Exhibit 10.2

EXECUTION VERSION

 

 

 

BACKSTOP COMMITMENT AGREEMENT

AMONG

PARKER DRILLING COMPANY

AND

THE COMMITMENT PARTIES PARTY HERETO

Dated as of December 12, 2018

 

 

 

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TABLE OF CONTENTS

 

         Page  

ARTICLE I DEFINITIONS

     2  

Section 1.1

  Definitions      2  

Section 1.2

  Construction      13  

ARTICLE II BACKSTOP COMMITMENT

     14  

Section 2.1

  The Rights Offering; Subscription Rights      14  

Section 2.2

  The Backstop Commitment      14  

Section 2.3

  Commitment Party Default      15  

Section 2.4

  Subscription Escrow Account Funding      16  

Section 2.5

  Closing      17  

Section 2.6

  Designation and Assignment Rights      18  

Section 2.7

  No Financial Accommodation Agreement      19  

ARTICLE III PUT OPTION CASH PREMIUM; PUT OPTION EQUITY PREMIUM; EXPENSE
REIMBURSEMENT

     20  

Section 3.1

  Put Option Cash Premium      20  

Section 3.2

  Return of Put Option Cash Premium; Put Option Equity Premium      20  

Section 3.3

  Expense Reimbursement      21  

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     22  

Section 4.1

  Existence; Compliance with Law      22  

Section 4.2

  Power; Enforceable Obligations      22  

Section 4.3

  Consents and Approvals      23  

Section 4.4

  No Conflict      23  

Section 4.5

  No Material Litigation      24  

Section 4.6

  Financial Statements; No Material Adverse Effect      24  

Section 4.7

  Material Contracts      25  

Section 4.8

  Authorized and Issued Capital Stock      25  

Section 4.9

  Ownership of Property; Liens      26  

Section 4.10

  Intellectual Property      26  

Section 4.11

  Taxes      27  

Section 4.12

  Labor Matters      27  

Section 4.13

  ERISA Compliance      28  

Section 4.14

  Investment Company Act; Other Regulations      29  

Section 4.15

  Subsidiaries      29  

 

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TABLE OF CONTENTS

 

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Section 4.16

  Environmental Matters      29  

Section 4.17

  Licenses and Permits      30  

Section 4.18

  Company SEC Documents and Disclosure Statement      30  

Section 4.19

  Insurance      30  

Section 4.20

  OFAC/Sanctions      31  

Section 4.21

  No Unlawful Payments      31  

Section 4.22

  Compliance with Money Laundering Laws      31  

Section 4.23

  Arm’s Length      32  

Section 4.24

  No Broker’s Fees      32  

Section 4.25

  No Undisclosed Relationships      32  

Section 4.26

  Internal Control Over Financial Reporting      32  

Section 4.27

  Disclosure Controls and Procedures      32  

Section 4.28

  CFIUS      32  

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMMITMENT PARTIES

     33  

Section 5.1

  Incorporation      33  

Section 5.2

  Corporate Power and Authority      33  

Section 5.3

  Execution and Delivery      33  

Section 5.4

  No Conflict      33  

Section 5.5

  Consents and Approvals      34  

Section 5.6

  Note Claims and Equity Interests      34  

Section 5.7

  No Registration      34  

Section 5.8

  Purchasing Intent      34  

Section 5.9

  Sophistication; Investigation      35  

Section 5.10

  No Broker’s Fees      35  

Section 5.11

  Sufficient Funds      35  

ARTICLE VI ADDITIONAL COVENANTS

     35  

Section 6.1

  Confirmation Order; Plan and Disclosure Statement      35  

Section 6.2

  Conduct of Business      36  

Section 6.3

  Access to Information      37  

Section 6.4

  Commercially Reasonable Efforts      38  

Section 6.5

  Registration Rights Agreement; Governance Documents      39  

 

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TABLE OF CONTENTS

 

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Section 6.6

  Commitments of the Company      39  

Section 6.7

  Additional Provisions Regarding Company’s Commitments      41  

Section 6.8

  DTC Eligibility      42  

Section 6.9

  Antitrust Approval      42  

Section 6.10

  Other Entities      43  

Section 6.11

  Reorganized Parker      43  

Section 6.12

  S-1 Preparation      44  

Section 6.13

  Share Legend      44  

Section 6.14

  Conversion Waiver      45  

ARTICLE VII CONDITIONS TO THE OBLIGATIONS OF THE PARTIES

     45  

Section 7.1

  Conditions to the Obligations of the Commitment Parties      45  

Section 7.2

  Waiver of Conditions to Obligation of Commitment Parties      48  

Section 7.3

  Conditions to the Obligations of the Company      48  

ARTICLE VIII INDEMNIFICATION AND CONTRIBUTION

     49  

Section 8.1

  Indemnification Obligations      49  

Section 8.2

  Indemnification Procedure      49  

Section 8.3

  Settlement of Indemnified Claims      50  

Section 8.4

  Contribution      51  

Section 8.5

  Treatment of Indemnification Payments      51  

Section 8.6

  No Survival      51  

ARTICLE IX TERMINATION

     52  

Section 9.1

  Termination Rights      52  

Section 9.2

  Effect of Termination      54  

ARTICLE X GENERAL PROVISIONS

     55  

Section 10.1

  Notices      55  

Section 10.2

  Assignment; Third Party Beneficiaries      56  

Section 10.3

  Prior Negotiations; Entire Agreement      56  

Section 10.4

  Governing Law; Venue      57  

Section 10.5

  Waiver of Jury Trial      57  

Section 10.6

  Counterparts      58  

Section 10.7

  Waivers and Amendments; Rights Cumulative; Consent      58  

Section 10.8

  Headings      59  

 

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TABLE OF CONTENTS

 

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Section 10.9

  Specific Performance      59  

Section 10.10

  Damages      59  

Section 10.11

  No Reliance      59  

Section 10.12

  Confidentiality and Publicity      60  

Section 10.13

  Settlement Discussions      61  

Section 10.14

  No Recourse      61  

Section 10.15

  Enforceability of Agreement      61  

Section 10.16

  Relationship Among Parties      62  

SCHEDULES AND EXHIBITS

 

Schedule 1

   Backstop Commitment Percentage – Put Option Cash Premium & Put Option
Equity Premium

Schedule 2A

   Backstop Commitment Percentage – No Existing Common Stock Rejection

Schedule 2B

   Backstop Commitment Percentage – Existing Common Stock Rejection

Schedule 3

   Notice Addresses for Commitment Parties

Schedule 4

   Fully Diluted Capital Stock of Reorganized Parker

Schedule 5

   Milestones

Exhibit A

   Joinder Agreement

Exhibit B

   Transfer Agreement

 

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BACKSTOP COMMITMENT AGREEMENT

THIS BACKSTOP COMMITMENT AGREEMENT (this “Agreement”), dated as of December 12,
2018, is made by and among Parker Drilling Company, a Delaware corporation (as a
debtor in possession or a reorganized debtor, as applicable, the “Company”), and
the parties set forth on the signature pages hereto (each referred to herein,
individually, as a “Commitment Party” and, collectively, as the “Commitment
Parties”), on the other hand. The Company and each Commitment Party signatory
hereto is referred to herein, individually, as a “Party” and, collectively, as
the “Parties”. Unless otherwise specified herein, all capitalized terms used and
not defined herein shall have the meanings ascribed to them in that certain
Restructuring Support Agreement, dated as of December 12, 2018, by and among the
Company, each of the other Company Parties (as defined in the RSA) party
thereto, and the Consenting Stakeholders (as defined in the RSA) party thereto
(such agreement, together with all exhibits, term sheets, schedules and annexes
thereto, as amended, restated or otherwise modified pursuant to the terms
thereof, the “RSA”).

RECITALS

WHEREAS, the Debtors and the Commitment Parties have entered into the RSA
(simultaneously with the execution of this Agreement), which provides for the
restructuring of the Debtors’ capital structure and financial obligations
pursuant to a “prearranged” plan of reorganization to be filed in the Chapter 11
Cases, implementing the terms and conditions of the Restructuring Transactions,
including the terms and conditions set forth in the Restructuring Term Sheet
attached as Exhibit A to the RSA;

WHEREAS, the Debtors plan to file with the Bankruptcy Court, in accordance with
the terms of the RSA, motions seeking entry of (x) the Disclosure Statement
Order and (y) the Confirmation Order;

WHEREAS, pursuant to the Plan and this Agreement, and in accordance with the
Rights Offering Procedures, the Company will issue the Subscription Rights (as
defined below) and conduct a rights offering in which, among other things, the
Company will offer to holders of Unsecured Notes, holders of Existing Common
Stock, holders of Existing Preferred Stock and the Commitment Parties (on
account of their status as holders of Unsecured Notes, Existing Common Stock and
Existing Preferred Stock, as applicable) the right to participate (based on such
holders’ Subscription Rights) in a rights offering to purchase New Common Stock
to be issued by Reorganized Parker for an aggregate of $95,000,000 of cash for
41.9241% of post-Closing New Common Stock (subject to dilution by New Common
Stock issued in connection with the Management Incentive Plan and the exercise
of the New Warrants) (the “Rights Offering”), as set forth on Schedule 4;
provided, however, that, if and to the extent that the Existing Common Stock
Rejection occurs, then the Company shall not accept the subscriptions in respect
of the Subscription Rights of the holders of Existing Common Stock from any
holders of Existing Common Stock on account of such holders’ Existing Common
Stock and instead all such shares shall be treated as Unsubscribed Shares; and

WHEREAS, subject to the terms and conditions contained in this Agreement, each
Commitment Party has agreed that it shall purchase (on a several and not joint
basis) its Backstop Commitment Percentage of the Unsubscribed Shares, if any.

 

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NOW, THEREFORE, in consideration of the mutual promises, agreements,
representations, warranties and covenants contained herein, each of the Parties
hereby agrees as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. Except as otherwise expressly provided in this
Agreement, whenever used in this Agreement (including any Exhibits and Schedules
hereto), the following terms shall have the respective meanings set forth below:

“Advance Payment Surplus” has the meaning set forth in Section 3.3(b).

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, such Person
as of the date on which, or at any time during the period for which, the
determination of affiliation is being made (including any Affiliated Funds of
such Person); provided, however, that for purposes of this Agreement, no
Commitment Party shall be deemed an Affiliate of the Company or any of its
Subsidiaries. For purposes of this definition, the term “control” (including the
correlative meanings of the terms “controlled by” and “under common control
with”), as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
policies of such Person, whether through the ownership of voting securities, by
Contract or otherwise.

“Affiliated Fund” has the meaning set forth in Section 2.6(b).

“Agreement” has the meaning set forth in the introductory paragraph hereto.

“Akin Advance Payment” has the meaning set forth in Section 3.3(a).

“Alternative Restructuring Proposal” has the meaning ascribed to such term in
the RSA.

“Antitrust Authorities ” means the United States Federal Trade Commission, the
Antitrust Division of the United States Department of Justice, the attorneys
general of the several states of the United States and any other Governmental
Entity having jurisdiction pursuant to the Antitrust Laws, and “Antitrust
Authority” means any of them.

“Antitrust Laws” mean the Sherman Act, the Clayton Act, the HSR Act, the Federal
Trade Commission Act, and any other Law governing agreements in restraint of
trade, monopolization, pre-merger notification, the lessening of competition
through merger or acquisition or anti-competitive conduct.

“Applicable Consent” has the meaning set forth in Section 4.3.

 

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“Audited Financial Statements” means the audited consolidated balance sheet of
the Company and its Subsidiaries as of December 31, 2016 and December 31, 2017,
and the related consolidated statements of operations, comprehensive income,
stockholders’ equity and cash flows of the Company and its Subsidiaries,
including the notes thereto, for the twelve (12) month periods ending
December 31, 2016 and December 31, 2017, respectively.

“Available Shares” means the Unsubscribed Shares that any Commitment Party fails
to purchase as a result of a Commitment Party Default by such Commitment Party.

“Backstop Commitment” has the meaning set forth in Section 2.2.

“Backstop Commitment Percentage” means, with respect to any Commitment Party,
the percentage set forth opposite such Commitment Party’s name as follows (as
such Schedule 1, Schedule 2A, or Schedule 2B, may be amended, supplemented or
otherwise modified from time to time in accordance with this Agreement):

(i) with respect to the Put Option Cash Premium and the Put Option Equity
Premium, as set forth on Schedule 1;

(ii) in the event that no Existing Common Stock Rejection occurs, with respect
to all Unsubscribed Shares, as set forth on Schedule 2A; and

(iii) in the event that an Existing Common Stock Rejection occurs, (x) with
respect to the portion of Unsubscribed Shares resulting from the occurrence of
an Existing Common Stock Rejection, as set forth on Schedule 2B(i), (y) with
respect to the portion of Unsubscribed Shares resulting from any failure of
holders of Existing Preferred Stock to exercise their Existing Preferred Holder
Subscription Rights, as set forth on Schedule 2B(ii), and (z) with respect to
the portion of Unsubscribed Shares resulting from any failure of holders of
Unsecured Notes to exercise their Existing Noteholder Subscription Rights, as
set forth on Schedule 2B(iii).

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure and the local
rules and general orders of the Bankruptcy Court, as in effect on the Petition
Date, if applicable, together with all amendments and modifications thereto
subsequently made applicable to the Chapter 11 Cases.

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time, and any successor statute.

“Closing” has the meaning set forth in Section 2.5(a).

“Closing Date” has the meaning set forth in Section 2.5(a).

“Code” means the Internal Revenue Code of 1986.

“Commitment Party” has the meaning set forth in the introductory paragraph
hereto and each permitted transferee of any Backstop Commitment pursuant to
Section 2.6.

 

 

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“Commitment Party Default” means the failure by any Commitment Party to
(a) deliver and pay the aggregate Per Share Purchase Price for such Commitment
Party’s Backstop Commitment Percentage of any Unsubscribed Shares by the
Subscription Escrow Funding Date in accordance with Section 2.4(b) or
(b) exercise its Subscription Rights pursuant to and in accordance with (i) the
Plan and (ii) Section 2.1(b).

“Commitment Party Replacement” has the meaning set forth in Section 2.3(a).

“Commitment Party Replacement Period” has the meaning set forth in Section
2.3(a).

“Company” has the meaning set forth in the introductory paragraph hereto.

“Company Disclosure Schedule” means the disclosure schedules delivered by the
Company to the Commitment Parties on the date of this Agreement.

“Company SEC Documents” means all of the reports, schedules, forms, statements
and other documents (including exhibits and other information incorporated
therein) filed with the SEC by the Company.

“Contract” means any legally binding agreement, contract or instrument,
including any loan, note, bond, mortgage, indenture, guarantee, deed of trust,
license, franchise, commitment, lease, franchise agreement, letter of intent,
memorandum of understanding or other enforceable arrangement or obligation, and
any amendments thereto, whether written or oral, but excluding the Plan.

“Defaulting Commitment Party” means, at any time, any Commitment Party that
caused a Commitment Party Default that is continuing at such time.

“Designated Jurisdiction” means any country or territory to the extent that such
country or territory itself is the subject of comprehensive Sanctions (which, as
of the date of this Agreement, includes only Crimea, Cuba, Iran, Syria, and
North Korea).

“DIP Facility” has the meaning ascribed to such term in the RSA.

“Disposition” means the sale, transfer, license, lease or other disposition
(including any sale and leaseback transaction) of any Property by any Person,
including any sale, assignment, transfer or other disposal, with or without
recourse, of any notes or accounts receivable or any rights and claims
associated therewith.

“Employee Benefit Plan” means any “employee benefit plan” (as such term is
defined in Section 3(3) of ERISA) established by the Company or any of its
Subsidiaries or, with respect to any such plan that is subject to Section 412 or
403 of the Code or Section 302 or 303 or Title IV of ERISA, any ERISA Affiliate.

 

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“Environmental Law” means any applicable international, regional, Federal,
state, foreign or local law, treaties, directives, protocols, codes, standards,
rules, regulations and rule of common law now or hereafter in effect and in each
case as amended, and any judicial or administrative interpretation thereof,
including any Order, to the extent binding on the Company or any of its
Subsidiaries, relating to the environment (including ambient air, surface water,
ground water, navigable waters, waters of the contiguous zone, coastal water,
ocean waters and international waters), and/or Hazardous Materials, including
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, 42 U.S.C. § 9601 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701
et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the
Hazardous Material Transportation Act, 49 U.S.C. § 1801 et seq.; the
Occupational Safety and Health Act, 29 U.S.C. § 651 et seq. (to the extent it
regulates occupational exposure to Hazardous Materials); the Toxic Substances
Control Act, 15 U.S.C. § 2601 et seq.; Regulation (EC) No 1907/2006 of the
European Parliament and of the Council of 18 December 2006 concerning the
Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH);
and any state and local or foreign counterparts or equivalents, in each case as
amended from time to time.

“Environmental Permit” means any permit, approval, identification number,
license or other authorization required under any Environmental Law.

“Equity Interests” means with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, and all of the other ownership or profit interests in such Person
(including partnership, member or trust interests therein).

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Company within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 or 430 of the Code or Section 302 or 303 of
ERISA).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Company or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a “substantial
employer” (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations that is treated as such a withdrawal under Section 4062(e) of ERISA;
(c) a complete or partial withdrawal by the Company or any ERISA Affiliate from
a Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of an Employee Benefit Plan amendment as a termination under Section 4041 or
4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Company or
any ERISA Affiliate.

“Event” means any event, development, occurrence, circumstance, effect,
condition, result, state of facts or change.

 

 

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“Existing Common Stock Rejection” means the voting Class of holders of Existing
Common Stock fails to accept the Plan in accordance with section 1126 of the
Bankruptcy Code.

“Exit Facility” has the meaning ascribed to such term in the RSA.

“Expense Reimbursement” has the meaning set forth in Section 3.3.

“Filing Party” has the meaning set forth in Section 6.9(b).

“Final Order” means an order or judgment of the Bankruptcy Court (or any other
court of competent jurisdiction) entered by the Clerk of the Bankruptcy Court
(or such other court) on the docket in the Chapter 11 Cases (or the docket of
such other court), which has not been modified, amended, reversed, vacated or
stayed and as to which (A) the time to appeal, petition for certiorari, or move
for a new trial, stay, reargument or rehearing has expired and as to which no
appeal, petition for certiorari or motion for new trial, stay, reargument or
rehearing shall then be pending or (B) if an appeal, writ of certiorari, new
trial, stay, reargument or rehearing thereof has been sought, such order or
judgment of the Bankruptcy Court (or other court of competent jurisdiction)
shall have been affirmed by the highest court to which such order was appealed,
or certiorari shall have been denied, or a new trial, stay, reargument or
rehearing shall have been denied or resulted in no modification of such order,
and the time to take any further appeal, petition for certiorari or move for a
new trial, stay, reargument or rehearing shall have expired, as a result of
which such order shall have become final in accordance with Rule 8002 of the
Federal Rules of Bankruptcy Procedure; provided that the possibility that a
motion under Rule 60 of the Federal Rules of Civil Procedure, or any analogous
rule under the Federal Rules of Bankruptcy Procedure, may be filed relating to
such order, shall not cause an order not to be a Final Order.

“Foreign Benefit Plan” has the meaning set forth in Section 4.13(d).

“Foreign Government Scheme or Arrangement” has the meaning set forth in
Section 4.13(d).

“Funding Notice” has the meaning set forth in Section 2.4(a).

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

“Governmental Entity” means any U.S. or non-U.S. international, regional,
federal, state, municipal or local governmental, judicial, administrative,
legislative or regulatory authority, entity, instrumentality, agency,
department, commission, court, or tribunal of competent jurisdiction (including
any branch, department or official thereof); excluding, however, any Person
engaged in the oil and gas extraction or services business that is owned in
whole or in part by any such U.S. or non-U.S. international, regional, federal,
state, municipal or local governmental, judicial, administrative, legislative or
regulatory authority, entity, instrumentality, agency, department, commission,
court, or tribunal of competent jurisdiction (including any branch, department
or official thereof).

 

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“Hazardous Materials” means: (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of “hazardous substances,” “hazardous waste,” “hazardous materials,”
“extremely hazardous substances,” “restricted hazardous waste,” “toxic
substances,” “toxic pollutants,” “contaminants,” or “pollutants,” under any
applicable Environmental Law; and (c) any other chemical, material or substance,
exposure to which is prohibited, limited or regulated by any Governmental Entity
under Environmental Laws due to its dangerous or deleterious properties.

“Houlihan” has the meaning set forth in Section 3.3.

“Houlihan Advance Payment” has the meaning set forth in Section 3.3(a).

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended from time to time.

“Indemnified Claim” has the meaning set forth in Section 8.2.

“Indemnified Person” has the meaning set forth in Section 8.1.

“Indemnifying Party” has the meaning set forth in Section 8.1.

“Intellectual Property” means all U.S. or foreign intellectual or industrial
property or proprietary rights, including any: (a) trademarks, service marks,
trade dress, domain names, social media identifiers, corporate and trade names,
logos and all other indicia of source or origin, together with all associated
goodwill, (b) patents, inventions, invention disclosures, technology, know-how,
processes and methods, (c) copyrights and copyrighted works, (including
software, applications, source and object code, databases and compilations,
online, advertising and promotional materials, mobile and social media content
and documentation), (d) trade secrets and confidential or proprietary
information or content, and (e) all registrations, applications, renewals,
re-issues, continuations, continuations-in-part, divisions, extensions, re-
examinations and foreign counterparts of any of the foregoing.

“IRS” means the United States Internal Revenue Service.

“Joint Filing Party” has the meaning set forth in Section 6.9(c).

“Knowledge of the Company” means the actual knowledge, after a reasonable
inquiry of their direct reports, of the chief executive officer, chief financial
officer and chief compliance officer.

“Legal Proceedings” means any legal, governmental, administrative, judicial or
regulatory investigations, audits, actions, suits, claims, arbitrations,
demands, demand letters, claims, notices of noncompliance or violations, or
proceedings.

 

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“Lien” means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or other security
interest or preferential arrangement in the nature of a security interest of any
kind or nature whatsoever (including any conditional sale or other title
retention agreement, any easement, right of way or other encumbrance on title to
real property, and any financing lease having substantially the same economic
effect as any of the foregoing).

“Losses” has the meaning set forth in Section 8.1.

“Material Adverse Effect” means any Event which individually, or together with
all other Events, has had or would reasonably be expected to have a material and
adverse effect on (a) the business, assets, liabilities, finances, properties,
results of operations or condition (financial or otherwise) of the Company and
its Subsidiaries (or Reorganized Parker and its Subsidiaries), taken as a whole,
or (b) the ability of the Company and its Subsidiaries (or Reorganized Parker
and its Subsidiaries), taken as a whole, to perform their obligations under, or
to consummate the transactions contemplated by, the Definitive Documents,
including the Rights Offering, in each case, except to the extent such Event
results from, arises out of, or is attributable to, the following (either alone
or in combination): (i) any change after the date hereof in global, national or
regional political conditions (including hostilities, acts of war, sabotage,
terrorism or military actions, or any escalation or material worsening of any
such hostilities, acts of war, sabotage, terrorism or military actions existing
or underway) or in the general business, market, financial or economic
conditions affecting the industries, regions and markets in which the Company
and its Subsidiaries operate, including any change in the United States or
applicable foreign economies or securities, commodities or financial markets, or
force majeure events or “acts of God”; (ii) any changes after the date hereof in
applicable Law or GAAP, or in the interpretation or enforcement thereof;
(iii) the execution, announcement or performance of this Agreement or the other
Definitive Documents or the transactions contemplated hereby or thereby
(including any act or omission of the Company and its Subsidiaries expressly
required or prohibited, as applicable, by this Agreement or consented to or
required by the Requisite Commitment Parties in writing); (iv) the filing or
pendency of the Chapter 11 Cases; (v) changes in the market price or trading
volume of the claims or equity or debt securities of the Company and its
Subsidiaries (but not the underlying facts giving rise to such changes unless
such facts are otherwise excluded pursuant to the clauses contained in this
definition); (vi) the departure of officers or directors of any of the Company
or its Subsidiaries (but not the underlying facts giving rise to such departure
unless such facts are otherwise excluded pursuant to the clauses contained in
this definition); (vii) declarations of national emergencies in the United
States or natural disasters in the United States; (viii) any matters expressly
disclosed in the Disclosure Statement or the Company Disclosure Schedule as
delivered on the date hereof; or (ix) the occurrence of a Commitment Party
Default; provided, however, that the exceptions set forth in clauses (i) and
(ii) shall not apply to the extent that such Event is disproportionately adverse
to the Company and its Subsidiaries, taken as a whole, as compared to other
companies in the industries in which the Company and its Subsidiaries operate.

“Material Contracts” means all “plans of acquisition, reorganization,
arrangement, liquidation or succession” and “material contracts” (as such terms
are defined in Items 601(b)(2) and 601(b)(10) of Regulation S-K under the
Exchange Act) to which the Company or any of its Subsidiaries is a party.

 

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“Milestones” means those certain milestones set forth in Schedule 5 attached
hereto.

“Money Laundering Laws” has the meaning set forth in Section 4.22.

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.

“New Common Stock” means the common stock of Reorganized Parker.

“Order” means any judgment, order, award, injunction, writ, permit, license or
decree of any Governmental Entity or arbitrator of applicable jurisdiction.

“Party” has the meaning set forth in the introductory paragraph hereto.

“PBGC” means the Pension Benefit Guaranty Corporation established pursuant to
Section 4002 of ERISA, or any successor thereto.

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Company or
any ERISA Affiliate or to which the Company or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five years.

“Permitted Liens ” means (a) Liens for Taxes that (i) are not due and payable,
(ii) are being contested in good faith by appropriate proceedings or for which
adequate reserves have been made with respect thereto or (iii) the nonpayment of
which is permitted by the Bankruptcy Code; (b) landlord’s, operator’s, vendors’,
carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other
similar Liens for labor, materials or supplies or other like Liens arising by
operation of law in the ordinary course of business provided with respect to any
Property incurred in the ordinary course of business consistent with past
practice and as otherwise not prohibited under this Agreement, for amounts that
are not more than sixty (60) days delinquent and that do not materially detract
from the value of, or materially impair the use of, any of the Real Property or
personal property of the Company and its Subsidiaries (taken as a whole), or, if
for amounts that do materially detract from the value of, or materially impair
the use of, any of the Real Property or personal property of the Company and its
Subsidiaries (taken as a whole), if such Lien is being contested in good faith
by appropriate proceedings and for which adequate reserves have been made with
respect thereto; (c) zoning, building codes and other land use Laws regulating
the use or occupancy of any Real Property or the activities conducted thereon
that are imposed by any Governmental Entity having jurisdiction over such Real
Property; provided, that no such zoning, building codes and other land use Laws
prohibit the use or occupancy of such Real Property; (d) easements, covenants,
conditions, minor encroachments, restrictions on transfer and other similar

 

 

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matters affecting title to any Real Property (including any title retention
agreement) and other title defects and encumbrances that do not or would not
materially impair the ownership, use or occupancy of such Real Property or the
operation of the business of the Company and its Subsidiaries; (e) Liens granted
under any Contracts, to the extent the same are ordinary and customary in the
business of the Company and its Subsidiaries and do not or would not materially
impair the ownership, use or occupancy of any Real Property or the operation of
the Company and its Subsidiaries’ business and which are for claims not more
than sixty (60) days delinquent or, if such claim does materially impair such
ownership, use, occupancy or operation and are for obligations that are more
than sixty (60) days delinquent, are being contested in good faith by
appropriate proceedings and for which adequate reserves have been made with
respect thereto; (f) from and after the occurrence of the Effective Date, Liens
granted in connection with the DIP Facility and the Exit Facility; (g) mortgages
on a lessor’s interest in a lease or sublease; provided, that no foreclosure
proceedings have been duly filed (unless, in such case, such mortgage has been
subordinated to the applicable lease); (h) Liens that, pursuant to the Plan and
the Confirmation Order, will be discharged and released on the Effective Date;
and (i) any Liens set forth on Section 1.1(a) of the Company Disclosure
Schedule.

“Per Share Purchase Price” means a price per share of New Common Stock to result
in the Rights Offering realizing aggregate proceeds of $95,000,000, calculated
as set forth in the Rights Offering Procedures.

“Person” means an individual, firm, corporation (including any non-profit
corporation), partnership, limited liability company, joint venture,
association, trust, Governmental Entity or other entity or organization.

“Post-Closing Expenses” has the meaning set forth in Section 3.3(b).

“Pre-Closing Period” has the meaning set forth in Section 6.2.

“Property” means any right or interest in or to property of any kind whatsoever,
whether real, personal or mixed and whether tangible or intangible, including,
without limitation, the Existing Equity Interests.

“Put Election” has the meaning set forth in Section 2.2.

“Put Option” has the meaning set forth in Section 2.2.

“Put Option Cash Premium” has the meaning set forth in Section 3.1.

“Put Option Equity Premium” has the meaning set forth in Section 3.2(b).

“Real Property” means, collectively, all right, title and interest (including
any leasehold estate) in and to any and all parcels of or interests in real
property owned in fee or leased by any of the Debtors, together with, in each
case, all easements, hereditaments and appurtenances relating thereto, all
improvements and appurtenant fixtures incidental to the ownership or lease
thereof.

“Reasonable Approvals” has the meaning set forth in Section 4.3.

 

 

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“Related Party” means, with respect to any Person, (i) any former, current or
future director, officer, agent, Affiliate, employee, general or limited
partner, member, manager or stockholder of such Person and (ii) any former,
current or future director, officer, agent, Affiliate, employee, general or
limited partner, member, manager or stockholder of any of the foregoing.

“Related Purchaser” has the meaning set forth in Section 2.6(a).

“Replacing Commitment Parties” has the meaning set forth in Section 2.3(a).

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

“Representatives” means, with respect to any Person, such Person’s directors,
officers, members, partners, managers, employees, agents, investment bankers,
attorneys, accountants, advisors and other representatives.

“Requirement of Law” means as to any Person, any Law applicable to or binding
upon such Person or any of its Property or to which such Person or any of its
Property is subject.

“Requisite Commitment Parties” means the Required Consenting Stakeholders (as
defined in the RSA).

“Rights Offering” has the meaning set forth in the recitals hereto.

“Rights Offering Expiration Time” means the time and the date on which the
rights offering subscription form must be duly delivered to the Rights Offering
Subscription Agent in accordance with the Rights Offering Procedures, together
with the applicable Per Share Purchase Price.

“Rights Offering Participants” means those Persons who duly subscribe for Rights
Offering Shares in accordance with the Rights Offering Procedures.

“Rights Offering Shares” means, collectively, the shares of New Common Stock
issued in the Rights Offering.

“Rights Offering Subscription Agent” means a subscription agent appointed by the
Company and satisfactory to the Requisite Commitment Parties.

“RSA” has the meaning set forth in the introductory paragraph hereto.

“Sanctions” means any sanctions administered or enforced by the United States
government (including, without limitation, the U.S. Department of the Treasury’s
Office of Foreign Assets Control or the U.S. Department of State), the United
Nations Security Council, the European Union or Her Majesty’s Treasury or other
applicable jurisdictions.

“Significant Subsidiaries” has the meaning set forth in Section 4.1.

“Subscription Escrow Account” has the meaning set forth in Section 2.4(a).

 

 

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“Subscription Escrow Agreement” has the meaning set forth in Section 2.4(b).

“Subscription Escrow Funding Date” has the meaning set forth in Section 2.4(b).

“Subscription Rights” means, collectively, (i) the rights of holders of
Unsecured Notes to purchase up to approximately 63.1579% of the New Common Stock
offered in the Rights Offering (on a pro rata basis based on such holder’s
percentage holdings of Unsecured Notes), (ii) the rights of holders of Existing
Common Stock to purchase up to approximately 22.1053% of the New Common Stock
offered in the Rights Offering (on a pro rata basis based on such holder’s
percentage holdings of Existing Common Stock), and (iii) the rights of holders
of Existing Preferred Stock to purchase up to approximately 14.7368% of the New
Common Stock offered in the Rights Offering (on a pro rata basis based on such
holder’s percentage holdings of Existing Preferred Stock); provided, however,
that, if and to the extent that the Existing Common Stock Rejection occurs, then
the Company shall not accept the subscriptions in respect of the Subscription
Rights of the holders of Existing Common Stock from any holders of Existing
Common Stock on account of such holders’ Existing Common Stock and instead all
such shares shall be treated as Unsubscribed Shares.

“Subsidiary” means, with respect to any Person, any corporation, partnership,
joint venture or other legal entity as to which such Person (either alone or
through or together with any other subsidiary), (a) owns, directly or
indirectly, more than fifty percent (50%) of the stock or other equity
interests, (b) has the power to elect a majority of the board of directors or
similar governing body or (c) has the power to direct the business and policies.

“Taxes” means all taxes, assessments, duties, or levies or other similar
mandatory charges paid to a Governmental Entity, including all federal, state,
local, non-U.S. and other income, franchise, profits, gross receipts, capital
gains, capital stock, transfer, property, sales, use, value-added, occupation,
excise, severance, windfall profits, stamp, payroll, social security,
withholding and other taxes (whether payable directly or by withholding and
whether or not requiring the filing of a return), all estimated taxes,
deficiency assessments, additions to tax, penalties and interest thereon and
shall include any liability for such amounts as a result of being a member of a
combined, consolidated, unitary or affiliated group.

“Ultimate Purchaser” has the meaning set forth in Section 2.6(b).

“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan’s assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.

“Unsubscribed Shares” means the Rights Offering Shares that have not been duly
purchased by the Rights Offering Participants in accordance with the Rights
Offering Procedures and the Plan (including, for the avoidance of doubt, any
Rights Offering Shares that have not been duly purchased by the holders of
Existing Common Stock due to the Existing Common Stock Rejection having
occurred).

“willful or intentional breach” has the meaning set forth in Section 9.2(a).

 

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Section 1.2 Construction. In this Agreement, unless the context otherwise
requires:

(a) references to Articles, Sections, Exhibits and Schedules are references to
the articles and sections or subsections of, and the exhibits and schedules
attached to, this Agreement;

(b) the descriptive headings of the Articles and Sections of this Agreement are
inserted for convenience only, do not constitute a part of this Agreement and
shall not affect in any way the meaning or interpretation of this Agreement;

(c) references in this Agreement to “writing” or comparable expressions include
a reference to a written document transmitted by means of electronic mail in
portable document format (.pdf), facsimile transmission or comparable means of
communication;

(d) words expressed in the singular number shall include the plural and vice
versa; words expressed in the masculine shall include the feminine and neuter
gender and vice versa;

(e) the words “hereof”, “herein”, “hereto” and “hereunder”, and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole,
including all Exhibits and Schedules attached to this Agreement, and not to any
provision of this Agreement;

(f) the term this “Agreement” shall be construed as a reference to this
Agreement as the same may have been, or may from time to time be, amended,
modified, varied, novated or supplemented;

(g) “include”, “includes” and “including” are deemed to be followed by “without
limitation” whether or not they are in fact followed by such words;

(h) references to “day” or “days” are to calendar days;

(i) references to “the date hereof” means the date of this Agreement;

(j) unless otherwise specified, references to a statute means such statute as
amended from time to time and includes any successor legislation thereto and any
rules or regulations promulgated thereunder in effect on the date of this
Agreement; and

(k) references to “dollars” or “$” are to United States of America dollars.

 

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ARTICLE II

BACKSTOP COMMITMENT

Section 2.1 The Rights Offering; Subscription Rights. On and subject to the
terms and conditions hereof, including entry of the Disclosure Statement Order
by the Bankruptcy Court, (a) the Company, on behalf of Reorganized Parker, shall
conduct the Rights Offering pursuant to and in accordance with this Agreement,
the Rights Offering Procedures, and the Plan and (b) each Commitment Party
shall, and shall cause each of its Affiliates (as applicable) to, exercise the
Subscription Rights issued to and held by such Commitment Party or its
Affiliates (as applicable), pursuant to and in accordance with this Agreement,
the Rights Offering Procedures and the Plan; provided, however, that, if and to
the extent that the Existing Common Stock Rejection occurs, then the Company
shall not accept the subscriptions in respect of the Subscription Rights of the
holders of Existing Common Stock from any holders of Existing Common Stock on
account of such holders’ Existing Common Stock and instead all such shares shall
be treated as Unsubscribed Shares. If requested by the Requisite Commitment
Parties from time to time prior to the Rights Offering Expiration Time (and any
extensions thereto), the Company shall use commercially reasonable efforts to
notify, or cause the Rights Offering Subscription Agent to notify, within two
(2) Business Days of receipt of such request by the Company, the Commitment
Parties of the aggregate number of Subscription Rights known by the Company or
the Rights Offering Subscription Agent to have been exercised pursuant to the
Rights Offering as of the most recent practicable time before such request. The
Rights Offering Shares and the shares of New Common Stock in respect of the Put
Option Equity Premium will be made in reliance on the exemption from
registration pursuant to Section 1145 of the Bankruptcy Code. The Unsubscribed
Shares will be issued pursuant to the exemption from registration under
Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder.

Section 2.2 The Backstop Commitment. On and subject to the terms and conditions
hereof, each Commitment Party hereby grants to the Company an option
(collectively, the “Put Option”) to require such Commitment Party to purchase
Unsubscribed Shares on the Closing Date subject to the terms and conditions of
this Agreement. Upon the exercise of the Put Option, each Commitment Party
agrees, severally and not jointly, to purchase, and the Company agrees to sell
to such Commitment Party, on the Closing Date, the number of Unsubscribed Shares
equal to (a) such Commitment Party’s Backstop Commitment Percentage multiplied
by (b) the aggregate number of Unsubscribed Shares (provided, that, for the
avoidance of doubt, such applicable portion of Unsubscribed Shares shall be
multiplied by the applicable Backstop Commitment Percentage for such Commitment
Party set forth on Schedule 2A or Schedule 2B, as applicable), rounded among the
Commitment Parties solely to avoid fractional shares as the Commitment Parties
may determine in their sole discretion (provided, that in no event shall such
rounding reduce the aggregate commitment of the Commitment Parties). The
obligations of the Commitment Parties to purchase Unsubscribed Shares as
described in this Section 2.2 shall be referred to as the “Backstop Commitment”.
The Company may exercise the Put Option by delivery to each Commitment Party of
a written put election notice (the “Put Election”); provided, however, that the
Put Option shall automatically and irrevocably be deemed to have been exercised
by the Company, without the need for delivery of a written notice or the taking
of any further action by the Company or any other Person. The purchase price
payable by each Commitment Party in respect of each Unsubscribed Share that such
Commitment Party is obligated to purchase under its Backstop Commitment shall be
the Per Share Purchase Price.

 

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Section 2.3 Commitment Party Default.

(a) Upon the occurrence of a Commitment Party Default, the Commitment 14 Parties
(other than any Defaulting Commitment Party) shall have the right, but not the
obligation, within five (5) Business Days after receipt of written notice from
the Company to all Commitment Parties of such Commitment Party Default, which
notice shall be given promptly following the occurrence of such Commitment Party
Default and to all Commitment Parties substantially concurrently (such five
(5) Business Day period, the “Commitment Party Replacement Period”), to make
arrangements for one or more of the Commitment Parties (other than the
Defaulting Commitment Party) to purchase all or any portion of the Available
Shares (such purchase, a “Commitment Party Replacement”) on the terms and
subject to the conditions set forth in this Agreement and in such amounts based
upon the applicable Backstop Commitment Percentage of any such Commitment
Parties or as may otherwise be agreed upon by all of the Commitment Parties
electing to purchase all or any portion of the Available Shares (such Commitment
Parties, the “Replacing Commitment Parties”); provided, however, that,
notwithstanding the foregoing, the Outside Date shall not be extended
automatically as a result of the existence of a Commitment Party Replacement
Period and the Commitment Party Replacement Period shall expire on or before the
Outside Date.

(b) In the event that any Commitment Parties do not elect to purchase all
Available Shares available for purchase pursuant to Section 2.3(a), the Company
may, in its sole discretion, elect to utilize the Cover Transaction Period to
consummate a Cover Transaction. As used herein, “Cover Transaction” means a
circumstance in which the Company, in its sole discretion, arranges for the sale
of all or any portion of the Available Shares to any other Person, on terms and
conditions substantially similar to the Backstop Commitment and the other terms
and conditions applicable to the Commitment Parties in their obligation to
purchase Unsubscribed Shares pursuant to this Agreement, during the Cover
Transaction Period, and “Cover Transaction Period” means the ten (10) Business
Day period following expiration of the Commitment Party Replacement Period;
provided, however, that, notwithstanding the foregoing, the Outside Date shall
not be extended automatically as a result of the existence of a Cover
Transaction Period and the Cover Transaction Period shall expire on or before
the Outside Date. For the avoidance of doubt, the Company’s election to pursue a
Cover Transaction, whether or not consummated, shall not relieve any Commitment
Party of its obligation to fulfill its Backstop Commitment.

(c) Any such Available Shares purchased by a Replacing Commitment Party (and any
commitment and applicable aggregate Per Share Purchase Price associated
therewith) shall be included, among other things, in the determination of
(x) the Unsubscribed Shares of such Replacing Commitment Party for all purposes
hereunder, and (y) the Backstop Commitment Percentage of such Replacing
Commitment Party for purposes of Section 2.3(d), Section 2.4(b), and
Section 3.1.

(d) If a Commitment Party is a Defaulting Commitment Party, it shall not be
entitled to, and shall be deemed to have irrevocably forfeited its rights to
(i) purchase or otherwise receive any of the Unsubscribed Shares and
(ii) receive, any of the Put Option Equity Premium hereunder, and the Replacing
Commitment Parties shall instead be entitled to such Put Option Equity Premium
ratably in proportion to their respective Commitment Party Replacement.

(e) If a Commitment Party becomes a Defaulting Commitment Party after the date
of this Agreement, it shall be obligated to repay its ratable portion of the Put
Option Cash Premium to the Replacing Commitment Parties ratably in proportion to
their respective Commitment Party Replacement.

 

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(f) No Commitment Party shall have any liability for the Backstop Commitment of
any other Commitment Party or for the failure of any other Commitment Party to
exercise its Subscription Rights. Nothing in this Agreement shall be deemed to
require a Commitment Party to purchase more than its Backstop Commitment
Percentage of the Unsubscribed Shares.

(g) For the avoidance of doubt, notwithstanding anything to the contrary set
forth in Section 9.2 but subject to Section 10.10, no provision of this
Agreement shall relieve any Defaulting Commitment Party from liability
hereunder, or limit the availability of the remedies set forth in Section 10.9,
in connection with any such Defaulting Commitment Party’s Commitment Party
Default.

Section 2.4 Subscription Escrow Account Funding.

(a) Funding Notice. No later than the tenth (10th) Business Day following the
Rights Offering Expiration Time, the Company shall cause the Rights Offering
Subscription Agent to deliver to each Commitment Party in accordance with
Section 10.1(b) a written notice (the “Funding Notice”) of (i) the number of
Rights Offering Shares elected to be purchased by the Rights Offering
Participants and the aggregate Per Share Purchase Price therefor; (ii) the
aggregate number of Unsubscribed Shares, if any, and the aggregate Per Share
Purchase Price therefor; (iii) the aggregate number of Unsubscribed Shares
(based upon such Commitment Party’s Backstop Commitment Percentage) to be issued
and sold by Reorganized Parker to such Commitment Party and the aggregate Per
Share Purchase Price therefor; and (iv) the escrow account to which such
Commitment Party shall deliver and pay the aggregate Per Share Purchase Price
for such Commitment Party’s Backstop Commitment Percentage of the Unsubscribed
Shares (the “Subscription Escrow Account”). The Company shall direct the Rights
Offering Subscription Agent to promptly provide any written backup, information
and documentation relating to the information contained in the applicable
Funding Notice as any Commitment Party may reasonably request.

(b) Subscription Escrow Account Funding. Notwithstanding any earlier obligation
contained in the Rights Offering Procedures, on the second (2nd) Business Day
before the Closing Date (such date, the “Subscription Escrow Funding Date”),
each Commitment Party shall deliver and pay an amount equal to the sum of
(i) the aggregate Per Share Purchase Price for such Commitment Party’s Backstop
Commitment Percentage of the Unsubscribed Shares, plus (ii) the aggregate Per
Share Purchase Price for the Rights Offering Shares pursuant to such Commitment
Party’s exercise of its Subscription Rights, by wire transfer in immediately
available funds in U.S. dollars into the Subscription Escrow Account in
satisfaction of such Commitment Party’s Backstop Commitment and its obligations
to fully exercise its Subscription Rights. The Subscription Escrow Account shall
be established with an escrow agent satisfactory to the Requisite Commitment
Parties and the Company pursuant to an escrow agreement in form and substance
reasonably acceptable to the Requisite Commitment Parties and the Company (the
“Subscription Escrow Agreement”). If (x) this Agreement is terminated for any
reason or (y) Closing has not occurred within four (4) Business Days after the
Subscription Escrow Funding Date, the funds held in the Subscription Escrow
Account shall be released, and each Commitment Party shall receive from the
Subscription Escrow Account the cash amount actually funded to the Subscription
Escrow Account by such Commitment Party, without any interest, as soon as
practicable thereafter.

 

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Section 2.5 Closing.

(a) Subject to Article VII unless otherwise mutually agreed in writing between
the Company and the Requisite Commitment Parties, the closing of the Backstop
Commitments (the “Closing”) shall take place at the offices of Kirkland & Ellis
LLP, 601 Lexington Avenue, New York, New York 10022, within three (3) Business
Days of the date on which all of the conditions set forth in Article VII shall
have been satisfied or waived in accordance with this Agreement (other than
conditions that by their terms are to be satisfied at the Closing, but subject
to the satisfaction or waiver of such conditions). The date on which the Closing
actually occurs shall be referred to herein as the “Closing Date”, which,
provided that all conditions set forth in Article VII shall have been satisfied
or waived in accordance with this Agreement, shall be the Effective Date.

(b) At the Closing, the funds held in the Subscription Escrow Account shall be
released and utilized as set forth in, and in accordance with, the Plan and the
Subscription Escrow Agreement.

(c) At the Closing, issuance of the Unsubscribed Shares and Available Shares, if
any, will be made by Reorganized Parker to each Commitment Party (or to its
designee in accordance with Section 2.6(a)) against payment of the aggregate Per
Share Purchase Price for the Unsubscribed Shares purchased by such Commitment
Party, in satisfaction of such Commitment Party’s Backstop Commitment, and
against payment of the aggregate Per Share Purchase Price for the Available
Shares purchased by such Commitment Party, if any. Unless a Commitment Party
requests delivery of a physical stock certificate, Reorganized Parker shall use
commercially reasonable efforts to cause the entry of any Unsubscribed Shares,
Available Shares, Rights Offering Shares and shares of New Common Stock in
respect of the Put Option Equity Premium to be delivered pursuant to this
Section 2.5(c) into the account of a Commitment Party pursuant to Reorganized
Parker’s book entry procedures and delivery to such Commitment Party of an
account statement reflecting the book entry of such Unsubscribed Shares,
Available Shares, Rights Offering Shares and shares of New Common Stock in
respect of the Put Option Equity Premium shall be deemed delivery of such
Unsubscribed Shares, Available Shares, Rights Offering Shares and shares of New
Common Stock in respect of the Put Option Equity Premium for purposes of this
Agreement, it being understood that such book entry procedures may be those of a
transfer agent acting on behalf of Reorganized Parker in such capacity, such
procedures and transfer agent being required to be reasonably satisfactory to
the Requisite Commitment Parties. Notwithstanding anything to the contrary in
this Agreement, all Unsubscribed Shares, Available Shares, Rights Offering
Shares and shares of New Common Stock in respect of the Put Option Equity
Premium will be delivered with all issue, stamp, transfer, sales and use, or
similar transfer Taxes or duties that are due and payable (if any) in connection
with such delivery duly paid by Reorganized Parker.

 

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Section 2.6 Designation and Assignment Rights.

(a) Each Commitment Party shall have the right to designate by written notice to
the Company no later than two (2) Business Days prior to the Closing Date that
some or all of (w) the Unsubscribed Shares that it is obligated to purchase
hereunder, (x) the Available Shares, if any, (y) the Rights Offering Shares
pursuant to its exercise of the Subscription Rights, or (z) the shares of New
Common Stock to be issued in respect of the Put Option Equity Premium, in each
case, be issued in the name of, and delivered to, one or more of its Affiliates
or Affiliated Funds (other than any portfolio company of such Commitment Party
or its Affiliates) (each, a “Related Purchaser”) upon receipt by the Company of
payment therefor in accordance with the terms hereof, which notice of
designation shall (i) be addressed to the Company and signed by such Commitment
Party and each such Related Purchaser, (ii) specify the number of Unsubscribed
Shares, Rights Offering Shares or shares of New Common Stock to be issued in
respect of the Put Option Equity Premium to be delivered to or issued in the
name of such Related Purchaser and (iii) contain a confirmation by each such
Related Purchaser of the accuracy of the representations and warranties set
forth in Section 5.7 through Section 5.11 as applied to such Related Purchaser;
provided, however, that no such designation pursuant to this Section 2.6(a)
shall relieve such Commitment Party from its obligations under this Agreement.

(b) Each Commitment Party shall have the right to Transfer all or any portion of
its Backstop Commitment only to (i) any investment fund the primary investment
advisor to which is such Commitment Party, the same investment advisor or
manager as such Commitment Party, or an Affiliate thereof (other than any
portfolio company) (an “Affiliated Fund”) or (ii) one or more special purpose
vehicles that are wholly-owned by one or more of such Commitment Party and its
Affiliated Funds, created for the purpose of holding such Backstop Commitment or
holding debt or equity of the Company and its Subsidiaries, and with respect to
which such Commitment Party either (A) has provided an adequate equity support
letter or a guarantee of such special purpose vehicle’s Backstop Commitment, in
form and substance reasonably acceptable to the Company or (B) otherwise remains
obligated to fund the Backstop Commitment to be transferred until the
consummation of the Plan; provided, however, that such special purpose vehicle
shall not be related to or Affiliated with any portfolio company of such
Commitment Party or any of its Affiliates or Affiliated Funds (other than solely
by virtue of its affiliation with such Commitment Party) and the equity of such
special purpose vehicle shall not be directly or indirectly transferable other
than to such Persons described in clauses (i) or (ii) of this Section 2.6(b),
and in such manner as such Commitment Party’s Backstop Commitment is
transferable pursuant to this Section 2.6(b) (each of the Persons referred to in
clauses (i) and (ii), an “Ultimate Purchaser”), and that, in each case, (1) the
Ultimate Purchaser provides a written agreement to the Company under which it
(w) confirms the accuracy of the representations set forth in Article V as
applied to such Ultimate Purchaser (x) agrees to purchase such portion of such
Commitment Party’s Backstop Commitment, (y) agrees to be fully bound by, and
subject to, this Agreement as a Commitment Party hereto pursuant to a joinder
agreement in the form set forth on Exhibit A attached hereto, and (z) agrees to
be bound by the RSA pursuant to a transfer agreement in the form set forth on
Exhibit B attached hereto, and (2) the transferring Commitment Party and
Ultimate Purchaser shall have duly executed and delivered to the Company written
notice of such Transfer; provided, further, that no sale or Transfer pursuant to
this Section 2.6(b) shall relieve such Commitment Party from its obligations
under this Agreement. Other than as set forth in this Section 2.6(b), no
Commitment Party shall be permitted to Transfer all or any portion of its
Backstop Commitment without the prior written consent of the Company, which
consent shall not be unreasonably withheld,

 

 

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conditioned or delayed (it being understood that it would be unreasonable for
the Company to withhold its consent to any such Transfer if (i) the transferee
is another Commitment Party or an Affiliate of another Commitment Party (other
than any portfolio company), or (ii) the transferee has the financial
wherewithal to fulfill its obligations with respect to the Backstop Commitment
to be transferred, as determined in the Company’s reasonable opinion after
request by the Company to the transferee, and prompt delivery to the Company by
the transferee, of proof of such financial wherewithal, and, in the case of
clauses (i) and (ii), such transferee provides a written agreement to the
Company under which it (w) confirms the accuracy of the representations set
forth in Article V as applied to such transferee, (x) agrees to purchase such
portion of such Commitment Party’s Backstop Commitment, (y) agrees to be fully
bound by, and subject to, this Agreement as a Commitment Party hereto pursuant
to a joinder agreement in the form set forth on Exhibit A attached hereto, and
(z) agrees to be bound by the RSA pursuant to a transfer agreement in the form
set forth on Exhibit B attached hereto). Any Transfer of a Commitment Party’s
obligations under this Agreement made in violation of this paragraph shall be
deemed null and void ab initio and of no force or effect, regardless of any
prior notice provided to the Debtors or any Commitment Party, and shall not
create any obligation or liability of any Debtor or any other Commitment Party
to the purported transferee.

(c) Each Commitment Party, severally and not jointly, agrees that it will not
Transfer, at any time prior to the Closing Date or the earlier termination of
this Agreement in accordance with its terms, any of its rights and obligations
under this Agreement to any Person other than in accordance with Section 2.3,
Section 2.6(a), and Section 2.6(b) of this Agreement. After the Closing Date,
nothing in this Agreement shall limit or restrict in any way the ability of any
Commitment Party (or any permitted transferee thereof) to Transfer any of its
Unsubscribed Shares, Rights Offering Shares or any interest therein; provided,
however, that any such Transfer shall be made pursuant to an effective
registration statement under the Securities Act or an exemption from the
registration requirements thereunder and pursuant to applicable securities laws.

Section 2.7 No Financial Accommodation Agreement. The Parties hereby
acknowledge, covenant, and agree that: (i) this Agreement does not, and shall
not, constitute a “financial accommodation agreement” that cannot be assumed
under Section 365(c)(2) of the Bankruptcy Code and the Parties hereby agree that
they shall not take a position to the contrary in the Bankruptcy Court or any
other court of competent jurisdiction and (ii) the Commitment Parties, alone or
in combination, will not initiate, or assert in, any litigation or other legal
proceeding that this Section 2.7 is illegal, invalid or unenforceable, in whole
or in part, or that this Agreement does or may constitute a “financial
accommodation agreement” under Section 365(c)(2) of the Bankruptcy Code.

 

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ARTICLE III

PUT OPTION CASH PREMIUM; PUT OPTION EQUITY PREMIUM; EXPENSE

REIMBURSEMENT

Section 3.1 Put Option Cash Premium. Subject to Section 3.2, as consideration
for the Put Option, the Backstop Commitment and the other agreements of the
Commitment Parties in this Agreement, the Company has paid or caused to be paid
on or prior to the execution of this Agreement, an aggregate premium equal to
$7,600,000.00, which premium has been paid in cash to the Commitment Parties or
their designees based upon their Backstop Commitment Percentages set forth on
Schedule 1 (the “Put Option Cash Premium”). The Put Option Cash Premium is and
has been fully earned, nonrefundable and non-avoidable, and has been paid by the
Company, free and clear of any withholding or deduction for any applicable Taxes
or any other claim, setoff, or reserve. The Put Option Cash Premium has been
paid irrespective of the amount of Unsubscribed Shares (if any) actually
existing or purchased. The provisions for the payment of the Put Option Cash
Premium and Expense Reimbursement, and the indemnification provided herein, are
an integral part of the transactions contemplated by this Agreement and without
these provisions the Commitment Parties would not have entered into this
Agreement.

Section 3.2 Return of Put Option Cash Premium; Put Option Equity Premium.

(a) The Commitment Parties hereby acknowledge and agree that the Put Option Cash
Premium shall be returned and repaid to the Company only (i) if this Agreement
is properly terminated by the Commitment Parties solely pursuant to
(x) Section 9.1(b)(iii) or (y) Section 9.1(d) if and only if, at such time,
(1) the only condition to the obligations of the Commitment Parties in
Section 7.1 remaining to be satisfied is that the Confirmation Order has been
entered by the Bankruptcy Court but it has not become a Final Order as set forth
in Section 7.1(c), (2) no Commitment Party has waived the condition in Section
7.1(c), and (3) solely due to the failure to waive the condition in Section
7.1(c), the Outside Date has not occurred, or (ii) if this Agreement is properly
terminated by the Company pursuant to Section 9.1(c)(ii), in each case in
respect of the foregoing clauses (i) and (ii) in this Section 3.2(a), in cash
within two (2) Business Days following such proper termination, and (iii) in
connection with the Closing pursuant to the terms of Section 3.2(b).

(b) In connection with, and conditional upon the occurrence of, the Closing, the
Commitment Parties shall return and repay the full Put Option Cash Premium to
the Company in exchange for, as consideration for the Put Option, the Backstop
Commitment and the other agreements of the Commitment Parties in this Agreement,
their ratable share, based on the Commitment Parties’ respective Backstop
Commitment Percentages set forth on Schedule 1 on the date of such payment, of
3.3539% of the New Common Stock, without any need for further payment for such
New Common Stock by the Commitment Parties (such New Common Stock, the “Put
Option Equity Premium”), to be issued by Reorganized Parker (subject to dilution
by New Common Stock issued in connection with the Management Incentive Plan and
the exercise of the New Warrants) (as set forth on Schedule 4); provided,
however, that the aggregate Put Option Equity Premium payable pursuant to this
Section 3.2 shall be reduced ratably upon a Commitment Party Default based on
the Backstop Commitment Percentage set forth on Schedule 1 of the Defaulting
Commitment Party; provided, further, that, if a Commitment Party Replacement
sufficient to cure all or a portion of the Commitment Party Default occurs
within the Commitment Party Replacement Period, the Put Option Equity Premium
shall only be ratably reduced to the extent of the uncured Commitment Party
Default, and such amount that would have otherwise been reduced shall be paid to
the Replacing Commitment Parties; provided, further, that, the obligation to
repay the Put Option Cash Premium as set forth in this Section 3.2(b) shall be
several and not joint and not joint and several.

 

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(c) The Parties agree to treat the Put Option Cash Premium and the Put Option
Equity Premium as “option premium” for U.S. federal income Tax purposes and to
not take any action inconsistent therewith unless otherwise required by a final
determination to the contrary within the meaning of Section 1313(a) of the Code.

Section 3.3 Expense Reimbursement. Until the earlier to occur of (i) the Closing
and (ii) the termination of this Agreement in accordance with its terms,
regardless of whether the Restructuring Transactions are consummated, the
Company agrees to pay (without duplication, and to the extent not otherwise paid
pursuant to Section 14.22 of the RSA) in cash all reasonable and documented
fees, costs and expenses (whether incurred before or after execution of this
Agreement) of (a) Akin Gump, as counsel to the Commitment Parties and the
Consenting Stakeholders, (b) any local counsel to the Commitment Parties and the
Consenting Stakeholders, (c) Houlihan Lokey Capital, Inc. (“Houlihan”), as
financial advisor to the Commitment Parties and the Consenting Stakeholders, and
(d) any consultants or other professionals retained by the Commitment Parties
represented by Akin Gump in connection with the Company Parties or the
Restructuring Transactions with the consent of the Company Parties (not to be
unreasonably withheld), in each case, in accordance with the engagement letters
of such consultant or professional signed by the Company Parties, including,
without limitation, any success fees contemplated therein, and in each case,
without further order of, or application to, the Bankruptcy Court by such
consultants or professionals, as applicable (the “Expense Reimbursement”).

(a) Simultaneously with the execution of this Agreement, the Company shall pay
(i) all reasonable and documented fees and expenses of Akin Gump incurred or
estimated to be incurred prior to and including the date hereof and (ii) an
amount equal to $3,000,000.00 to Akin Gump (the “Akin Advance Payment”) and an
amount equal to $450,000.00 to Houlihan (the “Houlihan Advance Payment”) and
such amounts shall be considered as advance payments.

(b) If, as of the earlier of the Closing or the termination of this Agreement in
accordance with Article IX, as applicable, and after the application of the Akin
Advance Payment or the Houlihan Advance Payment, as applicable, to fees and
expenses of Akin Gump and/or Houlihan included in the Expense Reimbursement,
there remain outstanding amounts in the Akin Advance Payment or the Houlihan
Advance Payment, as applicable (any such amount the “Advance Payment Surplus”),
then Akin Gump and/or Houlihan, as applicable, shall repay their portion (if
any) of the Advance Payment Surplus to the Company either within ten (10) days
of Closing or within ten (10) days following the termination of this Agreement
in accordance with Article IX, as applicable; provided, that, in the event
Closing occurs, the “Expense Reimbursement” shall also include (for all purposes
including determination of the existence of an Advance Payment Surplus) all fees
and expenses reasonably expected to be incurred by Akin Gump and/or Houlihan, as
applicable, related to the Restructuring Transactions following Closing (such
portion of the Expense Reimbursement in such scenario, the “Post-Closing
Expenses”), which shall be paid in connection with Closing as an advance
payment.

(c) Any Expense Reimbursement incurred by Akin Gump or Houlihan in excess of the
Akin Advance Payment or Houlihan Advance Payment (including for Post-Closing
Expenses), as applicable, and any other Expense Reimbursement due to any other
person, shall be due and payable by the Company contemporaneously with Closing
and shall not be due and payable prior thereto.

 

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(d) In addition, regardless of whether the Restructuring Transactions are
consummated, the Company shall promptly upon request reimburse each Commitment
Party in cash for all reasonable and documented out-of-pocket costs or expenses
(without limiting the Company’s obligations pursuant to the other provisions of
this Section 3.3, which out-of-pocket costs or expenses shall not include any
professional or advisor fees of such Commitment Party otherwise covered by this
Section 3.3) incurred by such Commitment Party in connection with this Agreement
or the Restructuring Transactions in connection with Closing.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except (i) as set forth in the Company Disclosure Schedules or (ii) as disclosed
in the Company SEC Documents filed with the SEC on or after December 31, 2017
and publicly available on the SEC’s Electronic Data-Gathering, Analysis and
Retrieval system prior to the date hereof (excluding the exhibits, annexes and
schedules thereto, any disclosures contained in the “Forward-Looking Statements”
or “Risk Factors” sections thereof, or any other statements that are similarly
predictive, cautionary or forward looking in nature), the Company hereby
represents and warrants to the Commitment Parties (unless otherwise set forth
herein, as of the date of this Agreement and as of the Closing Date) as set
forth below.

Section 4.1 Existence; Compliance with Law. Except as set forth on Section 4.1
of the Company Disclosure Schedule, the Company and each of its Subsidiaries set
forth on Exhibit 21 to the Company’s Form 10-K for the fiscal year ended
December 31, 2017 (such Subsidiaries, the “Significant Subsidiaries”) (a) is
duly organized or formed, validly existing and, if applicable, in good standing
(or the equivalent thereof) under the Laws of the jurisdiction of its
organization or formation, (b) has the requisite power and authority (corporate
or otherwise) to own and operate its Property, to lease the Property it operates
as lessee and to conduct the business in which it is currently engaged, (c) is
duly qualified and licensed and, as applicable, in good standing under the laws
of each jurisdiction where the conduct of its business, as currently conducted,
requires such qualification, except to the extent that the failure to be so
qualified would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect and (d) is in compliance with all
Requirements of Law and its Governance Documents, except to the extent that the
failure to comply therewith would not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.

Section 4.2 Power; Enforceable Obligations. The Company and each of its
Subsidiaries that has entered into this Agreement or any other Definitive
Document, as applicable, has the requisite power and authority (corporate or
otherwise) to enter into, execute and deliver this Agreement and, subject to
entry of the Confirmation Order, each other Definitive Document to which it is a
party and to perform its obligations hereunder and thereunder. The Company and
each of its Subsidiaries that has entered into this Agreement or any other
Definitive Document, as applicable, has taken all necessary action (corporate or
otherwise) required for the due authorization, execution, delivery and, subject
to entry of the Confirmation Order, performance by it of this Agreement and the
other Definitive Documents to which it is a party. This Agreement will
constitute, and each other Definitive Document upon execution will constitute,
valid and legally binding obligations of the Company and its Subsidiaries, as
applicable, that are a party hereto or thereto, enforceable against the Company
and each of its Subsidiaries, as applicable, in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency
reorganization or other similar laws limiting creditors’ rights generally or by
equitable principles relating to enforceability.

 

 

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Section 4.3 Consents and Approvals. No consent, approval, authorization, Order,
registration or qualification of or with any Governmental Entity having
jurisdiction over the Company or any of its Subsidiaries or any of their
Property (each an “Applicable Consent”) is required for the execution and
delivery by the Company and, to the extent relevant, its Subsidiaries, of this
Agreement and each other Definitive Document, the compliance by the Company and,
to the extent relevant, its Subsidiaries, with the provisions hereof and thereof
and the consummation of the transactions contemplated herein and therein, except
for (a) the entry of the Disclosure Statement Order, (b) the entry of an order
approving the Rights Offering Procedures, (c) the entry of the Confirmation
Order, (d) the entry by the Bankruptcy Court, or any other court of competent
jurisdiction, of Orders as may be necessary in the Chapter 11 Cases from time to
time, (e) such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or “Blue Sky” Laws in
connection with the purchase of the Unsubscribed Shares by the Commitment
Parties, the issuance of the Subscription Rights and the issuance of the Rights
Offering Shares pursuant to the exercise, if any, of the Subscription Rights,
and (f) (1) filings, if any, pursuant to the HSR Act and the expiration or
termination of all applicable waiting periods thereunder or any applicable
filing, notification, authorization, approval, consent, clearance, waiting
period or waiver under any other Antitrust Laws in connection with the
transactions contemplated by this Agreement, and (2) any other governmental
notifications, filings, consents, waivers, waiting periods and approvals, if
any, required for the consummation of the transactions contemplated by this
Agreement, the RSA and the Plan, which, in each case in respect of clauses
(1) and (2) of this Section 4.3(f), if not made or obtained, would reasonably be
expected, individually or in the aggregate, to prohibit, materially delay or
materially and adversely impact the Company or the Commitment Parties’
performance of their obligations under this Agreement or any other Definitive
Document to which the Company or the Commitment Parties are a party, as
reasonably determined and agreed by the Company and the Requisite Commitment
Parties upon advice of counsel within fifteen (15) Business Days of the date of
this Agreement, and which have been discussed between Akin Gump and counsel to
the Company prior to the date of this Agreement ((1) and (2) collectively, the
“Reasonable Approvals”), and (h) any Applicable Consents that, if not made or
obtained, would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

Section 4.4 No Conflict. Assuming the consents described in clauses (a) through
(h) of Section 4.3 are obtained, the execution and delivery of this Agreement
and each other Definitive Document to which the Company or its Subsidiaries is a
party, the compliance by the Company and its Subsidiaries, as applicable, with
the provisions hereof and thereof and the consummation of the transactions
contemplated herein and therein will not (a) violate the Governance Documents of
Reorganized Parker or any of the organization documents of any of the Company’s
Subsidiaries (other than with respect to the foregoing, for the avoidance of
doubt, a breach or default that would be triggered as a result of the Chapter 11
Cases or the Company’s or any Debtor’s undertaking to implement the
Restructuring Transactions through the Chapter 11 Cases), (b) conflict with, or
result in a breach, modification or violation of, any of the terms or

 

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provisions of, or constitute a default under (with or without notice or lapse of
time, or both), or result, except to the extent specified in the Plan, in the
acceleration of, or the creation of any Lien under, or cause any payment or
consent to be required under any Contract to which the Company or any Subsidiary
will be bound as of the Closing Date after giving effect to the Plan or to which
any of the property or assets of the Company or any of its Subsidiaries will be
subject as of the Closing Date after giving effect to the Plan, or (c) result in
any violation of any Law or Order applicable to the Company or any of its
Subsidiaries or its or their Property, except in the case of clause (b) and (c),
for any conflict, breach, modification, violation, default, acceleration or Lien
which would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

Section 4.5 No Material Litigation. (a) Except as set forth in Section 4.5 of
the Company Disclosure Schedule, and (b) other than the Chapter 11 Cases (and
any adversary proceedings or contested motions commenced in connection
therewith) or any matters referenced in any proof of claim filed therein, no
material litigation, investigation, claim or proceeding of or before any
arbitrator or Governmental Entity is pending or, to the Knowledge of the
Company, threatened against the Company or any of its Subsidiaries, pursuant to
which any Property of the Company or its Subsidiaries is subject to, in each
case, that in any manner draws into question the validity or enforceability of
this Agreement, the Plan or the other Definitive Documents or the transactions
contemplated hereby or thereby, or that would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

Section 4.6 Financial Statements; No Material Adverse Effect.

(a) The Audited Financial Statements, reported on by and accompanied by an
unqualified report from an independent certified public accounting firm of
national reputation, present fairly in all material respects the consolidated
financial condition of the Company and its Subsidiaries as of December 31, 2016
and December 31, 2017, as applicable, and the consolidated results of its
operations and its consolidated cash flows for the respective fiscal years then
ended, except as otherwise expressly noted therein.

(b) The unaudited consolidated condensed balance sheet of the Company and its
Subsidiaries as of September 30, 2018, and the related unaudited consolidated
condensed statements of operations and cash flows for the period ended on such
date, present fairly in all material respects the consolidated financial
condition of the Company and its Subsidiaries as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
quarterly period then ended (subject to the absence of footnotes, normal
year-end audit adjustments and other presentation items), except as otherwise
expressly noted therein.

(c) All such financial statements described in subsections (a) and (b) of this
Section 4.6, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as disclosed therein).

(d) During the period from December 31, 2017 to and including the Closing Date,
there has been no Disposition by the Company or any of its Significant
Subsidiaries of any material part of its business or Property, except as
reflected in the consolidated or consolidated condensed (as applicable)
financial statements described in subsections (a) and (b) of this Section 4.6.

 

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(e) Except as set forth on Section 4.6 of the Company Disclosure Schedule and
except for the Chapter 11 Cases, there has been no Event, either individually or
in the aggregate, between December 31, 2017 and the date of this Agreement, that
has had or would reasonably be expected to have a Material Adverse Effect.

Section 4.7 Material Contracts. Except as set forth on Section 4.7 of the
Company Disclosure Schedule and other than as a result of a rejection motion
filed by any of the Debtors in the Chapter 11 Cases, all Material Contracts are
valid, binding and enforceable by and against the Company or its relevant
Subsidiary party thereto (except where the failure to be valid, binding or
enforceable by and against the Company or its relevant Subsidiary may be limited
by bankruptcy, insolvency, reorganization or other similar laws limiting
creditors’ rights generally or by equitable principles relating to
enforceability), and no written notice to terminate, in whole or part, any
Material Contract has been delivered to the Company or any of its Subsidiaries
(except where such termination would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect). Except as set
forth on Section 4.7 of the Company Disclosure Schedule and other than as a
result of the filing of the Chapter 11 Cases, neither the Company nor any of its
Subsidiaries nor, to the Knowledge of the Company, any other party to any
Material Contract, is in material default or breach under the terms thereof, in
each case, except for such instances of material default or breach that would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. The Company has provided or made available correct and complete
copies of all Material Contracts (together with any amendments or modifications
thereto) in effect as of the date hereof to the Commitment Parties or its
Representatives prior to the date hereof.

Section 4.8 Authorized and Issued Capital Stock.

(a) The shares of New Common Stock to be issued pursuant to the Plan, including
the shares of New Common Stock to be issued in connection with the consummation
of the Rights Offering and pursuant to the terms hereof, will, when issued and
delivered on the Closing Date, be duly and validly authorized, issued and
delivered and shall be fully paid and non-assessable, and free and clear of all
Taxes, Liens (other than Transfer restrictions imposed hereunder or under the
Governance Documents of Reorganized Parker, the Registration Rights Agreement or
by applicable Law), preemptive rights, subscription and similar rights.

(b) Except as contemplated by the Plan, as of the Closing Date, no shares of
capital stock or other Equity Interests in Reorganized Parker will have been
issued, reserved for issuance or outstanding.

(c) Except as described in this Section 4.8 and except as set forth in the
Registration Rights Agreement, or the Governance Documents of Reorganized
Parker, as of the Closing Date, neither Reorganized Parker nor any of its
Subsidiaries will be party to or otherwise bound by or subject to any
outstanding option, warrant, call, right, security, commitment, Contract,
arrangement or undertaking (including any preemptive right) that (i) obligates
Reorganized Parker or any of its Subsidiaries to issue, deliver, sell or
transfer, or repurchase, redeem or otherwise

 

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acquire, or cause to be issued, delivered, sold or transferred, or repurchased,
redeemed or otherwise acquired, any shares of the capital stock of, or other
equity or voting interests in, Reorganized Parker or any of its Subsidiaries or
any security convertible or exercisable for or exchangeable into any capital
stock of, or other equity or voting interest in, Reorganized Parker or any of
its Subsidiaries, (ii) obligates Reorganized Parker or any of its Subsidiaries
to issue, grant, extend or enter into any such option, warrant, call, right,
security, commitment, Contract, arrangement or undertaking, (iii) restricts the
Transfer of any shares of capital stock of Reorganized Parker or any of its
Subsidiaries or (iv) relates to the voting of any shares of capital stock of
Reorganized Parker.

Section 4.9 Ownership of Property; Liens.

(a) The Company and each of its Subsidiaries have good and defensible title to,
or a valid leasehold interest in, its respective material Real Property, except
for such defects in title that do not materially interfere with its ability to
conduct its business as currently conducted or to utilize such properties and
assets for their intended purposes, and except where the failure (or failures)
to have such title would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, and none of such Property is subject
to any Liens (except for Permitted Liens); provided, however, the enforceability
of such leasehold interests may be limited by bankruptcy, insolvency
reorganization or other similar laws limiting creditors’ rights generally or by
equitable principles relating to enforceability, including the Chapter 11 Cases.

(b) Section 4.9(b) of the Company Disclosure Schedule sets forth a complete and
accurate list of all drilling units, workover units, and all other rigs, whether
land, barge, fixed, floating or otherwise owned or operated by the Company and
each of its Subsidiaries, showing the name, capacity year built, classification
society (if applicable), classification, IMO number and flag state (for rigs
that are vessels), registration number as presented on any certificate of title,
if applicable, or contained in the official records of the National Vessel
Documentation Center of the United States Coast Guard, or other applicable
Governmental Entity, and the status of each such rig or unit, including whether
it is cold stacked, warm stacked, or preparing to be cold stacked or warm
stacked. No such rig, drilling unit, or related equipment or asset, including
any platform, is under an operating lease from a lessor that has incurred
non-recourse indebtedness to finance the acquisition of such rig, drilling unit,
or asset. Excluding drilling units that have been cold-stacked, all material
Property owned, used, or held for use in connection with the conduct of business
by the Company or any Subsidiary, is in good condition and repair, ordinary wear
and tear excepted, sufficient in all material respects to conduct such business
in the ordinary course, consistent with past practice.

Section 4.10 Intellectual Property. Except as set forth on Section 4.10 of the
Company Disclosure Schedule, each of the Company and its Subsidiaries owns, or
is licensed to use, all material Intellectual Property necessary for the conduct
of its business as currently conducted. Except as set forth on Section 4.10 of
the Company Disclosure Schedule, no material claim has been asserted and is
pending by any Person challenging or questioning the Company’s or any of its
Subsidiaries’ use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor to the Knowledge of the
Company is there any valid basis for any such claim. To the Knowledge of the
Company, neither the Company nor any of its Subsidiaries interferes with,
infringes upon, misappropriates or otherwise violates any Intellectual Property
rights of any Person in any material respect.

 

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Section 4.11 Taxes. Except as set forth on Section 4.11 of the Company
Disclosure Schedule and except as would not reasonably be expected to be
material to the Company and its Subsidiaries taken as a whole: (a) the Company
and each of its Subsidiaries has filed or caused to be filed all federal, state
and non-U.S. Tax returns that are required to be filed and has paid all Taxes
shown to be due and payable on said returns and all other Taxes (other than any
amount the validity of which is currently being contested in good faith by
appropriate proceedings in each case, with respect to which reserves in
conformity with GAAP have been provided on the books of the Company or its
Subsidiaries, as the case may be), (b) no Tax Lien has been filed other than
Permitted Liens, (c) to the Knowledge of the Company, there is no pending claim
with respect to unpaid Taxes (except for any such Tax liabilities to Taxing
authorities outside of the United States which are not, in the aggregate,
material to the Company and its Subsidiaries taken as a whole), (d) neither the
Company nor any Subsidiary thereof is party to any tax sharing agreement, other
than an agreement the principal purpose of which is not the allocation of Taxes,
and (e) the unpaid Taxes of the Company and any Subsidiary do not exceed the
reserves for Tax liability set forth on the financial statements of the Company
and its Subsidiaries as adjusted for the passage of time through the Closing
Date in accordance with the past custom and practice of the Company and its
Subsidiaries. The representations set forth in this Section 4.11 and
Section 4.13 (below) are the only representations and warranties in this
Agreement with respect to Tax matters, and any claim for breach of a
representation or warranty with respect to Tax matters shall be based on the
representations and warranties made in this Section 4.11 and Section 4.13
(below) and shall not be based on the representations and warranties set forth
in any other provision of this Agreement.

Section 4.12 Labor Matters. Except as set forth on Section 4.12(i) of the
Company Disclosure Schedule, neither the Company nor any of its Subsidiaries is
a party to or subject to any collective bargaining agreement, works council
agreement, labor union contract, trade union agreement or other written
agreement or understandings with any union, works council, trade union or other
labor organization. Except as set forth on Section 4.12(ii) of the Company
Disclosure Schedule and except as would not reasonably be expected to have a
material impact on the ability of the Company and its Subsidiaries to carry on
its business in the ordinary course: (a) there are no strikes or other labor
disputes pending or, to the Knowledge of the Company, threatened against the
Company or any of its Subsidiaries, (b) the hours worked and payments made to
employees of the Company or any of its Subsidiaries have not been in violation
of the Fair Labor Standards Act or any other applicable Law dealing with such
matters, (c) all payments due from the Company or any of its Subsidiaries or for
which any claim may be made against the Company or any of its Subsidiaries on
account of wages and employee health and welfare insurance and other benefits
have been paid or accrued as a liability on the books of the Company and its
Subsidiaries to the extent required by GAAP, and (d) the consummation of the
transactions contemplated by the Definitive Documents will not give rise to a
right of termination or right of renegotiation on the part of any union, works
council, trade union or other labor organization under any material collective
bargaining agreement, works council agreement, labor union contract, trade union
agreement or other written agreement or understanding with any union, works
council, trade union or other labor organization to which the Company or any of
its Subsidiaries is a party or by which any of them is bound.

 

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Section 4.13 ERISA Compliance.

(a) Except as set forth on Section 4.13 of the Company Disclosure Schedule and
except for the filing and pendency of the Chapter 11 Cases, each Employee
Benefit Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other federal or state Laws, except where such
non-compliance has not resulted and could not reasonably be expected to result
in material adverse liability to the Company or any ERISA Affiliate. The base
prototype plan document which each Employee Benefit Plan that is intended to
qualify under Section 401(a) of the Code uses an opinion letter from the IRS, or
an application for such a letter is currently being processed by the IRS with
respect thereto and, to the Knowledge of the Company, nothing has occurred which
would prevent, or cause the loss of, such qualification. Except to the extent
the failure to do so could not reasonably be expected to result in material
adverse liability to the Company or any ERISA Affiliate, the Company and each
ERISA Affiliate have made all required contributions to each Employee Benefit
Plan subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Employee Benefit Plan.

(b) There are no pending or, to the Knowledge of the Company, threatened claims,
actions or lawsuits, or action by any Governmental Entity, with respect to any
Employee Benefit Plan that could reasonably be expected to result in material
adverse liability to the Company or any ERISA Affiliate. There has been no
prohibited transaction or violation of the fiduciary responsibility rules with
respect to any Employee Benefit Plan that has resulted or could reasonably be
expected to result in material adverse liability to the Company or any ERISA
Affiliate.

(c) Except to the extent such event could not reasonably be expected to result
in material adverse liability to the Company or any ERISA Affiliate: (i) no
ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension
Plan has any Unfunded Pension Liability; (iii) neither the Company nor any ERISA
Affiliate has incurred, or reasonably expects to incur, any liability under
Title IV of ERISA with respect to any Pension Plan (other than premiums due and
not delinquent under Section 4007 of ERISA); (iv) neither the Company nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and
no event has occurred which, with the giving of notice under Section 4219 of
ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with
respect to a Multiemployer Plan; and (v) neither the Company nor any ERISA
Affiliate has engaged in a transaction that could be subject to Section 4069 or
4212(c) of ERISA.

(d) Except as set forth on Section 4.13 of the Company Disclosure Schedule, with
respect to each scheme or arrangement mandated by a government other than the
United States (a “Foreign Government Scheme or Arrangement”) and with respect to
each employee benefit plan maintained or contributed to by the Company or any of
its Subsidiaries that is not subject to United States law (a “Foreign Benefit
Plan”), each Foreign Benefit Plan is in compliance in all material respects with
the provisions of the applicable law or terms of the applicable Foreign
Government Scheme or Arrangement and no Event has occurred or is reasonably
expected to occur with respect to such Foreign Government Scheme or Arrangement
that would reasonably be expected to result in material adverse liability to the
Company or any ERISA Affiliate.

 

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Section 4.14 Investment Company Act; Other Regulations. Neither the Company nor
any of its Subsidiaries is an “investment company”, or a company “controlled” by
an “investment company”, within the meaning of the Investment Company Act of
1940, as amended.

Section 4.15 Subsidiaries. The Subsidiaries listed on Section 4.15 of the
Company Disclosure Schedule constitute all of the Significant Subsidiaries of
the Company at the Closing Date. Section 4.15 of the Company Disclosure Schedule
sets forth as of the Closing Date the name and jurisdiction of incorporation or
formation of each such Subsidiary and, as to each, the percentage of each class
of Equity Interests owned by the Company or each Subsidiary of the Company, as
applicable. All of the outstanding Equity Interests in the Significant
Subsidiaries of the Company have been validly issued, and (to the extent
applicable) fully paid and non-assessable.

Section 4.16 Environmental Matters. Other than as set forth on Section 4.16 of
the Company Disclosure Schedule and exceptions to any of the following that
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect:

(a) The Company and its Subsidiaries: (i) are, and since January 1, 2014 have
been, in compliance with all applicable Environmental Laws, (ii) hold all
Environmental Permits (each of which is in full force and effect) required for
any of their current or intended operations or for any property owned, leased or
otherwise operated by any of them, (iii) are, and since January 1, 2014 have
been, in compliance with all of their Environmental Permits, and (iv) reasonably
believe that (x) each of their Environmental Permits will be timely renewed and
complied with, without material expense, (y) any additional Environmental
Permits that may be required of any of them will be timely obtained and complied
with, without material expense, and (z) compliance with any Environmental Law
that is or is expected to become applicable to any of them will be timely
attained and maintained, without material expense.

(b) Hazardous Materials are not present at, on, under, in, or about any real
property now or formerly owned, leased or operated by the Company or any of its
Subsidiaries, or at any other location (including, without limitation, any
location to which Hazardous Materials have been sent for re-use or recycling or
for treatment, storage, or disposal) which could reasonably be expected to
(i) give rise to liability of the Company or any of its Subsidiaries under any
applicable Environmental Law or otherwise result in costs to the Company or any
of its Subsidiaries, or (ii) interfere with the Company’s or any of its
Subsidiaries’ continued operations, or (iii) impair the fair saleable value of
any real property owned or leased by the Company or any of its Subsidiaries.

(c) There is no judicial, administrative, or arbitral proceeding (including any
notice of violation or alleged violation) under or relating to any Environmental
Law to which the Company or any of its Subsidiaries is, or to the Knowledge of
the Company or any of its Subsidiaries will be, named as a party that is pending
or, to the Knowledge of the Company or any of its Subsidiaries, threatened in
writing.

(d) Neither the Company nor any of its Subsidiaries has received any written
request for information, or been notified that it is a potentially responsible
party under or relating to the CERCLA or any similar Environmental Law, or with
respect to any Hazardous Material.

 

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(e) Neither the Company nor any of its Subsidiaries has entered into or agreed
to any consent decree, order, or settlement or other agreement, or is subject to
any judgment, decree, or order or other agreement, in any judicial,
administrative, arbitral, or other forum for dispute resolution, relating to
compliance with or liability under any Environmental Law.

(f) Neither the Company nor any of its Subsidiaries has assumed or retained, by
contract or, to the Knowledge of Seller, operation of law, any liabilities of
any kind, fixed or contingent, known or unknown, under any Environmental Law or
with respect to any Hazardous Material other than indemnity obligations in the
ordinary course of business.

This Section 4.16 contains the sole representations and warranties of the
Company in this Agreement with respect to matters arising under Environmental
Laws or relating to Hazardous Materials.

Section 4.17 Licenses and Permits. The Company and its Subsidiaries possess all
material licenses, certificates, permits and other authorizations issued by, and
have made all declarations and filings with, the appropriate Governmental
Entities that are necessary for the ownership or lease of their respective
properties and the conduct of the business. Neither the Company nor any of its
Subsidiaries (a) has received notice of any revocation or modification of any
such material license, certificate, permit or authorization or (b) has any
reason to believe that any such material license, certificate, permit or
authorization will not be renewed in the ordinary course. Except as set forth on
Section 4.17 of the Company Disclosure Schedule, no drilling rig, drilling unit,
or other material asset is, or will within six (6) months of the date hereof, be
or become subject to material customs duties or charges, whether as a result of
remaining in, or departing from, the jurisdiction in which such asset is located
as of the date hereof, except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect; provided, that, for
the purposes of determining whether any conditions to Closing have been
satisfied pursuant to Section 7.1(m), the representations and warranties
contained in this Section 4.17 shall not be deemed to be incorrect or breached
if the Company takes any action in respect of the activities described in this
Section 4.17 and the consent of the Requisite Commitment Parties has been
obtained in writing prior to the Company taking such action.

Section 4.18 Company SEC Documents and Disclosure Statement. Since January 1,
2017, the Company has filed all Company SEC Documents required to be filed by
the Company with the SEC. No Company SEC Document that has been filed prior to
the date of this Agreement, after giving effect to any amendments or supplements
thereto and to any subsequently filed Company SEC Documents, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not materially misleading. The
Company Disclosure Schedule as approved by the Bankruptcy Court will contain
“adequate information,” as such term in defined in section 1125 of the
Bankruptcy Code, and will otherwise comply in all material respects with section
1125 of the Bankruptcy Code.

Section 4.19 Insurance. The properties of the Company and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Company, and except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, (a) such insurance
policies are in such amounts with such deductibles

 

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and covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar properties in localities where the Company
or the applicable Subsidiary operates, except to the extent that reasonable
self-insurance meeting the same standards is maintained with respect to such
risks, (b) all premiums due and payable in respect of material insurance
policies maintained by the Company and its Subsidiaries have been paid, and
(c) as of the date hereof, to the Knowledge of the Company, neither the Company
nor any of its Subsidiaries has received notice from any insurer or agent of
such insurer with respect to any insurance policies of the Company and its
Subsidiaries of cancellation or termination of such policies, other than such
notices which are received in the ordinary course of business or for policies
that have expired in accordance with their terms.

Section 4.20 OFAC/Sanctions. Neither the Company nor any of its Subsidiaries,
nor, to the Knowledge of the Company, any of its or their respective directors,
officers, employees, agents, controlled Affiliates or other Persons acting on
its behalf with express authority to so act, is an individual or entity that is,
or is owned or controlled by, persons that are currently the subject of any
Sanctions, or is located, organized or residing in any Designated Jurisdiction.
Except as described on Section 4.20 of the Company Disclosure Schedule, neither
the Company nor any of its Subsidiaries, nor, to the Knowledge of the Company,
any of its or their respective current or former directors, officers, employees,
agents, controlled Affiliates or other Persons acting on its behalf with express
authority to so act, has engaged at any time within the previous five years, or
is engaged, in any transaction(s) or activities which would result in a
violation of Sanctions, which, individually or in the aggregate, would have a
material impact on the Company and its Subsidiaries, taken as a whole. The
Company will not directly or indirectly use the proceeds of the Rights Offering,
or lend, contribute or otherwise make available such proceeds to any Subsidiary,
joint venture partner or other Person, (i) for the purpose of financing the
activities of any Person that is the subject or target of Sanctions or located,
organized or residing in any Designated Jurisdiction or (ii) in any other manner
that would result in a violation of Sanctions by any Person (including the
Commitment Parties).

Section 4.21 No Unlawful Payments. Except as set forth on Section 4.21 of the
Company Disclosure Schedule, since January 1, 2016, neither the Company nor any
of its Subsidiaries nor, to the Knowledge of the Company, any of their Related
Parties has in any material respect: (a) used any funds of the Company or any of
its Subsidiaries for any unlawful contribution, gift, entertainment or other
unlawful expense, in each case relating to political activity, (b) made any
direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds, (c) violated or is in violation of
any provision of the United States Foreign Corrupt Practices Act of 1977 or the
UK Bribery Act 2010 or (d) made any bribe, rebate, payoff, influence payment,
kickback or other similar unlawful payment.

Section 4.22 Compliance with Money Laundering Laws. The operations of the
Company and its Subsidiaries are and have been at all times conducted in
compliance in all material respects with applicable financial recordkeeping and
reporting requirements of the U.S. Currency and Foreign Transactions Reporting
Act of 1970 and other applicable anti-money laundering laws (collectively, the
“Money Laundering Laws”) and no material Legal Proceeding by or before any
Governmental Entity or any arbitrator involving the Company or any of its
Subsidiaries with respect to Money Laundering Laws is pending or, to the
Knowledge of the Company, threatened.

 

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Section 4.23 Arm’s Length. The Company acknowledges and agrees that (a) each of
the Commitment Parties is acting solely in the capacity of an arm’s length
contractual counterparty to the Company with respect to the transactions
contemplated hereby (including in connection with determining the terms of the
Rights Offering) and not as a financial advisor or a fiduciary to, or an agent
of, the Company or any of its Subsidiaries, and (b) no Commitment Party is
advising the Company or any of its Subsidiaries as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction.

Section 4.24 No Broker’s Fees. Except as set forth on Section 4.24 of the
Company Disclosure Schedule, neither the Company nor any of its Subsidiaries is
a party to any Contract with any Person (other than this Agreement) that would
give rise to a valid claim against the Commitment Parties for a brokerage
commission, finder’s fee or like payment in connection with the Rights Offering
or the sale of the Unsubscribed Shares.

Section 4.25 No Undisclosed Relationships. Other than Contracts or other direct
or indirect relationships between or among the Company and its Subsidiaries,
there are no material Contracts or other material direct or indirect
relationships, existing as of the date hereof, between or among the Company or
any of its Subsidiaries, on the one hand, and any directors, officers,
stockholders, customers or suppliers of the Company or any of its Subsidiaries,
on the other hand, that is required by the Exchange Act to be described in the
Company SEC Documents and that are not so described in the Company SEC
Documents, except for the transactions contemplated by this Agreement and the
other Definitive Documents.

Section 4.26 Internal Control Over Financial Reporting. The Company has
established and maintains a system of internal control over financial reporting
(as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act)
that complies in all material respects with the requirements of the Exchange Act
and has been designed to provide reasonable assurances regarding the reliability
of financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP. To the Knowledge of the Company, there are no
material weaknesses in the Company’s internal control over financial reporting
as of the date hereof.

Section 4.27 Disclosure Controls and Procedures. Except as set forth on
Section 4.27 of the Company Disclosure Schedule, the Company maintains
disclosure controls and procedures (within the meaning of Rules 13a-15(e) and
15d-15(e) promulgated under the Exchange Act) designed to provide reasonable
assurance that information required to be disclosed by the Company in the
reports that it files and submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and
forms, including that information required to be disclosed by the Company in the
reports that it files and submits under the Exchange Act is accumulated and
communicated to management of the Company as appropriate to allow timely
decisions regarding required disclosure.

Section 4.28 CFIUS. Neither the Company nor any of its Subsidiaries is a “pilot
program U.S. business” as defined under 31 C.F.R. 800.213.

 

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ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE COMMITMENT PARTIES

Each Commitment Party represents and warrants as to itself only (unless
otherwise set forth herein, as of the date of this Agreement and as of the
Closing Date) as set forth below.

Section 5.1 Incorporation. Such Commitment Party is a legal entity duly
organized, validly existing and, if applicable, in good standing (or the
equivalent thereof) under the Laws of its jurisdiction of incorporation or
organization.

Section 5.2 Corporate Power and Authority. Such Commitment Party has the
requisite power and authority (corporate or otherwise) to enter into, execute
and deliver this Agreement and each other Definitive Document to which such
Commitment Party is a party and to perform its obligations hereunder and
thereunder and has taken all necessary action (corporate or otherwise) required
for the due authorization, execution, delivery and performance by it of this
Agreement and the other Definitive Documents.

Section 5.3 Execution and Delivery. This Agreement and each other Definitive
Document to which such Commitment Party is a party (a) has been, or prior to its
execution and delivery will be, duly and validly executed and delivered by such
Commitment Party and (b) assuming due and valid execution and delivery hereof
and thereof by the Company and the other Debtors (as applicable), will
constitute valid and legally binding obligations of such Commitment Party,
enforceable against such Commitment Party in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency
reorganization or other similar laws limiting creditors’ rights generally or by
equitable principles relating to enforceability.

Section 5.4 No Conflict. Assuming that the consents referred to in clauses
(a) and (b) of Section 5.5 are obtained, the execution and delivery by such
Commitment Party of this Agreement and each other Definitive Document to which
such Commitment Party is a party, the compliance by such Commitment Party with
all of the provisions hereof and thereof and the consummation of the
transactions contemplated herein and therein will not (a) result in any
violation of the provisions of the certificate of incorporation or bylaws (or
comparable constituent documents) of such Commitment Party, (b) conflict with,
or result in a breach, modification, termination or violation of, any of the
terms or provisions of, or constitute a default under (with or without notice or
lapse of time, or both), or result in the acceleration of, or the creation of
any Lien under, any Contract to which such Commitment Party is a party or by
which such Commitment Party is bound or to which any of the properties or assets
of such Commitment Party are subject, and (c) result in any material violation
of any Requirement of Law or Order applicable to such Commitment Party or any of
its properties, except, in each of the cases described in clauses (a) or (c),
for any conflict, breach, modification, termination, violation, default,
acceleration or Lien which would not reasonably be expected, individually or in
the aggregate, to prohibit, materially delay or materially and adversely impact
such Commitment Party’s performance of its obligations under this Agreement.

 

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Section 5.5 Consents and Approvals. No consent, approval, authorization, Order,
registration or qualification of or with any Governmental Entity having
jurisdiction over such Commitment Party or any of its Affiliates or properties
is required for the execution and delivery by such Commitment Party of this
Agreement and each other Definitive Document to which such Commitment Party is a
party, the compliance by such Commitment Party with the provisions hereof and
thereof and the consummation of the transactions (including the purchase by such
Commitment Party of its Backstop Commitment Percentage of the Unsubscribed
Shares and its portion of the New Common Stock) contemplated herein and therein,
except (a) any consent, approval, authorization, Order, registration or
qualification which, if not made or obtained, would not reasonably be expected,
individually or in the aggregate, to prohibit, materially delay or materially
and adversely impact the Company or the Commitment Parties’ performance of their
obligations under this Agreement and each other Definitive Document to which the
Company or the Commitment Parties are a party, (b) filings, notifications,
authorizations, approvals, consents, clearances or termination or expiration of
all applicable waiting periods under any Antitrust Laws in connection with the
transactions contemplated by this Agreement, and (c) any other Reasonable
Approvals.

Section 5.6 Note Claims and Equity Interests.

(a) As of the date hereof, such Commitment Party and its Affiliates were,
collectively, the beneficial owner of, or the investment advisor or manager for
the beneficial owner of, the aggregate principal amount of Unsecured Notes and
the aggregate amount of Equity Interests as previously disclosed to the Company.

(b) As of the date hereof, such Commitment Party or its applicable Affiliates
have the full power to vote, dispose of and compromise at least the aggregate
principal amount of Unsecured Notes and the number of shares of Preferred Stock
and Common Stock as previously disclosed to the Company.

(c) Other than the RSA or such Transfers permitted by the terms of the RSA or
the BCA, such Commitment Party has not entered into any Contract to Transfer, in
whole or in part, any portion of its right, title or interest in such Unsecured
Notes, Preferred Stock, or Common Stock where such Transfer would prohibit such
Commitment Party from complying with the terms of this Agreement or the RSA.

Section 5.7 No Registration. Such Commitment Party understands that (a) the
Unsubscribed Shares have not been registered under the Securities Act by reason
of a specific exemption from the registration provisions of the Securities Act,
the availability of which depends on, among other things, the bona fide nature
of the investment intent and the accuracy of such Commitment Party’s
representations as expressed herein or otherwise made pursuant hereto, and (b)
the foregoing shares cannot be sold unless subsequently registered under the
Securities Act or an exemption from registration is available.

Section 5.8 Purchasing Intent. Such Commitment Party is acquiring the
Unsubscribed Shares for its own account or accounts or funds over which it holds
voting discretion, not otherwise as a nominee or agent, and not otherwise with
the view to, or for resale in connection with, any distribution thereof not in
compliance with applicable securities laws, and such Commitment Party has no
present intention of selling, granting any other participation in, or otherwise
distributing the same, except in compliance with applicable securities laws.

 

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Section 5.9 Sophistication; Investigation. Such Commitment Party has such
knowledge and experience in financial and business matters such that it is
capable of evaluating the merits and risks of its investment in the Unsubscribed
Shares. Such Commitment Party is an “accredited investor” within the meaning of
Rule 501(a) of the Securities Act or a “qualified institutional buyer” within
the meaning of Rule 144A of the Securities Act. Such Commitment Party
understands and is able to bear any economic risks associated with such
investment (including the necessity of holding such shares for an indefinite
period of time). Except for the representations and warranties expressly set
forth in this Agreement or any other Definitive Documents, such Commitment Party
has independently evaluated the merits and risks of its decision to enter into
this Agreement and disclaims reliance on any representations or warranties,
either express or implied, by or on behalf of the Company or any of its
Subsidiaries.

Section 5.10 No Broker’s Fees. Such Commitment Party is not a party to any
Contract with any Person (other than this Agreement, any Contract giving rise to
the Expense Reimbursement hereunder, and any engagement letter or other
agreement that has been provided to counsel to the Commitment Parties) that
would give rise to a valid claim against the Company or any of its Subsidiaries,
for a brokerage commission, finder’s fee or like payment in connection with the
Rights Offering, the sale of the Unsubscribed Shares or the payment of the Put
Option Equity Premium.

Section 5.11 Sufficient Funds. Such Commitment Party has sufficient assets and
the financial capacity to perform all of its obligations under this Agreement,
including the ability to fully exercise all Subscription Rights that are owned
by it (or such managed funds or accounts) as of the Rights Offering Expiration
Time pursuant to the Rights Offering and fund such Commitment Party’s Backstop
Commitment.

ARTICLE VI

ADDITIONAL COVENANTS

Section 6.1 Confirmation Order; Plan and Disclosure Statement. The Debtors shall
use their commercially reasonable efforts to (a) obtain entry of the
Confirmation Order and (b) cause the Confirmation Order to become a Final Order
(and request that such Order be effective immediately upon entry by the
Bankruptcy Court pursuant to a waiver of Rules 3020 and 6004(h) of the
Bankruptcy Rules, as applicable), in each case, consistent with the Bankruptcy
Code, the Bankruptcy Rules, and the RSA. The Debtors shall provide to each of
the Commitment Parties and its counsel copies of the proposed pleadings seeking
entry of the Confirmation Order, the proposed Plan and the Disclosure Statement
and any proposed amendment, modification, supplement or change to the Plan or
the Disclosure Statement and a reasonable opportunity to review and comment on
such pleadings prior to such pleadings being filed with the Bankruptcy Court and
documents and each such pleading, amendment, modification, supplement or change
to the Plan or the Disclosure Statement must be in form and substance reasonably
acceptable to the Requisite Commitment Parties and the Debtors. The Debtors
shall provide to each of the Commitment Parties and its counsel a copy of the
proposed Confirmation Order (together with copies of any briefs, pleadings and
motions related thereto) and a reasonable opportunity to review and comment on
such Order, briefs, pleadings and motions prior to such Order, briefs, pleadings
and motions being filed with the Bankruptcy Court, and such Order, briefs,
pleadings and motions

 

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must be in form and substance reasonably acceptable to the Requisite Commitment
Parties and the Debtors. The Confirmation Order entered by the Bankruptcy Court
shall be in form and substance reasonably acceptable to the Requisite Commitment
Parties and the Debtors. Any amendments, modifications, changes or supplements
to the Confirmation Order, and any of the pleadings seeking entry of such Order,
shall be in form and substance reasonably acceptable to the Requisite Commitment
Parties and the Debtors.

Section 6.2 Conduct of Business.

(a) Except as set forth in this Agreement, the RSA, the Plan or with the prior
written consent of Requisite Commitment Parties, which consent shall not be
unreasonably withheld, conditioned or delayed, during the period from the date
of this Agreement to the earlier of the Closing Date and the date on which this
Agreement is terminated in accordance with its terms (the “Pre-Closing Period”),
the Company shall, and shall cause each of its Subsidiaries to, carry on its
business in the ordinary course in a manner consistent with past practices and
use its commercially reasonable efforts to (i) preserve intact its business,
(ii) preserve its material relationships with customers, suppliers, licensors,
licensees, distributors and others having material business dealings with the
Company or its Subsidiaries in connection with their business, (iii) maintain
books, accounts and records, (iv) comply with applicable Law in all material
respects and (v) file Company SEC Documents within the time periods required
under the Exchange Act.

(b) Except as set forth in this Agreement, the RSA, the Plan or with the prior
written consent of the Requisite Commitment Parties, during the Pre-Closing
Period, the Company shall not, and shall not permit any of its Subsidiaries to,
enter into any transaction that is material to their business other than
(A) transactions in the ordinary course of business and consistent with past
practices, (B) other transactions after prior notice to the Commitment Parties
to implement tax planning which transactions are not reasonably expected to
materially adversely affect any Commitment Party, (C) transactions expressly
contemplated by the RSA or the other Definitive Documents, and (D) such other
transactions set forth in Section 6.2 of the Company Disclosure Schedules. For
the avoidance of doubt, (1) the Company’s and its Subsidiaries’ entry into, or
any amendment, assumption, modification, termination, waiver, supplement,
replacement, restatement, reinstatement, or other change to, any Material
Contract (x) with a value less than $10,000,000 or (y) that does not result in
an increase (on a present value basis, applying a reasonable discount rate) of
the Company’s liabilities with respect to such Material Contract (other than any
Material Contracts that are otherwise addressed by clause (ii) below) may be
accomplished without the consent of the Requisite Commitment Parties, and
(2) the following shall be deemed to occur outside of the ordinary course of
business of the Company and shall require the prior written consent of the
Requisite Commitment Parties unless the same would otherwise be expressly
provided for under the RSA, the Plan or this Agreement (including the preceding
clause (B), (C) or (D)): (i) transferring any material asset or material right
of the Company Parties or any material asset or material right used in the
business of the Company Parties to any Person or entity outside the ordinary
course of business; (ii) entry into, or any amendment, assumption, modification,
termination, waiver, supplement, replacement, restatement, reinstatement or
other change to, any Material Contract that has a value equal to or greater than
$10,000,000 (other than any Material Contracts that are otherwise addressed by
clause (v) below); (iii) entry into, or any amendment, modification, termination
(other than for cause), waiver,

 

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supplement or other change to, any employment agreement to which the Company or
any of its Subsidiaries is a party or any assumption of any such employment
agreement in connection with the Chapter 11 Cases, other than with respect to
employment agreements entered into in the ordinary course of business consistent
with past practice that do not contain a change of control or similar provision,
or as may be required by law, (iv) the adoption of any management incentive or
equity plan by the Company or any of its Subsidiaries, other than the Management
Incentive Plan, (v) cold stacking, scrapping, abandonment, sale, lease, license,
or other transfer or disposition, or acquisition, directly or indirectly
(including through a commitment to an operating and maintenance agreement), of
any rig, drilling unit, workover unit, platform, or other material equipment,
fixture, or other asset, in each case, with a value in excess of $5,000,000,
(vi) the termination, suspension, abrogation, or modification in any material
respect of any material Environmental Permit or other material permit used or
held for use by the Company or any of its Subsidiaries in connection with the
conduct of business in the ordinary course, or (vii) capital expenditures made
by the Company and its Subsidiaries on a per-project basis in excess of
$10,000,000. Except as otherwise provided in this Agreement, nothing in this
Agreement shall give the Commitment Parties, directly or indirectly, any right
to control or direct the operations of the Company and its Subsidiaries prior to
the Closing Date. Prior to the Closing Date, the Company and its Subsidiaries
shall exercise, consistent with the terms and conditions of this Agreement,
complete control and supervision of the business of the Company and its
Subsidiaries.

(c) In the event the Company wishes to enter into a transaction or take an
action that would be otherwise prohibited under this Section 6.2, then the
Company shall send a written request to the Commitment Parties (in accordance
with Section 10.1(b)) for permission to enter into such transaction or take such
action. If the Requisite Commitment Parties fail to respond to such request for
a period of three (3) Business Days, then the Company may enter into such
transaction or take such action without the prior written consent of the
Requisite Commitment Parties. For the avoidance of doubt, in no instance will
the interim operating covenants set forth in this Section 6.2 restrict the
Company’s ability to take any actions that are necessary (in the Company’s
reasonable discretion) to address any emergency that threatens health, safety or
the environment.

Section 6.3 Access to Information. Subject to applicable Law, upon reasonable
notice during the Pre-Closing Period, the Company shall (and shall cause its
Subsidiaries to) afford the Commitment Parties and their Representatives, upon
request, reasonable access, during normal business hours and without
unreasonable disruption or interference with the Company’s and its Subsidiaries’
business or operations, to the Company’s and its Subsidiaries’ employees,
properties, books, Contracts and records and, during the Pre-Closing Period, the
Company shall (and shall cause its Subsidiaries to) furnish promptly to such
parties all reasonable information concerning the Company’s and its
Subsidiaries’ business, properties and personnel as may reasonably be requested
by any such party; provided, however, that the foregoing shall not require the
Company (a) to permit any inspection, or to disclose any information, that in
the reasonable judgment of the Company would cause the Company or any of its
Subsidiaries to violate any of their respective obligations with respect to
confidentiality to a third party if the Company shall have used its commercially
reasonable efforts to obtain, but failed to obtain, the consent of such third
party to such inspection or disclosure, (b) to disclose any legally privileged
information of the Company or any of its Subsidiaries, (c) to permit or conduct
any invasive or intrusive investigations or other testing, analysis or sampling
or (d) to violate any applicable Laws or Orders. All requests for information
and access made in accordance with this Section 6.3 shall be directed to an
executive officer of the Company or such Person as may be designated by the
Company’s executive officers.

 

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Section 6.4 Commercially Reasonable Efforts.

(a) Without in any way limiting any other respective obligation of the Company
or any Commitment Party in this Agreement or the RSA, each Party shall use
commercially reasonable efforts to take or cause to be taken all actions, and do
or cause to be done all things, reasonably necessary, proper or advisable in
order to consummate and make effective the transactions contemplated by this
Agreement, the RSA and the Plan, including using commercially reasonable efforts
in:

(i) identifying any Reasonable Approvals as promptly as practicable and timely
preparing and filing all documentation reasonably necessary to effect all
necessary notices, reports and other filings of such Person and to obtain as
promptly as practicable all consents, registrations, approvals, permits and
authorizations necessary or advisable to be obtained from any third party or
Governmental Entity;

(ii) defending any Legal Proceedings in any way challenging, as applicable,
(A) this Agreement, the Plan or any other Definitive Document, (B) the
Disclosure Statement Order and the Confirmation Order or (C) the consummation of
the transactions contemplated hereby and thereby, including seeking to have any
stay or temporary restraining Order entered by any Governmental Entity vacated
or reversed; and

(iii) working together to execute and deliver the Governance Documents, the
Definitive Documents and all other documents relating thereto (for timely
inclusion in the Plan and filing with the Bankruptcy Court) and any other
agreement required to effectuate and consummate the Restructuring Transactions
as contemplated by this Agreement, the RSA or the Plan and the approval rights
therein; provided, however, that, nothing in this Agreement shall modify the
approval rights over the Definitive Documents set forth in the RSA (including
Section 3.02 thereof), and that, except with respect to Section 10.7 of this
Agreement, in the event of any inconsistency between this Agreement and the RSA
the approval rights set forth in the RSA shall control.

(b) Subject to applicable Laws relating to the exchange of information, and in
accordance with the RSA, the Commitment Parties and the Company shall have the
right to review in advance, and to the extent practicable each will consult with
the other on all of the information relating to Commitment Parties or the
Company, as the case may be, and any of their respective Subsidiaries, that
appears in any filing made with, or written materials submitted to, any
Governmental Entity in connection with the transactions contemplated by this
Agreement or the Plan; provided, however, that the Commitment Parties are not
required to provide for review in advance declarations or other evidence
submitted in connection with any filing with the Bankruptcy Court. In exercising
the foregoing rights, the Parties shall act reasonably and as promptly as
practicable.

 

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(c) Without limitation to Section 6.1, the Company and its Subsidiaries shall
(i) provide counsel for the Commitment Parties a reasonable opportunity to
review (which shall be no less than two (2) Business Days) draft copies of all
proposed orders, and (ii) to the extent reasonably practicable, provide counsel
for the Commitment Parties a reasonable opportunity to review draft copies of
any document that the Company or any of its Subsidiaries intends to file with
the Bankruptcy Court; provided, however, that each such pleading or document
shall be in form and substance reasonably acceptable to the Company and the
Required Commitment Parties;

(d) Nothing contained in this Section 6.4 shall limit the ability of any
Commitment Party to consult with the Debtors, to appear and be heard, or to file
objections, concerning any matter arising in the Chapter 11 Cases to the extent
not inconsistent with the RSA, this Agreement or the Plan.

Section 6.5 Registration Rights Agreement; Governance Documents.

(a) From and after the Closing Date, the rights of each Consenting Stakeholder
to registration rights shall be determined pursuant to a Registration Rights
Agreement. A form of the Registration Rights Agreement shall be filed with the
Bankruptcy Court as part of the Plan Supplement or an amendment thereto.

(b) The Plan will provide that on the Effective Date, the Governance Documents
shall be duly approved, adopted, and effective. Forms of the Governance
Documents shall be filed with the Bankruptcy Court as part of the Plan
Supplement or an amendment thereto.

Section 6.6 Commitments of the Company.

(a) Affirmative Covenants. Except as set forth in Section 6.7, from the date of
this Agreement until the Closing Date, the Company agrees to (and to cause the
other Company Parties to):

(i) support and take all steps reasonably necessary and desirable to consummate
the Restructuring Transactions in accordance with the RSA, including the
applicable Milestones set forth on Schedule 5 attached hereto;

(ii) to the extent any legal or structural impediment arises that would prevent,
hinder, or delay the consummation of the Restructuring Transactions contemplated
in the RSA, support and take all steps reasonably necessary and desirable to
address and resolve any such impediment;

(iii) use commercially reasonable efforts to seek additional support for the
Restructuring Transactions from their other material stakeholders to the extent
reasonably prudent and to the extent the Company Parties receive any Joinders or
Transfer Agreements, notify the Commitment Parties and the Consenting
Stakeholders of such Joinders and Transfer Agreements;

 

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(iv) actively oppose and object to the efforts of any person seeking to object
to, delay, impede, or take any other action to interfere with the acceptance,
implementation, or consummation of the Restructuring Transactions (including, if
applicable, the filing of timely filed objections or written responses) to the
extent such opposition or objection is reasonably necessary or desirable to
facilitate implementation of the Restructuring Transactions;

(v) consult and negotiate in good faith with the Commitment Parties and the
Consenting Stakeholders and their advisors regarding the execution of the
Restructuring Transactions;

(vi) upon reasonable request of the Commitment Parties or the Consenting
Stakeholders, inform the advisors to the Commitment Parties or the Consenting
Stakeholders as to: (i) the material business and financial (including
liquidity) performance of the Consolidated Group; (ii) the status and progress
of the Restructuring Transactions, including progress in relation to the
negotiations of the Definitive Documents; and (iii) the status of obtaining any
necessary or desirable authorizations (including any consents) from each
Commitment Party and Consenting Stakeholder, any competent judicial body,
governmental authority, banking, taxation, supervisory, or regulatory body or
any stock exchange;

(vii) inform counsel to the Commitment Parties and the Consenting Stakeholders
as soon as reasonably practicable after becoming aware of: (i) any matter or
circumstance which they know, or suspect is likely, to be a material impediment
to the implementation or consummation of the Restructuring Transactions;
(ii) any notice of any commencement of any material involuntary Insolvency
Proceedings, legal suit for payment of debt or securement of security from or by
any person in respect of any Company Party; (iii) a breach of this Agreement
(including a breach by any Company Party); and (iv) any representation or
statement made or deemed to be made by them under this Agreement which is or
proves to have been materially incorrect or misleading in any respect when made
or deemed to be made;

(viii) use commercially reasonable efforts to maintain their good standing under
the Laws of the state or other jurisdiction in which they are incorporated or
organized;

(ix) on or after the date hereof, not engage in any material merger,
consolidation, disposition, acquisition, investment, dividend, incurrence of
indebtedness or other similar transaction outside of the ordinary course of
business other than the Restructuring Transactions;

(x) use commercially reasonable efforts to (i) provide counsel for the
Commitment Parties and the Consenting Stakeholders a reasonable opportunity
(which shall be no less than two (2) Business Days) to review draft copies of
all First Day Pleadings and second day motions and proposed orders and, (ii) to
the extent reasonably practicable, provide counsel for the Commitment Parties
and the Consenting Stakeholders a reasonable opportunity to review and provide
comments on draft copies of all other substantive documents that the Company
Parties intend to file with the Bankruptcy Court; and

 

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(xi) take any and all actions necessary and appropriate to ensure that the
provisions of the NOL Rights Plan are not triggered on account of the
Restructuring Transactions or the entry into the RSA or this Agreement by any of
the Consenting Stockholders or Commitment Parties and that the NOL Rights Plan
is terminated on the Effective Date.

(b) Negative Commitments. Except as set forth in Section 6.7, from the date of
this Agreement until the Closing Date, the Company shall not (and shall cause
the other Company Parties not to) directly or indirectly:

(i) object to, delay, impede, or take any other action to interfere with
acceptance, implementation, or consummation of the Restructuring Transactions;

(ii) take any action that is inconsistent with, or is intended to frustrate or
impede approval, implementation and consummation of the Restructuring
Transactions described in, this Agreement and the Definitive Documents;

(iii) modify the Plan, in whole or in part, in a manner that is not consistent
with this Agreement and the Definitive Documents; or

(iv) file any motion, pleading, or other Definitive Documents with the
Bankruptcy Court or any other court (including any modifications or amendments
thereof) that, in whole or in part, is not materially consistent with this
Agreement and the Definitive Documents.

Section 6.7 Additional Provisions Regarding Company’s Commitments.

(a) Notwithstanding anything to the contrary in this Agreement, nothing in this
Agreement shall require a Company Party or the board of directors, board of
managers, or similar governing body of a Company Party, after consulting with
counsel, to take any action or to refrain from taking any action with respect to
the Restructuring Transactions to the extent taking or failing to take such
action would be inconsistent with applicable Law or its fiduciary obligations
under applicable Law; provided, however, that to the extent that any such action
or inaction is inconsistent with this Agreement or would be deemed to constitute
a breach hereunder, including a determination to pursue an Alternative
Restructuring Proposal, the Company Parties shall provide the Consenting
Stakeholders with written notice two (2) Business Days prior to when it or they
intend to take such action or inaction.

(b) Notwithstanding anything to the contrary in this Agreement, each Company
Party and their respective directors, officers, employees, investment bankers,
attorneys, accountants, consultants, and other advisors or representatives shall
have the rights to: (i) consider, respond to, and facilitate Alternative
Restructuring Proposals; (ii) provide access to non-public information
concerning any Company Party to any Entity or enter into Confidentiality
Agreements or nondisclosure agreements with any Entity; (iii) maintain or
continue discussions or negotiations with respect to Alternative Restructuring
Proposals; (iv) otherwise cooperate with, assist, participate in, or facilitate
any inquiries, proposals, discussions, or negotiation of Alternative
Restructuring Proposals; and (v) enter into or continue discussions or
negotiations with holders of

 

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Claims against or Existing Equity Interests in a Company Party (including any
Consenting Stakeholder), any other party in interest (including, if applicable,
in the Chapter 11 Cases (including any official committee and the United States
Trustee)), or any other Entity regarding the Restructuring Transactions or
Alternative Restructuring Proposals. At all times prior to the date on which the
Company Parties enter into a definitive agreement in respect of an Alternative
Restructuring Proposal, the Company Parties shall provide to Akin Gump with
updates on the status of any discussions regarding an Alternative Restructuring
Proposal and a copy of any written offer or proposal for such Alternative
Restructuring Proposal within three (3) Business Days of the Company Parties’ or
their advisors’ receipt of such offer or proposal.

(c) Nothing in this Agreement shall: (i) impair or waive the rights of any
Company Party to assert or raise any objection permitted under this Agreement in
connection with the Restructuring Transactions; or (ii) prevent any Company
Party from enforcing this Agreement or contesting whether any matter, fact, or
thing is a breach of, or is inconsistent with, this Agreement.

Section 6.8 DTC Eligibility. The Company shall use commercially reasonable
efforts to promptly make, when applicable from time to time after the Closing,
all New Common Stock to be issued pursuant to the Rights Offering and the Plan
eligible for deposit with The Depository Trust Company or able to be transferred
through a transfer agent.

Section 6.9 Antitrust Approval.

(a) Each Party agrees to use commercially reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary to
consummate and make effective the transactions contemplated by this Agreement,
the Plan, and the other Definitive Documents, including (i) if applicable,
filing, or causing to be filed, the Notification and Report Form pursuant to the
HSR Act with respect to the transactions contemplated by this Agreement with the
Antitrust Division of the United States Department of Justice and the United
States Federal Trade Commission and any filings (or, if required by any
Antitrust Authority, any drafts thereof) in connection with any Reasonable
Approvals as soon as reasonably practicable (and with respect to any filings
required pursuant to the HSR Act, no later than fifteen (15) Business Days
following the date hereof) and (ii) promptly furnishing documents or information
reasonably requested by any Antitrust Authority; provided, however, that nothing
in this Section 6.9 shall require any Commitment Party or any of their
Affiliates to engage in any sale, divestiture or disposition of any of its
assets, properties or businesses or make any changes to its operations. Each
Commitment Party agrees to monitor its expected holdings in Reorganized Parker
pursuant to the transactions contemplated by this Agreement, the Plan, and the
other Definitive Documents, and to notify the Company promptly if it is
reasonably likely that any changes in such expected holdings would result in the
need for such Commitment Party to make a filing pursuant to the HSR Act. Each
Commitment Party agrees not to take any actions that would result in any changes
in its expected holdings in Reorganized Parker pursuant to the transactions
contemplated by this Agreement, the Plan, and the other Definitive Documents, if
it is reasonably likely that such changes would result in the need for such
Commitment Party or any other party to make a filing pursuant to the HSR Act.

 

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(b) The Company and each Commitment Party subject to an obligation pursuant to
the Antitrust Laws to notify any transaction contemplated by this Agreement, the
Plan or the other Definitive Documents that has notified the Company in writing
of such obligation (each such Commitment Party, a “Filing Party”) agree to
reasonably cooperate with each other as to the appropriate time of filing such
notification and its content. If applicable, the Company and each Filing Party
shall, to the extent permitted by applicable Law: (i) promptly notify each other
of, and if in writing, furnish each other with copies of (or, in the case of
material oral communications, advise each other orally of) any communications
from or with an Antitrust Authority; (ii) not participate in any meeting with an
Antitrust Authority unless it consults with each other Filing Party and the
Company, as applicable, in advance and, to the extent permitted by the Antitrust
Authority and applicable Law, give each other Filing Party and the Company, as
applicable, a reasonable opportunity to attend and participate thereat;
(iii) furnish each other Filing Party and the Company, as applicable, with
copies of all correspondence and communications between such Filing Party or the
Company and the Antitrust Authority; (iv) furnish each other Filing Party with
such necessary information and reasonable assistance as may be reasonably
necessary in connection with the preparation of necessary filings or submission
of information to the Antitrust Authority; and (v) not withdraw its filing, if
any, under the HSR Act without the prior written consent of the Requisite
Commitment Parties and the Company.

(c) Should a Filing Party be subject to an obligation under the Antitrust Laws
to jointly notify with one or more other Filing Parties (each, a “Joint Filing
Party”) any transaction contemplated by this Agreement, the Plan or the other
Definitive Documents, such Joint Filing Party shall promptly notify each other
Joint Filing Party of, and if in writing, furnish each other Joint Filing Party
with copies of (or, in the case of material oral communications, advise each
other Joint Filing Party orally of) any communications from or with an Antitrust
Authority.

(d) The Company and each Filing Party shall use their commercially reasonable
efforts to obtain all authorizations, approvals, consents, waivers, or
clearances under any applicable Antitrust Laws or to cause the termination or
expiration of all applicable waiting periods under any Antitrust Laws in
connection with the transactions contemplated by this Agreement at the earliest
possible date after the date of filing, and (ii) avoid any Legal Proceeding,
whether brought by any Antitrust Authority or any third party. The
communications contemplated by this Section 6.9 may be made by the Company or a
Filing Party on an outside counsel-only basis or subject to other agreed upon
confidentiality safeguards. The obligations in this Section 6.9 shall not apply
to filings, correspondence, communications or meetings with Antitrust
Authorities unrelated to the transactions contemplated by this Agreement, the
Plan or the other Definitive Documents.

Section 6.10 Other Entities. The Company shall cause each of the other Debtors
to comply with all terms of this Agreement applicable to such Debtors.

Section 6.11 Reorganized Parker.

(a) The Debtors shall cause Reorganized Parker to be registered under Section 12
of the Exchange Act on the Effective Date or as promptly as commercially
reasonable thereafter.

 

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(b) The Debtors shall cause Reorganized Parker to be a successor to the Company
under the Plan and the Rights Offering will be exempt from registration under
the Securities Act pursuant to Section 1145 of the Bankruptcy Code or, with the
consent of the Requisite Commitment Parties, which consent shall not be
unreasonably withheld, conditioned or delayed, another available exemption from
registration under the Securities Act.

(c) On the Effective Date, all rights and obligations of the Company under this
Agreement shall vest in Reorganized Parker, and the Plan shall include language
to such effect. From and after the Effective Date, Reorganized Parker shall be
deemed to be a party to this Agreement as the successor to all rights and
obligations of the Company hereunder.

Section 6.12 S-1 Preparation. The Company shall take all such necessary action
in connection with its obligations under the Registration Rights Agreement to
prepare and file with the SEC a registration statement on Form S-1 for the
resale of the Registrable Securities (as defined in the Registration Rights
Agreement) held by the Consenting Stakeholders as soon as reasonably practicable
after the Effective Date (and, in any event, no later than fifteen (15) days
after Closing, unless extended after Closing (i) by the board of directors of
Reorganized Parker, which extension may be for a period of no more than an
additional fifteen (15) days or (ii) in accordance with the terms of the
Registration Rights Agreement) and shall consult with Akin Gump and include Akin
Gump in all aspects of the process to finalize such registration statement.

Section 6.13 Share Legend. Except for any Unsubscribed Shares being issued
pursuant to Section 1145 of the Bankruptcy Code, if any, each certificate
evidencing Unsubscribed Shares issued hereunder, and each certificate issued in
exchange for or upon the Transfer of any such shares, shall be stamped or
otherwise imprinted with a legend (the “Legend”) in substantially the following
form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON [DATE
OF ISSUANCE], HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”), OR ANY OTHER APPLICABLE STATE SECURITIES LAWS, AND
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR AN AVAILABLE EXEMPTION FROM REGISTRATION THEREUNDER.”

In the event that any such shares are uncertificated, such shares shall be
subject to a restrictive notation substantially similar to the Legend in the
stock ledger or other appropriate records maintained by Reorganized Parker or
agent and the term “Legend” shall include such restrictive notation. Reorganized
Parker shall remove the Legend (or restrictive notation, as applicable) set
forth above from the certificates evidencing any such shares (or the share
register or other appropriate Reorganized Company records, in the case of
uncertificated shares), upon request, at any time after the restrictions
described in such Legend cease to be applicable, including, as applicable, when
such shares may be sold under Rule 144 of the Securities Act. The Reorganized
Company may reasonably request such opinions, certificates or other evidence
that such restrictions no longer apply as a condition to removing the Legend.

 

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Section 6.14 Conversion Waiver. The Company acknowledges and agrees (on behalf
of itself and the other Company Parties) that any Commitment Party or Consenting
Stakeholder that has checked the box on its signature page to the RSA in
connection with the “Existing Preferred Stock Conversion Waiver” shall have
irrevocably waived its right thereby to convert any of the shares of Existing
Preferred Stock into shares of Existing Common Stock until such time as the RSA
is terminated other than upon the consummation of the Plan on the Effective
Date.

ARTICLE VII

CONDITIONS TO THE OBLIGATIONS OF THE PARTIES

Section 7.1 Conditions to the Obligations of the Commitment Parties. The
obligations of each Commitment Party to consummate the transactions contemplated
hereby shall be subject to (unless waived in accordance with Section 7.2) the
satisfaction of the following conditions prior to or at the Closing:

(a) Disclosure Statement Order. The Bankruptcy Court shall have entered the
Disclosure Statement Order and such order shall modify the automatic stay to
permit the Commitment Parties or the Consenting Stakeholders to provide notices,
including notice of termination, in connection with this Agreement and/or the
RSA in accordance with the terms hereof and thereof and shall otherwise be in
form and substance reasonably acceptable to the Company Parties and the
Requisite Commitment Parties.

(b) RSA. An Event shall not have occurred that, in the absence of the automatic
stay imposed by section 362 of the Bankruptcy Code or similar provision of
applicable Law, with or without the provision of any notice or the giving effect
to any cure period, would constitute a termination event by the applicable
threshold of Consenting Stakeholders under the RSA in accordance with its terms,
and the Company Parties shall not be in breach or default of their obligations
under the RSA.

(c) Confirmation Order. The Bankruptcy Court shall have entered the Confirmation
Order and such order shall be in form and substance reasonably acceptable to the
Company Parties and the Requisite Commitment Parties and shall be a Final Order;
provided, that, notwithstanding anything to the contrary in Section 7.2, the
condition that the Confirmation Order must be a Final Order may be waived after
the applicable appeals period has elapsed during the pendency of an appeal by
any single Commitment Party and such waiver shall be applicable with respect to
all Commitment Parties.

(d) Plan. The Plan shall be in form and substance reasonably acceptable to the
Company Parties and the Requisite Commitment Parties. The Company and all of the
other Debtors shall have complied, in all respects, with the terms of the Plan
(as amended or supplemented from time to time) that are to be performed by the
Company and the other Debtors on or prior to the Effective Date and the
conditions to the occurrence of the Effective Date (other than any conditions
relating to occurrence of the Closing) set forth in the Plan shall have been
satisfied or, with the prior written consent of the Requisite Commitment
Parties, waived in accordance with the terms thereof.

 

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(e) Rights Offering. The Rights Offering shall have been conducted, in all
material respects, in accordance with this Agreement, the Rights Offering
Procedures and the Disclosure Statement Order, and the Rights Offering
Expiration Time shall have occurred.

(f) Effective Date. The Effective Date shall have occurred, or shall be deemed
to have occurred concurrently with the Closing, as applicable, in accordance
with the terms and conditions in the Plan and in the Confirmation Order.

(g) Funding Notice. The Commitment Parties shall have received a Funding Notice
in accordance with Section 2.4(a).

(h) MAE. Since the date of this Agreement, no Material Adverse Effect shall

have occurred.

(i) Registration Rights Agreement; Governance Documents.

(i) The Registration Rights Agreement, in form and substance reasonably
acceptable to the Company Parties and the Requisite Commitment Parties, shall
have been executed and delivered by the Company, shall otherwise have become
effective with respect to the Commitment Parties desiring to be a party thereto
and the other parties thereto, and shall be in full force and effect.

(ii) The Governance Documents of Reorganized Parker, in form and substance
reasonably acceptable to the Company Parties and the Requisite Commitment
Parties, shall have been duly approved and adopted and shall be in full force
and effect.

(j) Expense Reimbursement. The Company and its Subsidiaries shall have paid all
Expense Reimbursement accrued or anticipated through the Closing Date as well as
the Post-Closing Expenses reasonably expected to be incurred after the Closing
Date, in each case in accordance with Section 3.3; provided, that invoices for
such Expense Reimbursements shall have been received by the Company at least
three (3) Business Days prior to the Closing Date in order to be required to be
paid on the Closing Date (which invoice, if for Post-Closing Expenses, shall set
forth a reasonable estimate with respect thereto).

(k) Consents. The Reasonable Approvals shall have been received.

(l) No Legal Impediment to Issuance. No Law or Order shall have been enacted,
adopted or issued by any Governmental Entity of competent authority that
prohibits the implementation of the Plan or the transactions contemplated by
this Agreement.

(m) Representations and Warranties.

(i) The representations and warranties of the Company and its Subsidiaries
contained in Section 4.6(e) shall be true and correct in all respects on and as
of the Closing Date with the same effect as if made on and as of the Closing
Date (except for such representations and warranties made as of a specified
date, which shall be true and correct only as of the specified date).

 

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(ii) The representations and warranties of the Company and its Subsidiaries
contained in Section 4.2, Section 4.4, and Section 4.8, shall be true and
correct in all material respects on and as of the Closing Date (after giving
effect to the Plan) with the same effect as if made on and as of the Closing
Date (after giving effect to the Plan) (except for such representations and
warranties made as of a specified date, which shall be true and correct in all
material respects only as of the specified date).

(iii) The other representations and warranties of the Company and its
Subsidiaries contained in this Agreement shall be true and correct (disregarding
all materiality or Material Adverse Effect qualifiers) on and as of the Closing
Date (after giving effect to the Plan) with the same effect as if made on and as
of the Closing Date (after giving effect to the Plan) (except for such
representations and warranties made as of a specified date, which shall be true
and correct only as of the specified date), except where the failure to be so
true and correct does not constitute, individually or in the aggregate, a
Material Adverse Effect.

(n) Covenants. The Company and its Subsidiaries shall have performed and
complied, in all material respects, with all of their respective covenants and
agreements contained in this Agreement that contemplate, by their terms,
performance or compliance prior to the Closing Date.

(o) Officer’s Certificate. The Commitment Parties shall have received on and as
of the Closing Date a certificate of the chief executive officer or chief
financial officer of the Company confirming that the conditions set forth in
Section 7.1(m) and Section 7.1(n) have been satisfied.

(p) Minimum Liquidity and Minimum Cash of the Company. The amount, determined on
a pro forma basis after giving effect to the occurrence of the Effective Date
and the transactions contemplated by the Definitive Documents, of unrestricted
cash and cash equivalents of the Company shall be no less than $25 million of
unrestricted cash, net of all fees, expenses and any other payments contemplated
in connection with the consummation of the Restructuring Transactions (other
than the proceeds from the Rights Offering, which shall not be included for
purposes of calculating such $25 million).

(q) Put Option. The Put Option shall have been exercised in accordance with
Section 2.2; provided, that the Put Option shall automatically and irrevocably
be deemed to have been exercised by the Company in accordance with Section 2.2,
without the need for delivery of a written notice or the taking of any further
action by the Company or any other Person.

(r) Improper Amendment or Modification. None of this Agreement, the RSA or any
other Definitive Document shall have been amended, restated, modified, changed,
supplemented or altered without obtaining the requisite approvals of the
Commitment Parties pursuant to this Agreement (including, for the avoidance of
doubt, pursuant to Section 10.7 of this Agreement) and the Consenting
Stakeholders pursuant to the RSA (including, for the avoidance of doubt,
pursuant to Section 13 of the RSA) in writing.

 

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Section 7.2 Waiver of Conditions to Obligation of Commitment Parties. Except for
Section 7.1(r), all or any of the conditions set forth in Section 7.1 may only
be waived in whole or in part with respect to all Commitment Parties by a
written instrument executed by the Requisite Commitment Parties in their sole
discretion and if so waived, all Commitment Parties shall be bound by such
waiver; provided, that a waiver shall be deemed to have occurred if, by
agreement between counsel to the Parties submitting and receiving such waiver,
it is conveyed in writing (including electronic mail) between each such counsel
without representations or warranties of any kind on behalf of counsel.

Section 7.3 Conditions to the Obligations of the Company. The obligation of the
Company and any of the other Debtors to consummate the transactions contemplated
hereby with any Commitment Party is subject to (unless waived by the Company)
the satisfaction of each of the following conditions:

(a) Confirmation Order. The Bankruptcy Court shall have entered the Confirmation
Order and such order shall be in form and substance reasonably acceptable to the
Company Parties and the Requisite Commitment Parties.

(b) Plan. The Plan shall be in form and substance reasonably acceptable to the
Company Parties and the Requisite Commitment Parties. The Requisite Commitment
Parties shall have complied with the terms of the Plan that are to be performed
by the Requisite Commitment Parties on or prior to the Effective Date and the
conditions to the occurrence of the Effective Date (other than any conditions
relating to occurrence of the Closing) set forth in the Plan shall have been
satisfied or waived in accordance with the terms thereof.

(c) Rights Offering. The Rights Offering Expiration Time shall have occurred.

(d) Consents. The Reasonable Approvals shall have been received.

(e) No Legal Impediment to Issuance. No Law or Order shall have been enacted,
adopted or issued by any Governmental Entity of competent authority that
prohibits the implementation of the Plan or the transactions contemplated by
this Agreement.

(f) Representations and Warranties. The representations and warranties of the
Commitment Parties contained in this Agreement which contain materiality or
Material Adverse Effect qualifiers shall be true and correct in all respects on
and as of the Closing Date with the same effect as if made on and as of the
Closing Date (except for such representations and warranties made as of a
specified date, which shall be true and correct in all respects only as of the
specified date), and those representations and warranties of the Commitment
Parties without such qualifiers shall be true and correct in all material
respects, on and as of the Closing Date with the same effect as if made on and
as of the Closing Date (except for such representations and warranties made as
of a specified date, which shall be true and correct in all material respects
only as of the specified date).

(g) Covenants. Each of the Commitment Parties shall have performed and complied,
in all material respects, with all of its covenants and agreements contained in
this Agreement and in any other document delivered pursuant to this Agreement.

 

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ARTICLE VIII

INDEMNIFICATION AND CONTRIBUTION

Section 8.1 Indemnification Obligations. The Company and its Subsidiaries (the
“Indemnifying Parties” and each an “Indemnifying Party”) shall, jointly and
severally, indemnify and hold harmless each Commitment Party and its Affiliates,
equity holders, members, partners, general partners, managers and its and their
respective Representatives and controlling persons (each, an “Indemnified
Person”) from and against any and all losses, claims, damages, liabilities and
costs and expenses (other than Taxes of the Commitment Parties except to the
extent otherwise provided for in this Agreement) arising out of a claim asserted
by a third party (collectively, “Losses”) that any such Indemnified Person may
incur or to which any such Indemnified Person may become subject arising out of
or in connection with this Agreement, the transactions contemplated hereby and
the obligations hereunder, including the Backstop Commitments, the Rights
Offering, the payment of the Put Option Equity Premium or the use of the
proceeds of the Rights Offering, or any claim, challenge, litigation,
investigation or proceeding relating to any of the foregoing, regardless of
whether any Indemnified Person is a party thereto, whether or not such
proceedings are brought by the Company, its Subsidiaries, their respective
equity holders, Affiliates, creditors or any other Person, and reimburse each
Indemnified Person upon demand for reasonable documented (with such
documentation subject to redaction to preserve attorney client and work product
privileges) legal or other third-party expenses incurred in connection with
investigating, preparing to defend or defending, or providing evidence in or
preparing to serve or serving as a witness with respect to, any lawsuit,
investigation, claim or other proceeding relating to any of the foregoing
(including in connection with the enforcement of the indemnification obligations
set forth herein), irrespective of whether or not the transactions contemplated
by this Agreement or the Plan are consummated or whether or not this Agreement
is terminated; provided, however, that the foregoing indemnity will not, as to
any Indemnified Person, apply to Losses (a) as to a Defaulting Commitment Party,
its Related Parties or any Indemnified Person related thereto, caused by a
Commitment Party Default by such Commitment Party, or (b) to the extent they are
found by a final, non-appealable judgment of a court of competent jurisdiction,
whether such judgment is in such underlying action, suit or proceeding, or
otherwise, to arise from the bad faith, willful misconduct or gross negligence
of such Indemnified Person.

Section 8.2 Indemnification Procedure. Promptly after receipt by an Indemnified
Person of notice of the commencement of any claim, challenge, litigation,
investigation or proceeding (an “Indemnified Claim”), such Indemnified Person
will, if a claim is to be made hereunder against the Indemnifying Party in
respect thereof, notify the Indemnifying Party in writing of the commencement
thereof; provided, however, that (a) the omission to so notify the Indemnifying
Party will not relieve the Indemnifying Party from any liability that it may
have hereunder except to the extent it has been materially prejudiced by such
failure and (b) the omission to so notify the Indemnifying Party will not
relieve the Indemnifying Party from any liability that it may have to such
Indemnified Person otherwise than on account of this Article VIII. In case any
such Indemnified Claims are brought against any Indemnified Person and it
notifies the Indemnifying Party of the commencement thereof, the Indemnifying
Party will be entitled to participate therein, and, at its election by providing
written notice to such Indemnified Person, the Indemnifying Party will be
entitled to assume the defense thereof, with counsel reasonably acceptable to
such Indemnified Person; provided, however, that if the parties (including any

 

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impleaded parties) to any such Indemnified Claims include both such Indemnified
Person and the Indemnifying Party and based on advice of such Indemnified
Person’s counsel there are legal defenses available to such Indemnified Person
that are different from or additional to those available to the Indemnifying
Party, such Indemnified Person shall have the right to select separate counsel
to assert such legal defenses and to otherwise participate in the defense of
such Indemnified Claims. Upon receipt of notice from the Indemnifying Party to
such Indemnified Person of its election to so assume the defense of such
Indemnified Claims with counsel reasonably acceptable to the Indemnified Person,
the Indemnifying Party shall not be liable to such Indemnified Person for
expenses incurred by such Indemnified Person in connection with the defense
thereof or participation therein (other than reasonable costs of investigation)
unless (i) such Indemnified Person shall have employed separate counsel (in
addition to any local counsel) in connection with the assertion of legal
defenses in accordance with the proviso to the immediately preceding sentence
(it being understood, however, that the Indemnifying Party shall not be liable
for the expenses of more than one separate counsel representing the Indemnified
Persons who are parties to such Indemnified Claims (in addition to one local
counsel in each jurisdiction in which local counsel is required)), (ii) the
Indemnifying Party shall not have employed counsel reasonably acceptable to such
Indemnified Person to represent such Indemnified Person within a reasonable time
after the Indemnifying Party has received notice of commencement of the
Indemnified Claims from, or delivered on behalf of, the Indemnified Person,
(iii) after the Indemnifying Party assumes the defense of the Indemnified
Claims, the Indemnified Person determines in good faith that the Indemnifying
Party has failed or is failing to defend such claim and provides written notice
of such determination and the basis for such determination, and such failure is
not reasonably cured within ten (10) Business Days of receipt of such notice, or
(iv) the Indemnifying Party shall have authorized in writing the employment of
counsel for such Indemnified Person. Notwithstanding anything herein to the
contrary, the Company and its Subsidiaries shall have sole control over any Tax
controversy or Tax audit and shall be permitted to settle any liability for
Taxes of the Company and its Subsidiaries.

Section 8.3 Settlement of Indemnified Claims. In connection with any Indemnified
Claim for which an Indemnified Person is assuming the defense in accordance with
this Article VIII, the Indemnifying Party shall not be liable for any settlement
of any Indemnified Claims effected by such Indemnified Person without the
written consent of the Indemnifying Party (which consent shall not be
unreasonably withheld, conditioned or delayed). If any settlement of any
Indemnified Claims is consummated with the written consent of the Indemnifying
Party or if there is a final judgment for the plaintiff in any such Indemnified
Claims, the Indemnifying Party agrees to indemnify and hold harmless each
Indemnified Person from and against any and all Losses by reason of such
settlement or judgment to the extent such Losses are otherwise subject to
indemnification by the Indemnifying Party hereunder in accordance with, and
subject to the limitations of, this Article VIII. Notwithstanding anything in
this Article VIII to the contrary, if at any time an Indemnified Person shall
have requested the Indemnifying Party to reimburse such Indemnified Person for
legal or other expenses in connection with investigating, responding to or
defending any Indemnified Claims as contemplated by this Article VIII, the
Indemnifying Party shall be liable for any settlement of any Indemnified Claims
effected without its written consent if (a) such settlement is entered into more
than forty-five (45) days after receipt by the Indemnifying Party of such
request for reimbursement, so long as the Indemnifying Party has not notified
the Indemnified Party that it contests, in good faith, such request for
reimbursement, (b) the

 

 

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Indemnifying Party shall not have reimbursed such Indemnified Person in
accordance with such request prior to the date of such settlement, and (c) the
Indemnifying Party shall not have instructed the Indemnified Person to avoid
settlement of any Indemnified Claims prior to the date of such settlement. The
Indemnifying Party shall not, without the prior written consent of an
Indemnified Person (which consent shall be granted or withheld, conditioned or
delayed in the Indemnified Person’s sole discretion), effect any settlement of
any pending or threatened Indemnified Claims in respect of which indemnity or
contribution has been sought hereunder by such Indemnified Person unless
(i) such settlement includes an unconditional release of such Indemnified Person
in form and substance satisfactory to such Indemnified Person from all liability
on the claims that are the subject matter of such Indemnified Claims and
(ii) such settlement does not include any statement as to or any admission of
fault, culpability or a failure to act by or on behalf of any Indemnified
Person.

Section 8.4 Contribution. If for any reason the foregoing indemnification is
unavailable to any Indemnified Person or insufficient to hold it harmless from
Losses that are subject to indemnification pursuant to Section 8.1, then the
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Person as a result of such Loss in such proportion as is appropriate
to reflect not only the relative benefits received by the Indemnifying Party, on
the one hand, and such Indemnified Person, on the other hand, but also the
relative fault of the Indemnifying Party, on the one hand, and such Indemnified
Person, on the other hand, as well as any relevant equitable considerations. It
is hereby agreed that the relative benefits to the Indemnifying Party, on the
one hand, and all Indemnified Persons, on the other hand, shall be deemed to be
in the same proportion as (a) the total value received or proposed to be
received by the Company pursuant to the issuance and sale of the Unsubscribed
Shares in the Rights Offering contemplated by this Agreement and the Plan bears
to (b) the Put Option Cash Premium and the Put Option Equity Premium paid or
proposed to be paid to the Commitment Parties. The Indemnifying Parties also
agree that no Indemnified Person shall have any liability based on their
comparative or contributory negligence or otherwise to the Indemnifying Parties,
any Person asserting claims on behalf of or in right of any of the Indemnifying
Parties, or any other Person in connection with an Indemnified Claim.

Section 8.5 Treatment of Indemnification Payments. All amounts paid by an
Indemnifying Party to an Indemnified Person under this Article VIII shall, to
the extent permitted by applicable Law, be treated as adjustments to the Per
Share Purchase Price for all Tax purposes. The provisions of this Article VIII
are an integral part of the transactions contemplated by this Agreement and
without these provisions the Commitment Parties would not have entered into this
Agreement.

Section 8.6 No Survival. All representations, warranties, covenants and
agreements made in this Agreement shall not survive the Closing Date except for
covenants and agreements that by their terms are to be satisfied after the
Closing Date, which covenants and agreements shall survive until satisfied in
accordance with their terms.

 

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ARTICLE IX

TERMINATION

Section 9.1 Termination Rights. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing Date:

(a) by mutual written consent of the Company and the Requisite Commitment
Parties;

(b) by the Requisite Commitment Parties upon written notice to the Company if:

(i) (x) the failure of any of Milestones a., b., c., or d. on Schedule 5 to be
satisfied which remains unsatisfied for three (3) Business Days, or (y) the
failure of Milestone e. on Schedule 5 to be satisfied which remains unsatisfied
for one (1) Business Day;

(ii) the Disclosure Statement Order is reversed, stayed, dismissed, vacated, or
is modified or amended after entry without the prior written consent of the
Requisite Commitment Parties;

(iii) the Confirmation Order has not become a Final Order after the applicable
appeals period has elapsed due to a pending appeal; provided, however, that,
notwithstanding anything to the contrary herein, each Commitment Party must
provide written notice to the Company in order for this Agreement to be
terminated pursuant to this Section 9.1(b)(iii);

(iv) any of this Agreement, the RSA, the Rights Offering Procedures, the Plan or
any documents related to the Plan, including notices, exhibits or appendices, or
any of the Definitive Documents is amended, restated, modified, changed,
supplemented or altered without obtaining the requisite approvals of the
Commitment Parties pursuant to this Agreement (including, for the avoidance of
doubt, pursuant to Section 10.7 of this Agreement) and the Consenting
Stakeholders pursuant to the RSA (including, for the avoidance of doubt,
pursuant to Section 13 of the RSA) in writing;

(v) if an Event occurs that, in the absence of the automatic stay imposed by
section 362 of the Bankruptcy Code or similar provisions of applicable Law, with
or without the provision of any notice or the giving effect to any cure period,
would constitute a termination event under the RSA in accordance with its terms;

(vi) (i) the Company shall have breached (other than an immaterial breach) any
representation, warranty, covenant or other agreement made by the Company in
this Agreement or any such representation or warranty shall have become
inaccurate after the date of this Agreement, and such breach or inaccuracy
would, individually or in the aggregate, cause a condition set forth in
Section 7.1(m) or Section 7.1(n) not to be satisfied, (ii) the Requisite
Commitment Parties shall have delivered written notice of such breach or
inaccuracy to the Company, and (iii) such breach or inaccuracy is not cured (to
the extent curable) by the Company or its Subsidiaries by the fifth (5th)
Business Day after receipt of such notice; provided, however, that the Requisite
Commitment Parties shall not have the right to terminate this Agreement pursuant
to this Section 9.1(b)(vi) if they are then in breach of any representation,
warranty, covenant or other agreement hereunder that would result in the failure
of any condition set forth in Section 7.3 being satisfied;

 

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(vii) any Law or final and non-appealable Order shall have been enacted, adopted
or issued by any Governmental Entity that prohibits the implementation of the
Plan or the Rights Offering or the transactions contemplated by this Agreement
or the other Definitive Documents;

(viii) the entry of an order by the Bankruptcy Court, or the filing of a motion
or application by any Company Party seeking an order (without the prior written
consent of the Required Consenting Stakeholders, not to be unreasonably
withheld), (i) converting one or more of the Chapter 11 Cases of a Company Party
to a case under chapter 7 of the Bankruptcy Code, (ii) appointing an examiner
with expanded powers beyond those set forth in sections 1106(a)(3) and (4) of
the Bankruptcy Code or a trustee under section 1104 of the Bankruptcy Code in
one or more of the Chapter 11 Cases of a Company Party, (iii) dismissing one or
more of the Chapter 11 Cases, (iv) terminating exclusivity under Bankruptcy Code
section 1121, or (v) rejecting this Agreement;

(ix) an order is entered by the Bankruptcy Court granting relief from the
automatic stay imposed by section 362 of the Bankruptcy Code authorizing any
party to proceed against any material asset of the Company Parties that would
materially and adversely affect the Company’s operational or financial
performance;

(x) the Company Parties (i) withdraw the Plan, (ii) publicly announce their
intention not to support the Restructuring Transactions or (iii) file, publicly
announce, or execute a definitive written agreement with respect to an
Alternative Restructuring Proposal;

(xi) the making public, modification, amendment, restatement, change, alteration
or filing of any of the Definitive Documents without obtaining the requisite
approvals of the Consenting Stakeholders pursuant to the RSA (including, for the
avoidance of doubt, pursuant to Section 13 of the RSA) in writing;

(xii) upon the delivery of notice by the Company Parties pursuant to
Section 6.7(a);

(xiii) failure by the Company to pay the fees and expenses set forth in
Section 3.3 of this Agreement as and when required;

(xiv) the Company Parties file any motion or pleading with the Bankruptcy Court
that is not consistent in all material respects with this Agreement and such
motion has not been withdrawn within two (2) Business Days of receipt by the
Company Parties of written notice from the Requisite Commitment Parties that
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(xv) the Bankruptcy Court orders that (A) any Commitment Party must return or
repay all or part of the Put Option Cash Premium to the Company, other than
pursuant to Section 3.2(b) or if any Commitment Party becomes a Defaulting
Commitment Party, or (B) Akin Gump or Houlihan must return or repay all or part
of the Akin Advance Payment or Houlihan Advance Payment, as applicable, to the
Company other than repayment of the Advance Payment Surplus (if any) pursuant to
Section 3.3(b).

(c) by the Company upon written notice to each Commitment Party if:

(i) any Law or final and non-appealable Order shall have been enacted, adopted
or issued by any Governmental Entity that prohibits the implementation of the
Plan or the Rights Offering or the transactions contemplated by this Agreement
or the other Definitive Documents;

(ii) subject to the right of the Commitment Parties to arrange a Commitment
Party Replacement in accordance with Section 2.3(a), (i) any Commitment Party
shall have breached (other than an immaterial breach) any representation,
warranty, covenant or other agreement made by such Commitment Party in this
Agreement or any such representation or warranty shall have become inaccurate,
and such breach or inaccuracy would, individually or in the aggregate, cause a
condition set forth in Section 7.3(f) or Section 7.3(g) not to be satisfied,
(ii) the Company shall have delivered written notice of such breach or
inaccuracy to such Commitment Party, (iii) such breach or inaccuracy is not
cured (to the extent curable) by such Commitment Party by the fifth (5th)
Business Day after receipt of such notice, and (iv) as a result of such failure
to cure, a condition set forth in Section 7.3(f) or Section 7.3(g) is not
capable of being satisfied or has not been satisfied by the date on which such
condition must, by its terms, be satisfied; provided, however, that the Company
shall not have the right to terminate this Agreement pursuant to this
Section 9.1(c)(ii) if it is then in breach of any representation, warranty,
covenant or other agreement (x) hereunder that would result in the failure of
any condition set forth in Section 7.1 being satisfied or (y) under the RSA; or

(iii) two (2) Business Days after delivery of notice by the Company Parties
pursuant to Section 6.7(a).

(d) by any Commitment Party or the Company, upon written notice to the Company
or to each Commitment Party, as applicable, upon the occurrence of the Outside
Date and at any time thereafter, provided, that no Party shall have the right to
terminate this Agreement pursuant to this Section 9.1(d) if it is then in
willful or intentional breach (as defined below) of this Agreement.

Section 9.2 Effect of Termination.

(a) Upon termination of this Agreement pursuant to this Article IX, this
Agreement shall forthwith become void and there shall be no further obligations
or liabilities on the part of the Parties; provided, however, that (i) the
obligations of the Company and its Subsidiaries to pay the Expense Reimbursement
pursuant to and in accordance with Section 3.3, to satisfy their indemnification
obligations pursuant to and in accordance with Article VIII shall survive the
termination of this Agreement and shall remain in full force and effect, in each
case, until such obligations have been satisfied, (ii) the provisions set forth
in this Section 9.2 and

 

 

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Article X shall survive the termination of this Agreement in accordance with
their terms, (iii) pursuant to and in accordance with Section 3.2(a), the
obligations of the Commitment Parties to repay the Put Option Cash Premium in
the event of termination of this Agreement under the circumstances set forth in
Section 3.2(a) shall survive the termination of this Agreement and shall remain
in full force and effect until such obligations have been satisfied, and
(iv) subject to Section 10.10, nothing in this Section 9.2 shall relieve any
Party from liability for its gross negligence or any willful or intentional
breach of this Agreement. For purposes of this Agreement, “willful or
intentional breach” shall mean a breach of this Agreement that is a consequence
of an act undertaken by the breaching party with the knowledge that the taking
of such act would, or would reasonably be expected to, cause a breach of this
Agreement.

(b) If this Agreement is terminated for any reason other than by the Commitment
Parties under Section 9.1(b)(iii) or by the Company under Section 9.1(c)(ii),
the Commitment Parties shall be entitled to keep the full Put Option Cash
Premium, and, for the avoidance of doubt, (i) if this Agreement is terminated by
the Commitment Parties under Section 9.1(b)(iii) or by the Company under
Section 9.1(c)(ii), the Commitment Parties shall be required to, within two
(2) Business Days following such proper termination, return the full Put Option
Cash Premium to the Company and (ii) contemporaneously with the Closing, the
Commitment Parties shall return the full Put Option Cash Premium to the Company
in exchange for the Put Option Equity Premium in accordance with Section 3.2(b).
For the avoidance of doubt, other than the Company’s payment of the Put Option
Cash Premium, which has been paid to the Commitment Parties at or prior to the
effectiveness of this Agreement, the Commitment Parties shall not and do not
have any additional recourse against the Debtors for any obligations or
liabilities relating to or arising from this Agreement, except for liability for
gross negligence or willful or intentional breach of this Agreement pursuant to
Section 9.2(a). For the avoidance of doubt, the automatic stay arising pursuant
to section 362 of the Bankruptcy Code shall be deemed waived or modified for
purposes of providing notice or exercising rights hereunder and under the RSA.

ARTICLE X

GENERAL PROVISIONS

Section 10.1 Notices. All notices and other communications in connection with
this Agreement shall be in writing and shall be deemed given if delivered via
electronic mail, courier, or registered or certified mail (return receipt
requested) to the Parties at the following addresses (or at such other address
for a Party as may be specified by like notice):

 

  (a)

If to the Company:

Parker Drilling Company

Five Greenway Plaza, Suite 100

Houston, TX 77046

Attention: John Edward Menger and Jennifer Simons

Email: Ed.Menger@parkerdrilling.com and

Jennifer.Simons@parkerdrilling.com

with a copy (which shall not constitute notice) to:

 

 

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Kirkland & Ellis LLP

601 Lexington Avenue

New York, NY 10022

Attention: Christopher J. Marcus, P.C., Brian Schartz, P.C.,

Julian Seiguer, P.C., Matthew Fagen and Benjamin Adelson

Email: christopher.marcus@kirkland.com; brian.schartz@kirkland.com;

matthew.fagen@kirkland.com; julian.seiguer@kirkland.com;

benjamin.adelson@kirkland.com

(b) If to the Commitment Parties (or to any of them) or any other Person to
which notice is to be delivered hereunder, to the address set forth opposite
each such Commitment Party’s name on Schedule 3, with a copy (which shall not
constitute notice) to:

Akin Gump Strauss Hauer & Feld LLP

1333 New Hampshire Avenue, N.W.

Washington, D.C. 20036

Attention: James Savin and Daniel Fisher

Email: jsavin@akingump.com; dfisher@akingump.com

and

Akin Gump Strauss Hauer & Feld LLP

One Bryant Park, Bank of America Tower

New York, NY 10036

Attention: Michael S. Stamer

Email: mstamer@akingump.com

Section 10.2 Assignment; Third Party Beneficiaries. Neither this Agreement nor
any of the rights, interests or obligations under this Agreement shall be
assigned by any Party (whether by operation of Law or otherwise) without the
prior written consent of the Company and the Requisite Commitment Parties, other
than an assignment by a Commitment Party expressly permitted by Section 2.3 or
Section 2.6 and any purported assignment in violation of this Section 10.2 shall
be void ab initio. Except as provided in Article VIII with respect to the
Indemnified Persons, this Agreement (including the documents and instruments
referred to in this Agreement) is not intended to and does not confer upon any
Person any rights or remedies under this Agreement other than the Parties.

Section 10.3 Prior Negotiations; Entire Agreement.

(a) This Agreement (including the agreements attached as Exhibits to and the
documents and instruments referred to in this Agreement) constitutes the entire
agreement of the Parties and supersedes all prior agreements, arrangements or
understandings, whether written or oral, among the Parties with respect to the
subject matter of this Agreement, except that the Parties hereto acknowledge
that any confidentiality agreements heretofore executed among the Parties and
the RSA (including the Restructuring Term Sheet) and other Definitive Documents
will each continue in full force and effect in accordance with their respective
terms and constitute valid and binding obligations of the Parties thereto. All
exhibits and schedules annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein.

 

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(b) Notwithstanding anything to the contrary in the Plan (including any
amendments, supplements or modifications thereto) or the Confirmation Order (and
any amendments, supplements or modifications thereto) or an affirmative vote to
accept the Plan submitted by any Commitment Party, nothing contained in the Plan
(including any amendments, supplements or modifications thereto) or Confirmation
Order (including any amendments, supplements or modifications thereto) shall
alter, amend or modify the rights of the Commitment Parties under this Agreement
unless such alteration, amendment or modification has been made in accordance
with Section 10.7.

Section 10.4 Governing Law; Venue. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
FOR ANY CONFLICTS OF LAW PRINCIPLES THAT WOULD APPLY THE LAWS OF ANY OTHER
JURISDICTION, OR, TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE. THE PARTIES
CONSENT AND AGREE THAT ANY ACTION TO ENFORCE THIS AGREEMENT OR ANY DISPUTE,
WHETHER SUCH DISPUTES ARISE IN LAW OR EQUITY, ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND THE AGREEMENTS, INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY
SHALL BE BROUGHT EXCLUSIVELY IN THE BANKRUPTCY COURT WHERE THE DEBTORS FILE THE
CHAPTER 11 CASES (OR, SOLELY TO THE EXTENT THE BANKRUPTCY COURT DECLINES
JURISDICTION OVER SUCH ACTION OR DISPUTE, EXCLUSIVELY IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR ANY NEW YORK STATE COURT
SITTING IN NEW YORK CITY). THE PARTIES CONSENT TO AND AGREE TO SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE BANKRUPTCY COURT SOLELY IN CONNECTION WITH THIS
AGREEMENT AND THE AUTHORITY OF THE BANKRUPTCY COURT TO ENTER FINAL ORDERS
RELATING TO SUCH DISPUTES. EACH OF THE PARTIES HEREBY WAIVES AND AGREES NOT TO
ASSERT IN ANY SUCH DISPUTE RELATED TO THIS AGREEMENT, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTIONS TO VENUE OR JURISDICTION OR ANY
CLAIM THAT (I) SUCH PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF THE
BANKRUPTCY COURT, (II) SUCH PARTY OR SUCH PARTY’S PROPERTY IS IMMUNE FROM ANY
LEGAL PROCESS ISSUED BY THE BANKRUPTCY COURT OR (III) ANY LITIGATION OR OTHER
PROCEEDING COMMENCED IN THE BANKRUPTCY COURT IS BROUGHT IN AN INCONVENIENT
FORUM. THE PARTIES HEREBY AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN
CONNECTION WITH ANY SUCH ACTION OR PROCEEDING TO AN ADDRESS PROVIDED IN WRITING
BY THE RECIPIENT OF SUCH MAILING, OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY
LAW, SHALL BE VALID AND SUFFICIENT SERVICE THEREOF AND HEREBY WAIVE ANY
OBJECTIONS TO SERVICE ACCOMPLISHED IN THE MANNER HEREIN PROVIDED.

Section 10.5 Waiver of Jury Trial. EACH PARTY HEREBY WAIVES ALL RIGHTS TO TRIAL
BY JURY IN ANY JURISDICTION IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE AMONG THE PARTIES UNDER THIS AGREEMENT, WHETHER IN CONTRACT,
TORT OR OTHERWISE.

 

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Section 10.6 Counterparts. This Agreement may be executed through the use of
electronic signature and in any number of counterparts, all of which will be
considered an original and one and the same agreement and will become effective
when counterparts have been signed (electronically or otherwise) by each of the
Parties and delivered to each other Party (including via facsimile or other
electronic transmission), it being understood that each Party need not sign the
same counterpart.

Section 10.7 Waivers and Amendments; Rights Cumulative; Consent. This Agreement
may be amended, restated, modified, changed, supplemented or altered only by a
written instrument signed by the Company and the Requisite Commitment Parties;
provided, however, that (a) the prior written consent of each Commitment Party
that was an original signatory hereto still a Commitment Party as of such date
of amendment, restatement, modification, change, supplement or alteration shall
be required for any amendment, restatement, modification, change, supplement or
alteration to this Agreement, the RSA or any other Definitive Document that
would, directly or indirectly: (i) modify such Commitment Party’s Backstop
Commitment Percentage set forth on Schedule 1, Schedule 2A, or Schedule 2B, or
the amount of the Backstop Commitment applicable to such Commitment Party,
(ii) increase the Per Share Purchase Price to be paid in respect of the
Unsubscribed Shares, (iii) modify the Put Option Cash Premium, the Put Option
Equity Premium, Section 3.1, Section 3.2 or the amount of the Put Option Cash
Premium or Put Option Equity Premium applicable to such Commitment Party,
(iv) modify its Subscription Rights (including any percentages contained in the
definition thereof) or the amount of Rights Offering Shares applicable to such
Commitment Party, (v) modify its right and requirement to purchase the
Unsubscribed Shares, (vi) modify any of its rights to receive the Expense
Reimbursement, the Put Option Cash Premium, the Put Option Equity Premium and
the indemnification provisions, (vii) modify the Rights Offering, the aggregate
amount of cash proceeds to be received in the Rights Offering of $95 million,
the 41.9241% amount of post-Closing shares of New Common Stock (subject to
dilution by New Common Stock issued in connection with the Management Incentive
Plan and the exercise of the New Warrants) to be issued pursuant to such Rights
Offering, or the allocation of rights among classes of debt and equity,
(viii) modify the percentage of New Common Stock to be issued to the holders of
2020 Notes Claims and 2022 Notes Claims, as set forth in the Restructuring Term
Sheet and the exhibits thereto, (ix) modify the principal amount, coupon, call
schedule, term, security or priority of the New Second Lien Term Loan, as set
forth in the Restructuring Term Sheet, the Second Lien Term Loan Term Sheet and
the exhibits thereto, (x) modify the percentage of the New Warrants to be issued
to the holders of Existing Common Stock and Existing Preferred Stock, the
provisions of the New Warrant Term Sheet under the section entitled “Sales of
Reorganized Parker”, the strike price of the New Warrants as determined in
accordance with the New Warrant Term Sheet or the term of the New Warrants, as
set forth in the Restructuring Term Sheet, the New Warrant Term Sheet and the
exhibits thereto, (xi) modify the percentage of New Common Stock to be issued to
the holders of Existing Common Stock or Existing Common Stock, as set forth in
the Restructuring Term Sheet and the exhibits thereto, (xii) have a materially
adverse and disproportionate effect on such Commitment Party, or (xiii) amend,
change or alter the definition of “Outside Date” or “Requisite Commitment
Parties” (including, for the avoidance of doubt, due to a change in the

 

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definition of “Required Consenting Stakeholders”); provided, however, that the
consent of any Defaulting Commitment Party shall not be required for any
amendments set forth in clauses (a)(ii) or (a)(iii) above. Notwithstanding the
foregoing, Schedule 1, Schedule 2A, and Schedule 2B shall be revised as
necessary without requiring a written instrument signed by the Company and the
Requisite Commitment Parties to reflect changes in the composition of the
Commitment Parties and the Backstop Commitment Percentages as a result of
Transfers permitted in accordance with the terms and conditions of this
Agreement and no such revisions shall give rise to any termination right or
allow the Commitment Parties to fail to close the transactions contemplated by
this Agreement; provided, each Commitment Party shall receive a revised copy of
all such Schedules. The terms and conditions of this Agreement (other than
(x) Section 7.1(r), Section 7.2, Section 9.1(b)(iv), Section 9.1(b)(xi), and
this Section 10.7, the waiver of which shall only be made with the requisite
approvals of the Commitment Parties pursuant to this Agreement (including, for
the avoidance of doubt, pursuant to this Section 10.7), and (y) other than the
conditions set forth in Section 7.1 and Section 7.3, the waiver of which shall
be governed solely by Article VII) may be waived (i) by the Company and its
Subsidiaries only by a written instrument executed by the Company and (ii) by
the Requisite Commitment Parties only by a written instrument executed by the
Requisite Commitment Parties. No delay on the part of any Party in exercising
any right, power or privilege pursuant to this Agreement will operate as a
waiver thereof, nor will any waiver on the part of any Party of any right, power
or privilege pursuant to this Agreement, nor will any single or partial exercise
of any right, power or privilege pursuant to this Agreement, preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege pursuant to this Agreement. Any proposed amendment, restatement,
modification, change, alteration, supplement or waiver that does not comply with
this Section 10.7 shall be ineffective and void ab initio.

Section 10.8 Headings. The headings in this Agreement are for reference purposes
only and will not in any way affect the meaning or interpretation of this
Agreement.

Section 10.9 Specific Performance. The Parties agree that irreparable damage may
occur if any provision of this Agreement were not performed in accordance with
the terms hereof and that the Parties shall be entitled to an injunction or
injunctions without the necessity of posting a bond to prevent breaches of this
Agreement or to enforce specifically the performance of the terms and provisions
hereof, in addition to any other remedy to which they are entitled at law or in
equity. Unless otherwise expressly stated in this Agreement, no right or remedy
described or provided in this Agreement is intended to be exclusive or to
preclude a Party from pursuing other rights and remedies to the extent available
under this Agreement, at law or in equity.

Section 10.10 Damages. Notwithstanding anything to the contrary in this
Agreement, none of the Parties will be liable for, and none of the Parties shall
claim or seek to recover, any punitive, special, indirect or consequential
damages or damages for lost profits.

Section 10.11 No Reliance. No Commitment Party or any of its Related Parties
shall have any duties or obligations to the other Commitment Parties in respect
of this Agreement, the Plan or the transactions contemplated hereby or thereby,
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) no Commitment Party or any of its Related Parties shall be
subject to any fiduciary or other implied duties to the other Commitment
Parties, (b) no Commitment Party or any of its Related Parties shall have any
duty to take any discretionary

 

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action or exercise any discretionary powers on behalf of any other Commitment
Party, (c) no Commitment Party or any of its Related Parties shall have any duty
to the other Commitment Parties to obtain, through the exercise of diligence or
otherwise, to investigate, confirm, or disclose to the other Commitment Parties
any information relating to the Company or any of its Subsidiaries that may have
been communicated to or obtained by such Commitment Party or any of its
Affiliates in any capacity, (d) no Commitment Party may rely, and each
Commitment Party confirms that it has not relied, on any due diligence
investigation that any other Commitment Party or any Person acting on behalf of
such other Commitment Party may have conducted with respect to the Company or
any of its Affiliates or any of their respective securities and (e) each
Commitment Party acknowledges that no other Commitment Party is acting as a
placement agent, initial purchaser, underwriter, broker or finder with respect
to its Unsubscribed Shares or Backstop Commitment Percentage of its Backstop
Commitment.

Section 10.12 Confidentiality and Publicity. Other than as may be required by
applicable Law and regulation or by any governmental or regulatory authority, no
Party shall disclose to any person (including for the avoidance of doubt, any
other Commitment Party), other than legal, accounting, financial and other
advisors to the Company Parties (who are under obligations of confidentiality to
the Company Parties with respect to such disclosure, and whose compliance with
such obligations the Company Parties shall be responsible for), the name or the
principal amount or percentage of the Company Claims/Interests held by any
Commitment Party or any of its respective subsidiaries (including, for the
avoidance of doubt, any Company Claims/Interests acquired pursuant to any
Transfer); provided, however, that the Company Parties shall be permitted to
disclose at any time the aggregate principal amount of, and aggregate percentage
of, any class of the Company Claims/Interests held by the Commitment Parties
collectively; and, provided, further, that the Company Parties may disclose the
names of any Commitment Party (at the institution level) at a hearing in
connection with the Chapter 11 Cases, but not the principal amount or percentage
of the Company Claims/Interests held by any such Commitment Party or any of its
respective subsidiaries (including, for the avoidance of doubt, any Company
Claims/Interests acquired pursuant to any Transfer). Notwithstanding the
foregoing, the Commitment Parties hereby consent to the disclosure of the
execution, terms and contents of this Agreement by the Company Parties in the
Definitive Documents or as otherwise required by law or regulation; provided,
however, that (i) if any of the Company Parties determines that they are
required to attach a copy of this Agreement, any Joinder or Transfer Agreement
to any Definitive Documents or any other filing or similar document relating to
the transactions contemplated hereby, they will redact any reference to or
identifying information concerning a specific Commitment Party and such
Commitment Party’s holdings (including before filing any pleading with the
Bankruptcy Court) and (ii) if disclosure of additional identifying information
of any Commitment Party is required by applicable Law, advance notice of the
intent to disclose, if permitted by applicable Law, shall be given by the
disclosing Party to each Commitment Party (who shall have the right to seek a
protective order prior to disclosure). The Company Parties further agree that
such information shall be redacted from “closing sets” or other representations
of the fully executed Agreement, any Joinder or Transfer Agreement.
Notwithstanding the foregoing, the Company Parties will submit to counsel for
the Commitment Parties all press releases, public filings, public announcements
or other communications with any news media, in each case, to be made by the
Company Parties relating to this Agreement or the transactions contemplated
hereby and any amendments thereof at least two (2) Business Days (it being

 

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understood that such period may be shortened to the extent there are exigent
circumstances that require such public communication to be made to comply with
applicable law) in advance of release and will take such counsel’s view with
respect to such communications into account. Nothing contained herein shall be
deemed to waive, amend or modify the terms of any Confidentiality Agreement.

Section 10.13 Settlement Discussions. This Agreement and the transactions
contemplated herein are part of a proposed settlement of a dispute between the
Parties. Nothing herein shall be deemed an admission of any kind. Pursuant to
Section 408 of the U.S. Federal Rule of Evidence and any applicable state rules
of evidence, this Agreement and all negotiations relating thereto shall not be
admissible into evidence in any Legal Proceeding, except to the extent filed
with, or disclosed to, the Bankruptcy Court in connection with the Chapter 11
Cases (other than a Legal Proceeding to approve or enforce the terms of this
Agreement).

Section 10.14 No Recourse. Notwithstanding anything that may be expressed or
implied in this Agreement, and notwithstanding the fact that certain of the
Parties may be partnerships or limited liability companies, each Party
covenants, agrees and acknowledges that no recourse under this Agreement or any
documents or instruments delivered in connection with this Agreement shall be
had against any Party’s Affiliates, or any of such Party’s Affiliates’ or
respective Related Parties, in each case, other than the Parties to this
Agreement and each of their respective successors and permitted assignees based
upon, arising out of or relating to this Agreement, whether by the enforcement
of any assessment or by any legal or equitable proceeding, or by virtue of any
applicable Law, it being expressly agreed and acknowledged that no personal
liability whatsoever shall attach to, be imposed on or otherwise be incurred by,
any of the Related Parties not a Party to this Agreement or any documents or
instruments delivered in connection herewith, as such, for any obligation or
liability of any Party under this Agreement or any documents or instruments
delivered in connection herewith for any claim based on, in respect of or by
reason of, such obligations or liabilities or their creation; provided, however,
nothing in this Section 10.14 shall relieve or otherwise limit the liability of
any Party hereto or any of their respective successors or permitted assigns for
any breach or violation of, its obligations under this Agreement or such other
documents or instruments entered into in connection with the transactions
contemplated hereby and thereby (including any confidentiality, non-disclosure
or similar agreements).

Section 10.15 Enforceability of Agreement. The Parties hereby acknowledge,
covenant and agree: (i) that the provision of any notice or exercise of
termination rights under this Agreement is not prohibited by the automatic stay
provisions of the Bankruptcy Code, (ii) that they waive any right to assert that
the exercise of any notice or termination rights under this Agreement is subject
to the automatic stay provisions of the Bankruptcy Code and expressly stipulate
and consent hereunder to the prospective modification of the automatic stay
provisions of the Bankruptcy Code for purposes of exercising notice and
termination rights under this Agreement, to the extent the Bankruptcy Court
determines that such relief is required, (iii) that they shall not take a
position to the contrary of this Section 10.15 in the Bankruptcy Court or any
other court of competent jurisdiction and (iv) that they will not initiate, or
assert in, any litigation or other legal proceeding that this Section 10.15 is
illegal, invalid or unenforceable, in whole or in part.

 

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Section 10.16 Relationship Among Parties. Notwithstanding anything to the
contrary herein, the duties and obligations of the Commitment Parties under this
Agreement shall be several, not joint. None of the Commitment Parties shall have
any fiduciary duty, any duty of trust or confidence in any form, or other duties
or responsibilities to each other, any Commitment Party, any Company Party, or
any of the Company Party’s respective creditors or other stakeholders, and there
are no commitments among or between the Commitment Parties, in each case except
as expressly set forth in this Agreement. No prior history, pattern or practice
of sharing confidence among or between any of the Commitment Parties and/or the
Company Parties shall in any way affect or negate this understanding and
agreement. The Parties have no agreement, arrangement or understanding with
respect to acting together for the purpose of acquiring, holding, voting or
disposing of any securities of any of the Company Parties and do not constitute
a “group” within the meaning of Section 13(d)(3) of the Exchange Act or Rule
13d-5 promulgated thereunder. For the avoidance of doubt: (1) each Commitment
Party is entering into this Agreement directly with the Company and not with any
other Commitment Party, (2) no other Commitment Party shall have any right to
bring any action against any other Commitment Party with respect to this
Agreement (or any breach thereof) and (3) no Commitment Party shall, nor shall
any action taken by a Commitment Party pursuant to this Agreement, be deemed to
be acting in concert or as any group with any other Commitment Party with
respect to the obligations under this Agreement nor shall this Agreement create
a presumption that the Commitment Parties are in any way acting as a group. All
rights under this Agreement are separately granted to each Commitment Party by
the Company and vice versa, and the use of a single document is for the
convenience of the Company. The decision to commit to enter into the
transactions contemplated by this Agreement has been made independently.

[Signature Pages Follow]

 

 

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IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the date
first above written.

 

PARKER DRILLING COMPANY By:  

/s/ Michael W. Sumruld

  Name: Michael W. Sumruld   Title:   Authorized Signatory

[Signature Page to Backstop Commitment Agreement]

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Schedule 4

Fully Diluted Capital Stock of Reorganized Parker

Assuming that the Existing Common Stock Rejection does not occur, the fully
diluted post-Closing New Common Stock on the Effective Date shall be held as the
following:

 

Source of New Common Stock

   Percentage of post-Closing New
Common Stock on a  fully-diluted
basis1  

Rights Offering

     41.9241 % 

Put Option Equity Premium

     3.3539 % 

Converted 2020 Notes

     18.7932 % 

Converted 2022 Notes

     34.4239 % 

Existing Preferred Stock

     0.6019 % 

Existing Common Stock

     0.9029 % 

 

1 

All percentages reflected in the chart above are subject to dilution by New
Common Stock issued in connection with the Management Incentive Plan and the
exercise of the New Warrants.

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Schedule 5

Milestones

 

a.

The Debtors shall commence the Chapter 11 Cases and file the First Day Pleadings
with the Bankruptcy Court no later than 2 days after the date hereof.

 

b.

Within one day of the Petition Date, the Debtors shall file the Plan, the
Disclosure Statement, and a motion (or motions) for approval of the Rights
Offering Procedures and the Disclosure Statement with the Bankruptcy Court.

 

c.

The Debtors shall obtain entry by the Bankruptcy Court of orders approving (i)
the Disclosure Statement and (ii) the Rights Offering Procedures, in each case
within 45 days after the Petition Date.

 

d.

The Debtors shall obtain entry of the Confirmation Order by no later than 92
days after the Petition Date.

 

e.

The Effective Date of the Plan and Closing of the Rights Offering shall have
occurred by no later than (i) 107 days after the Petition Date and (ii) 15 days
after the date (without taking into account any grace period provided under
Section 9.1(b)(i) of this Agreement) set forth in sub-clause d. of this Schedule
5.

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Exhibit A

Form of Joinder Agreement

This joinder agreement (the “Joinder Agreement”) to Backstop Commitment
Agreement, dated December 12, 2018 (as has been or may be hereafter amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with the terms thereof, the “BCA”), between Parker Drilling Company
(the “Company”) and the Commitment Parties party thereto, is executed and
delivered by [•] (the “Joining Party”) as of [•], 201[•] (the “Joinder Date”).
Each capitalized term used herein but not otherwise defined herein shall have
the meaning set forth in the BCA.

Agreement to be Bound. The Joining Party hereby agrees to be bound by all of the
terms of the BCA, a copy of which is attached to this Joinder Agreement as Annex
I (as the same has been or may be hereafter amended, amended and restated or
otherwise modified from time to time in accordance with the provisions thereof).
The Joining Party shall hereafter be deemed to be a “Commitment Party” for all
purposes under the BCA. The Joining Party and the Company agree that the
Backstop Commitment Percentage will be updated in accordance with the terms of
the BCA.

Representations and Warranties. The Joining Party hereby severally and not
jointly makes the representations and warranties of the Commitment Parties set
forth in Article 5 of the BCA to the Company as of the Joinder Date.

Governing Law. This Joinder Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard for any
conflicts of law principles that would apply the laws of any other jurisdiction,
or, to the extent applicable, the Bankruptcy Code.

[Signature Pages Follow]

 

Exhibit A

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

IN WITNESS WHEREOF, the Joining Party has caused this Joinder Agreement to be
executed as of the Joinder Date.

 

JOINING PARTY [COMMITMENT PARTY] By:  

                     

Name:  

 

Title:  

 

 

AGREED AND ACCEPTED (as of the Joinder Date): PARKER DRILLING COMPANY By:  

                     

Name:  

 

Title:  

 

 

 

[Signature Page to Joinder Agreement]

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EXHIBIT B

Form of Transfer Agreement

The undersigned (“Transferee”), as of the date executed below, (a) hereby
acknowledges that it has read and understands the Restructuring Support
Agreement, made and entered into as of December 12, 2018, (as has been or may be
hereafter amended, amended and restated, supplemented or otherwise modified from
time to time in accordance with the terms thereof, the “Agreement”), by and
among Parker Drilling Company, the other Company Parties party thereto and the
Consenting Stakeholders party thereto, (b) desires to acquire the Company
Claims/Interests held by the transferor (the “Transferor”) described below, and
acknowledges and agrees that it shall be deemed a “Consenting Stakeholder” under
the terms of the Agreement, (c) agrees to be bound by the terms and conditions
of the Agreement to the extent applicable to the Transferor and and (d) the
Transferee hereby severally and not jointly makes all representations and
warranties of the Consenting Stakeholders set forth in Section 9 of the
Agreement as of the date hereof. Capitalized used herein but not otherwise
defined herein shall have the meanings ascribed to such terms in the Agreement.

 

Date Executed: [TRANSFEREE] By:  

                                              

Name:  

 

Title:  

 

Address:                                          
                                    E-mail address(es):
                                                              Telephone:
                                                                         
Facsimile:                                          
                               

 

Aggregate Amount of Transferred Company Claims/Interests

Type

  

Amount

 

 

Exhibit B