Exhibit 10.1

EXECUTION VERSION

PLAN SUPPORT AGREEMENT

This PLAN SUPPORT AGREEMENT (as amended, supplemented, or otherwise modified
from time to time, this “Plan Support Agreement”) dated December 22, 2016 is
made between:

 

  (a)

Memorial Production Partners LP (“Memorial Parent”), a Delaware limited
partnership, and each of its undersigned subsidiaries that are parties hereto
(each, a “Memorial Party” and collectively, the “Memorial Parties”), including
Memorial Production Finance Corporation (“MPFC”) and Memorial Production
Operating LLC; and

 

  (b)

the undersigned beneficial holders, or investment advisers or managers for the
account of beneficial holders, of the (i) 6.875% Senior Unsecured Notes due 2022
(the “6.875% Senior Unsecured Notes”) issued under that certain indenture dated
as of July 17, 2014, between Memorial Parent and MPFC, as issuers, each of the
guarantors party thereto, and Wilmington Trust, National Association, as
successor trustee (such indenture, as amended, modified, or otherwise
supplemented from time to time, the “6.875% Senior Unsecured Note Indenture”),
together with their respective successors and permitted assigns and any holder
of 6.875% Senior Unsecured Notes that subsequently becomes a party hereto in
accordance with the terms hereof (collectively, the “Consenting 6.875% Senior
Unsecured Noteholders”), and (ii) 7.625% Senior Unsecured Notes due 2021 (the
“7.625% Senior Unsecured Notes” and, together with the 6.875% Senior Unsecured
Notes, the “Unsecured Notes”) issued under that certain indenture dated as of
April 17, 2013, between Memorial Parent and MPFC, as issuers, each of the
guarantors party thereto, and Wilmington Trust, National Association, as
successor trustee (such indenture, as amended, modified, or otherwise
supplemented from time to time, the “7.625% Senior Unsecured Note Indenture”
and, together with the 6.875% Senior Unsecured Note Indenture, the “Unsecured
Note Indentures”), together with their respective successors and permitted
assigns and any holder of 7.625% Senior Unsecured Notes that subsequently
becomes a party hereto in accordance with the terms hereof (collectively, the
“Consenting 7.625% Senior Unsecured Noteholders” and, together with the
Consenting 6.875% Senior Unsecured Noteholders, the “Consenting Noteholders”)
that are members of the ad hoc group of holders of Unsecured Notes Claims (the
“Ad Hoc Group”) that is represented by Davis Polk & Wardwell LLP (“Davis Polk”)
and Miller Buckfire & Co., LLC.

Each of the Memorial Parties, Consenting Noteholders, and any subsequent person
or entity that becomes a party hereto in accordance with the terms hereof are
referred to collectively herein as the “Parties” and each individually as a
“Party.”

WHEREAS, the Parties have agreed to undertake a financial restructuring of the
Memorial Parties (the “Restructuring”) which is anticipated to be effected
through a prepackaged or prenegotiated plan of reorganization (including any
schedules and exhibits attached thereto, the “Plan”) on terms and conditions set
forth in the term sheet attached hereto

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as Exhibit A (including any schedules and exhibits attached thereto, the
“Restructuring Term Sheet”), and the commencement by each Memorial Party of a
voluntary case (collectively, the “Chapter 11 Cases”) under chapter 11 of title
11 of the United States Code (the “Bankruptcy Code”) in the Southern District of
Texas or, with the consent of the Requisite Noteholders (as defined below), any
other jurisdiction that the Memorial Parties choose (the “Bankruptcy Court”).

WHEREAS, as of the date hereof, the Consenting 6.875% Senior Unsecured
Noteholders, in the aggregate, hold approximately 63.4% of the aggregate
outstanding principal amount of 6.875% Senior Unsecured Notes.

WHEREAS, as of the date hereof, the Consenting 7.625% Senior Unsecured
Noteholders, in the aggregate, hold approximately 40.7% of the aggregate
outstanding principal amount of 7.625% Senior Unsecured Notes.

WHEREAS, as of the date hereof, the Consenting Noteholders, in the aggregate,
hold approximately 50.2% of the aggregate outstanding principal amount of
Unsecured Notes.

WHEREAS, the Parties desire to express to each other their mutual support and
commitment in respect of the Restructuring, including matters discussed in the
Restructuring Term Sheet and hereunder.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties, intending
to be legally bound, agree as follows:

1.    Certain Definitions.

Capitalized terms used herein but not otherwise defined shall have the meaning
set forth in the Restructuring Term Sheet. As used in this Plan Support
Agreement, the following terms have the following meanings:

(a)    “Claim” has the meaning set forth in section 101(5) of the Bankruptcy
Code.

(b)    “Cash Collateral Order” means the Bankruptcy Court order authorizing the
Memorial Parties to use prepetition collateral and cash collateral in form and
substance reasonably acceptable to the Memorial Parties and the Requisite
Noteholders.

(c)    “Definitive Documents” means the documents (including any related
agreements, instruments, schedules, or exhibits) that are necessary or desirable
to implement, or otherwise relate to, the Restructuring, including this Plan
Support Agreement, the Plan (including any plan supplements), the Disclosure
Statement, any order approving the Disclosure Statement, and any order
confirming the Plan, in each case on terms and conditions consistent with the
Restructuring Term Sheet and otherwise in form and substance reasonably
satisfactory to the Memorial Parties and the Requisite Noteholders.

 

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(d)    “Effective Date” means the date upon which all the conditions to the
effectiveness of the Plan have been satisfied or waived in accordance with its
terms.

(e)    “Plan Support Effective Date” means the date on which counterpart
signature pages to this Plan Support Agreement shall have been executed and
delivered by the Memorial Parties and Consenting Noteholders.

(f)    “Plan Support Period” means the period commencing on the Plan Support
Effective Date and ending on the earlier of the (i) date on which this Plan
Support Agreement is terminated in accordance with Section 6 hereof and (ii) the
Effective Date.

(g)    “Requisite Noteholders” means, as of the date of determination,
Consenting Noteholders holding at least a majority of the outstanding principal
amount of the Unsecured Notes held by Consenting Noteholders as of such date.

(h)    “SEC” means the United States Securities and Exchange Commission.

(i)    “Securities Act” shall mean the Securities Act of 1933, as amended.

(j)    “Solicitation” means the solicitation of votes for the Plan pursuant to,
and in compliance with, the Bankruptcy Code and any applicable nonbankruptcy
law, rule, or regulation governing the adequacy of disclosure in connection with
such solicitation.

(k)    “Supermajority Noteholders” means, as of the date of determination,
Consenting Noteholders holding at least 66 and 2/3% of the outstanding principal
amount of the Unsecured Notes outstanding under the Unsecured Note Indentures.

2.    Restructuring Term Sheet. The material terms and conditions of the
Restructuring are set forth in the Restructuring Term Sheet; provided that the
Restructuring Term Sheet is supplemented by the terms and conditions of this
Plan Support Agreement. In the event of any inconsistencies between the
Restructuring Term Sheet and this Plan Support Agreement, the terms of the
Restructuring Term Sheet shall govern.

3.    Bankruptcy Process; Plan of Reorganization.

(a)    Commencement of the Chapter 11 Cases. Each Memorial Party hereby agrees
that, as soon as reasonably practicable, but in no event later than January 16,
2017, such Memorial Party shall file with the Bankruptcy Court a voluntary
petition for relief under chapter 11 of the Bankruptcy Code and any and all
other documents necessary to commence the Chapter 11 Case of such Memorial
Party.

(b)    Filing of the Plan. On the Petition Date (as defined in Section 6), the
Memorial Parties shall file the Plan along with the Disclosure Statement in
respect to the Plan with the Bankruptcy Court.

(c)    Confirmation of the Plan. Each Memorial Party shall use its commercially
reasonable efforts to obtain confirmation of the Plan as soon as reasonably
practicable after the Petition Date (as defined in Section 6) in accordance with
the Bankruptcy Code and on terms consistent with this Plan Support Agreement,
and each Consenting Noteholder shall use its commercially reasonable efforts to
cooperate fully in connection therewith.

 

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4.    Agreements of the Consenting Noteholders.

(a)    Agreement to Vote. During the Plan Support Period, subject to the terms
and conditions hereof, each Consenting Noteholder agrees that it shall, subject
to the receipt by such Consenting Noteholder of the Disclosure Statement and
other solicitation materials in respect of the Plan:

(i)    vote or cause to be voted its Claims against the Memorial Parties to
accept the Plan by delivering its duly executed and completed ballots accepting
the Plan on a timely basis as soon as reasonably practicable after receiving the
ballots; provided that such vote shall be immediately revoked by all Consenting
Noteholders and deemed void ab initio upon termination of this Plan Support
Agreement before the consummation of the Plan pursuant to the terms hereof;

(ii)    not change or withdraw (or cause to be changed or withdrawn) any such
vote; and

(iii)    not (A) object to, delay, impede, or take any other action to interfere
with acceptance or implementation of the Plan, (B) directly or indirectly
solicit, encourage, propose, file, support, participate in the formulation of or
vote for, any restructuring, sale of assets, merger, workout, or plan of
reorganization for any of the Memorial Parties other than the Plan, or
(C) otherwise take any action that would interfere with, delay, or postpone the
consummation of the Restructuring.

(b)    Transfers.

(i)    During the Plan Support Period, each Consenting Noteholder agrees, solely
with respect to itself, that such Consenting Noteholder shall not sell,
transfer, loan, issue, pledge, assign, or otherwise dispose of (each, a
“Transfer”), directly or indirectly, in whole or in part, any of its Unsecured
Notes Claims (including grant any proxies, deposit any interest in the Unsecured
Notes Claims into a voting trust or enter into a voting agreement with respect
to any such Unsecured Notes Claims), unless the transferee thereof is either
(A) a Consenting Noteholder or (B) before such Transfer is effective,
(x) represents that it does not own, directly or indirectly, any Memorial Parent
Interests, (y) agrees in writing for the benefit of the Parties to become a
Consenting Noteholder, and (z) agrees to be bound by all of the terms of this
Plan Support Agreement applicable to Consenting Noteholders (including with
respect to any and all Unsecured Notes Claims it already may hold before such
Transfer) by executing a joinder agreement substantially in the form attached
hereto as Exhibit B (a “Joinder Agreement”), and delivering an executed copy
thereof within two (2) business days after such execution to (1) Weil, Gotshal &
Manges LLP (“Weil”), counsel to the Memorial Parties and (2) Davis Polk, counsel
to the Ad Hoc Group, in which event, upon compliance with the foregoing, (x) the
transferee (including the Consenting Noteholder transferee, if applicable) shall
be deemed to be a Consenting Noteholder hereunder to the

 

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extent of such transferred rights and obligations and shall be deemed to make
all of the representations, warranties, and covenants of a Party, as applicable,
set forth in this Plan Support Agreement and (y) the transferor shall be deemed
to relinquish its rights (and be released from its obligations) under this Plan
Support Agreement to the extent of such transferred rights and obligations;
provided that this Section 4(b)(i) shall not apply to the grant of any liens or
encumbrances in favor of a bank or broker-dealer holding custody of securities
in the ordinary course of business and which lien or encumbrance is released
upon the Transfer of such securities. Each Consenting Noteholder agrees that any
Transfer of any Unsecured Notes Claims that does not comply with the terms and
procedures set forth herein shall be deemed void ab initio and shall not create
any obligation or liability of any Party to the purported transferee, and the
applicable Memorial Party and each other Consenting Noteholder shall have the
right to enforce the voiding of such Transfer. Any Consenting Noteholder that
effectuates a Transfer in compliance with the foregoing shall have no liability
under this Plan Support Agreement arising from or related to the failure of the
transferee to comply with the terms of this Plan Support Agreement.

(ii)    Notwithstanding Section 4(b)(i): (A) a Consenting Noteholder may settle
or deliver any Unsecured Notes Claims to settle any confirmed transaction
pending as of the date of such Consenting Noteholder’s entry into this Plan
Support Agreement (subject to compliance with applicable securities laws and it
being understood that such Unsecured Notes Claims so acquired and held (i.e.,
not as a part of a short transaction) shall be subject to the terms of this Plan
Support Agreement); (B) a Consenting Noteholder may Transfer its Unsecured Notes
Claims to an entity that is acting in its capacity as a Qualified Marketmaker
without the requirement that the Qualified Marketmaker become a Party; provided
that (1)(x) such Qualified Marketmaker must Transfer such right, title, or
interest in such Unsecured Notes before the plan voting deadline and (y) any
subsequent Transfer by such Qualified Marketmaker of the right, title, or
interest in such Unsecured Notes is to a transferee that is or becomes a
Consenting Noteholder at the time of such transfer, or (2) the Qualified
Marketmaker will be required to execute and deliver a Joinder Agreement; and
(C) to the extent that a Consenting Noteholder is acting in its capacity as a
Qualified Marketmaker, it may Transfer any right, title, or interest in
Unsecured Notes that the Qualified Marketmaker acquires from an Unsecured
Noteholder who is not a Consenting Noteholder without the requirement that the
transferee be or become a Consenting Noteholder or execute a Joinder Agreement.

For these purposes, a “Qualified Marketmaker” means an entity that (x) holds
itself out to the public or applicable private markets as standing ready in the
ordinary course of its business to purchase from customers and sell to customers
Claims against the Memorial Parties (including debt securities or other debt) or
enter with customers into long and short positions in Claims against the
Memorial Parties (including debt securities or other debt), in its capacity as a
dealer or market maker in such Claims against the Memorial Parties, and (y) is
in fact regularly in the business of making a market in Claims against issuers
or borrowers (including debt securities or other debt).

 

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(c)    Agreement to Contribute. So long as this Plan Support Agreement has not
been terminated in accordance with the terms hereof, each Consenting Noteholder
agrees to contribute its Unsecured Notes Claims to Contribution LLC and to cause
Contribution LLC to in turn contribute the Unsecured Notes Claims to Memorial
Parent NewCo and timely perform any other act in accordance with the
Restructuring Transactions set forth on Annex 3 of the Restructuring Term Sheet;
provided, however, that if the Consenting Noteholders shall in the aggregate own
in excess of 77% of the Unsecured Notes Claims (or such lesser percentage as
Memorial Parent, after consultation with the counsel to the Ad Hoc Group,
reasonably determines), the Consenting Noteholder(s) with the least ownership
shall not contribute any of their Unsecured Notes Claims, but only such holders
as are necessary to bring the aggregate ownership of contributing Consenting
Noteholders within such percentage ownership limit.

(d)    Additional Claims. This Plan Support Agreement shall in no way be
construed to preclude any Consenting Noteholder from acquiring additional
Unsecured Notes Claims. Each Consenting Noteholder agrees that if any Consenting
Noteholder acquires additional Unsecured Notes Claims, then (i) such Unsecured
Notes Claims shall be subject to this Plan Support Agreement (including the
obligations of the Consenting Noteholders under this Section 4) and (ii) after
such acquisition, such Consenting Noteholder shall notify Weil of the amount and
types of Claims it has acquired (A) on no less than a monthly basis and
(B) additionally, upon the reasonable request of Weil.

(e)    Forbearance. During the period commencing on the date hereof and ending
on the termination of this Plan Support Agreement in accordance with its terms,
each Consenting Noteholder hereby agrees it will not enforce, or otherwise take
any action to direct enforcement of, any of the rights and remedies available to
the Consenting Noteholders (or any registered holder of Unsecured Notes) or the
trustee under the Unsecured Note Indentures or the Unsecured Notes or otherwise,
including, without limitation, any action to accelerate, or join in any request
for acceleration of, the Unsecured Notes (“Remedial Action”) under the Unsecured
Note Indentures or the Unsecured Notes with respect to any defaults or events of
default set forth on Schedule A hereto. The Consenting Noteholders hereby
request that during the Plan Support Period any applicable administrative agent
or indenture trustee not take, and direct such administrative agent or indenture
trustee not to take, any Remedial Action with respect to any defaults or events
of default set forth on Schedule A hereto, and shall, upon request of the
Memorial Parties, provide such further direction to any administrative agent or
indenture trustee as may be necessary to effectuate the intent of the foregoing.
The Consenting Noteholders further agree that if any applicable administrative
agent or indenture trustee takes any action inconsistent with such Consenting
Noteholder’s obligations under this Plan Support Agreement, such Consenting
Noteholder shall use its commercially reasonable efforts to require such
administrative agent or indenture trustee to cease and refrain from taking any
such action (including, by written notice to the indenture trustee, rescinding
and canceling such acceleration to the fullest extent permitted under the
Unsecured Note Indentures).

The foregoing forbearance shall not be construed to impair the ability of the
Consenting Noteholders or the indenture trustee to exercise any rights or
remedies under the Unsecured Note Indentures or take any Remedial Action (x) at
any time after the Plan Support Period or (y) during the Plan Support Period,
for defaults or events of default other than the defaults or events of default
set forth on Schedule A hereto, and, except as provided herein, nothing shall

 

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restrict, impair, or otherwise affect the exercise of the Consenting
Noteholders’ or the indenture trustee’s rights under this Plan Support
Agreement, the Unsecured Note Indentures or the Unsecured Notes.

With respect to the foregoing forbearance, each Consenting Noteholder’s
agreements, as provided herein, shall immediately terminate without requirement
for any notice, demand, or presentment of any kind after the Plan Support
Period, and the Memorial Parties at that time shall be obligated to comply with
and perform all terms, conditions, and provisions of the Unsecured Note
Indentures and the Unsecured Notes without giving effect to the forbearance, and
the indenture trustee and the Consenting Noteholders may at any time thereafter
proceed to exercise any and all of their rights and remedies, including, without
limitation, their rights and remedies in connection with any defaults or events
of default under the Unsecured Note Indentures or rights under this Plan Support
Agreement, to the extent continuing.

For the avoidance of doubt, the forbearance set forth in this Section 4(e) shall
not by implication or otherwise limit, impair, constitute a waiver of or
otherwise affect the rights and remedies of the Consenting Noteholders or the
trustee under the Unsecured Note Indentures or Unsecured Notes and shall not,
except as expressly set forth herein, alter, modify, amend, or in any way affect
any of the terms, conditions, obligations, covenants, or agreements contained in
the Unsecured Note Indentures or the Unsecured Notes or any other provision of
the Unsecured Note Indentures or the Unsecured Notes, all of which are ratified
and affirmed in all respects and shall continue in full force and effect. The
forbearance set forth in this Section 4(e) shall not bar any Consenting
Noteholder from filing a proof of claim or taking action to establish the amount
of its Claim. If the transactions contemplated hereby are not consummated or if
this Plan Support Agreement is terminated for any reason, the Parties fully
reserve any and all of their rights.

(f)    The Consenting Noteholders agree to provide prompt written notice to the
Memorial Parties between the date hereof and the Effective Date of (i) receipt
of any notice that is not publicly available of any judicial proceeding
commenced, or, to the actual knowledge of any Consenting Noteholder, threatened
in writing against any Consenting Noteholder, relating to or involving or
otherwise affecting in any material respect the transactions contemplated by the
Restructuring, and (ii) any failure of any Consenting Noteholder to comply with
or satisfy, in any material respect, any covenant, condition, or agreement
hereunder.

(g)    The agreements of the Consenting Noteholders in this Section 4 shall be
solely on such Consenting Noteholder’s own behalf and not on behalf of any other
Consenting Noteholders and shall be several and not joint.

5.    Agreements of the Memorial Parties.

Prior to and during the Plan Support Period, subject to the terms and conditions
hereof, each Memorial Party, jointly and severally, agrees that it shall:

(a)    (i) act in good faith and use commercially reasonable efforts to support
and complete successfully the Solicitation in accordance with the terms of this
Plan Support Agreement, (ii) do all things reasonably necessary and appropriate,
including considering actions reasonably requested by the Requisite Noteholders,
in furtherance of confirming the Plan and

 

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consummating the Restructuring and the transactions contemplated thereby in
accordance with, and within the time frames contemplated by, this Plan Support
Agreement (including within the deadlines set forth in Section 6); provided that
no Memorial Party shall be obligated to agree to any modification of any
document that is inconsistent with the Restructuring Term Sheet, (iii) not take
any action directly or indirectly that is inconsistent with, or that would
reasonably be expected to prevent, interfere with, delay or impede the approval
of the Disclosure Statement, the Solicitation of votes on the Plan, and the
confirmation and consummation of the Plan and the Restructuring, including
soliciting or causing or allowing any of its agents or representatives to
solicit any agreements relating to any chapter 11 plan or restructuring
transaction (including, for the avoidance of doubt, a transaction premised on an
asset sale of substantially all of the Memorial Parties’ assets under section
363 of the Bankruptcy Code) other than the Restructuring (an “Alternative
Transaction”), and (iv) not, nor encourage any other person to, take any action
which would, or would reasonably be expected to, breach or be inconsistent with
this Plan Support Agreement or delay, impede, appeal, or take any other negative
action, directly or indirectly, or encourage any other entity to interfere with
the acceptance or implementation of the Restructuring or delay the time frames
contemplated by this Plan Support Agreement (including within the deadlines set
forth in Section 6);

(b)    (i) file on the Petition Date (as defined below) such first day motions
and pleadings that are reasonably acceptable, in form and substance, to the
Requisite Noteholders, (ii) use commercially reasonable efforts to cause the
Confirmation Order to become effective and enforceable immediately upon its
entry and to have the period in which an appeal thereto must be filed commence
immediately upon its entry, (iii) use commercially reasonable efforts to
complete and file, within the timeframes contemplated by this Plan Support
Agreement, all Definitive Documents, and (iv) use commercially reasonable
efforts to obtain entry by the Bankruptcy Court of the Cash Collateral Order.

(c)    provide draft copies of all material motions, applications, and other
documents (including the Plan and Disclosure Statement, any proposed amended
version of the Plan or Disclosure Statement, and all first day pleadings) any
Memorial Party intends to file with the Bankruptcy Court to Davis Polk, if
reasonably practicable and applicable, at least two (2) calendar days before the
date when the applicable Memorial Party intends to file any such motion,
application, or other document (and, if not reasonably practicable, as soon as
reasonably practicable before filing) and shall consult in good faith with such
counsel regarding the form and substance of any such proposed filing with the
Bankruptcy Court. Subject to Section 4(a), nothing in this Plan Support
Agreement shall restrict, limit, prohibit, or preclude, in any manner not
inconsistent with its obligations under this Plan Support Agreement, any of the
Consenting Noteholders from appearing in the Bankruptcy Court with respect to
any motion, application, or other documents filed by the Memorial Parties and
objecting to, or commenting upon, the relief requested therein;

(d)    use commercially reasonable efforts to obtain authority, through the Cash
Collateral Order, to pay the fees and expenses of the Ad Hoc Group incurred
pursuant to Section 24 hereof;

 

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(e)    subject to professional responsibilities, timely file with the Bankruptcy
Court or any other applicable United States court a formal written objection to
any motion filed with the Bankruptcy Court or any other United States court by
any party seeking the entry of an order (i) directing the appointment of an
examiner with expanded powers or a trustee in any of the Chapter 11 Cases,
(ii) converting any of the Chapter 11 Cases to cases under chapter 7 of the
Bankruptcy Code, (iii) dismissing any of the Chapter 11 Cases, (iv) modifying or
terminating Memorial Parties’ exclusive right to file and/or solicit acceptances
of a plan of reorganization, or (v) granting any relief inconsistent with this
Plan Support Agreement and the Definitive Documents;

(f)    provide to the Consenting Noteholders and/or their respective
professionals, upon reasonable advance notice to any Memorial Party,
(i) reasonable access (without any material disruption to the conduct of the
applicable Memorial Party’s business) during normal business hours to the
applicable Memorial Party’s books, records, and facilities, (ii) reasonable
access to the respective management and advisors of the applicable Memorial
Party for the purposes of evaluating the Memorial Party’s finances and
operations and participating in the planning process with respect to the
Restructuring, (iii) prompt access to any information provided to any existing
or prospective financing sources (including lenders under any exit financing),
and (iv) timely and reasonable responses to all reasonable diligence requests;
provided, that the Consenting Noteholders understand and agree that the Memorial
Parties may (in their sole discretion) refuse to provide a Consenting Noteholder
with any confidential information if such Consenting Noteholder is not a party
to a confidentiality agreement that is reasonable to the Memorial Parent (in its
sole discretion);

(g)    operate its businesses without material change in such operations or
disposition of material assets (unless in such instance, the Requisite
Noteholders have consented thereto in writing) in accordance with its business
judgment;

(h)    use commercially reasonable efforts to preserve intact in all material
respects its current business organizations, keep available the services of its
current officers and material employees (in each case, other than voluntary
resignations, terminations for cause, or terminations consistent with applicable
fiduciary duties) and preserve in all material respects its relationships with
customers, sales representatives, suppliers, distributors, and others, in each
case, having material business dealings with the Memorial Parties (other than
terminations for cause or consistent with applicable fiduciary duties);

(i)    provide prompt written notice to the Consenting Noteholders between the
date hereof and the Effective Date of (i) receipt of any notice that is not
publicly available of any judicial proceeding commenced, or, to the actual
knowledge of any Memorial Party, threatened in writing against any Memorial
Party, relating to or involving or otherwise affecting in any material respect
the transactions contemplated by the Restructuring and (ii) any failure of any
Memorial Party to comply with or satisfy, in any material respect, any covenant,
condition, or agreement hereunder; and

(j)    provide a copy of any written offer or proposal for an Alternative
Transaction received to Davis Polk within two (2) business days of the Memorial
Parties’ or their advisors’ receipt of such offer or proposal.

 

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6.    Termination of Plan Support Agreement.

This Plan Support Agreement shall automatically terminate one (1) business day
after the delivery of written notice to the other Parties (in accordance with
Section 22) from the Requisite Noteholders at any time after and during the
continuance of any Noteholder Termination Event enumerated in Section 6(a). In
addition, this Plan Support Agreement shall automatically terminate one
(1) business day after the delivery of notice from the Memorial Parties to the
Consenting Noteholders (in accordance with Section 22) at any time after the
occurrence and during the continuance of any Memorial Termination Event
enumerated in Section 6(b). This Plan Support Agreement shall terminate
automatically without any further required action or notice on the Effective
Date.

(a)    A “Noteholder Termination Event” shall mean any of the following:

(i)    The breach in any material respect by any Memorial Party of any of the
undertakings, representations, warranties, or covenants of the Memorial Parties
set forth herein which remains uncured for a period of five (5) business days
after the receipt of written notice of such breach from the Requisite
Noteholders pursuant to this Section 6 and in accordance with Section 22 (as
applicable).

(ii)    At 11:59 p.m. Eastern Time on January 16, 2017, unless the Memorial
Parties have commenced the Chapter 11 Cases (the date on which such commencement
occurs, the “Petition Date”).

(iii)    At 11:59 p.m. Eastern Time five (5) calendar days after the Petition
Date, unless the Memorial Parties have filed the Plan, the Disclosure Statement,
and a motion for approval of the Plan and the Disclosure Statement.

(iv)    At 11:59 p.m. Eastern Time sixty (60) calendar days after the Petition
Date if the Memorial Parties commenced Solicitation before the Petition Date
(otherwise, forty (40) calendar days after the Petition Date), unless the
Memorial Parties have obtained approval of the Disclosure Statement.

(v)    At 11:59 p.m. Eastern Time sixty (60) calendar days after the Petition
Date if the Memorial Parties commenced Solicitation before the Petition Date
(otherwise, seventy-five (75) calendar days after the Petition Date), unless the
Bankruptcy Court shall have entered the Confirmation Order in form and substance
reasonably satisfactory to the Memorial Parties and the Requisite Noteholders.

(vi)    At 11:59 p.m. Eastern Time on the date that is fifteen (15) calendar
days after the date of entry of the Confirmation Order (the “Outside Date”),
unless the Effective Date shall have occurred.

(vii)    The Memorial Parties withdraw the Plan or Disclosure Statement, or the
Memorial Parties file any motion or pleading with the Bankruptcy Court that is
not consistent with this Plan Support Agreement or the Restructuring Term Sheet
in any material respect, and such motion or pleading has not been withdrawn
before the earlier of (A) two (2) business days after the Memorial Parties
receive written notice from the

 

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Requisite Noteholders (in accordance with Section 22) that such motion or
pleading is inconsistent with this Plan Support Agreement or the Restructuring
Term Sheet in any material respect and (B) entry of an order of the Bankruptcy
Court approving such motion or pleading.

(viii)    Any Memorial Party files any motion for, or the Bankruptcy Court
enters an order granting, the (A) conversion of one or more of the Chapter 11
Cases to a case under chapter 7 of the Bankruptcy Code, (B) appointment of
examiner with expanded powers beyond those set forth in section 1106(a)(3) and
(4) of the Bankruptcy Code or a trustee or receiver in one or more of the
Chapter 11 Cases or (C) dismissal of one or more of the Chapter 11 Cases.

(ix)    The Bankruptcy Court grants relief that is (A) inconsistent with this
Plan Support Agreement or the Restructuring Term Sheet in any respect that is
materially adverse to the Requisite Noteholders or (B) would, or would
reasonably be expected to materially frustrate the purposes of this Plan Support
Agreement, including by preventing the consummation of the Restructuring, unless
the Memorial Parties have sought a stay of such relief within five (5) business
days after the date of such issuance, and such order is stayed, reversed, or
vacated within ten (10) business days after the date of such issuance, except if
such relief is granted pursuant to a motion by any Consenting Noteholder.

(x)    Any Memorial Party files, propounds, or otherwise supports or fails to
timely file with the Bankruptcy Court a statement that it does not support any
plan of reorganization inconsistent with the Restructuring Term Sheet.

(xi)    Any Memorial Party files, propounds, or otherwise supports any motion or
application seeking authority to sell all or a material portion of its assets.

(xii)    Any Memorial Party files, propounds, or otherwise supports or fails to
timely object to any motion or pleading challenging the amount or validity of
any Unsecured Noteholders Claim.

(xiii)    Any of the Definitive Documents shall have been modified in a manner
adverse in any material respect to any Consenting Noteholder, without prior
written consent of the Requisite Noteholders.

(xiv)    Other than pursuant to any relief sought by the Memorial Parties that
is not materially inconsistent with its obligations under this Plan Support
Agreement or the Plan, the Bankruptcy Court grants relief terminating,
annulling, or modifying the automatic stay (as set forth in section 362 of the
Bankruptcy Code) and parties other than the Consenting Noteholders exercise
rights with respect to any assets of the Memorial Parties having an aggregate
fair market value in excess of $5 million without the prior written consent of
the Requisite Noteholders.

(xv)    The issuance by any governmental authority, including any regulatory
authority or court of competent jurisdiction, of any ruling, judgment, or order
enjoining the consummation of or rendering illegal the Restructuring, which
ruling, judgment, or order has not been not stayed, reversed, or vacated within
ten (10) business days after such issuance.

 

11

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(xvi)    The Bankruptcy Court or other court of competent jurisdiction enters an
order denying confirmation of the Plan.

(xvii)    At 11:59 p.m. Eastern Time on the date that is thirty (30) calendar
days after the Petition Date unless (A) the Cash Collateral Order grants the
Memorial Parties authority to pay the fees and expenses of the Ad Hoc Group
incurred pursuant to Section 24 hereof, or (B) the Bankruptcy Court enters an
order approving the assumption of the Plan Support Agreement.

(b)    A “Memorial Termination Event” shall mean any of the following:

(i)    The breach in any material respect by one or more of the Consenting
Noteholders, of any of the undertakings, representations, warranties, or
covenants of the Consenting Noteholders set forth herein in any material respect
which remains uncured for a period of five (5) business days after the receipt
of written notice of such breach pursuant to this Section 6 and Section 22 (as
applicable), but only if the non-breaching Consenting Noteholders constitute
less than the Supermajority Noteholders.

(ii)    The board of directors or managers (or comparable governing body),
members, or partners, as applicable, of any Memorial Party reasonably determines
in good faith based upon the advice of outside counsel that continued
performance under this Plan Support Agreement would be inconsistent with the
exercise of its fiduciary duties under applicable law; provided that the
Memorial Party provides notice of such determination to the Consenting
Noteholders within five (5) business days after the date thereof.

(iii)    The Consenting Noteholders fail to comply with Section 4(c) hereof.

(iv)    The Bankruptcy Court grants relief that is inconsistent with this Plan
Support Agreement or the Restructuring Term Sheet in any respect that is
materially adverse to the Memorial Parties, except if such relief is granted
pursuant to a motion by the Memorial Parties.

(v)    At 11:59 p.m. Eastern Time on the earlier of (A) one hundred sixty five
(165) calendar days after the Petition Date if the Memorial Parties commenced
Solicitation before the Petition Date (otherwise, one hundred eighty
(180) calendar days after the Petition Date) and (B) the Outside Date, in each
case unless the Effective Date shall have occurred.

(vi)    The issuance by any governmental authority, including any regulatory
authority or court of competent jurisdiction, of any ruling, judgment, or order
enjoining the consummation of or rendering illegal the Restructuring, which
ruling, judgment, or order has not been not stayed, reversed, or vacated within
ten (10) business days after such issuance.

 

12

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(vii)    The Consenting Noteholders subject to this Plan Support Agreement do
not beneficially own or control at any time sufficient amount of Unsecured Notes
to constitute the Supermajority Noteholders commencing on December 30, 2016 and
at any time thereafter.

(viii)    The Bankruptcy Court enters an order granting, the (A) conversion of
one or more of the Chapter 11 Cases to a case under chapter 7 of the Bankruptcy
Code or (B) dismissal of one or more of the Chapter 11 Cases; provided that the
Memorial Parties did not file or support any motion or pleading for the
(A) conversion of one or more of the Chapter 11 Cases to a case under chapter 7
of the Bankruptcy Code and/or (B) dismissal of one or more of the Chapter 11
Cases.

(ix)    The Bankruptcy Court or other court of competent jurisdiction enters an
order denying confirmation of the Plan.

Notwithstanding any provision in this Plan Support Agreement to the contrary,
upon written consent of the Requisite Noteholders, each of the dates set forth
in Section 6(a) may be extended prior to or upon such date and such later dates
agreed to in lieu thereof and shall be of the same force and effect as the dates
provided herein.

(c)    Mutual Termination. This Plan Support Agreement may be terminated by
mutual agreement of the Memorial Parties and the Requisite Noteholders upon the
receipt of written notice delivered in accordance with Section 22.

(d)    Effect of Termination. Subject to the provisions contained in Section 15,
upon the termination of this Plan Support Agreement in accordance with this
Section 6, this Plan Support Agreement shall become void and of no further force
or effect and each Party shall, except as otherwise provided in this Plan
Support Agreement, be immediately released from its respective liabilities,
obligations, commitments, undertakings, and agreements under or related to this
Plan Support Agreement, shall have no further rights, benefits, or privileges
hereunder, and shall have all the rights and remedies that it would have had and
shall be entitled to take all actions, whether with respect to the Restructuring
or otherwise, that it would have been entitled to take had it not entered into
this Plan Support Agreement and no such rights or remedies shall be deemed
waived pursuant to a Claim of laches or estoppel; provided that in no event
shall any such termination relieve a Party from liability for its breach or
non-performance of its obligations hereunder before the date of such
termination.

(e)    Automatic Stay. The Memorial Parties acknowledge and agree that after the
commencement of the Chapter 11 Cases, the giving of notice of termination by any
Party pursuant to this Plan Support Agreement shall not be a violation of the
automatic stay of section 362 of the Bankruptcy Code; provided that nothing
herein shall prejudice any Party’s rights to argue that the giving of notice of
termination was not proper under the terms of this Plan Support Agreement.

 

13

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7.    Definitive Documents; Good Faith Cooperation; Further Assurances.

Each Party hereby covenants and agrees to cooperate with each other in good
faith in connection with, and shall exercise commercially reasonable efforts
with respect to, the pursuit, approval, implementation, and consummation of the
Restructuring as well as the negotiation, drafting, execution, and delivery of
the Definitive Documents. Furthermore, subject to the terms hereof, each of the
Parties shall take such action as may be reasonably necessary or reasonably
requested by the other Parties to carry out the purposes and intent of this Plan
Support Agreement, and shall refrain from taking any action that would frustrate
the purposes and intent of this Plan Support Agreement.

8.    Representations and Warranties.

(a)    Each Party, severally (and not jointly), represents and warrants to the
other Parties that the following statements are true and correct as of the date
hereof (or as of the date a Consenting Noteholder becomes a party hereto):

(i)    Such Party is validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, and has all requisite corporate,
partnership, limited liability company or similar authority to enter into this
Plan Support Agreement and carry out the transactions contemplated hereby and
perform its obligations contemplated hereunder. The execution and delivery of
this Plan Support Agreement and the performance of such Party’s obligations
hereunder have been duly authorized by all necessary corporate, limited
liability company, partnership, or other similar action on its part.

(ii)    The execution, delivery, and performance by such Party of this Plan
Support Agreement does not and will not (A) violate any material provision of
law, rule, or regulation applicable to it or its charter or bylaws (or other
similar governing documents), or (B) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
material contractual obligation to which it is a party, except, in the case of
the Memorial Parties, for the filing of the Chapter 11 Cases.

(iii)    The execution, delivery, and performance by such Party of this Plan
Support Agreement does not and will not require any material registration or
filing with, consent or approval of, or notice to, or other action, with or by,
any federal, state or governmental authority or regulatory body, except the
filing of the Chapter 11 Cases and such filings as may be necessary or required
by the SEC.

(iv)    This Plan Support Agreement is the legally valid and binding obligation
of such Party, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, or other similar
laws relating to or limiting creditors’ rights generally, concepts of
reasonableness or general equitable principles.

(b)    Each Consenting Noteholder severally (and not jointly) represents and
warrants to the Memorial Parties that, as of the date hereof (or as of the date
such Consenting Noteholder becomes a party hereto), such Consenting Noteholder
(i) is the owner of the

 

14

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aggregate principal amount of the Unsecured Notes set forth below its name on
the signature page hereto (or below its name on the signature page of a Joinder
Agreement for any Consenting Noteholder that becomes a party hereto after the
date hereof) or has, with respect to the beneficial owner(s) of such Unsecured
Notes, (A) sole investment or voting discretion with respect to such Unsecured
Notes, (B) full power and authority to vote on and consent to matters concerning
such Unsecured Notes or to exchange, assign, and Transfer such Unsecured Notes,
and (C) full power and authority to bind or act on the behalf of such beneficial
owner(s) and (ii) is an accredited investor as such term is defined in Rule
501(a) of Regulation D under the Securities Act.

(c)    Each Consenting Noteholder severally (and not jointly) represents and
warrants to the other Parties that:

(i)    Except as set forth on Schedule B, such Consenting Noteholder does not
directly own (nor does any entity disregarded as separate from such Consenting
Noteholder, for U.S. federal income tax purposes, directly own) any Memorial
Parent Interests.

(ii)    Such Consenting Noteholder shall use commercially reasonable efforts to
promptly notify the Memorial Parties if, as of the date hereof or on any date on
or prior to the Effective Date, such Consenting Noteholder controls (through
direct or indirect equity ownership) any entity that owns Memorial Parent
Interests. Such notification shall include the amount and type of Memorial
Parent Interests that such controlled entity owns.

(iii)    Such Consenting Noteholder shall use commercially reasonable efforts to
promptly notify the Memorial Parties if, as of the date hereof or on any date on
or before the Effective Date, (A) such Consenting Noteholder’s general partner
(if such Consenting Noteholder is a limited partnership), such Consenting
Noteholder’s managing member (if such Consenting Noteholder is a limited
liability company) or other equityholder in a similar managing capacity with
respect to the Consenting Noteholder owns Memorial Parent Interests or (B) a
person or entity directly owning more than 50% of the equity interests in such
Consenting Noteholder owns Memorial Parent Interests. Such notification shall
include the amount and type of Memorial Parent Interests that such person or
entity owns.

(iv)    Such Consenting Noteholder shall not (A) acquire any Memorial Parent
Interests nor (B) cause any entities controlled (through direct or indirect
equity ownership) by such Consenting Noteholder to acquire any Memorial Parent
Interests.

(v)    Upon the commencement of the Solicitation, such Consenting Noteholder
shall use commercially reasonable efforts to send its investors a notification
substantially in the form attached hereto as Exhibit C.

(vi)    At the reasonable request of the Memorial Parties or Memorial Parent
NewCo in respect of any audit or other proceeding relating to the income tax
treatment of the Restructuring, such Consenting Noteholder agrees to use
commercially

 

15

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reasonable efforts to make available to the Memorial Parties or Memorial Parent
NewCo, as applicable, such information, records, or other documents as are
within the possession or control of such Consenting Noteholder, provided that in
no event shall such Consenting Noteholder be obligated to (A) disclose the
identity of any direct or indirect investor in such Consenting Noteholder or
(B) make available any information, records, or other documents that, in the
Consenting Noteholder’s reasonable judgment, is prohibited by applicable law or
would subject such Consenting Noteholder to any material unreimbursed cost or
expense or materially prejudice the legal or commercial position of such
Consenting Noteholder.

9.    Disclosure; Publicity. The Memorial Parties shall submit drafts to Davis
Polk of any press releases, public documents, and any and all filings with the
SEC regarding this Plan Support Agreement or any of the transactions
contemplated hereunder at least two (2) business days before making any such
disclosure. Except as required by applicable law or otherwise permitted under
the terms of any other agreement between any Memorial Party and any Consenting
Noteholder, no Party or its advisors shall disclose to any person or entity
(including, for the avoidance of doubt, any other Consenting Noteholder), other
than advisors to the Memorial Parties, the principal amount or percentage of
Unsecured Notes held by any Consenting Noteholder, in each case, without such
Consenting Noteholder’s prior written consent; provided that (a) if such
disclosure is required by law, subpoena or other legal process or regulation,
the disclosing Party shall afford the relevant Consenting Noteholder a
reasonable opportunity to review and comment before such disclosure and shall
take all reasonable measures to limit such disclosure, (b) the foregoing shall
not prohibit the disclosure of the aggregate percentage or aggregate principal
amount of 6.875% Senior Unsecured Notes or 7.625% Senior Unsecured Notes held by
all Consenting Noteholders collectively and (c) any Party may disclose
information requested by a regulatory authority with jurisdiction over its
operations to such authority without limitation or notice to any Party or other
person or entity. Notwithstanding the provisions in this Section 9, any Party
may disclose, to the extent consented to in writing by a Consenting Noteholder,
such Consenting Noteholder’s individual holdings. Any public filing of this Plan
Support Agreement, with the Bankruptcy Court or otherwise, which includes
executed signature pages to this Plan Support Agreement shall include such
signature pages only in redacted form with respect to the holdings of each
Consenting Noteholder (provided that the holdings disclosed in such signature
pages may be filed in unredacted form with the Bankruptcy Court under seal).

10.    Creditors’ Committee. The Consenting Noteholders will not seek or
support, and will not instruct the Unsecured Notes Trustee to seek or support,
the appointment of an official committee of unsecured creditors. Notwithstanding
anything herein to the contrary, if any Consenting Noteholder is appointed to
and serves on an official committee of unsecured creditors in the Chapter 11
Cases, the terms of this Plan Support Agreement shall not be construed so as to
limit such Consenting Noteholder’s exercise of its fiduciary duties to any
person or entity arising from its service on such committee, and any such
exercise of such fiduciary duties shall not be deemed to constitute a breach of
the terms of this Plan Support Agreement. All Parties agree they shall not
oppose the participation of any of the Consenting Noteholders or the trustee
under the Unsecured Note Indentures on any official committee of unsecured
creditors formed in the Chapter 11 Cases.

 

16

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11.    Amendments and Modifications. Except as otherwise expressly set forth
herein, this Plan Support Agreement (including the Restructuring Term Sheet or
any exhibits or schedules hereto and thereto) and the Plan may not be waived,
modified, amended, or supplemented except in a writing signed by the Memorial
Parties (which may be signed by Memorial Parent on behalf of all the Memorial
Parties) and the Requisite Noteholders; provided that (a) any modification,
amendment, or change to the definition of “Consenting Noteholders” or “Requisite
Noteholders” shall require the written consent of each Consenting Noteholder and
(b) any waiver, change, modification, or amendment to this Plan Support
Agreement, the Restructuring Term Sheet, or the Plan that materially adversely
affects the economic recoveries or treatment of any Consenting Noteholder
compared to the economic recoveries or treatment set forth in the Restructuring
Term Sheet attached hereto may not be made without the written consent of each
such materially adversely affected Consenting Noteholder. In the event that a
materially adversely affected Consenting Noteholder (“Non-Consenting
Noteholder”) does not consent to a waiver, change, modification, or amendment to
this Plan Support Agreement requiring the consent of each Consenting Noteholder,
but such waiver, change, modification, or amendment receives the consent of the
Supermajority Noteholders, this Plan Support Agreement shall be deemed to have
been terminated only as to such Non-Consenting Noteholder, but this Plan Support
Agreement shall continue in full force and effect in respect to all other
Consenting Noteholders.

12.    Effectiveness. This Plan Support Agreement shall become effective and
binding upon each Party upon the Plan Support Effective Date; provided that
signature pages executed by Consenting Noteholders shall be delivered to
(a) other Consenting Noteholders in a redacted form that removes such Consenting
Noteholders’ holdings of the Unsecured Notes and (b) the Memorial Parties, Weil,
and the Memorial Parties’ other advisors in an unredacted form (to be held by
Weil and such other advisors on a professionals’ eyes only basis).

13.    Governing Law; Jurisdiction; Waiver of Jury Trial.

(a)    This Plan Support Agreement shall be construed and enforced in accordance
with, and the rights of the Parties shall be governed by, the laws of the State
of New York, without giving effect to the conflict of laws principles thereof.
Each of the Parties irrevocably agrees that any legal action, suit, or
proceeding arising out of or relating to this Plan Support Agreement (or the
transactions contemplated hereby) brought by any Party or its successors or
assigns shall be brought and determined in any federal or state court in the
Borough of Manhattan, the City of New York (the “New York Courts”), and each of
the Parties hereby irrevocably submits to the exclusive jurisdiction of the New
York Courts for itself and with respect to its property, generally and
unconditionally, with regard to any such proceeding arising out of or relating
to this Plan Support Agreement and the Restructuring. Each of the Parties agrees
not to commence any proceeding relating hereto or thereto except in the New York
Courts, other than proceedings in any court of competent jurisdiction to enforce
any judgment, decree or award rendered by any New York Court. Each of the
Parties further agrees that notice as provided in Section 22 shall constitute
sufficient service of process and the Parties further waive any argument that
such service is insufficient. Each of the Parties hereby irrevocably and
unconditionally waives and agrees not to assert that a proceeding in any New
York Court is brought in an inconvenient forum or the venue of such proceeding
is improper. Notwithstanding the foregoing, during the pendency of the Chapter
11 Cases, all proceedings contemplated by this Section 13(a) shall be brought in
the Bankruptcy Court.

 

17

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(b)    Each Party hereby waives, to the fullest extent permitted by applicable
law, any right it may have to a trial by jury in any legal proceeding directly
or indirectly arising out of or relating to this Plan Support Agreement or the
transactions contemplated hereby (whether based on contract, tort or any other
theory).

14.    Specific Performance/Remedies. The Parties understand and agree that
money damages would be an insufficient remedy for any breach of this Plan
Support Agreement by any Party and each non-breaching Party shall be entitled to
specific performance and injunctive or other equitable relief (including
attorneys’ fees and costs) as a remedy of any such breach, without the necessity
of proving the inadequacy of money damages as a remedy. Each Party hereby waives
any requirement for the security or posting of any bond in connection with such
remedies.

15.    Survival. Notwithstanding the termination of this Plan Support Agreement
pursuant to Section 6, Sections 9 and 13-22 shall survive such termination and
shall continue in full force and effect in accordance with the terms hereof;
provided that any liability of a Party for failure to comply with the terms of
this Plan Support Agreement shall survive such termination.

16.    Headings. The headings of the sections, paragraphs, and subsections of
this Plan Support Agreement are inserted for convenience only and shall not
affect the interpretation hereof or, for any purpose, be deemed a part of this
Plan Support Agreement.

17.    Successors and Assigns; Severability. This Plan Support Agreement is
intended to bind and inure to the benefit of the Parties and their respective
successors, permitted assigns, heirs, executors, administrators and
representatives; provided that nothing contained in this Section 17 shall be
deemed to permit Transfers of the Unsecured Notes Claims or any Claims other
than in accordance with the express terms of this Plan Support Agreement. If any
provision of this Plan Support Agreement, or the application of any such
provision to any person or entity or circumstance, shall be held invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
attach only to such provision or part thereof and the remaining part of such
provision hereof and this Plan Support Agreement shall continue in full force
and effect. Upon any such determination of invalidity, the Parties shall
negotiate in good faith to modify this Plan Support Agreement so as to effect
the original intent of the Parties as closely as possible in a reasonably
acceptable manner so that the transactions contemplated hereby are consummated
as originally contemplated to the greatest extent possible.

18.    Several, Not Joint, Obligations. The agreements, representations,
warranties, and obligations of the Parties under this Plan Support Agreement
are, in all respects, several and not joint.

19.    Relationship Among Parties. Unless expressly stated herein, this Plan
Support Agreement shall be solely for the benefit of the Parties and no other
person or entity shall be a third-party beneficiary hereof. No Party shall have
any responsibility for any trading

 

18

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by any other entity by virtue of this Plan Support Agreement. No prior history,
pattern, or practice of sharing confidences among or between the 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 equity securities
of the Memorial Parent and do not constitute a “group” within the meaning of
Rule 13d-5 under the Securities Exchange Act of 1934, as amended.

20.    Prior Negotiations; Entire Agreement. This Plan Support Agreement,
including the exhibits and schedules hereto (including the Restructuring Term
Sheet), constitutes the entire agreement of the Parties, and supersedes all
other prior negotiations, with respect to the subject matter hereof and thereof,
except that the Parties acknowledge that any confidentiality agreements executed
between any Memorial Party and each Consenting Noteholder before the execution
of this Plan Support Agreement shall continue in full force and effect.

21.    Counterparts. This Plan Support Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same agreement. Execution copies of
this Plan Support Agreement delivered by facsimile or PDF shall be deemed to be
an original for the purposes of this paragraph.

22.    Notices. All notices hereunder shall be deemed given if in writing and
delivered, if contemporaneously sent by electronic mail, facsimile, courier or
by registered or certified mail (return receipt requested) to the following
addresses and facsimile numbers:

(a)    If to any Memorial Party, to:

Memorial Production Partners LP

500 Dallas Street, Suite 1600

Houston, TX 77002

Attention:     Jason Childress

E-mail:         jchildress@memorialpp.com

Facsimile:    (713) 490-8901

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

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, NY 10153

Attention:     Gary T. Holtzer, Joseph Smolinsky, and Ted S. Waksman

E-mail:         Gary.Holtzer@weil.com, joseph.smolinsky@weil.com and

Ted.Waksman@weil.com

Facsimile:    (212) 310-8007

 

19

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(b)    If to the Consenting Noteholders, to:

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, NY 10170

Attention:     Brian Resnick and Angela M. Libby

E-mail:         Brian.Resnick@davispolk.com and Angela.Libby@davispolk.com

Facsimile:    (212) 701-5800

Any notice given by delivery, mail, or courier shall be effective when received.
Any notice given by facsimile or electronic mail shall be effective upon oral,
machine, or electronic mail (as applicable) confirmation of transmission.

23.    Settlement Discussions. This Plan Support Agreement is part of a proposed
settlement of matters that could otherwise be the subject of litigation among
the Parties. Pursuant to Rule 408 of the Federal Rules of Evidence, any
applicable state rules of evidence and any other applicable law, foreign or
domestic, this Plan Support Agreement and all negotiations relating thereto
shall not be admissible into evidence in any proceeding other than a proceeding
to enforce its terms.

24.    Fees. The Memorial Parties shall pay all reasonable documented
prepetition and postpetition costs and expenses of the advisors to the Ad Hoc
Group incurred on or prior to the date of termination of this Plan Support
Agreement, in accordance with existing engagement letters with any Memorial
Party, including, without limitation, the reasonable and documented costs and
expenses of (a) Davis Polk, as legal advisor to the Ad Hoc Group, (b) Miller
Buckfire & Co., LLC, as financial advisor to the Ad Hoc Group, and (c) Stroock &
Stroock & Lavan LLP, as legal advisor to the successor trustee under the
Unsecured Note Indentures.

25.    No Solicitation; Adequate Information. This Plan Support Agreement is not
and shall not be deemed to be a solicitation for consents to the Plan. The votes
of the holders of Claims against the Memorial Parties will not be solicited
until such holders who are entitled to vote on the Plan have received the Plan,
the Disclosure Statement and related ballots, and other required solicitation
materials. In addition, this Plan Support Agreement does not constitute an offer
to issue or sell securities to any person or entity, or the solicitation of an
offer to acquire or buy securities, in any jurisdiction where such offer or
solicitation would be unlawful.

26.    Interpretation; Rules of Construction; Representation by Counsel. When a
reference is made in this Plan Support Agreement to a Section, Exhibit, or
Schedule, such reference shall be to a Section, Exhibit, or Schedule,
respectively, of or attached to this Plan Support Agreement unless otherwise
indicated. Unless the context of this Plan Support Agreement otherwise requires,
(a) words using the singular or plural number also include the plural or
singular number, respectively, (b) the terms “hereof,” “herein,” “hereby” and
derivative or similar words refer to this entire Plan Support Agreement, (c) the
words “include,” “includes” and “including” when used herein shall be deemed in
each case to be followed by the words “without limitation,” and (d) the word
“or” shall not be exclusive and shall be read to mean “and/or.” The Parties
agree that they have been represented by legal counsel during the negotiation
and execution of this Plan Support Agreement and, therefore, waive the
application of any law, regulation, holding, or rule of construction providing
that ambiguities in an agreement or other document shall be construed against
the party drafting such agreement or document.

[Signature pages follow.]

 

20

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IN WITNESS WHEREOF, the Parties have caused this Plan Support Agreement to be
executed and delivered by their respective duly authorized officers, solely in
their respective capacities as officers of the undersigned and not in any other
capacity, as of the date first set forth above.

 

MEMORIAL PARTIES MEMORIAL PRODUCTION PARTNERS LP By:   Memorial Production
Partners GP LLC,   its general partner By:  

/s/ Robert L. Stillwell, Jr.

Name:   Robert L. Stillwell, Jr. Title:   Chief Financial Officer MEMORIAL
PRODUCTION OPERATING LLC By:   Memorial Production Partners LP,   its sole
member By:   Memorial Production Partners GP LLC,   its general partner By:  

/s/ Robert L. Stillwell, Jr.

Name:   Robert L. Stillwell, Jr. Title:   Chief Financial Officer

[MEMORIAL PARTIES SIGNATURE PAGE TO PLAN SUPPORT AGREEMENT]

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

COLUMBUS ENERGY, LLC By:   Memorial Production Operating LLC,   its sole member
By:   Memorial Production Partners LP,   its sole member By:   Memorial
Production Partners GP LLC,   its general partner By:  

/s/ Robert L. Stillwell, Jr.

Name:   Robert L. Stillwell, Jr. Title:   Chief Financial Officer RISE ENERGY
OPERATING, LLC By:   Memorial Production Operating LLC,   its sole member By:  
Memorial Production Partners LP,   its sole member By:   Memorial Production
Partners GP LLC,   its general partner By:  

/s/ Robert L. Stillwell, Jr.

Name:   Robert L. Stillwell, Jr. Title:   Chief Financial Officer

[MEMORIAL PARTIES SIGNATURE PAGE TO PLAN SUPPORT AGREEMENT]

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

RISE ENERGY MINERALS, LLC By:   Rise Energy Operating, LLC,   its sole member
By:   Memorial Production Operating LLC,   its sole member By:   Memorial
Production Partners LP,   its sole member By:   Memorial Production Partners GP
LLC,   its general partner By:  

/s/ Robert L. Stillwell, Jr.

Name:   Robert L. Stillwell, Jr. Title:   Chief Financial Officer RISE ENERGY
BETA, LLC By:   Rise Energy Operating, LLC,   its sole member By:   Memorial
Production Operating LLC,   its sole member By:   Memorial Production Partners
LP,   its sole member By:   Memorial Production Partners GP LLC,   its general
partner By:  

/s/ Robert L. Stillwell, Jr.

Name:   Robert L. Stillwell, Jr. Title:   Chief Financial Officer

[MEMORIAL PARTIES SIGNATURE PAGE TO PLAN SUPPORT AGREEMENT]

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

MEMORIAL PRODUCTION FINANCE CORPORATION By:  

/s/ Robert L. Stillwell, Jr.

Name:   Robert L. Stillwell, Jr. Title:   Chief Financial Officer WHT ENERGY
PARTNERS LLC By:   Memorial Production Operating LLC,   its sole member By:  
Memorial Production Partners LP,   its sole member By:   Memorial Production
Partners GP LLC,   its general partner By:  

/s/ Robert L. Stillwell, Jr.

Name:   Robert L. Stillwell, Jr. Title:   Chief Financial Officer WHT CARTHAGE
LLC By:   WHT Energy Partners LLC,   its sole member By:   Memorial Production
Operating LLC,   its sole member By:   Memorial Production Partners LP,   its
sole member By:   Memorial Production Partners GP LLC,   its general partner By:
 

/s/ Robert L. Stillwell, Jr.

Name:   Robert L. Stillwell, Jr. Title:   Chief Financial Officer

[MEMORIAL PARTIES SIGNATURE PAGE TO PLAN SUPPORT AGREEMENT]

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

MEMORIAL ENERGY SERVICES LLC By:   Memorial Production Operating LLC,   its sole
member By:   Memorial Production Partners LP,   its sole member By:   Memorial
Production Partners GP LLC,   its general partner By:  

/s/ Robert L. Stillwell, Jr.

Name:   Robert L. Stillwell, Jr. Title:   Chief Financial Officer MEMORIAL
MIDSTREAM LLC By:   Memorial Production Operating LLC,   its sole member By:  
Memorial Production Partners LP,   its sole member By:   Memorial Production
Partners GP LLC,   its general partner By:  

/s/ Robert L. Stillwell, Jr.

Name:   Robert L. Stillwell, Jr. Title:   Chief Financial Officer SAN PEDRO BAY
PIPELINE COMPANY By:  

/s/ Robert L. Stillwell, Jr.

Name:   Robert L. Stillwell, Jr. Title:   Chief Financial Officer

[MEMORIAL PARTIES SIGNATURE PAGE TO PLAN SUPPORT AGREEMENT]

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

MEMORIAL PRODUCTION PARTNERS GP LLC By:  

/s/ Robert L. Stillwell, Jr.

Name:   Robert L. Stillwell, Jr. Title:   Chief Financial Officer BETA OPERATING
COMPANY, LLC By:   Memorial Production Operating LLC,   its sole member By:  
Memorial Production Partners LP,   its sole member By:   Memorial Production
Partners GP LLC,   its general partner By:  

/s/ Robert L. Stillwell, Jr.

Name:   Robert L. Stillwell, Jr. Title:   Chief Financial Officer MEMP SERVICES
LLC By   Memorial Production Partners LP,   its sole member By:   Memorial
Production Partners GP LLC,   its general partner By:  

/s/ Robert L. Stillwell, Jr.

Name:   Robert L. Stillwell, Jr. Title:   Chief Financial Officer

[MEMORIAL PARTIES SIGNATURE PAGE TO PLAN SUPPORT AGREEMENT]

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

CONSENTING NOTEHOLDERS

 

TRUST ASSET MANAGEMENT LLC

By:

 

/s/ Mark Shinder                    

Name:

 

Mark Shinder                         

Title:

 

President and CIO                  

Principal Amount of the 6.875% Senior Unsecured Notes: $                    

Principal Amount of the 7.625% Senior Unsecured Notes: $                    

Notice Address:

 

Trust Asset Management, LLC                  1900 Saint James Place, Suite
300             Houston, TX 77056                                    Fax: (713)
343-5443                                   Attention: Mark
Shinder                             Email: mark.shinder@tam-llc.com            

[CONSENTING NOTEHOLDER SIGNATURE PAGE TO PLAN SUPPORT AGREEMENT]

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CONSENTING NOTEHOLDERS

 

BRIGADE CAPITAL MANAGEMENT LP, on behalf of funds and accounts managed by it By:
  /s/ Scott Hoffman                     Name:   Scott
Hoffman                          Title:   Senior
Analyst                         

Principal Amount of the 6.875% Senior Unsecured Notes: $                    

Principal Amount of the 7.625% Senior Unsecured Notes: $                    

Notice Address:

 

399 Park Avenue                                             Suite
1600                                                       New York, NY
10022                                    Fax:
                                                                Attention: Scott
Hoffman                             

Email: SH@bridadecapital.com                

  

[CONSENTING NOTEHOLDER SIGNATURE PAGE TO PLAN SUPPORT AGREEMENT]

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

CONSENTING NOTEHOLDERS

 

CITADEL EQUITY FUND LTD. By: Citadel Advisors LLC, its Portfolio Manager By:  
/s/ Christopher L. Ramsay                     Name:   Christopher L.
Ramsay                          Title:   Authorized
Signatory                            

Principal Amount of the 6.875% Senior Unsecured Notes: $                    

Principal Amount of the 7.625% Senior Unsecured Notes: $                    

 

Notice Address:

c/o Citadel LLC

131 S. Dearborn Street

Chicago, Illinois 60603

Fax:  

312-267-7300

Attention:  

Legal Department

Email:  

CitadelAgreementNotice@citadel.com

[CONSENTING NOTEHOLDER SIGNATURE PAGE TO PLAN SUPPORT AGREEMENT]

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

CONSENTING NOTEHOLDERS

 

FIR TREE INC (on behalf of certain investment funds under management) By:  

/s/ Brian Meyer                     

Name:

 

Brian Meyer                          

Title:

 

Authorized Person                

Principal Amount of the 6.875% Senior Unsecured Notes: $                    

Principal Amount of the 7.625% Senior Unsecured Notes: $                    

Notice Address:

 

55 West 46th Street                                   
29th Floor                                                   New York,
NY 10036                               
Fax:                                                            
Attention: Evan Lederman                       
Email: elederman@firtree.com                

[CONSENTING NOTEHOLDER SIGNATURE PAGE TO PLAN SUPPORT AGREEMENT]

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

EXHIBIT A

Restructuring Term Sheet

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

MEMORIAL PRODUCTION PARTNERS LP

RESTRUCTURING TERM SHEET

DECEMBER 22, 2016

This term sheet (the “Restructuring Term Sheet”)1 sets forth the principal terms
of a proposed financial restructuring (the “Restructuring”) of Memorial
Production Partners LP (the “Memorial Parent”) and the subsidiaries set forth
below (each, a “Debtor,” and collectively, the “Company” or the “Debtors”) to be
implemented pursuant to a joint plan of reorganization consistent with the terms
set forth herein (the “Plan”), which will be filed in cases to be commenced by
the Company under chapter 11 of the Bankruptcy Code. As reflected in the plan
support agreement dated as of December 22, 2016, by and among the Company and
the Consenting Noteholders (the “Plan Support Agreement”), to which this
Restructuring Term Sheet is an exhibit, the Restructuring is supported by the
Company and the Consenting Noteholders.

THIS TERM SHEET DOES NOT CONSTITUTE (NOR SHALL IT BE CONSTRUED AS) AN OFFER WITH
RESPECT TO ANY SECURITIES OR A SOLICITATION OF ACCEPTANCES OR REJECTIONS AS TO
ANY PLAN OF REORGANIZATION, IT BEING UNDERSTOOD THAT SUCH A SOLICITATION, IF
ANY, ONLY WILL BE MADE IN COMPLIANCE WITH APPLICABLE PROVISIONS OF SECURITIES,
BANKRUPTCY AND/OR OTHER APPLICABLE LAWS. THIS TERM SHEET DOES NOT ADDRESS ALL
TERMS THAT WOULD BE REQUIRED IN CONNECTION WITH ANY POTENTIAL RESTRUCTURING AND
ENTRY INTO OR THE CREATION OF ANY BINDING AGREEMENT IS SUBJECT TO THE EXECUTION
OF DEFINITIVE DOCUMENTATION IN FORM AND SUBSTANCE CONSISTENT WITH THIS TERM
SHEET AND OTHERWISE REASONABLY SATISFACTORY IN ALL RESPECTS TO THE COMPANY AND
THE REQUISITE NOTEHOLDERS. THIS TERM SHEET HAS BEEN PRODUCED FOR DISCUSSION AND
SETTLEMENT PURPOSES ONLY AND IS SUBJECT TO THE PROVISIONS OF RULE 408 OF THE
FEDERAL RULES OF EVIDENCE AND OTHER SIMILAR APPLICABLE STATE AND FEDERAL RULES.
THIS TERM SHEET AND THE INFORMATION CONTAINED HEREIN IS STRICTLY CONFIDENTIAL
AND SHALL NOT BE SHARED WITH ANY OTHER PARTY ABSENT THE PRIOR WRITTEN CONSENT OF
THE COMPANY AND THE REQUISITE NOTEHOLDERS, EXCEPT AS REQUIRED BY LAW AND AS
CONTEMPLATED BY THE PLAN SUPPORT AGREEMENT.

 

Transaction Overview

The Company:

  

(1)    Memorial Production Partners LP

(2)    Memorial Production Partners GP LLC

(3)    MEMP Services LLC

(4)    Memorial Production Operating LLC

(5)    Memorial Production Finance Corporation

(6)    WHT Energy Partners LLC

(7)    WHT Carthage LLC

(8)    Memorial Midstream LLC

(9)    Beta Operating Company, LLC

(10)  Columbus Energy, LLC

(11)  Rise Energy Operating, LLC

(12)  Rise Energy Minerals LLC

(13)  Rise Energy Beta, LLC

(14)  San Pedro Bay Pipeline Company

(15)  Memorial Energy Services LLC

 

1 

Capitalized terms used but not otherwise herein defined have the meanings
ascribed to them in either Annex 1 attached hereto or the Plan Support Agreement
(as defined herein). To the extent of any direct conflict between this
Restructuring Term Sheet and the Plan Support Agreement, this Restructuring Term
Sheet will govern and control.

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

Claims and Interests to be Restructured:   

RBL Credit Facility Claims: consisting of approximately $701 million in unpaid
principal due as of December 20, 2016 less any reduction after giving effect to
the termination and monetization of certain outstanding hedges, plus interest,
fees and other expenses arising under or in connection with that certain credit
agreement, dated as of December 14, 2011, by and among Memorial Production
Operating LLC, as borrower, each of the guarantors named therein, Wells Fargo
Bank, National Association, as administrative agent (the “RBL Credit Facility
Agent”), and the lenders party thereto (as amended, modified or otherwise
supplemented from time to time the “RBL Credit Facility” and, such claims under
the RBL Credit Facility, the “RBL Credit Facility Claims”);

 

Unsecured Notes Claims: consisting of approximately $1,111.3 million in unpaid
principal, plus interest, fees and other expenses due as of the Petition Date
under: (a) the 6.875% Senior Unsecured Notes due 2022 (the “6.875% Senior
Unsecured Notes”) under that certain indenture dated as of July 17, 2014, by and
among Memorial Parent and Memorial Production Finance Corporation, as issuers,
each of the guarantors party thereto, and Wilmington Trust, National
Association, as successor trustee, as amended, modified, or otherwise
supplemented from time to time, (the “6.875% Senior Unsecured Note Indenture”);
and (b) the 7.625% Senior Unsecured Notes due 2021 (the “7.625% Senior Unsecured
Notes” and, together with the 6.875% Senior Unsecured Notes, the “Unsecured
Notes”) under that certain indenture, dated as of April 17, 2013, by and among
Memorial Parent and Memorial Production Finance Corporation, as issuers, each of
the guarantors party thereto, and Wilmington Trust, National Association, as
successor trustee, as amended, modified, or otherwise supplemented from time to
time, (the “7.625% Senior Unsecured Note Indenture” and together with the 6.875%
Senior Unsecured Note Indenture, the “Unsecured Notes Indentures”). The holders
of the Unsecured Notes are collectively referred to herein as the “Unsecured
Noteholders” (and each individually as an “Unsecured Noteholder”) holding
“Unsecured Notes Claims”;

 

General Unsecured Claims: consisting of any Claim against the Company (other
than the Unsecured Notes Claims or any Intercompany Claims) as of the Petition
Date that is neither secured by collateral nor entitled to priority under the
Bankruptcy Code or any order of the Bankruptcy Court (the “General Unsecured
Claims”); and

 

Memorial Parent Interests: consisting of any Interests in Memorial Parent,
including partnership interests, units, and any options, warrants, or rights to
acquire any Interests in Memorial Parent (the “Memorial Parent Interests” and
the holders of Memorial Parent limited partnership units, other than Memorial
General Partner, the “Memorial Limited Partners”).

Transaction Overview

Restructuring Summary:

  

The Company will implement the Restructuring pursuant to the Plan. The Plan will
provide for the classification and treatment of Claims and Interests as
described below under “Classification and Treatment of Claims and Interests.” No
later than January 16, 2017, the Company will commence the Chapter 11 Cases. In
the event that the Company commences the solicitation of votes in favor of the
Plan before the Petition Date, such solicitation will be made pursuant to
Section 4(a)(2) and Regulation D of the Securities Act and, with respect to
holders of Unsecured Notes Claims, the Company will only solicit votes on the
Plan from Eligible Noteholders.

 

2

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

  

The Company will obtain a commitment to lend pursuant to an exit credit facility
to be provided on the Effective Date, which exit credit facility may be an
amendment or an amendment and restatement of the existing RBL Credit Facility or
replacement financing, in each case on terms set forth on the term sheet
attached hereto as Annex 2 and otherwise acceptable to the lenders thereunder
and the Company, each in their sole discretion, and reasonably acceptable to the
Requisite Noteholders (the “Exit Credit Facility”).

 

On or before the Effective Date, the Company and the Consenting Noteholders will
take the actions set forth in Annex 3 hereto (the “Restructuring Transactions”).

 

The proceeds from the Exit Credit Facility, plus Cash on hand, will be used by
the Company to (a) provide additional liquidity for working capital and general
corporate purposes, (b) pay all reasonable and documented fees and expenses
incurred by the Company, the RBL Credit Facility Agent, and expenses of the
respective legal and financial advisors of the Company, the RBL Credit Facility
Agent, and the Ad Hoc Group (but unless consented to by the Company, no more
than one legal counsel, one local counsel (if necessary), and one financial
advisor to each of the RBL Credit Facility Agent and the Ad Hoc Group)
(collectively, the “Restructuring Expenses”), (c) fund distributions under the
Plan, and (d) fund the administration of the Chapter 11 Cases.

Use of Cash Collateral/ Postpetition Financing:   

The Debtors will continue using prepetition collateral and cash collateral
pursuant to terms agreed upon with the RBL Credit Facility Lenders and
reasonably acceptable to the Requisite Noteholders.

Classification and Treatment of Claims and Interests Administrative, Priority
Tax, and Other Priority Claims:   

On or as soon as practicable after the Effective Date, each Allowed
Administrative Expense Claim, Priority Tax Claim, and Other Priority Claim shall
be paid in full in Cash or otherwise receive treatment consistent with the
provisions of section 1129(a)(9) of the Bankruptcy Code.

 

Unimpaired – Presumed to Accept

Other Secured Claims:   

On the Effective Date, to the extent any Other Secured Claims exist, all such
Other Secured Claims of the Company that are Allowed as of the Effective Date
shall be satisfied by either (a) payment in full in Cash, (b) reinstatement
pursuant to section 1124 of the Bankruptcy Code, or (c) such other recovery
necessary to satisfy section 1129 of the Bankruptcy Code.

 

Unimpaired – Presumed to Accept

RBL Credit Facility Claims:   

On the Effective Date, each holder of an Allowed RBL Credit Facility Claim shall
receive, in full and final satisfaction of such Claim, (after giving effect to
the termination and monetization of certain outstanding hedges) its Pro Rata
share of term loans under the Exit Credit Facility; provided, that each holder
of an Allowed RBL Credit Facility Claim that elects to participate in the Exit
Credit Facility as an Exit Facility Revolver Lender shall receive its Pro Rata
share of revolving loans under the Exit Credit Facility.

 

3

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

  

The termination and monetization of certain outstanding hedges shall occur on
terms consistent with the terms set forth on the term sheet attached hereto as
Annex 2; provided, however, that the Debtors shall consult with the Consenting
Noteholders with respect to the termination and monetization of such hedges.

 

Impaired – Entitled to Vote

Unsecured Notes Claims:   

On the Effective Date, pursuant to the terms of the Restructuring Transactions,
(a) each holder of an Allowed Unsecured Notes Claim (other than the Contributed
Notes Claims) will be entitled to receive, in full and final satisfaction of
such Allowed Unsecured Notes Claim, its Pro Rata share (based on all Allowed
Unsecured Notes Claims, including the Contributed Notes Claims) of New Common
Shares representing in the aggregate 98% of the total outstanding shares of
Memorial Parent NewCo on the Effective Date, subject to dilution by the
Management Incentive Plan and the Memorial Limited Partner Warrants, and (b)
AcquisitionCo, as the holder of the Contributed Notes Claims, will be entitled
to receive, in full and final satisfaction of such Claims and in consideration
for the shares to be distributed to holders of Allowed Unsecured Notes Claims
(other than the Contributed Notes Claims) pursuant to the preceding clause and
shares and warrants to be distributed to holders of Memorial Parent Interests,
all of the assets of Memorial Parent (other than Cash distributable on the
Effective Date pursuant to the Plan), subject to any liabilities of Memorial
Parent not discharged, satisfied or otherwise provided for pursuant to the Plan.

 

Accordingly, each holder of an Allowed Unsecured Notes Claim immediately prior
to the Restructuring Transactions will, immediately after the Restructuring
Transactions, own (directly or indirectly) a Pro Rata share of New Common Shares
representing in the aggregate 98% of the total outstanding shares of Memorial
Parent NewCo on the Effective Date, subject to dilution by the Management
Incentive Plan and the Memorial Limited Partner Warrants.

 

Additionally, if elected by the Requisite Noteholders no later than the Plan
voting deadline, in their sole discretion, on the Effective Date each Unsecured
Noteholder shall receive a Pro Rata share of a $24,639,691.88 Cash distribution.

 

Impaired – Entitled to Vote

General Unsecured Claims:   

On the Effective Date, except to the extent that a holder of a General Unsecured
Claim agrees to different treatment, the Company or Reorganized Company, as
applicable, will continue to pay or dispute each General Unsecured Claim in the
ordinary course of business as if the Chapter 11 Cases had never been commenced.

 

Unimpaired – Presumed to Accept

Intercompany Claims:   

All Intercompany Claims will be paid, adjusted, reinstated or discharged as
determined by the Company subject to the consent of the Requisite Noteholders.

 

Unimpaired – Presumed to Accept

Intercompany Interests:   

On the Effective Date, or as soon as practicable thereafter, all Intercompany
Interests will be reinstated.

 

4

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

  

Unimpaired – Presumed to Accept

Memorial Parent Interests:

  

On the Effective Date, the Memorial Parent Interests will be cancelled and,
pursuant to the terms of the Restructuring Transactions, each Memorial Limited
Partner will receive its Pro Rata share of (a) New Common Shares representing in
the aggregate 2% of the total outstanding shares of Memorial Parent NewCo on the
Effective Date, and (b) the Memorial Limited Partner Warrants, in each case
subject to dilution by the Management Incentive Plan and, in the case of such
New Common Shares, the Memorial Limited Partner Warrants.

 

Impaired – Deemed to Reject

Section 510(b) Claims:

  

Any holder of a claim against the Company that is described in section 510(b) of
the Bankruptcy Code shall not receive a distribution under the Plan and such
section 510(b) claims shall be extinguished.

 

Impaired – Deemed to Reject

General Provisions

Ballots:

  

Each Unsecured Noteholder will be asked to separately certify on such Unsecured
Noteholder’s ballot (a) the amount and type of Memorial Parent Interests that
such Unsecured Noteholder owns, for U.S. federal income tax purposes, as of the
date of execution of the ballot and (b) that such Unsecured Noteholder will not
acquire, for U.S. federal income tax purposes, any Memorial Parent Interests
after the date of execution of the ballot.

Definitive Documents:   

This Restructuring Term Sheet is indicative, and any final agreement will be
subject to the Definitive Documents. The Definitive Documents will contain
terms, conditions, representations, warranties, and covenants, each customary
for the transactions described herein and consistent with the terms of this
Restructuring Term Sheet.

Most Favored Nations Provision for Consenting Noteholders:   

Any plan support agreement or similar agreement with the RBL Credit Facility
Lenders entered into by the Company (any such agreement, the “RBL Plan Support
Agreement”) shall be on terms substantially similar to the Plan Support
Agreement, and any “termination events” in any such RBL Plan Support Agreement
that are favorable to the RBL Credit Facility Lenders (if analogous provisions
are not already in the Plan Support Agreement or are in the Plan Support
Agreement in a manner less favorable to the Consenting Noteholders), shall be
deemed automatically incorporated into the Plan Support Agreement for the
benefit of (and modified to be applicable to) the Consenting Noteholders
immediately upon the effectiveness of the RBL Plan Support Agreement.

Executory Contracts and Unexpired Leases:   

The Company reserves the right to reject certain executory contracts and
unexpired leases subject to the consent of the Requisite Noteholders. All
executory contracts and unexpired leases not expressly rejected will be deemed
assumed pursuant to the Plan.

Corporate Governance:

  

Upon the Effective Date, the New Board shall be a five member board composed of
(a) the Chief Executive Officer and (b) four directors designated by the
Requisite

 

5

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

  

Noteholders; provided that the Requisite Noteholders will consider at least two
directors proposed by the Chief Executive Officer. The members of the New Board
shall be identified no later than the confirmation hearing or otherwise in
accordance with section 1129(a)(5) of the Bankruptcy Code. On the Effective
Date, the terms of the current members of the board of directors of Memorial
General Partner shall expire. The terms and conditions of the new corporate
governance documents of the Reorganized Company (including the bylaws,
certificates of incorporation, partnership agreements and other organizational
and governance documents) shall be subject to the consent of the Requisite
Noteholders.

 

The stockholders agreement will provide that if Unsecured Noteholders
beneficially owning, in the aggregate, at least 10% of the New Common Shares,
desire to effect the sale of New Common Shares to a third party (other than a
competitor), then Memorial Parent Newco shall use its commercially reasonable
efforts to cooperate with such proposed sale, including by providing such
information regarding the business of Memorial Parent Newco as may be reasonably
requested in connection with such sale (subject to appropriate confidentiality
agreements); provided that (a) such request may not be made more than two times
in any twelve month period and shall not in any event exceed three times and
(b) Memorial Parent Newco shall not be required to expend fees in excess of
$25,000 in connection with any such request. For the avoidance of doubt, the
foregoing obligation shall not include the obligation to participate in “road
shows,” furnish any opinions or comfort letters, or take other actions customary
for a registered offering.

Cancellation of Existing Securities and Agreements   

Except as expressly provided in the Plan, on the Effective Date, all notes,
instruments, certificates evidencing debt of, or equity interests in, the
Debtors, including, without limitation, the RBL Credit Facility (to the extent
such facility is not amended and restated), the Unsecured Notes, the Unsecured
Notes Indentures, the Memorial Parent Interests, and all warrants, options, and
other entitlements to purchase and/or receive Memorial Parent Interests, shall
be deemed surrendered and cancelled and any obligation of the Debtors thereunder
shall be discharged.

Management Incentive Plan:

  

A post-Restructuring management incentive plan to be approved and implemented
with the terms more specifically set forth in the term sheet attached as Annex 4
hereto (the “Management Incentive Plan”).

 

6

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Compensation Plans:

  

The existing senior management change in control agreements (each, a “CIC
Agreement”), the Key Employee Incentive Plan (the “KEIP”) and the Key Employee
Retention Program (the “KERP”) will be assumed, subject to the modifications
described below.

 

Each executive’s CIC Agreement will be modified to provide that the occurrence
of the Effective Date will not be a “Change of Control” for purposes of such CIC
Agreement, provided that the severance benefits under the CIC Agreements shall
be applicable in connection with the Restructuring to the extent provided in the
Management Incentive Plan.

 

The KEIP will be modified to provide that, with respect to each participant
therein, (a) such participant will be eligible for a pro-rata annual bonus for
the portion of the 2017 calendar year that follows the end of the calendar
quarter in which the Restructuring is consummated, in lieu of the quarterly
bonuses for which such participant is currently eligible for the remainder of
such year, in an amount equal to the aggregate amount of such remaining
quarterly bonuses and (b) to receive payment of such pro-rata annual bonus, such
participant must in all circumstances be employed on the date following the end
of 2017 on which the annual bonuses for 2017 are paid to participants in the
KEIP generally. For avoidance of doubt, each participant will remain eligible
for their quarterly KEIP bonus for the full calendar quarter in which the
Restructuring is consummated.

Releases, Exculpation, and Indemnification:   

The Plan and Confirmation Order shall provide customary releases (including
third party releases), exculpation, and indemnification provisions, in each
case, to the fullest extent permitted by law, for the benefit of the Debtors,
the Reorganized Debtors, the Unsecured Noteholders, the Unsecured Notes Trustee,
the administrative agent for the Exit Credit Facility and the lenders
thereunder, and with respect to the foregoing, such entities’ predecessors,
successors and assigns, subsidiaries, affiliates, managed accounts or funds, and
all of their respective current and former officers, directors, principals,
shareholders, members, partners, employees, agents, advisory board members,
financial advisors, attorneys, accountants, investment bankers, consultants,
representatives, management companies, fund advisors, and other professionals,
and such persons’ respective heirs, executors, estates, servants and nominees.

Injunction:

  

The Plan will contain standard and customary injunction provisions.

Securities Exemptions and Registration Rights:   

The issuance and distribution under the Plan of (a) the New Common Shares to the
Unsecured Noteholders and Memorial Limited Partners, and (b) the Memorial
Limited Partner Warrants, and the New Common Shares issuable upon exercise
thereof, will be exempt from registration under the Securities Act or applicable
securities laws without further act or action by any person pursuant to section
1145(a) of the Bankruptcy Code and/or any other applicable exemptions.

 

If directed by the Requisite Noteholders, in their sole discretion, the
Reorganized Company will use commercially reasonable efforts to cause the New
Common Shares to be listed for trading on The NASDAQ Global Market or another
national securities exchange or quoted on a recognized over-the-counter market
on or as soon as practicable after the Effective Date. On the Effective Date,
Memorial Parent Newco and the Unsecured Noteholders will enter into a
registration rights agreement providing for customary registration rights
exercisable by any Unsecured Noteholder that (a) beneficially owns at least 10%
of the New Common Shares or (b) furnishes an

 

7

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

  

opinion of legal counsel to the effect that such Unsecured Noteholder could
reasonably be considered to be an affiliate of Memorial Parent Newco for
purposes of Rule 144 of the Securities Act of 1933, as amended.

Retention of Jurisdiction:

  

The Plan will provide for a broad retention of jurisdiction by the Bankruptcy
Court for (a) resolution of Claims, (b) allowance of compensation and expenses
for pre-Effective Date services, (c) resolution of motions, adversary
proceedings or other contested matters, (d) entering such orders as necessary to
implement or consummate the Plan and any related documents or agreements and
(e) other purposes.

 

8

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ANNEX 1

Defined Terms

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

Defined Terms

 

“AcquisitionCo”

  

A Delaware corporation formed by Memorial Parent NewCo in accordance with the
Restructuring Transactions.

“Administrative Expense Claim”   

A Claim for costs and expenses of administration during the Chapter 11 Cases
pursuant to sections 328, 330, 363, 364(c)(1), 365, 503(b) or 507(a)(2) of the
Bankruptcy Code, including, (a) the actual and necessary costs and expenses
incurred from and after the Petition Date and through the Effective Date of
preserving the Estates and operating the businesses of the Debtors (such as
wages, salaries or commissions for services and payments for goods and other
services and leased premises); (b) Fee Claims; (c) Restructuring Expenses; and
(d) all fees and charges assessed against the Estates pursuant to sections 1911
through 1930 of chapter 123 of title 28 of the United States Code, 28 U.S.C. §§
1-1401.

“Allowed”

  

With reference to any Claim or Interest, (a) any Claim or Interest arising on or
before the Effective Date (i) as to which no objection to allowance has been
interposed within the time period set forth in the Plan, or (ii) as to which any
objection has been determined by a Final Order of the Bankruptcy Court to the
extent such objection is determined in favor of the respective holder, (b) any
Claim or Interest as to which the liability of the Debtors and the amount
thereof are determined by a Final Order of a court of competent jurisdiction
other than the Bankruptcy Court or (c) any Claim or Interest expressly allowed
under the Plan; provided, however, that notwithstanding the foregoing, the
Reorganized Company shall retain all claims and defenses with respect to Allowed
Claims that are reinstated or otherwise unimpaired pursuant to the Plan.

“Bankruptcy Code”

  

Title 11 of the United States Code, 11 U.S.C. §§ 101, et seq., as amended.

“Bankruptcy Rules”

  

The Federal Rules of Bankruptcy Procedure as promulgated by the United States
Supreme Court under section 2075 of title 28 of the United States Code, as
amended from time to time, applicable to the Chapter 11 Cases, and any local
rules of the Bankruptcy Court.

“Bankruptcy Court”

  

The United States Bankruptcy Court for the Southern District of Texas.

“Cash”

  

Legal tender of the United States of America.

“Chapter 11 Cases”

  

The Debtors’ cases under chapter 11 of the Bankruptcy Code and pending before
the Bankruptcy Court.

“Claim”

  

A “claim,” as defined in section 101(5) of the Bankruptcy Code, against any
Debtor.

“Class”

  

Any group of Claims or Interests classified by the Plan pursuant to section
1122(a)(1) of the Bankruptcy Code.

“Confirmation”

  

The entry on the docket of the Chapter 11 Cases of the Confirmation Order.

“Confirmation Order”

  

The order of the Bankruptcy Court confirming the Plan in the Chapter 11 Cases,
which order shall be in form and substance reasonably satisfactory to the
Company and the Requisite Noteholders.

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

Defined Terms

 

“Contributed Notes Claims”

  

The Allowed Unsecured Notes Claims contributed to Contribution LLC by the
Contributing Noteholders pursuant to the Restructuring Transactions.

“Contribution LLC”

  

A Delaware limited liability company formed by the Contributing Noteholders in
accordance with the Restructuring Transactions.

“Contribution LLC Units”

  

The membership units in Contribution LLC.

“Contributing Noteholders”

  

Certain of the Consenting Noteholders who hold in the aggregate at least 52%
(but no more than 77%), or such lesser amount as reasonably determined by
counsel to the Consenting Noteholders and the Debtors, of the Allowed Unsecured
Notes Claims.

“Definitive Documents”

  

The documents (including any related agreements, instruments, schedules, or
exhibits) that are necessary or desirable to implement, or otherwise relate to,
the Restructuring, including the Plan Support Agreement, the Plan (including any
plan supplements), the Disclosure Statement, any order approving the Disclosure
Statement, and any order confirming the Plan, in each case on terms and
conditions consistent with the Restructuring Term Sheet and otherwise in form
and substance reasonably satisfactory to the Company and the Requisite
Noteholders.

“Disclosure Statement”

  

The disclosure statement for the Plan prepared and distributed in accordance
with sections 1125, 1126(b), and 1145 of the Bankruptcy Code, Bankruptcy Rules
3016 and 3018 and/or other applicable law.

“Disputed”

  

With respect to a Claim or Interest, any such Claim or Interest (a) to the
extent neither Allowed nor disallowed under the Plan or a Final Order nor deemed
Allowed under section 502, 503, or 1111 of the Bankruptcy Code, or (b) for which
a proof of claim or interest for payment has been made, to the extent the
Debtors or any party in interest has interposed a timely objection or request
for estimation before the date of Confirmation in accordance with the Plan,
which objection or request for estimation has not been withdrawn or determined
by a Final Order.

“Effective Date”

  

The date on which all conditions to the effectiveness of the Plan have been
satisfied or waived in accordance with its terms.

“Eligible Noteholder”

  

An Unsecured Noteholder that, as of a certain date set forth in the Disclosure
Statement, is an “Accredited Investor” as defined in Rule 501(a) of Regulation D
of the Securities Act.

“Estate(s)”

  

Individually or collectively, the estate or estates of the Company created under
section 541 of the Bankruptcy Code.

“Exit Facility Revolver Lenders”   

The lenders from time to time party to the Exit Credit Facility as revolving
loan lenders thereunder, including any applicable assignees and participants
thereof.

“Fee Claim”

  

A Claim for professional services rendered or costs incurred on or after the
Petition Date and on or before the Effective Date by professional persons
retained in the Chapter 11 Cases by the Debtors or any statutory committee
appointed in the Chapter 11 Cases pursuant to sections 327, 328, 329, 330, 331,
503(b), or 1103 of the Bankruptcy Code.

 

2

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

Defined Terms

“Final Order”

  

An order or judgment of a court of competent jurisdiction that has been entered
on the docket maintained by the clerk of such court, which has not been
reversed, vacated or stayed and as to which (a) the time to appeal, petition for
certiorari, or move for a new trial, reargument or rehearing has expired and as
to which no appeal, petition for certiorari, or other proceedings for a new
trial, reargument or rehearing shall then be pending, or (b) if an appeal, writ
of certiorari, new trial, reargument or rehearing thereof has been sought, such
order or judgment shall have been affirmed by the highest court to which such
order was appealed, or certiorari shall have been denied, or a new trial,
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, reargument or rehearing shall have expired; provided,
however, that no order or judgment shall fail to be a “Final Order” solely
because of the possibility that a motion pursuant to section 502(j) or 1144 of
the Bankruptcy Code or under Rule 60 of the Federal Rules of Civil Procedure or
Bankruptcy Rule 9024 has been or may be filed with respect to such order or
judgment.

“Intercompany Claim”

  

Any Claim against a Debtor held by another Debtor.

“Intercompany Interest”

  

Any Interest in a Debtor held by another Debtor or an Interest in a Debtor held
by an affiliate of a Debtor (other than any Memorial Parent Interests).

“Interest”

  

Any ownership interest in any Debtor, including all partnership interests,
common stock or units, preferred stock or units, or other instrument evidencing
an ownership interest in any Debtor, whether or not transferable, and including
any option, warrant, or right, contractual or otherwise, to acquire any such
interests in a Debtor that existed immediately before the Effective Date.

“Memorial Limited Partner Warrants”   

The cashless warrants to purchase New Common Shares representing 8% of the total
issued and outstanding New Common Shares on the Effective Date (including New
Common Shares issuable upon full exercise of the Memorial Limited Partner
Warrants but excluding any New Common Shares issued pursuant to the Management
Incentive Plan), subject to dilution by the Management Incentive Plan,
exercisable for a five (5) year period commencing on the Effective Date at a per
share exercise price equal to the principal and accrued interest on the
Unsecured Notes as of December 31, 2016 divided by the number of issued and
outstanding New Common Shares (including New Common Shares issuable upon full
exercise of the Memorial Limited Partner Warrants but excluding any New Common
Shares issued pursuant to the Management Incentive Plan).

“Memorial General Partner”

  

Memorial Production Partners GP LLC.

“Memorial Parent NewCo”

  

A Delaware corporation formed by Contribution LLC in accordance with the
Restructuring Transactions.

“New Board”

  

The board of directors of Memorial Parent NewCo.

“New Common Shares”

  

The common shares, par value $0.01 per share, of Memorial Parent NewCo, to be
issued and distributed under the Plan.

 

3

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Defined Terms

 

“Other Priority Claim”

  

Any Claim entitled to priority in payment as specified in section 507(a)(3),
(4), (5), (6), (7) or (9) of the Bankruptcy Code (other than an Administrative
Expense Claim or a Priority Tax Claim).

“Other Secured Claim”

  

A Secured Claim, other than an Administrative Expense Claim, a Priority Tax
Claim, an RBL Credit Facility Claim, or any other Secured Claim that receives
alternative treatment under the Plan.

“Petition Date”

  

The date of commencement of the Chapter 11 Cases.

“Priority Tax Claim”

  

Any secured or unsecured Claim of a governmental unit of the kind entitled to
priority in payment as specified in sections 502(i) and 507(a)(8) of the
Bankruptcy Code.

“Pro Rata”

  

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

“RBL Credit Facility Lenders”

  

The lenders from time to time party to the RBL Credit Facility as lenders
thereunder, including any applicable assignees and participants thereof.

“Reorganized Company”

  

The Company, as reorganized on the Effective Date in accordance with the Plan,
including, with respect to Memorial Parent, Memorial Parent NewCo.

“Requisite Noteholders”

  

As of the date of determination, Consenting Noteholders holding at least a
majority in aggregate principal amount outstanding of the Unsecured Notes held
by the Consenting Noteholders as of such date.

“Secured Claim”

  

A Claim, to the extent (a) secured by property of the Estate, the amount of
which is equal to or less than the value of such property (i) as set forth in
the Plan, (ii) as agreed to by the holder of such Claim and the Company, or
(iii) as determined by a Final Order in accordance with section 506(a) of the
Bankruptcy Code, or (b) secured by the amount of any rights of setoff of the
holder thereof under section 553 of the Bankruptcy Code.

“Unsecured Notes Trustee”

  

Wilmington Trust, National Association in its capacity as trustee under the
Unsecured Notes Indentures, together with its successors and assigns.

 

4

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ANNEX 2

Exit Facility Term Sheet

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LOGO [g314248imr1.jpg]

Memorial Production Partners, L.P. Confidential Discussion Terms &amp;
Conditions December 20, 2016 CONFIDENTIAL DRAFT FRE 408 – SETTLEMENT
COMMUNICATIONS

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LOGO [g314248imr2.jpg]

Disclaimer CONFIDENTIAL DRAFT FRE 408 – SETTLEMENT COMMUNICATIONS The terms set
forth in this Confidential Discussion Terms and Conditions (this “Document”) are
being provided on a confidential basis as part of a comprehensive proposal, each
element of which is consideration for the other elements and an integral aspect
of the proposal. This Document is for discussion purposes only and is not a
commitment for any financing arrangement. Any agreement to amend the Credit
Agreement, dated as of December 20, 2011 (as amended, restated or otherwise
modified from time to time), among Memorial Production Operating LLC, Memorial
Production Partners, LP, Wells Fargo Bank, National Association, as
administrative agent (the “Agent”), and the lenders from time to time party
thereto (the “Lenders”), will be subject to definitive documentation
satisfactory to the Agent and the Lenders, each acting in its sole discretion,
and approval from each such person’s internal credit committees (if any). The
Agent cannot guarantee that any such approval will be sought or obtained by the
Agent or the Lenders on these terms. This Document is proffered in the nature of
a settlement proposal in furtherance of settlement discussions, and is intended
to be entitled to the protections of Federal Rule of Evidence 408 and any other
applicable statutes or doctrines protecting the use or disclosure of
confidential information and information exchanged in the context of settlement
discussions. Memorial Production Partners, LP 2

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LOGO [g314248imr3.jpg]

Restructuring Proposal CONFIDENTIAL DRAFT FRE 408 – SETTLEMENT COMMUNICATIONS
Amortizing Borrowing Base (see page 5) Varies based on hedges achieved, see page
4 Facility $480-500mm at Exit ( if January 2017 Exit); $460-475mm by Nov. ‘17
First BBRD Nov. ‘17; company gets one interim First lien on all assets Security
Mortgages on no less than 95% of oil and gas assets Maturity March 2021
Leverage: 4.0x Financial Interest Coverage: 2.5x Covenants Current Ratio: 1.0x
Leave $80mm of MTM in place ( in ‘17 and in ‘18) Commodity Monetize all other
hedges (prepetition) Within 10 days of exit add new hedges until 50% of PDP
through Cal’18. By FYE ‘17, must add 50% of PDP in Cal’19. All new hedges with
Hedging lenders only. Libor + 300-400 Pricing Grid 50 bps unused fee at all
tiers Lender Fees Upfront fee: 100 bps Anti-Cash Hoarding: see page 5 Reset
various lien and debt baskets Current market terms for restructured RBLs Other
Unsecured debt basket: see page 5 Second lien debt basket: none Any first lien
lender that does not consent to the terms of the exit facility will receive
first lien, second out term loans Memorial Production Partners, LP 3

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LOGO [g314248imr4.jpg]

Hedge Summary CONFIDENTIAL DRAFT FRE 408 – SETTLEMENT COMMUNICATIONS Company is
required to add hedges for 50% of 2019 PDP volumes by the end of calendar 2017.
Required Total Hedge Volumes Required Total Hedges Oil (Mbl) Gas (MMcf) Volume
Volume 2017 1,566 14,810 2018 1,453 13,216 Less: Retained Hedges Retained Hedges
Oil (MMbl) Gas (MMcf) Volume Strike Volume Strike 2017 762 $83.43 10,080 $4.272
2018 984 $84.58 8,880 $4.308 = New Hedges Targets Chart 1A Chart 1B New
Additional Hedges Target to Achieve $460mm Borrowing Base New Additional Hedges
Target to Achieve $475mm Borrowing Base Oil (Mbl) Gas (MMcf) Oil (Mbl) Gas
(MMcf) Volume Strike Volume Strike Volume Strike Volume Strike 2017 804 $48.24
4,730 $2.886 2017 804 $51.96 4,730 $3.285 2018 469 $49.90 4,336 $2.837 2018 469
$53.13 4,336 $3.016 Memorial Production Partners, LP 4

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LOGO [g314248imr5.jpg]

Other Necessary Information CONFIDENTIAL DRAFT FRE 408 – SETTLEMENT
COMMUNICATIONS Borrowing Base Amortization Schedule during BBRD Holiday:
Amortization Schedule BB Jan Feb Mar Apr May June July Aug Sep Oct Nov 1a 480.0
478.0 476.0 474.0 472.0 470.0 468.0 466.0 464.0 462.0 460.0 1b 500.0 497.5 495.0
492.5 490.0 487.5 485.0 482.5 480.0 477.5 475.0 Anti-Cash Hoarding: Anti-cash
hoarding limit is $35MM; provided that the Company may elect to increase the
anti-cash hoarding limit by $15MM at the time when proceeds from asset sales
greater than such assets? contribution to the borrowing base equal or exceed
$15MM; provided further that (a) at such time when the Company has a total of
$10MM or greater of unsecured debt outstanding, the Company will no longer have
the ability to increase the anti-cash hoarding limit above $35MM, and (b) if the
Company increased the anti-cash hoarding limit as described in the previous
proviso, the anti-cash hoarding limit will be immediately decreased to $35MM at
such time when the Company has a total of $10MM or greater of unsecured debt
outstanding. Unsecured Debt Basket: If a borrowing base redetermination would
leave the Company with less than $50MM of liquidity after the repayment of the
borrowing base deficiency resulting from such borrowing base redetermination,
within 90 days of such borrowing base redetermination, the Company may issue a
total of up to $80MM of unsecured debt, provided that (a) such debt bears cash
interest of no more than 3% per annum, has no PIK interest above a rate that,
together with the cash interest, exceeds the interest rate on the RBL, has a
maturity longer than the RBL by at least 180 days and has no amortization or
mandatory or voluntary prepayments before that date; (b) the borrowing base
deficiency caused by the redetermination is paid in full on the date of such
issuance; (c) on the date of any such issuance, the Company is hedged no less
than 50% of PDP for the next three years; (d) such unsecured debt is issued at
par (no OID) and there are no upfront fees associated with such unsecured debt
(but fees payable only at maturity or upon prepayment would be permitted so long
as the RBL debt is paid off in full before any such fees may be paid by the
Company; provided that any such fees are no greater than the market rates for
upfront fees at the time such debt is incurred); (e) no Default or Event of
Default has occurred and is continuing at the time of any such issuance, or
would exist immediately after giving effect to any such issuance; and (f) such
debt is contractually subordinated to the RBL debt on terms acceptable to the
Administrative Agent (including such terms to be agreed and listed on a schedule
to the Credit Agreement). In no event shall the total unsecured debt so issued
exceed $80MM. Memorial Production Partners, LP 5

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ANNEX 3

Restructuring Transactions

Pursuant to the Plan,1 the following transactions shall occur on or before the
Effective Date in the order specified below:

 

1.

On or prior to the Effective Date, the Contributing Noteholders shall contribute
all of the Contributed Notes Claims to Contribution LLC, in exchange for
Contribution LLC Units representing in the aggregate all of the equity capital
of Contribution LLC. Each Consenting Noteholder shall receive its Pro Rata share
of the Contribution LLC Units (excluding, any Allowed Unsecured Notes Claims
that are not Contributed Notes Claims).

 

2.

On the Effective Date, Contribution LLC shall contribute the Contributed Notes
Claims to Memorial Parent NewCo in exchange for common shares in Memorial Parent
NewCo representing in the aggregate all of the then outstanding common stock of
Memorial Parent NewCo.

 

3.

Memorial Parent NewCo shall contribute to AcquisitionCo (a) the Contributed
Notes Claims, (b) a number of New Common Shares sufficient to satisfy the
Allowed Unsecured Notes Claims, other than Contributed Notes Claims, and Allowed
Memorial Parent Interests in accordance with the treatment section of the Plan
and (c) Memorial Limited Partner Warrants, in exchange for common stock in
AcquisitionCo representing in the aggregate all of the then outstanding common
stock of AcquisitionCo.

 

4.

AcquisitionCo shall acquire all of the assets of Memorial Parent (other than
cash distributable on the Effective Date pursuant to the Plan), subject to any
liabilities of Memorial Parent not discharged, satisfied or otherwise provided
for pursuant to the Plan (the “Asset Acquisition”) in exchange for (a) full and
final satisfaction of the Contributed Notes Claims, (b) the New Common Shares
received by AcquisitionCo from Memorial Parent NewCo, and (c) Memorial Limited
Partner Warrants. Immediately after the Asset Acquisition, Contribution LLC
shall continue to own more than 50% of the total outstanding New Common Shares.

 

5.

On the Effective Date, in accordance with the treatment section of the Plan,
Memorial Parent shall distribute to holders of Allowed Unsecured Notes Claims,
other than Contributed Notes Claims, and to holders of Memorial Parent
Interests, as applicable, New Common Shares and Memorial Limited Partner
Warrants.

 

6.

In accordance with the Plan, there shall be a Management Incentive Plan under
which an amount of New Common Shares authorized as of the Effective Date shall
be reserved for issuance to management and other key employees.

 

1  Capitalized terms used but not otherwise herein defined have the meanings
ascribed to them in Annex 1.

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

ANNEX 4

MIP Term Sheet

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

ANNEX 4

Memorial Parent NewCo., Inc.

Post-Emergence Management Incentive Plan Term Sheet

The following describes the principal terms of the management incentive plan
(the “Plan”) to be adopted by Memorial Parent NewCo., Inc., a Delaware
corporation (the “Company”), in connection with the Restructuring, and the
initial grant of awards post-Restructuring to management and other key employees
as of the Effective Date (the “Emergence Awards”). For the avoidance of doubt,
the Plan (and the awards thereunder) shall be adopted and authorized in
connection with the Restructuring and will not require board approval by the New
Board or Committee. This term sheet does not contain all of the terms and
conditions of the Plan. Defined terms not otherwise defined herein shall have
the meaning set forth in the Memorial Production Partners LP Restructuring Term
Sheet.

TERMS OF THE PLAN

 

Category

  

Terms

Effective Date

   The Plan (and the Emergence Awards) shall be effective on the Effective Date.

Administration

   The New Board or such committee appointed by the New Board (the “Committee”)
shall administer the Plan and make all determinations with respect to awards
granted under the Plan; provided that the Emergence Awards shall be as set forth
below.

Participants

  

•       Participants who receive the Emergence Awards shall be specified in a
letter agreement by and between the Company and the counsel to the Consenting
Noteholders (the “MIP Letter Agreement”).

 

•       Future awards shall be granted to such management and other key
employees of the Company and its subsidiaries who are designated by the
Committee to receive awards under the Plan, taking into account the
recommendations of the Company’s Chief Executive Officer.

Award Pool

  

•       10% of the New Common Shares outstanding as of the Effective Date,
taking into account dilution for shares issuable under the Plan (but not shares
issuable under the Memorial Limited Partner Warrants) will be available for
grant under the Plan (the “Award Pool”).

 

•       If any outstanding award expires or is forfeited, cancelled or otherwise
terminated, the shares underlying such award shall again be available for grant
under the Plan.

 

•       Shares available and granted under the Plan shall be subject to
equitable adjustments in the event of capital restructuring events.

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

Category

  

Terms

Plan Awards

  

•       The Plan will be an “omnibus” incentive plan (similar to the Memorial
Production Partners GP LLC Long-Term Incentive Plan) which will permit the
Committee to grant various types of equity awards, including:

 

•       stock options (ISOs and NQSOs)

 

•       stock appreciation rights

 

•       restricted stock

 

•       restricted stock units

 

•       phantom units

 

•       other stock-based awards.

Vesting and Other Terms of Awards   

•       Vesting of future awards may be time- and/or performance-based, and may
include provisions for acceleration of vesting under certain circumstances, as
specified by the Committee.

 

•       The Committee shall determine other terms and conditions of awards
(other than the Emergence Awards), including the terms of exercise, payment and
forfeiture of awards.

 

•       Vesting and other terms of the Emergence Awards will be as described
below.

Liquidity and

Valuation

  

•       If the New Common Shares are not traded on a national securities
exchange at the time of payment of an award, then subject to any applicable
restrictions under the RBL Credit Facility, liquidity will be provided by the
Company for vested awards or shares upon termination of employment without
“Cause,” for “Good Reason,” or upon death or “Disability” (such terms as defined
in the Memorial Production Partners LP Key Employee Incentive Plan). In
addition, the Plan will provide that, if the New Board, in consultation with the
Company’s Chief Executive Officer, determines that it is appropriate to provide
participants reasonable liquidity opportunities in other circumstances, such
opportunities will be provided, subject to any applicable restrictions under the
RBL Credit Facility.

 

•       If not so traded, valuation of New Common Shares shall be determined
based upon a pre-established formula (e.g., multiple of earnings) or independent
appraisals obtained on an ongoing basis (e.g., quarterly valuations), as
determined by the Committee. Valuations will be communicated to Participants.

TERMS OF EMERGENCE AWARDS

 

Category

  

Terms

Participants    The Emergence Awards will be allocated to management and other
key employees, as set forth in the MIP Letter Agreement (the “Initial
Participants”).

Emergence

Award Pool

  

•       The Emergence Awards will represent 50% of the Award Pool (5% of the New
Common Shares).

 

2

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

Category

  

Terms

  

•       Emergence Awards will be granted to the Initial Participants on the
Effective Date in accordance with the MIP Letter Agreement.

Form of

Emergence

Awards

  

•       50% of the Emergence Awards (2.5% of the New Common Shares) will be
granted in the form of restricted stock units (“RSUs”). RSUs will include
dividend equivalent rights, which will be accumulated and reinvested in RSUs,
subject to vesting.

 

•       50% of the Emergence Awards (2.5% of the New Common Shares) will be
granted in the form of non-qualified stock options (“Stock Options”). For the
Stock Options, the term will be six (6) years and the exercise price will equal
the VWAP Price (or Plan Equity Value, if the New Common Shares are not listed on
a national exchange on the Effective Date).

 

•       “VWAP Price” means the volume-weighted average price of a New Common
Share for the 20 calendar day period beginning on the 11th calendar day after
the Effective Date and ending on the 30th calendar day after the Effective Date
(as determined consistent with the requirements of Section 409A of the Internal
Revenue Code).

 

•       “Plan Equity Value” means the reorganized equity value of the New Common
Shares on the Effective Date.

Vesting   

•       RSUs – one-third (1/3) of the New Common Shares subject to such award
will vest on each of the first three anniversaries of the Effective Date,
subject to the participant’s continued employment.

 

•       Stock Options – one-third (1/3) of the New Common Shares subject to such
award will vest on each of the first three anniversaries of the Effective Date,
subject to the participant’s continued employment.

 

•       Upon termination of employment without “Cause,” for “Good Reason,” or
upon death or “Disability” (such terms as defined in the Memorial Production
Partners LP Key Employee Incentive Plan), the RSUs will become fully vested, and
the Stock Options that were scheduled to vest within 12 months following such
termination will vest. If the New Common Shares are not then listed on a
national securities exchange, the shares will be valued at the time of
termination as provided above.

 

•       Emergence Awards will become fully vested in the event of termination of
employment without “Cause” or for “Good Reason,” in either case following a
“Change in Control” of the Company (as defined in the Plan).

 

•       Upon the termination of employment without “Cause” or for “Good Reason”
of a participant within two (2) years following the Effective Date who is party
to a Change in Control Agreement, such participant would be paid the greater of
(A) the aggregate cash value of the payments or benefits due under Section 3 of
the participant’s Change in Control Agreement, or (B) the aggregate cash value
of his or her Emergence Awards, with RSU value determined based upon the then
value of the New Common Shares and Stock Options determined based on the value
of such Stock Options at the time of such termination; provided that the
foregoing payment shall be calculated solely by reference to clause (B) if in
the good faith judgment of the New Board

 

3

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

Category

  

Terms

  

providing a greater payment pursuant to clause (A) is not warranted because the
participant was terminated for poor performance. The Change in Control
Agreements will otherwise be modified to apply to a future Change in Control
event.

Exercise and Settlement   

•       RSUs – payment in New Common Shares (with tax withholding paid in cash
or, if permitted by the Committee at the time, via “net” settlement); payment
within 30 days following vesting.

 

•       Stock Options – may be exercised by payment of exercise price and
withholding taxes in cash (or, if permitted by the Committee at the time, shares
or “net” exercise).

 

4

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EXHIBIT B

FORM OF JOINDER AGREEMENT FOR CONSENTING NOTEHOLDERS

This Joinder Agreement to the Plan Support Agreement, dated as of
[            ], 2016 (as amended, supplemented or otherwise modified from time
to time, the “Plan Support Agreement”), between Memorial Production Partners LP
(the “Memorial Parent”), the subsidiaries of the Memorial Parent party thereto,
and the holders of the principal amounts outstanding under the Unsecured Note
Indentures (together with their respective successors and permitted assigns, the
“Consenting Noteholders” and each, a “Consenting Noteholder”) is executed and
delivered by                                                       (the “Joining
Party”) as of                             , 2017. Each capitalized term used
herein but not otherwise defined shall have the meaning set forth in the Plan
Support Agreement.

1. Agreement to Be Bound. The Joining Party hereby agrees to be bound by all of
the terms of the Plan Support Agreement, a copy of which is attached to this
Joinder Agreement as Annex I (as the same has been or may be hereafter amended,
restated, or otherwise modified from time to time in accordance with the
provisions hereof). The Joining Party shall hereafter be deemed to be a
“Consenting Noteholder” and a “Party” for all purposes under the Plan Support
Agreement and with respect to any and all Claims held by such Joining Party.

2. Representations and Warranties. With respect to the aggregate principal
amount of 6.875% Senior Unsecured Notes, and the aggregate principal amount of
7.625% Senior Unsecured Notes, in each case, set forth below its name on the
signature page hereto, the Joining Party hereby makes the representations and
warranties of the Consenting Noteholders set forth in Section 8 of the Plan
Support Agreement to each other Party to the Plan Support Agreement.

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

[Signature page follows.]

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

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

 

[CONSENTING NOTEHOLDER] By:  

 

Name:   Title:  

Principal Amount of the 6.875% Senior Unsecured Notes: $                    

Principal Amount of the 7.625% Senior Unsecured Notes: $                    

 

Notice Address:    

 

 

 

 

 

  Fax:  

 

  Attention:  

 

  Email:  

 

 

 

Acknowledged: MEMORIAL PRODUCTION PARTNERS LP By:   Memorial Production Partners
GP, LLC,   its general partner By:  

 

Name:   Title:  

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

EXHIBIT C

Dear [INVESTOR],

On [●], 2017, Memorial Production Partners LP (“Memorial Parent”) and its
subsidiaries commenced a solicitation of votes for a plan of reorganization (the
“Plan”) pursuant to chapter 11 of the Bankruptcy Code. An electronic copy of the
Plan is available on the case information website http://www.[●].com.

In connection with the Plan, we have been requested by Memorial Parent to inform
our investors of potential adverse tax consequences to those investors that own,
directly or indirectly, both (a) equity interests in [CONSENTING NOTEHOLDER] and
(b) equity interests in Memorial Parent (including any options, warrants, or
rights to acquire an equity interest in Memorial Parent, each a “Memorial Parent
Interest”) upon consummation of the Plan, as more fully described in the Plan.
Each such investor should review the Plan and seek advice from its tax advisors
regarding the potential tax consequences to it of owning Memorial Parent
Interests upon the consummation of the Plan or disposing such Memorial Parent
Interests before the consummation of the Plan.

This notification is being provided for informational purposes only and should
not be construed as legal, business, financial or tax advice.

Kind regards,

[CONSENTING NOTEHOLDER]

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

Schedule A

 

1)

Any default or event of default arising from or related to a failure by the
Memorial Parties to pay any amounts on the 7.625% Senior Unsecured Notes,
including any cross-defaults arising from or related to such failure.

 

2)

Any default or event of default arising from or related to entry into or
performance under this Plan Support Agreement by the Memorial Parties and the
Consenting Noteholders, including, without limitation, the execution or
commencement of Solicitation of the Plan.

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Schedule B