Distribution Agent are unable to resolve any differences regarding Disputed fees
or expenses, either party shall be authorized to move to have such dispute heard
by the Bankruptcy Court.

 

Section 7.03.                         Delivery of Distributions

 

Distributions to holders of Allowed Claims shall be made at the address of the
holder of such Claim as indicated in the Claims Register as of the Distribution
Record Date. A Distribution Agent shall have no obligation to recognize the
transfer of or sale of any Claim that occurs after the close of business on the
Distribution Record Date, and will be entitled for all purposes herein to
recognize and distribute only to those holders of Allowed Claims who are holders
as of the close of business on the Distribution Record Date.

 

Section 7.04.                         No Fractional or De Minimis Distributions

 

Notwithstanding anything contained herein to the contrary, payments of
fractional dollars will not be made. Whenever any payment of a fraction of a
dollar under the Plan would otherwise be called for, the actual payment made
will reflect a rounding down of such fractions. A Debtor or a Reorganized
Debtor, as applicable, or a Distribution Agent shall not be required to make any
payment of less than $20.00 on any distribution.

 

Section 7.05.                         Undeliverable Distributions

 

(a)                                 Holding of Undeliverable Distributions

 

If any distribution to a holder of an Allowed Claim is returned to a Debtor or a
Reorganized Debtor, as applicable, or a Distribution Agent as undeliverable, no
further distributions shall be made to such holder unless and until such Debtor
or Reorganized Debtor, as applicable, or Distribution Agent is notified in
writing of such holder’s then-current address or other necessary information for
delivery, at which time all currently due missed distributions shall be made to
such holder as soon as practicable. Undeliverable Distributions shall remain in
the possession of a Debtor or a Reorganized Debtor, as applicable, or a
Distribution Agent until such time as a distribution becomes deliverable, and
shall not be supplemented with any interest, dividends or other accruals of any
kind.

 

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(b)                                 Failure to Claim Undeliverable Distributions

 

Any holder of an Allowed Claim that does not assert a Claim pursuant to this
Plan for an Undeliverable Distribution within one hundred eighty (180) days
after the distribution is distributed shall be deemed to have waived its Claim
for such Undeliverable Distribution and shall be forever barred from asserting
any such Claim against the Reorganized Debtors or their property. In such cases,
notwithstanding any applicable federal or state escheat, abandoned or unclaimed
property laws to the contrary, any Cash held for distribution on account of such
Undeliverable Distribution shall be property of the relevant Reorganized Debtor,
free of any restrictions thereon. Nothing contained in this Plan shall require
the Debtors, the Reorganized Debtors, or a Distribution Agent to attempt to
locate any holder of an Allowed Claim.

 

Section 7.06.                         Tax Withholding From Distributions

 

A Debtor or a Reorganized Debtor, as applicable, or a Distribution Agent shall
withhold all amounts required by law to be withheld from payments made under
this Plan. Any amounts so withheld from any payment made under the Plan shall be
deemed paid to the holder of the Allowed Claim subject to withholding.
Notwithstanding the above, each holder of an Allowed Claim that is to receive a
distribution under this Plan shall have the sole and exclusive responsibility
for the satisfaction and payment of any taxes imposed on such holder by any
Governmental Unit on account of such distribution, except for taxes withheld
from payments made under the Plan. A Debtor or a Reorganized Debtor, as
applicable, or a Distribution Agent has the right, but not the obligation, not
to make a distribution until such holder has made arrangements satisfactory to a
Debtor or a Reorganized Debtor, as applicable, or a Distribution Agent for
payment of any withholding tax obligations. If a Debtor or a Reorganized Debtor,
as applicable, or a Distribution Agent fails to withhold with respect to any
such holder’s distribution, and is later held liable for the amount of such
withholding, the holder shall reimburse the relevant Debtor, Reorganized Debtor
or any Distribution Agent, as applicable. Notwithstanding any provision in this
Plan to the contrary, the Debtors, Reorganized Debtors or any Distribution Agent
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 this 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 it believes are reasonable and appropriate. The Debtors,
Reorganized Debtors or any Distribution Agent may require, as a condition to the
receipt of a distribution, that the holder complete the appropriate Form W-8 or
Form W-9, as applicable to each holder. If the holder fails to comply with such
a request within six (6) months, such distribution shall be deemed an
Undeliverable Distribution. Finally, a Debtor or a Reorganized Debtor, as
applicable, or a Distribution Agent reserves the right to allocate all
distributions made under this Plan in compliance with all applicable wage
garnishments, alimony, child support, and other spousal awards, Liens, and
encumbrances.

 

Section 7.07.                         Allocations

 

Unless otherwise provided in this Plan, distributions in respect of Allowed
Claims shall be allocated first to the principal amount (as determined for U.S.
federal income tax purposes) of

 

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such Allowed Claims, and then, to the extent the consideration exceeds the
principal amount of such Allowed Claims, to any portion of such Allowed Claims
for accrued but unpaid interest.

 

Section 7.08.                         Time Bar to Cash Payments

 

Checks issued on account of Allowed Claims shall be null and void if not
negotiated within ninety (90) days after the date of issuance therein. Requests
for reissuance of any check shall be made in writing directly to the appropriate
Debtor or Reorganized Debtor, or any Distribution Agent by the holder of the
Allowed Claim with respect to which such check originally was issued. Any Claim
in respect of such a voided check shall be made in writing on or before the
later of one hundred eighty (180) days after the Effective Date or ninety (90)
days after the date of issuance of such check. After such date, all Claims in
respect of void checks shall be discharged and forever barred and the
distribution on account of such Claims shall be treated in accordance with
Section 7.05 of this Plan.

 

Section 7.09.                         Means of Cash Payments

 

Any Cash payment to be made pursuant to this Plan will be made in U.S. dollars
by checks drawn on or by wire transfer from a domestic bank selected by a Debtor
or a Reorganized Debtor, as applicable, or a Distribution Agent. No
post-Effective Date interest shall be paid on Cash distributions hereunder.

 

Section 7.10.                         Foreign Currency Exchange Rates

 

As of the Effective Date, any Claim asserted in currency(ies) other than U.S.
dollars shall be automatically deemed converted to the equivalent U.S. dollar
value using the mid-range spot rate of exchange for the applicable currency as
published in The Wall Street Journal, National Edition, the day after the
Petition Date.

 

Section 7.11.                         Setoffs

 

Except as otherwise provided herein (including Section 10.02 of this Plan), a
Final Order of the Bankruptcy Court, or as agreed to by the holder of a Claim
and the Debtors or Reorganized Debtors, as applicable, each Debtor or a
Reorganized Debtor, as applicable, or a Distribution Agent may, pursuant to
section 553 of the Bankruptcy Code and applicable non-bankruptcy law, set off
against any Allowed Claim and the distributions to be made pursuant to this Plan
on account of such Claim (before any distribution is made on account of such
Claim), the claims, rights and Causes of Action of any nature that the Debtors
or the Reorganized Debtors, as applicable, may hold against the holder of such
Allowed Claim; provided, however, that neither the failure to effect such a
setoff nor the allowance of any Claim hereunder shall constitute a waiver or
release of any such claims, rights and Causes of Action that the Debtors or the
Reorganized Debtors may possess against such holder.

 

Section 7.12.                         Claims Paid or Payable by Third Parties

 

A Claim shall be reduced in full and such Claim shall be disallowed without a
Claims 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

 

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account of such Claim from a party that is not a Debtor, Reorganized Debtor or a
Distribution Agent. 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, a
Reorganized Debtor or a Distribution Agent, such holder shall repay, return or
deliver any distribution held by or transferred to the holder to the applicable
Debtor or Reorganized Debtor, as applicable, to the extent the holder’s total
recovery on account of such Claim from the third party and under this Plan
exceeds the total amount of such Claim.

 

ARTICLE VIII
PROCEDURES FOR RESOLVING DISPUTED CLAIMS

 

Section 8.01.                         Prosecution of Objections to Claims

 

After the Effective Date, the Reorganized Debtors shall have and shall retain
any and all rights and defenses they may have with respect to any Claim, and
shall have the exclusive authority to file objections and to settle, compromise,
withdraw or litigate to judgment objections to Claims (except those Allowed by,
or released by, this Plan, or by the Final DIP Order, the Confirmation Order or
other Final Order). The Reorganized Debtors shall file objections to any
Disputed Claims in accordance with the Bankruptcy Rules on or before the Claims
Objection Deadline, as the same may be extended pursuant to the terms of this
Plan or order of the Bankruptcy Court.

 

Section 8.02.                         Estimation of Claims

 

The Debtors or the Reorganized Debtors, as applicable, may at any time request
that the Bankruptcy Court estimate any contingent or unliquidated Claim,
pursuant to section 502(c) of the Bankruptcy Code, regardless of whether the
Debtors or the Reorganized Debtors, as applicable, previously objected to such
Claim or whether the Bankruptcy Court has ruled on any such objection, and the
Bankruptcy Court will retain jurisdiction to estimate any Claim at any time,
including during litigation concerning any objection to any Claim, and during
the pendency of any appeal relating to any such objection. If the Bankruptcy
Court estimates any contingent or unliquidated Claim, that estimated amount will
constitute either the Allowed amount of such Claim or a maximum limitation on
such Claim, as determined by the Bankruptcy Court. If the estimated amount
constitutes a maximum limitation on such Claim, the applicable Debtor or
Reorganized Debtor may elect to pursue any supplemental proceedings to object to
the allowance and any ultimate payment on such Claim. Claims may be estimated
and subsequently compromised, settled, withdrawn or resolved by any mechanism
approved by the Bankruptcy Court.

 

Section 8.03.                         No Distributions on Disputed Claims

 

Notwithstanding any provision in this Plan to the contrary, no distributions,
partial or otherwise, shall be made with respect to a Disputed Claim until all
disputes with respect to such Claim are resolved by Final Order. Subject to the
provisions of this Plan, after a Disputed Claim becomes an Allowed Claim, the
holder of such an Allowed Claim will receive all distributions to which such
holder is then entitled under this Plan. No post-Effective Date interest shall
be paid on distributions hereunder. If a Creditor incorporates more than one
Claim in a Proof of Claim

 

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then: (a) such Claims will be considered one Claim for purposes of this Plan,
and (b) no such Claim will be bifurcated into an Allowed portion and a Disputed
portion.

 

ARTICLE IX
CONDITIONS PRECEDENT TO CONFIRMATION AND CONSUMMATION OF THIS PLAN

 

Section 9.01.                         Conditions Precedent to Confirmation

 

It shall be a condition to Confirmation of the Plan that the Disclosure
Statement Order shall have been entered by the Bankruptcy Court on the docket of
the Chapter 11 Cases, in form and substance acceptable to the Debtors, the DIP
Lenders, the Restructuring Support Parties, and such order shall not be subject
to a stay.

 

Section 9.02.                         Conditions Precedent to the Effective Date

 

It shall be a condition to occurrence of the Effective Date of the Plan that the
following conditions shall have been satisfied or waived pursuant to
Section 9.03 of this Plan:

 

(i)

 

all conditions precedent to Confirmation have been satisfied;

 

 

 

(ii)

 

the RSA shall have been approved pursuant to a Final Order of the Bankruptcy
Court and shall not have been terminated in accordance with its terms;

 

 

 

(iii)

 

the Confirmation Order shall have been entered by the Bankruptcy Court on the
docket of the Chapter 11 Cases, in form and substance acceptable to the Debtors,
the DIP Lenders, the Restructuring Support Parties, and such order shall not be
subject to a stay;

 

 

 

(iv)

 

all other actions and documents necessary to implement the provisions of this
Plan to be effectuated on or before the Effective Date (including but not
limited to the Plan Supplement) shall be satisfactory to the Debtors, the DIP
Lenders, the Restructuring Support Parties;

 

 

 

(v)

 

[the Debtors shall have closed the Exit Facility]; and

 

 

 

(vi)

 

the Debtors shall have received all authorizations, consents, approvals,
regulatory approvals, rulings, letters, opinions or documents, if any, necessary
to implement this Plan.

 

Section 9.03.                         Effect of Non-Occurrence of Conditions to
Confirmation or Conditions Precedent to the Effective Date

 

If the conditions in Section 9.01 and Section 9.02 of this Plan are not
satisfied, or if the Confirmation Order is vacated, the Plan shall be null and
void in all respects and nothing contained in the Plan or the Disclosure
Statement shall: (a) constitute a waiver or release of any Claims by or against,
or any Equity Interests in, the Debtors; (b) prejudice in any manner the

 

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rights of the Debtors, or any other Person or Entity; or (c) constitute an
admission, acknowledgment, offer or undertaking by the Debtors or any other
Person or Entity in any respects.

 

Section 9.04.                         Waiver of Conditions Precedent

 

The Debtors may waive any of the conditions precedent set forth in Section 9.01
and Section 9.02 of this Plan in whole or in part at any time with the written
consent of the DIP Lenders and the Restructuring Support Parties.

 

ARTICLE X
EFFECT OF CONFIRMATION OF THIS PLAN

 

Section 10.01.                  Discharge of Claims Against and Equity Interests
in the Debtors

 

Except as otherwise provided for herein or in the Confirmation Order and
effective as of the Effective Date: (a) the rights afforded in this Plan and the
treatment of all Claims against and Equity Interests in the Debtors shall be in
exchange for and in complete satisfaction, discharge, and release of all Claims
against and Equity Interests in, their property and Estates of any nature
whatsoever, including any interest accrued on such Claims from and after the
Petition Date; (b) this Plan shall bind all holders of Claims against and Equity
Interests in the Debtors, notwithstanding whether any such holders failed to
vote to accept or reject this Plan or voted to reject this Plan; (c) the Debtors
shall be deemed discharged and released under and to the fullest extent provided
under the Bankruptcy Code from any and all Claims against and Equity Interests
in the Debtors, of any kind or nature whatsoever, and all Claims against and
Equity Interests in the Debtors, their property and Estates shall be deemed
satisfied, discharged, and released in full, and the Debtors’ liability with
respect thereto shall be extinguished completely, including any liability of the
kind specified under section 502(g) of the Bankruptcy Code; and (d) all Entities
shall be precluded from asserting against the Debtors or the Reorganized
Debtors, as applicable, their Estates, their successors and assigns and their
assets and properties any and all Claims, Equity Interests, damages, debts, and
other liabilities based upon any documents, instruments, or any act or omission,
transaction or other activity of any kind or nature that occurred prior to the
Effective Date.

 

Section 10.02.                  Certain Releases by the Debtors

 

Notwithstanding anything contained herein to the contrary, on the Confirmation
Date and effective as of the Effective Date, and to the fullest extent
authorized by applicable law, for good and valuable consideration, the adequacy
of which is hereby confirmed, the Released Parties are deemed conclusively,
absolutely, unconditionally, irrevocably, and forever released and discharged by
the Debtors, the Reorganized Debtors, their Estates and any Person or Entity
seeking to exercise the rights of the Debtors, the Reorganized Debtors or their
Estates from any and all claims, obligations, suits, judgments, damages,
demands, debts, remedies, Causes of Action, rights of setoff, other rights, and
liabilities whatsoever, whether for tort, contract, violations of federal or
state securities laws, Avoidance Actions, including any derivative claims,
asserted or that could possibly

 

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have been asserted directly or indirectly on behalf of the Debtors, the
Reorganized Debtors, their Estates or their Affiliates, whether liquidated or
unliquidated, fixed or contingent, matured or unmatured, known or unknown,
foreseen or unforeseen, existing or hereafter arising, in law, equity, or
otherwise, and any and all Causes of Action asserted or that could possibly have
been asserted on behalf of the Debtors, the Reorganized Debtors, the Estates or
their Affiliates (whether individually or collectively) or on behalf of the
holder of any Claim or Equity Interest or other Entity, based on or in any way
relating to, or in any manner arising from, in whole or in part, the Debtors,
the Reorganized Debtors, their Estates or their Affiliates, the conduct of the
Debtors’ businesses, the negotiation and issuance of the First Lien Notes and
the Second Lien Notes and any act or omission, transaction, agreement, event or
other occurrence taking place in connection therewith, [the in-court or
out-of-court efforts to implement the Exit Facility], the formulation,
preparation, solicitation, dissemination, negotiation, or filing of the
Disclosure Statement or Plan or any contract, instrument, release, or other
agreement or document created or entered into in connection with or pursuant to
the Disclosure Statement, or the Plan, the filing and prosecution of the Chapter
11 Cases, the pursuit of Confirmation, the pursuit of Consummation, the
purchase, sale, or rescission of the purchase or sale of any Security of the
Debtors, the subject matter of, or the transactions or events giving rise to,
any Claim or Equity Interest that is treated in the Plan, the business or
contractual arrangements between the Debtors, their Estates or their Affiliates,
on the one hand, and any Released Party, on the other hand, prepetition
contracts and agreements with one or both Debtors, or any other act or omission,
transaction, agreement, event, or other occurrence taking place before the
Effective Date; provided that to the extent that a claim or Cause of Action
(other than with respect to the negotiation and issuance of the First Lien Notes
and the Second Lien Notes and any act or omission, transaction, agreement, event
or other occurrence taking place in connection therewith) is determined by a
Final Order to have resulted from fraud, gross negligence or willful misconduct
of a Released Party, such claim or Cause of Action shall not be so released
against such Released Party; provided further, that the foregoing “Release by
the Debtors” shall be deemed to include any and all pre-Effective Date claims
and Causes of Action which may be asserted against any Released Party and their
respective predecessors, successors and assigns, and current and former
shareholders, affiliates, subsidiaries, principals, employees, agents, officers,
directors, managers, trustees, partners, members, professionals,
representatives, advisors, attorneys, financial advisors, accountants,
investment bankers, and consultants, in each case in their capacity as such, at
any time including (without limitation) arising from, related to, or in
connection with any prepetition debt purchases or exchanges by Prepetition
Secured Parties. Notwithstanding anything to the contrary in the foregoing, the
release set forth above does not release any obligations arising on or after the
Effective Date of any party under the Plan, or any document, instrument, or
agreement (including those set forth in the Plan Supplement) executed to
implement the Plan.

 

Entry of the Confirmation Order shall constitute the Bankruptcy Court’s
approval, pursuant to Bankruptcy Rule 9019, of the release set forth in this
Section 10.02, which includes by reference each of the related provisions and
definitions contained herein, and further, shall constitute the Bankruptcy
Court’s finding that such 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 this Section 10.02; (c) in the

 

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best interests of the Debtors, their Estates and all holders of Claims and
Equity Interests; (d) fair, equitable, and reasonable; (e) given and made after
due notice and opportunity for hearing; and (f) a bar to any Entity asserting
any claim or Cause of Action released by this Section 10.02.

 

Section 10.03.                  Certain Voluntary Releases by Holders of Claims
and Equity Interests

 

Notwithstanding anything contained herein to the contrary, on the Confirmation
Date and effective as of the Effective Date, and to the fullest extent
authorized by applicable law, the Releasing Parties shall be deemed to have
conclusively, absolutely, unconditionally, irrevocably, and forever, released
and discharged the Released Parties from any and all claims, obligations, suits,
judgments, damages, demands, debts, remedies, Causes of Action, rights of
setoff, other rights, and liabilities whatsoever, whether for tort, contract,
violations of federal or state securities laws, Avoidance Actions, including any
derivative claims, asserted or that could possibly have been asserted directly
or indirectly on behalf of the Releasing Parties or their Affiliates, whether
liquidated or unliquidated, fixed or contingent, matured or unmatured, known or
unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity,
or otherwise, and any and all Causes of Action asserted or that could possibly
have been asserted on behalf of the Releasing Parties or their Affiliates
(whether individually or collectively) or on behalf of the holder of any Claim
or Equity Interest or other Entity, based on or in any way relating to, or in
any manner arising from, in whole or in part, the Debtors, their Estates or
their Affiliates, the conduct of the Debtors’ businesses, the negotiation and
issuance of the First Lien Notes and the Second Lien Notes and any act or
omission, transaction, agreement, event or other occurrence taking place in
connection therewith, [the in-court or out-of-court efforts to implement the
Exit Facility], the formulation, preparation, solicitation, dissemination,
negotiation, or filing of the Disclosure Statement or Plan or any contract,
instrument, release, or other agreement or document created or entered into in
connection with or pursuant to the Disclosure Statement, or the Plan; the filing
and prosecution of the Chapter 11 Cases, the pursuit of Confirmation, the
pursuit of Consummation, the purchase, sale, or rescission of the purchase or
sale of any Security of the Debtors, the subject matter of, or the transactions
or events giving rise to, any Claim or Equity Interest that is treated in the
Plan, the business or contractual arrangements between the Debtors, their
Estates or their Affiliates, on the one hand, and any Released Party, on the
other hand, prepetition contracts and agreements with one or both Debtors, or
any other act or omission, transaction, agreement, event, or other occurrence
taking place before the Effective Date; provided that to the extent that a claim
or Cause of Action (other than with respect to the negotiation and issuance of
the First Lien Notes and the Second Lien Notes and any act or omission,
transaction, agreement, event or other occurrence taking place in connection
therewith) is determined by a Final Order to have resulted from fraud, gross
negligence or willful misconduct of a Released Party, such claim or Cause of
Action shall not be so released against such Released Party; provided further,
that the foregoing “Release by Holders of Claims and Equity Interests” shall be
deemed to include any and all pre-Effective Date claims and Causes of Action
which may be asserted against any Released Party and their respective
predecessors, successors and assigns, and current and former shareholders,
affiliates, subsidiaries, principals, employees, agents, officers, directors,
managers, trustees, partners, members, professionals, representatives, advisors,

 

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attorneys, financial advisors, accountants, investment bankers, and consultants,
in each case in their capacity as such, at any time, including (without
limitation) arising from, related to, or in connection with any prepetition debt
purchases or exchanges by Prepetition Secured Parties. Notwithstanding anything
to the contrary in the foregoing, the release set forth above does not release
any obligations arising on or after the Effective Date of any party under the
Plan, or any document, instrument, or agreement (including those set forth in
the Plan Supplement) executed to implement the Plan.

 

Entry of the Confirmation Order shall constitute the Bankruptcy Court’s
approval, pursuant to Bankruptcy Rule 9019, of the release set forth in this
Section 10.03, which includes by reference each of the related provisions and
definitions contained herein, and further, shall constitute the Bankruptcy
Court’s finding that such 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 this Section 10.03; (c) in the best
interests of the Debtors, their Estates and all holders of Claims and Equity
Interests; (d) fair, equitable, and reasonable; (e) given and made after due
notice and opportunity for hearing; and (f) a bar to any Entity granting a
release under this Section 10.03 from asserting any claim or Cause of Action
released by this Section 10.03.

 

Section 10.04.                  Exculpation

 

Effective as of the Effective Date and to the fullest extent authorized by
applicable law, no Exculpated Party shall have or incur, and each Exculpated
Party is hereby released and exculpated from, any Exculpated Claim or any
obligation, Cause of Action, or liability for any Exculpated Claim; provided
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; provided, further, that
the foregoing “Exculpation” shall have no effect on the liability of any
Exculpated Party to the extent determined in a Final Order to have resulted from
actual fraud, gross negligence or willful misconduct of such Exculpated Party;
provided, further, that the foregoing “Exculpation” shall be deemed to include
any and all claims and Causes of Action arising before the Effective Date which
may be asserted against any Exculpated Party or their respective predecessors,
successors and assigns, and current and former shareholders, affiliates,
subsidiaries, principals, employees, agents, officers, directors, managers,
trustees, partners, members, professionals, representatives, advisors,
attorneys, financial advisors, accountants, investment bankers, and consultants,
in each case in their capacity as such, at any time, including (without
limitation) arising from, related to, or in connection with any prepetition debt
purchases or exchanges by the Prepetition Secured Parties. 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 with regard to the solicitation of acceptances and rejections of the Plan
and the making of distributions pursuant to the Plan and, therefore, are not and
shall not be liable at any time for the violation 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.

 

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Section 10.05.                  Injunction

 

Except as otherwise provided herein or in the Confirmation Order, from and after
the Effective Date and to the fullest extent authorized by applicable law, all
Entities are, to the fullest extent provided under section 524 and other
applicable provisions of the Bankruptcy Code, permanently enjoined and forever
barred from taking any of the following actions against, as applicable, the
Released Parties, the Debtors, the Reorganized Debtors, and/or the Exculpated
Parties and their respective properties and Assets: (a) commencing or continuing
in any manner any action or other proceeding of any kind on account of or in
connection with or with respect to any Claims or Equity Interests;
(b) enforcing, attaching, collecting, or recovering by any manner or means any
judgment, award, decree, or order on account of or in connection with or with
respect to any such Claims or Equity Interests; (c) creating, perfecting, or
enforcing any encumbrance of any kind on account of or in connection with or
with respect to any such Claims or Equity Interests; (d) asserting any right of
setoff, subrogation, or recoupment of any kind on account of or in connection
with or with respect to any such Claims or Equity Interests unless such holder
has filed a motion requesting the right to perform such setoff on or before the
Confirmation Date; and (e) commencing or continuing in any manner any action or
other proceeding of any kind on account of or in connection with or with respect
to any such Claims or Equity Interests released, exculpated or settled pursuant
to the Plan.

 

Section 10.06.                  Protection Against Discriminatory Treatment

 

In accordance with section 525 of the Bankruptcy Code, and consistent with
paragraph 2 of Article VI of the United States Constitution, no Governmental
Unit shall discriminate against any Debtor or Reorganized Debtor, as applicable,
or any Entity with which a Debtor or Reorganized Debtor has been or is
associated, solely because such Debtor or Reorganized Debtor was a debtor under
chapter 11, may have been insolvent before the commencement of the Chapter 11
Cases (or during the Chapter 11 Cases but before such Debtor or Reorganized
Debtor was granted a discharge) or has not paid a debt that is dischargeable in
the Chapter 11 Cases.

 

Section 10.07.                  Release of Liens

 

Except as otherwise provided herein, in the Confirmation Order, or in any
contract, instrument, release or other agreement or document created pursuant to
or as contemplated under this Plan, on the Effective Date all mortgages, deeds
of trust, Liens, pledges or other security interests against any property of the
Debtors’ Estates shall be fully released, settled and discharged, and all of the
rights, title and interest of any holder of such mortgages, deeds of trust,
Liens, pledges or other security interests shall revert to the Debtors or the
Reorganized Debtors, as applicable.

 

Section 10.08.                  Cancellation of Securities and Notes Against the
Debtors

 

So long as the treatments provided for herein, and the distributions
contemplated thereby, are effectuated or made, on the Effective Date, but
subject to this Section 10.08 and the introductory paragraph to ARTICLE III,
each of (a) the DIP Loan Documents; (b) the First Lien Senior Notes; (c) the
Second Lien Senior Notes; (d) the 8.875% Senior Notes; (e) the PIK

 

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Toggle Notes; (f) the Equity Interests in the Debtors; and (g)  any other notes,
bonds, indentures, certificates or other instruments or documents evidencing or
creating any Claims or Equity Interests that are Impaired by this Plan, shall be
cancelled and deemed terminated and satisfied and discharged solely with respect
to the Debtors, and the holders thereof shall have no further rights or
entitlements in respect thereof against the Debtors or the Reorganized Debtors,
except the rights to receive the distributions, if any, to which the holders
thereof are entitled under this Plan.

 

ARTICLE XI
MODIFICATION, REVOCATION OR WITHDRAWAL OF THIS PLAN

 

Section 11.01.                  Modification of the Plan

 

The Debtors reserve the right, in accordance with the Bankruptcy Code and the
Bankruptcy Rules and with the consent of the DIP Lenders and the Restructuring
Support Parties, to amend or modify this Plan before the entry of the
Confirmation Order. After entry of the Confirmation Order, the Debtor(s) may,
with the consent of the DIP Lenders and the Restructuring Support Parties amend
or modify the Plan in accordance with section 1127(b) of the Bankruptcy Code,
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.

 

Entry of a Confirmation Order shall mean that all modifications or amendments to
this 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.

 

Section 11.02.                  Revocation or Withdrawal of the Plan

 

The Debtors reserve the right, with the consent of the DIP Lenders and the
Restructuring Support Parties, to revoke or withdraw this Plan before the
Confirmation Date and to file subsequent chapter 11 plans. If the Debtors revoke
or withdraw the Plan, or if Confirmation or Consummation does not occur with
respect to the Plan, then: (a) the Plan will be null and void in all respects;
(b) any settlement or compromise embodied in the Plan, assumption or rejection
of Executory Contracts or Unexpired Leases effected by the Plan, and any
document or agreement executed pursuant hereto shall be null and void in all
respects; and (c) nothing contained in the Plan or the Disclosure Statement
shall: (i) constitute a waiver or release of any Claims by or against, or any
Equity Interests in, the Debtors; (ii) prejudice in any manner the rights of the
Debtors or any other Entity; or (iii) constitute an admission, acknowledgment,
offer or undertaking by the Debtors or any other Entity in any respects.

 

ARTICLE XII
RETENTION OF JURISDICTION

 

Notwithstanding the entry of the Confirmation Order and the occurrence of the
Effective Date for the Plan, the Bankruptcy Court shall retain such jurisdiction
over the Chapter 11 Cases after the Effective Date as legally permissible,
including jurisdiction to:

 

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(i)

 

allow, disallow, determine, liquidate, classify, estimate or establish the
priority or secured or unsecured status of any Claim, including the resolution
of any request for payment of any Administrative Claim and the resolution of any
and all objections to the allowance or priority of Claims;

 

 

 

(ii)

 

grant or deny any applications for allowance of compensation or reimbursement of
expenses authorized pursuant to the Bankruptcy Code or this Plan, for periods
ending on or before the Effective Date;

 

 

 

(iii)

 

resolve any matters related to the assumption, assumption and assignment or
rejection of any Executory Contract or Unexpired Lease (including Cure Costs);

 

 

 

(iv)

 

ensure that distributions to holders of Allowed Claims are accomplished pursuant
to the provisions of this Plan;

 

 

 

(v)

 

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

 

 

 

(vi)

 

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

 

 

 

(vii)

 

enter and enforce any order related to or otherwise in connection with any sale
of property by the Debtors pursuant to sections 363 or 1123 of the Bankruptcy
Code;

 

 

 

(viii)

 

decide or resolve any Causes of Action arising under the Bankruptcy Code,
including, without limitation, Avoidance Actions and Claims under sections 362,
510, 542 and 543 of the Bankruptcy Code;

 

 

 

(ix)

 

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

 

 

 

(x)

 

issue injunctions, enter and implement other orders or take such other actions
as may be necessary or appropriate to restrain interference by any Person or
Entity with Consummation or enforcement of this Plan, except as otherwise
provided herein;

 

 

 

(xi)

 

resolve any cases, controversies, suits or disputes with respect to the
releases, injunction and other provisions contained in ARTICLE X of this Plan
and enter such orders as may be necessary or appropriate to implement such
releases, injunction and other provisions;

 

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(xii)

 

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

 

 

 

(xiii)

 

determine any other matters that may arise in connection with or relate to this
Plan, the Disclosure Statement, the Confirmation Order, [the Exit Facility] or
any contract, instrument, release, indenture or other agreement or document
created in connection with this Plan or the Disclosure Statement;

 

 

 

(xiv)

 

enter order(s) and/or Final Decree(s) concluding the Chapter 11 Cases;

 

 

 

(xv)

 

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

 

 

 

(xvi)

 

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

 

 

 

(xvii)

 

hear any other matter not inconsistent with the Bankruptcy Code.

 

ARTICLE XIII
MISCELLANEOUS PROVISIONS

 

Section 13.01.                  General Settlement of Claims

 

Unless otherwise set forth in this Plan, 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 this
Plan, on the Effective Date, the provisions of this Plan constitute a good-faith
compromise and settlement of all Claims against and Equity Interests in the
Debtors.

 

Section 13.02.                  Preservation of Causes of Action Not Expressly
Released

 

The Debtors or the Reorganized Debtors, as applicable, retain all rights to
commence and pursue, as appropriate, any and all claims or Causes of Action of
the Debtors or the Reorganized Debtors, as applicable, whether arising before or
after the Petition Date, in any court or other tribunal including, without
limitation, in an adversary proceeding filed in one or more of the Chapter 11
Cases, other than Avoidance Actions or any Causes of Action released under this
Plan. The failure to list any potential or existing claims or Causes of Action
is not intended to limit the rights of the Debtors or the Reorganized Debtors,
as applicable, to pursue any claims or Causes of Action not listed or
identified.

 

Unless a claim or Cause of Action against a Creditor or other Person or Entity
is expressly waived, relinquished, released, compromised or settled in this Plan
or any Final Order, the Debtors or the Reorganized Debtors, as applicable,
expressly reserve such claim or Cause of Action for later adjudication for and
on behalf of the Debtors or the Reorganized Debtors, as

 

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applicable (including, without limitation, claims and Causes of Action not
specifically identified or which Debtors may presently be unaware or which may
arise or exist by reason of additional facts or circumstances unknown to the
Debtors at this time or facts or circumstances which may change or be different
from those which the Debtors now believe to exist). No preclusion doctrine,
including, without limitation, the doctrines of res judicata, collateral
estoppel, issue preclusion, claim preclusion, waiver, estoppel (judicial,
equitable or otherwise) or laches shall apply to such claims or Causes of Action
upon or after the Confirmation or Consummation of this Plan based on the
Disclosure Statement, this Plan or the Confirmation Order, except where such
claims or Causes of Action have been released in this Plan or other Final Order.
In addition, the Debtors or the Reorganized Debtors, as applicable, and their
successor entities under this Plan expressly reserve the right to pursue or
adopt any claims alleged in any lawsuit in which the Debtors or the Reorganized
Debtors, as applicable, are a defendant or an interested party, against any
Person or Entity, including, without limitation, the plaintiffs or co-defendants
in such lawsuits.

 

Except as otherwise provided in this Plan or in any contract, instrument,
release, indenture or other agreement entered into in connection with this Plan,
in accordance with section 1123(b)(3) of the Bankruptcy Code, any claims,
rights, and Causes of Action that the Debtors or the Reorganized Debtors, as
applicable, may hold against any Person, shall vest as of the Effective Date in
the Reorganized Debtors, and the Reorganized Debtors, through their authorized
agents or representatives, shall retain and may exclusively enforce any and all
such claims, rights or Causes of Action without the consent or approval of any
third party and without any further order of court.

 

Delivery (by any means) of this Plan or Disclosure Statement to any Person to
whom the Debtors or the Reorganized Debtors, as applicable, have incurred an
obligation (whether on account of services, purchase or sale of goods or
otherwise), or who has received services from the Debtors or the Reorganized
Debtors, as applicable, or a transfer of money or property of the Debtors or the
Reorganized Debtors, as applicable, or who has transacted business with the
Debtors or the Reorganized Debtors, as applicable, or leased equipment or
property from the Debtors or the Reorganized Debtors, as applicable, shall
constitute actual notice that such obligation, transfer, or transaction may be
reviewed by the Debtors or the Reorganized Debtors, as applicable subsequent to
the Effective Date and may, if appropriate, be the subject of an action after
the Effective Date, whether or not: (a) such Person has filed a Proof of Claim
in these Chapter 11 Cases; (b) such Person’s Proof of Claim has been objected to
by the Debtors or the Reorganized Debtors, as applicable; (c) such Person’s
Claim was included in Debtors’ Schedules; (d) such Person’s scheduled Claim has
been objected to by the Debtors or the Reorganized Debtors, as applicable, or
has been identified by the Debtors or the Reorganized Debtors, as applicable, as
a Disputed Claim; or (e) such action falls within the list of affirmative Causes
of Action in the Plan Supplement.

 

Section 13.03.                  Section 1146(a) Exemption

 

Pursuant to section 1146(a) of the Bankruptcy Code, any transfers of property
under this Plan shall not be subject to any document recording tax, stamp tax,
conveyance fee, intangibles or similar tax, mortgage tax, real estate transfer
tax, mortgage recording tax, Uniform Commercial Code filing or recording tax, or
other similar tax or governmental assessment. Upon

 

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entry of the Confirmation Order, the appropriate state or local governmental
officials or agents shall forego the collection of any such tax, fee, or
governmental assessment and accept for filing and recordation any of the
foregoing instruments or other documents without the payment of any such tax,
recordation fee, or governmental assessment.

 

Section 13.04.                  Elimination of Vacant Classes

 

Any Class of Claims or Equity Interests that is not populated as of the
commencement of the Confirmation Hearing by an Allowed Claim or Equity Interest,
or a Claim or Equity Interest that is temporarily allowed under Bankruptcy
Rule 3018, shall be deemed eliminated from the Plan for purposes of: (a) voting
to accept or reject the Plan; and (b) determining the acceptance or rejection of
the Plan by such Class pursuant to section 1129(a)(8) of the Bankruptcy Code.

 

Section 13.05.                  Intercompany Claims

 

On the Effective Date, or as soon as practicable thereafter, all Intercompany
Claims between and among the Debtors shall be reinstated or compromised by the
Reorganized Debtors, as applicable, consistent with the Reorganized Debtors’
business plan, and subject to the consent of the DIP Lenders and the
Restructuring Support Parties.

 

Section 13.06.                  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 or the Reorganized Debtors, as applicable, and all holders of Claims and
Equity 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 this Plan.

 

Section 13.07.                  Successors and Assigns

 

The rights, benefits and obligations of any Entity named or referred to in this
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.

 

Section 13.08.                  Reservation of Rights

 

Except as expressly set forth in this Plan, this Plan shall have no force or
effect unless the Bankruptcy Court has entered the Confirmation Order. Neither
this Plan, any statement or provision contained in this Plan, nor any action
taken or not taken by any Debtor or Reorganized Debtors, as applicable, with
respect to this Plan, the Disclosure Statement, the Confirmation Order or the
Plan Supplement, shall be or shall be deemed to be an admission or waiver of any
rights of the Debtors or the Reorganized Debtors, as applicable, with respect to
the holders of Claims or Equity Interests prior to the Effective Date.

 

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Section 13.09.                  Notices

 

Except as otherwise set forth in this Plan, all notices or requests in
connection with this Plan shall be in writing and will be deemed to have been
given when received by personal delivery, facsimile, e-mail, overnight courier
or first class mail and addressed to:

 

If to the Debtors:

 

Bracewell LLP
Attn: Robert G. Burns, Robin J. Miles
1251 Avenue of Americas, 49th Floor
New York, New York 10020
Facsimile: (800) 404-3970
Robert.Burns@bracewelllaw.com
Robin.Miles@bracewelllaw.com

 

If to the DIP Lenders and/or the Restructuring Support Parties

 

Davis Polk & Wardwell LLP
Attn: Damian S. Schaible, Darren S. Klein
450 Lexington Avenue
New York, NY 10017
Fax: (212) 701-5580
damian.schaible@davispolk.com
darren.klein@davispolk.com

 

Section 13.10.                  Term of Injunctions or Stay

 

Unless otherwise provided in this 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 existing
on the Confirmation Date (excluding any injunctions or stays contained in this
Plan or the Confirmation Order) shall remain in full force and effect until the
Effective Date. All injunctions or stays contained in this Plan or the
Confirmation Order shall remain in full force and effect in accordance with
their terms.

 

Section 13.11.                  Entire Agreement

 

Except as otherwise indicated, on the Effective Date, this Plan supersedes all
previous and contemporaneous negotiations, promises, covenants, agreements,
understandings, and representations on such subjects, all of which will have
become merged and integrated into this Plan on the Effective Date. To the extent
the Confirmation Order is inconsistent with this Plan, the Confirmation Order
shall control for all purposes.

 

Section 13.12.                  Plan Supplement Exhibits

 

All exhibits and documents included in the Plan Supplement are incorporated into
and are a part of this Plan as if set forth in full in this Plan. After the
exhibits and documents are filed, copies of such exhibits and documents shall be
made available upon written request to the Debtors’ counsel at the address above
or by downloading such exhibits and documents from the

 

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Claims and Solicitation Agent’s website at [•] or the Bankruptcy Court’s website
at www.deb.uscourts.gov.

 

Section 13.13.                  Severability

 

If, prior to the entry of the Confirmation Order, any term or provision of this
Plan is held by the Bankruptcy Court to be invalid, void or unenforceable, the
Bankruptcy Court, at the request of the Debtors, 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 term or provision
shall then be applicable as altered or interpreted. Notwithstanding any such
holding, alteration or interpretation, the remainder of the terms and provisions
of this Plan shall remain in full force and effect and shall in no way be
affected, impaired or invalidated by such holding, alteration or interpretation.
The Confirmation Order shall constitute a judicial determination and shall
provide that each term and provision of this Plan, as it may have been altered
or interpreted in accordance with the foregoing, is (a) valid and enforceable
pursuant to its terms; (b) integral to this Plan; and (c) non-severable and
mutually dependent.

 

Section 13.14.                  Substantial Consummation

 

On the Effective Date, this Plan shall be deemed to be substantially consummated
under sections 1101 and 1127(b) of the Bankruptcy Code.

 

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Dated: [·], 2016

 

Wilmington, Delaware

 

 

 

 

 

VENOCO, INC.

 

DENVER PARENT CORPORATION

 

ELLWOOD PIPELINE, INC.

 

WHITTIER PIPELINE CORPORATION

 

TEXCAL ENERGY (GP) LLC

 

 

 

By:

/s/ Mark A. DePuy

 

Name:

Mark A. DePuy

 

Title:

Chief Executive Officer of Venoco, Inc.

 

 

 

 

 

TEXCAL ENERGY (LP) LLC

 

 

 

By: VENOCO, INC., its Manager

 

 

 

By:

/s/ Mark A. DePuy

 

Name:

Mark A. DePuy

 

Title:

Chief Executive Officer of Venoco, Inc.

 

 

 

 

 

TEXCAL ENERGY SOUTH TEXAS, L.P.

 

 

 

By: TEXCAL ENERGY (GP) LLC, as general partner

 

 

 

By:

/s/ Mark A. DePuy

 

Name:

Mark A. DePuy

 

Title:

Chief Executive Officer of Venoco, Inc.

 

 

[Signature Page to Joint Plan of Reorganization Under Chapter 11 of the
Bankruptcy Code]

 

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Exhibit B

 

Execution Version

 

DIVESTMENT LETTER AGREEMENT

 

This Divestment Letter Agreement (this “Agreement”) is dated as of March 17,
2016 (the “Execution Date”), by and between Venoco, Inc., a Delaware Corporation
(“Venoco”), and Timothy M. Marquez, an individual with an address of 1133
14th Street, Unit 4450, Denver, Colorado 80202 (“TMM”).  Venoco and TMM may
sometimes be referred to herein together as the “Parties” and individually as a
“Party”.

 

RECITALS:

 

WHEREAS, reference is made to that certain Restructuring Support Agreement dated
as of March 17, 2016, by and among:

 

(i)                                     Venoco, Denver Parent Corporation,
Ellwood Pipeline, Inc., TexCal Energy (LP) LLC, Whittier Pipeline Corporation,
TexCal Energy (GP) LLC and TexCal Energy South Texas, L.P.;

 

(ii)                                  each of the beneficial holders identified
on the signature pages to the Restructuring Support Agreement or that becomes a
party to the Restructuring Support Agreement by executing and delivering a
Transferee Joinder (as defined therein) of outstanding notes issued pursuant to
the Indenture, dated as of April 2, 2015, for the issuance of 12.00% Senior
Notes due 2019 among Venoco, as issuer, the other Guarantors (as defined in such
Indenture) party thereto, and U.S. Bank National Association, as indenture
trustee under such Indenture; and

 

(iii)                               each of the beneficial holders identified on
the signature pages to the Restructuring Support Agreement or that becomes a
party to the Restructuring Support Agreement by executing and delivering a
Transferee Joinder of outstanding notes issued pursuant to the Indenture, dated
as of April 2, 2015, for the issuance of 8.875% Senior Notes due 2019 among
Venoco, as issuer, the other Guarantors (as defined in such Indenture) party
thereto, and U.S. Bank, as indenture trustee under such Indenture (such
Restructuring Support Agreement shall be referred to herein as the “RSA”).

 

WHEREAS, prior to the date hereof Venoco has applied with the California State
Lands Commission (the “SLC”) to expand the boundary of the Subject Lease as
reflected in the Ellwood Lease Adjustment to Existing Easterly Boundary of PRC
3242.1, as described in Venoco’s submission to the SLC on June 30, 2014 (as
amended by its subsequent submissions with respect thereto) (the “Elwood LLA”).

 

WHEREAS, pursuant to the RSA, Venoco has agreed that upon the occurrence of the
LLA Approval Date (as hereinafter defined), it shall assign to TMM  a certain
overriding royalty interest in the portion of Venoco’s leasehold interest
covering the PRC 3242.1 Expansion Area (as hereinafter defined), as more
particularly set forth in this Agreement and the documents to be executed
pursuant hereto.

 

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AGREEMENT

 

NOW, THEREFORE, in consideration of the aforementioned, of the mutual promises
and agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties hereby
agree as follows:

 

ARTICLE 1

 

AGREEMENTS CONCERNING THE TRANSACTION

 

Section 1.1                                    Definitions.  For purposes of
this Agreement, capitalized terms have the meanings provided in this
Section 1.1, unless defined elsewhere in this Agreement.

 

(a)                                           “Affiliate” means, with respect to
any Person, any other Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by, or is under common Control with,
such Person.

 

(b)                                           “Control” (including the terms
“Controlling,” “Controlled by” and “under common Control with”) means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting shares, by contract or otherwise.

 

(c)                                            “Governmental Authority” means
any federal, state, local, municipal, tribal or other government; any
governmental, regulatory or administrative agency, commission, body or other
authority exercising or entitled to exercise any administrative, executive,
judicial, legislative, regulatory or taxing authority or power; and any court or
governmental tribunal, including any tribal authority having or asserting
jurisdiction.

 

(d)                                           “Law” means any applicable
statute, law, rule, regulation, ordinance, order, code, ruling, writ,
injunction, decree or other official act of or by any Governmental Authority.

 

(e)                                            “LLA Approval Date” means the
first day after the occurrence of all of the following:

 

(i)                                     all required Environmental Impact
Reports for the Ellwood LLA, as required by the SLC, have been completed;

 

(ii)                                  the SLC Public Comment Periods for the
draft Environmental Impact Reports for the Ellwood LLA has passed; and

 

(iii)                               Venoco has received final regulatory
approval for the Ellwood LLA, which approval may include reasonable mitigation
requirements, and pursuant to which Venoco may pursue a drilling permit with
respect to the Ellwood LLA.

 

(f)                                             “Management LLA Override” means
an overriding royalty interest in and to the oil, gas and other hydrocarbons
produced, saved and sold from the portion of the Subject Lease included in the
PRC 3242.1 Expansion Area, and the amount of which and other attributes,

 

2

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limitations, terms and conditions of which are more particularly described in
the Form of Assignment of Overriding Royalty Interest attached hereto as
Exhibit A.

 

(g)                                            “Person” means any individual,
corporation, company, partnership, limited partnership, limited liability
company, trust, estate, Governmental Authority or any other entity.

 

(h)                                           “PRC 3242.1 Expansion Area” means
the geographical area covering the additional lands added to the Subject Lease
pursuant to the Elwood LLA as more particularly described on Schedule 1.1.

 

(i)                                               “Subject Lease” means that
certain State Lands Commission, State of California Oil and Gas Lease, W.O. 5424
(Parcel 24), P.R.C. 3242.1 dated the 8th day of April, 1965 by and between the
State of California, acting by and through the State Lands Commission and
Richfield Oil Corporation, a Delaware corporation and SOCONY MOBIL OIL
COMPANY, Inc., a New York Corporation (as such Oil and Gas Lease has been, and
may hereafter be, amended from time to time).

 

Section 1.2                                    Conditions to Closing.  The
obligations of each of the Parties to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction on or prior to the
Closing of each of the following conditions:

 

(a)                                           the LLA Approval Date shall have
occurred; and

 

(b)                                           the representations and warranties
of the other Parties set forth in Article 2 shall be true and correct in all
material respects (i) as of the Execution Date and (ii) as of the Closing Date
as though made on and as of the Closing Date.

 

Section 1.3                                    Closing.

 

(a)                                           If the conditions set forth in
Section 1.2 are met, the Parties shall consummate the transactions contemplated
by this Agreement (the “Closing”) on or before the fifteenth (15th) day
following the LLA Approval Date, unless the Parties agree in writing as to
another date (the day on which the Closing actually occurs shall be referred to
herein as the “Closing Date”).

 

(b)                                           At Closing, each of Venoco and TMM
shall execute, acknowledge and deliver an Assignment of Overriding Royalty
Interest in a form substantially identical to Exhibit A attached hereto (the
“Management LLA Override Assignment”) to transfer the Management LLA Override to
TMM;.

 

Section 1.4                                    Further Assurances.  Each of the
Parties hereby agrees to take such further actions and to execute, acknowledge
and deliver all such further documents as are reasonably requested by the other
Party, or which are reasonably necessary to successfully consummate the
transactions contemplated by this Agreement.

 

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Section 1.5                                    Termination.

 

(a)                                           This Agreement and the
transactions contemplated hereby may be completely terminated at any time at or
prior to the Closing:

 

(i)                                     by mutual written consent of the
Parties; or

 

(ii)                                  automatically, if the Closing has not
occurred by December 18, 2018 (the “Automatic Termination Date”) provided, if
Venoco withdraws the Elwood LLA application from the review or approval process
or delays or suspends the review or approval process, ( each a “Suspension”),
the Automatic Termination Date shall be extended by adding thereto the same
number of days as the number of days in any such Suspension.

 

(b)                                           In the event that the Closing does
not occur as a result of this Agreement being terminated pursuant to this
Section 1.5, then, except for the provisions of Section 1.1, this Section 1.5,
Article 3, Article 4 and Article 5 (other than Section 5.12), this Agreement
shall thereafter be null and void, and the Parties shall be mutually released
from any further obligation or liability under this Agreement except for any
obligation or liability accrued prior to the date of such termination.

 

ARTICLE 2
REPRESENTATIONS AND WARRANTIES

 

Section 2.1                                    Representations and Warranties of
Venoco.  Venoco represents and warrants to TMM, as of the Execution Date and as
of the Closing Date, the following:

 

(a)                                           Venoco is a corporation duly
organized, validly existing, and in good standing under the laws of the state of
Delaware.

 

(b)                                           Venoco has the power to enter into
and perform this Agreement (and all documents required to be executed and
delivered by Venoco at Closing) and to consummate the transactions contemplated
by this Agreement (and such documents).

 

(c)                                            The execution, delivery, and
performance of this Agreement (and all documents required to be executed and
delivered by Venoco at Closing), and the consummation of the transactions
contemplated hereby and thereby, have been duly and validly authorized by all
necessary action on the part of Venoco.  This Agreement has been duly executed
and delivered by Venoco (and all documents required to be executed and delivered
by Venoco at Closing shall be duly executed and delivered by Venoco), and this
Agreement constitutes, and at the Closing such documents shall constitute, the
valid and binding obligations of Venoco, enforceable in accordance with their
terms except as such enforceability may be limited by applicable bankruptcy or
other similar Laws affecting the rights and remedies of creditors generally as
well as to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

 

(d)                                           The execution, delivery and
performance of this Agreement by Venoco, and the consummation of the
transactions contemplated by this Agreement shall not (i) violate

 

4

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any provision of the certificate of incorporation or bylaws, as applicable, of
Venoco, (ii) result in a default (with due notice or lapse of time or both) or
the creation of any lien or encumbrance or give rise to any right of
termination, cancellation, or acceleration under any material note, bond,
mortgage, indenture, or other financing instrument to which Venoco is a party or
by which it is bound, (iii) violate any judgment, order, ruling, or decree
applicable to Venoco as a party in interest, or (iv) violate any Laws applicable
to Venoco, except any matters described in clauses (ii), (iii), or (iv) above
which would not have a material adverse effect on Venoco or its properties.

 

(e)                                            TMM shall not, directly or
indirectly, have any responsibility, liability, or expense as a result of the
undertakings or agreements of Venoco prior to Closing for brokerage fees,
finder’s fees, agent’s commissions, or other similar forms of compensation to an
intermediary in connection with the negotiation, execution or delivery of this
Agreement or any agreement or transaction contemplated hereby.

 

Section 2.2                                    Representations and Warranties of
TMM.  TMM represents and warrants to Venoco, as of the Execution Date and as of
the Closing Date, the following:

 

(a)                                           TMM has all requisite and legal
capacity to enter into and perform this Agreement (and all documents required to
be executed and delivered by TMM at Closing) and to consummate the transactions
contemplated by this Agreement (and such documents).  The correct marital status
for TMM is married.

 

(b)                                           This Agreement has been duly
executed and delivered by TMM (and all documents required to be executed and
delivered by TMM at Closing shall be duly executed and delivered by TMM), and
this Agreement constitutes, and at the Closing such documents shall constitute,
the valid and binding obligations of TMM, enforceable in accordance with their
terms except as such enforceability may be limited by applicable bankruptcy or
other similar Laws affecting the rights and remedies of creditors generally as
well as to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

 

(c)                                            The execution, delivery and
performance of this Agreement by TMM, and the consummation of the transactions
contemplated by this Agreement shall not (i)  result in a default (with due
notice or lapse of time or both) or the creation of any lien or encumbrance or
give rise to any right of termination, cancellation, or acceleration under any
material note, bond, mortgage, indenture, or other financing instrument to which
TMM is a party or by which it is bound, (ii) violate any judgment, order,
ruling, or decree applicable to TMM as a party in interest, or (iii) violate any
Laws applicable to TMM, except any matters described in clauses (i), (ii) or
(iii) above which would not have a material adverse effect on TMM or its
properties.

 

(d)                                           Venoco shall not, directly or
indirectly, have any responsibility, liability, or expense as a result of the
undertakings or agreements of TMM prior to Closing for brokerage fees, finder’s
fees, agent’s commissions, or other similar forms of compensation to an
intermediary in connection with the negotiation, execution or delivery of this
Agreement or any agreement or transaction contemplated hereby.

 

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Section 2.3                                    Disclaimer.  EXCEPT AS AND TO THE
EXTENT SET FORTH IN THIS ARTICLE 2, IN THE RSA, OR IN ANY DOCUMENTS TO BE
EXECUTED PURSUANT HERETO OR THERETO, (I) VENOCO MAKES NO REPRESENTATIONS OR
WARRANTIES, EXPRESS, STATUTORY OR IMPLIED AND (II) VENOCO EXPRESSLY DISCLAIMS
ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY, STATEMENT OR
INFORMATION MADE OR COMMUNICATED (ORALLY OR IN WRITING) TO TMM (INCLUDING,
WITHOUT LIMITATION, ANY OPINION, INFORMATION, PROJECTION OR ADVICE THAT MAY HAVE
BEEN PROVIDED TO TMM BY ANY OFFICER, DIRECTOR, SUPERVISOR, EMPLOYEE, AGENT,
CONSULTANT, REPRESENTATIVE OR ADVISOR OF VENOCO OR ANY OF ITS AFFILIATES).
WITHOUT LIMITING THE FOREGOING, EXCEPT AS AND TO THE EXTENT SET FORTH IN THIS
ARTICLE 2, IN THE RSA, OR IN ANY DOCUMENTS TO BE EXECUTED PURSUANT HERETO OR
THERETO, EACH PARTY EXPRESSLY DISCLAIMS, ANY REPRESENTATION OR WARRANTY,
EXPRESS, IMPLIED, OR STATUTORY, AS TO (I) TITLE TO THE SUBJECT LEASE, (II) THE
CONTENTS, CHARACTER OR NATURE OF ANY DESCRIPTIVE MEMORANDUM, OR ANY REPORT OR
OTHER INFORMATION MADE AVAILABLE TO THE OTHER PARTIES RELATED TO THIS AGREEMENT,
THE RSA OR THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY, (III) THE QUANTITY,
QUALITY OR RECOVERABILITY OF PETROLEUM SUBSTANCES IN OR FROM THE SUBJECT LEASE,
(IV) THE RIGHTS OF ANY PARTY TO MAINTAIN FACILITIES ON OR WITH RESPECT TO THE
SUBJECT LEASE FOR ANY PERIOD OF TIME; (V) THE ABILITY OF THE SUBJECT LEASE TO
PRODUCE HYDROCARBONS, INCLUDING PRODUCTION RATES, DECLINE RATES, AND
RECOMPLETION OPPORTUNITIES; (VI) ANY ESTIMATES OF THE VALUE OF THE SUBJECT LEASE
OR FUTURE REVENUES GENERATED BY ANY INTEREST IN THE SUBJECT LEASE,
(VII) INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHT, (VIII) ANY OTHER
MATERIALS OR INFORMATION THAT MAY HAVE BEEN MADE AVAILABLE OR COMMUNICATED TO
THE OTHER PARTIES OR, IF APPLICABLE, THEIR AFFILIATES, OR ITS OR THEIR
EMPLOYEES, AGENTS, CONSULTANTS, REPRESENTATIVES OR ADVISORS IN CONNECTION WITH
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE RSA OR ANY DISCUSSION OR
PRESENTATION RELATING THERETO, AND FURTHER DISCLAIMS ANY REPRESENTATION OR
WARRANTY, EXPRESS, IMPLIED, OR STATUTORY, OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OR ANY
EQUIPMENT, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES THAT, EXCEPT
AS AND TO THE EXTENT SET FORTH IN ARTICLE 2, IN THE RSA, OR IN ANY DOCUMENTS TO
BE EXECUTED PURSUANT HERETO OR THERETO, THE INTERESTS IN THE SUBJECT LEASE BEING
TRANSFERRED BY VENOCO ARE BEING TRANSFERRED “AS IS, WHERE IS,” WITH ALL FAULTS
AND DEFECTS.

 

6

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ARTICLE 3
INDEMNITY OBLIGATIONS

 

Section 3.1                                    Venoco’s Indemnity Obligation. 
From and after the date hereof, Venoco shall indemnify, defend and hold TMM
harmless from any and all damages, liabilities, claims and causes of action of
every kind or character (including reasonable expenses and attorney’s fees)
arising out of or in connection with a breach of any of Venoco’s representations
and warranties, contained in Section 2.1 of this Agreement, EVEN IF SUCH
EXPENSES, ATTORNEY’S FEES, DAMAGES, LIABILITIES, CLAIMS, OR CAUSES OF ACTION ARE
CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE (WHETHER SOLE, JOINT OR
CONCURRENT), STRICT LIABILITY OR OTHER LEGAL FAULT OF THE PERSON INDEMNIFIED
HEREUNDER, AN INVITEE, OR A THIRD PERSON, AND WHETHER OR NOT CAUSED BY A
PRE-EXISTING CONDITION, BUT EXCLUDING THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF ANY PERSON INDEMNIFIED HEREUNDER, excluding, however, in each case any and
all expenses, attorney’s fees, damages, liabilities, claims and causes of action
of every kind or character for which TMM would be required to indemnify Venoco
under Section 3.2.

 

Section 3.2                                    TMM’s Indemnity Obligation.  From
and after the date hereof, TMM shall indemnify, defend and hold Venoco, any of
its Affiliates and its and their respective officers, directors, managers,
partners, employees, and agents harmless from any and all damages, liabilities,
claims and causes of action of every kind or character (including reasonable
expenses and attorney’s fees) arising out of or in connection with a breach of
any of TMM’s representations and warranties, contained in Section 2.2 of this
Agreement, EVEN IF SUCH EXPENSES, ATTORNEY’S FEES, DAMAGES, LIABILITIES, CLAIMS,
OR CAUSES OF ACTION ARE CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE (WHETHER
SOLE, JOINT OR CONCURRENT), STRICT LIABILITY OR OTHER LEGAL FAULT OF THE PERSON
INDEMNIFIED HEREUNDER, AN INVITEE, OR A THIRD PERSON, AND WHETHER OR NOT CAUSED
BY A PRE-EXISTING CONDITION, BUT EXCLUDING THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF ANY PERSON INDEMNIFIED HEREUNDER.

 

ARTICLE 4
CLAIMS AND DISPUTES

 

Section 4.1                                    Governing Law; Jurisdiction;
Venue; Jury Waiver.  This Agreement and the transactions contemplated hereby
shall be construed in accordance with, and governed by, the Laws of the State of
California without regard to principles of conflicts of law that would refer
construction of such provisions to the laws of another jurisdiction.  Each Party
consents to personal jurisdiction in any action brought in the United States
federal courts located in the State of California or California state courts
located in Santa Barbara County, California with respect to any dispute, claim
or controversy arising out of or in relation to or in connection with this
Agreement, and each of the Parties agrees that any action instituted by it
against the other with respect to any such dispute, controversy or claim will be
instituted exclusively in the United States District Court for the Western
Division of the Central District of California or if such jurisdiction is not
available, California state courts located in Santa Barbara County, California. 
Each Party (a) irrevocably submits to the exclusive jurisdiction of such courts,
(b) waives any objection to laying venue in any such action or proceeding in
such courts, (c) waives any objection that such courts are an inconvenient forum
or do not have jurisdiction over it, and (d) agrees that service of process upon
it may be effected by mailing a copy thereof by registered

 

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mail (or any substantially similar form of mail), postage prepaid, to it at its
address specified in Section 5.2.  The foregoing consents to jurisdiction and
service of process shall not constitute general consents to service of process
in the State of California for any purpose except as provided herein and shall
not be deemed to confer any rights on any Person other than the Parties to this
Agreement.  The Parties hereby waive trial by jury in any action, proceeding or
counterclaim brought by any Party against another in any matter whatsoever
arising out of or in relation to or in connection with this Agreement.

 

ARTICLE 5

 

MISCELLANEOUS

 

Section 5.1                                    Counterparts; Electronic
Execution.  This Agreement may be executed in counterparts, each of which shall
be deemed to be an original instrument, but all such counterparts together shall
constitute but one Agreement.  The execution and delivery of this Agreement by
any Party may be evidenced by facsimile or other electronic transmission of an
executed signature page to this Agreement (including scanned documents delivered
by email), which shall be binding upon all Parties the same as an original hand
executed signature page.

 

Section 5.2                                    Notices.  All notices that are
required or may be given pursuant to this Agreement shall be sufficient in all
respects if given in writing, in English and by personal delivery (if signed for
receipt), by certified or registered United States mail (postage prepaid, return
receipt requested), by a nationally recognized overnight delivery service for
next day delivery, transmitted via facsimile transmission or transmitted via
electronic mail (following appropriate confirmation of receipt by return email,
but excluding an automated confirmation of receipt) and shall be deemed to have
been made and the receiving Party charged with notice, when received except that
if received after 5:00 p.m. (in the recipient’s time zone) on a Business Day or
if received on a day that is not a Business Day, such notice, request or
communication will not be effective until the next succeeding Business Day.  All
notices shall be addressed as follows:

 

 

If to Venoco:

 

 

Venoco, Inc.

 

 

370 17th Street, Suite 3900

 

 

Denver, CO 80202

 

 

Attention:

Brian E. Donovan

 

 

Telephone:

(303) 600-2911

 

 

Facsimile:

(303) 626-8315

 

 

Email:  be.donovan@venocoinc.com

 

 

 

If to TMM:

 

 

Timothy M. Marquez

 

 

1133 14th St. Unit 4450

 

 

Denver, CO 80202

 

 

Telephone:

(303) 263-9183

 

 

Email:

TMarquez@venocoinc.com

 

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Each Party may change its address for notice by notice to the other Parties in
the manner set forth above.  All notices shall be deemed to have been duly given
at the time of receipt by each Party to which such notice is addressed.

 

Section 5.3                                    Captions.  The captions in this
Agreement are for convenience only and shall not be considered to be a part of
or affect the construction or interpretation of any provision of this Agreement.

 

Section 5.4                                    Waivers.  Any failure by any
Party to comply with any of its obligations, agreements or conditions herein
contained may be waived by the Party to whom such compliance is owed by an
instrument signed by the Party to whom compliance is owed and expressly
identified as a waiver, but not in any other manner.  No waiver of, or consent
to a change in, any of the provisions of this Agreement shall be deemed to be or
shall constitute a waiver of, or consent to change in, other provisions hereof
(whether or not similar), nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.

 

Section 5.5                                    Assignment.  No Party shall
assign or otherwise transfer all or any part of this Agreement, nor shall any
Party delegate any of its rights or duties hereunder, without the prior written
consent of the other Parties, and any transfer or delegation made without such
consent shall be void.  Subject to the foregoing, this Agreement shall be
binding upon, and inure to the benefit of, the Parties and their respective
successors and assigns.

 

Section 5.6                                    Entire Agreement.  This
Agreement, the RSA, and the documents to be executed hereunder and thereunder,
and the Exhibits and Schedules attached hereto and thereto constitute the entire
agreement among the Parties pertaining to the subject matter hereof, and
supersede all prior arrangements, understandings, negotiations and discussions,
whether oral or written, of the Parties pertaining to the subject matter hereof.

 

Section 5.7                                    Limitation on Damages. 
Notwithstanding anything to the contrary contained herein, no Party or any of
its Affiliates, or its and their respective officers, directors, managers,
partners, employees, and agents shall be entitled to consequential, special,
punitive, indirect, exemplary, remote or speculative damages, or damages for
lost profits or loss of business opportunity of any kind arising under or in
connection with this Agreement or the transactions contemplated hereby, except
to the extent any such party suffers such damages (including costs of defense
and reasonable attorneys’ fees incurred in connection with defending of such
damages) to a third party, which damages (including costs of defense and
reasonable attorneys’ fees incurred in connection with defending against such
damages) shall not be excluded by this provision as to recovery hereunder, and
each Party, for itself and on behalf of its Affiliates, and its and their
respective officers, directors, managers, partners, employees, and agents,
hereby, subject to the immediately preceding sentence, expressly waives any
right to consequential, special, punitive, indirect, exemplary, remote or
speculative damages, or damages for lost profits or loss of business opportunity
of any kind arising under or in connection with this Agreement or the
transactions contemplated hereby.

 

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Section 5.8                                    Expenses.  Except as otherwise
provided in this Agreement, the RSA and the documents to be executed pursuant
hereunder and thereunder, (i) all expenses incurred by Venoco in connection with
or related to the authorization, preparation or execution of this Agreement, and
the exhibits and schedules hereto and thereto, and all other matters related to
the Closing, including all fees and expenses of counsel, accountants, brokers
and financial advisers employed by Venoco, shall be borne solely and entirely by
Venoco and (ii) all such expenses incurred by TMM shall be borne solely and
entirely by TMM.

 

Section 5.9                                    Amendments and Severability.  No
amendments or other modifications to this Agreement shall be effective or
binding on either of the Parties unless the same are in writing, expressly
designated as an amendment or modification, and signed by each of the Parties. 
If any provision of this Agreement, or any application thereof, is held invalid,
illegal, or unenforceable in any respect under any Law, this Agreement shall be
reformed to the extent necessary to conform, in each case consistent with the
intention of the Parties, to such Law, and, to the extent such provision cannot
be so reformed, then such provision (or the invalid, illegal, or unenforceable
application thereof) shall be deemed deleted from (or prohibited under) this
Agreement, as the case may be, and the validity, legality, and enforceability of
the remaining provisions contained herein (and any other application of such
provision) shall not in any way be affected or impaired thereby.

 

Section 5.10                             Time of the Essence.  Time is of the
essence in this Agreement.  If the date specified in this Agreement for giving
any notice or taking any action is not a day other than a Saturday, a Sunday, or
a day on which banks are closed for business in New York, New York, United
States of America (a “Business Day”) (or if the period during which any notice
is required to be given or any action taken expires on a date which is not a
Business Day), then the date for giving such notice or taking such action (and
the expiration of such period during which notice is required to be given or
action taken) shall be the next day which is a Business Day

 

Section 5.11                             Exclusive Remedy.  Notwithstanding
anything to the contrary contained in this Agreement, from and after the
Closing, the Parties’ sole and exclusive remedy against each other with respect
to the transactions contemplated by this Agreement, the RSA and the documents to
be executed pursuant hereunder and thereunder shall be pursuant to the express
provisions of this Agreement, the RSA and the documents to be executed pursuant
hereunder and thereunder.

 

Section 5.12                             Survival.  If the Closing occurs, the
provisions of this Agreement shall survive for the applicable statute of
limitations.

 

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IN WITNESS WHEREOF, this Agreement has been executed by each of the Parties as
of the date first above written.

 

 

 

Venoco, Inc.

 

 

 

 

 

By:

/s/ Scott M. Pinsonnault

 

Name:

Scott M. Pinsonnault

 

Title:

Chief Financial Officer and Chief Restructuring Officer

 

 

 

 

 

Timothy M. Marquez

 

 

 

 

 

By:

/s/ Timothy M. Marquez

 

Signature Page to Divestment Letter Agreement

 

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Schedule 1.1

 

PRC 3242.1 Expansion Area

 

[See Attached]

 

Schedule 1.1 to Divestment Letter Agreement

 

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Exhibit A

 

Form of Assignment of Overriding Royalty Interest for Management LLA Override

 

[See Attached]

 

Exhibit A to Divestment Letter Agreement

 

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EXHIBIT C

 

Interim DIP Order

 

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EXHIBIT D

 

Form of Transferee Joinder

 

This joinder (the “Transferee Joinder”) to the Restructuring Support Agreement,
dated as of March 17, 2016 (the “Agreement”), among: (i) Venoco, Inc., Denver
Parent Corporation, Ellwood Pipeline, Inc., TexCal Energy (LP) LLC, Whittier
Pipeline Corporation, TexCal Energy (GP) LLC and TexCal Energy South Texas,
L.P.; (ii) the Consenting First Lien Noteholders; and (iii) the Consenting
Second Lien Noteholders, is executed and delivered by [                ]
(the “Joining Party”) as of [                ]. Each capitalized term used
herein but not otherwise defined shall have the meaning ascribed to it in the
Agreement.

 

1.                                      Agreement to be Bound. The Joining Party
hereby agrees to be bound by all of the terms of the Agreement, a copy of which
is attached to this Joinder as Annex 1 (as the same has been or may be hereafter
amended, restated, or otherwise modified from time to time in accordance with
the provisions thereof). The Joining Party shall hereafter be deemed to be a
Party for all purposes under the Agreement and one or more of the entities
comprising the Restructuring Support Parties.

 

2.                                      Representations and Warranties. The
Joining Party hereby represents and warrants to each other Party to the
Agreement that, as of the date hereof, such Joining Party (a) is the legal or
beneficial holder of, and has all necessary authority (including authority to
bind any other legal or beneficial holder) with respect to, the First Lien Notes
and/or the Second Lien Notes identified below its name on the signature
page hereof, and (b) makes, as of the date hereof, the representations and
warranties set forth in Section 13 of the Agreement to each other Party.

 

3.                                      Governing Law. This Joinder shall be
governed by and construed in accordance with the internal laws of the State of
Delaware, without regard to any conflicts of law provisions which would require
the application of the law of any other jurisdiction.

 

4.                                      Notice. All notices and other
communications given or made pursuant to the Agreement shall be sent to:

 

To the Joining Party at:

 

Joining Party

Attn:

Address:

Fax:

Email:

 

[Signatures and annex follow.]

 

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IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be executed as
of the date first written above.

 

 

 

JOINING PARTY

 

 

 

 

 

Holdings: $                  of First Lien Notes

 

 

 

 

 

Holdings: $                  of Second Lien Notes

 

 

 

 

 

Holdings: $                  of Other Debt

 

[Signature page to transferee joinder]

 

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