Exhibit 10.1

 

Shenkman Capital

Management, Inc.

461 Fifth Avenue,

22nd Floor

New York, NY 10017

 

CVC Capital

Partners

712 Fifth Avenue,

42nd Floor

New York, NY 10019

 

J.P. Morgan

Securities LLC

383 Madison Avenue

New York, NY 10179

 

Franklin Advisers, Inc.

One Franklin

Parkway, Suite 2100

San Mateo, CA 94403

July 25, 2016

COMMITMENT LETTER

$40 MILLION CONVERTIBLE SENIOR SECURED SECOND LIEN NOTES

Goodrich Petroleum Corporation

801 Louisiana, Suite 700

Houston, Texas 77002

Attention: Robert C. Turnham, Jr., President

Ladies and Gentleman:

You have informed us that on April 15, 2016 (the “Petition Date”), Goodrich
Petroleum Corporation (the “Issuer”), and together with Goodrich Petroleum
Company, L.L.C. (the “Guarantor”), “you” and the “Debtors”) filed voluntary
petitions (the “Chapter 11 Proceedings”) for relief under chapter 11 of title 11
of the United States Code (as amended, the “Bankruptcy Code”) in the United
States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy
Court”).

Shenkman Capital Management, Inc. (acting on behalf of such of its investment
advisory clients as it deems appropriate, “Shenkman”), CVC Capital Partners
(acting through such of its affiliates or managed funds as it deems appropriate,
“CVC”), J.P. Morgan Securities LLC (acting through such of its affiliates or
managed funds as it deems appropriate, “JPMS”), Franklin Advisers, Inc. (acting
through such of its affiliates or managed funds as it deems appropriate,
“Franklin”, together with Shenkman, CVC and JPMS, the “Commitment Parties” or
“we”) are pleased to confirm the arrangements under which the Commitment Parties
severally (but not jointly) commit to provide the Facility (as defined below) on
the terms and conditions set forth in this letter and Attachment A hereto
(collectively, this “Commitment Letter”). Capitalized terms used but not defined
in this Commitment Letter shall have the meanings set forth in the Term Sheet
(as defined below). All obligations of the Issuer and the Guarantor hereunder
(including references to “you”) are joint and several.

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Reference is made to the Debtors’ Joint Plan of Reorganization filed with the
Bankruptcy Court on April 15, 2016 (the “Filed Plan of Reorganization”). You
have also informed us that the Issuer will be capitalized and the related
working capital requirements of the Issuer from and after the effectiveness of
the Plan (the “Plan Effective Date”) will be financed from the following sources
(collectively, the “Capitalization Transactions”):

(i) the Issuer will enter into a RBL credit facility (the “RBL Exit Facility”)
on the Plan Effective Date in an aggregate principal amount (including
outstanding letters of credit) not to exceed $20,000,000 (after giving effect to
the use of $20,000,000 of the proceeds of the Facility to make payments to the
lenders under the existing Senior Credit Facility (as defined in the Filed Plan
of Reorganization) (plus additional cash on hand to pay accrued interest, fees
and expenses and to pay hedge termination costs) and in accordance with the
terms of the Plan on the Plan Effective Date), which we understand will be
deemed to refinance the existing Senior Credit Facility;

(ii) a $40,000,000 issuance of convertible senior secured second lien notes by
the Issuer (the “Facility”) having terms materially consistent with those set
forth on Attachment A (the “Term Sheet”) to be entered into on the Closing Date;
and

(iii) equitization or discharge of all other indebtedness and other obligations
of the Debtors in accordance with the terms of the Plan.

Commitment

You have requested that the Commitment Parties severally commit to provide the
Facility upon the terms and subject to the conditions set forth or referred to
in this Commitment Letter, including Attachment A. Based on the foregoing, each
Commitment Party is pleased to confirm by this Commitment Letter its commitment
to severally provide the amount of the Facility specified opposite the name of
such Commitment Party in Schedule A hereto (the commitments specified in
Schedule A hereto, the “Commitments”). The Commitments are several, and not
joint and several, obligations of each Commitment Party. You agree that no
compensation (other than that expressly contemplated by this Commitment Letter,
including Attachment A) will be paid in connection with the Facility unless you
and we shall so agree. You also agree that the Closing Date and the concurrent
closing of the Facility shall be a date mutually agreed upon between you and us,
but in any event shall not occur until the terms and conditions hereof have been
satisfied.

Notwithstanding anything to the contrary contained herein, the Issuer agrees that the
Commitment Parties shall have the right to make modifications to the proposed
Facility structure and/or the manner of execution of the Facility (including,
without limitation, by transferring commitments among each other) to address any
tax, regulatory, environmental or similar aspects of the transaction so long as
such modification does not adversely change the proposed economic terms of the
Facility to the Issuer and does not otherwise adversely affect the rights and
obligations of the Issuer thereunder.

Conditions Precedent

The Commitment of the Commitment Parties in respect of the Facility is subject
to (i) the satisfaction of the conditions precedent set forth in Attachment A in
a manner reasonably acceptable to the Commitment Parties, (ii) the negotiation,
execution and delivery of definitive documentation with respect to the Facility
(including, without limitation, an intercreditor agreement and security
documentation) reflecting, among other things, the terms and conditions set forth herein and in
Attachment A in a manner reasonably acceptable to the Commitment Parties, (iii)
the consummation of the Capitalization Transactions and (iv) the entry of the
order in form and substance reasonably satisfactory to the Commitment Parties
(the “Commitment Approval Order”) by the Bankruptcy Court approving this
Commitment Letter and the terms and conditions hereof (which shall at all times
be in full force and effect and, as of the Closing Date, shall be a final,
non-appealable order in full force and effect not subject to a stay) ((i), (ii),
(iii) and (iv), collectively the “Conditions”). The Commitment Parties shall
have no obligation to consummate the Facility if the Conditions are not
satisfied or any covenant or agreement in this Commitment Letter is not complied
with in any material respect or any representationor warranty in this Commitment
Letter is not true and correct in any material respect.

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Costs, Fees and Expenses

In consideration of this commitment and recognizing that, in connection
herewith, the Commitment Parties are incurring costs and expenses and allocating
resources (including, without limitation, fees and disbursements of external
counsel, filing and recording fees, costs and expenses of due diligence,
syndication, transportation, duplication, messenger, appraisal, audit, and
consultant costs and expenses), you hereby agree to pay or reimburse the
Commitment Parties for such reasonable and documented out-of-pocket costs and
expenses (collectively, “Expenses”) incurred on and after June 10, 2016,
regardless of whether any of the transactions contemplated hereby is
consummated; provided that (i) such Expenses in an aggregate amount of up to
$600,000 shall be paid within ten business days after the Commitment Parties’
delivery of an invoice for such Expenses and (ii) any additional Expenses shall
be paid upon the earlier of (x) the consummation of the Capitalization
Transactions and (y) the date this Commitment Letter is terminated in accordance
with its terms. You also agree to pay to each Commitment Party on demand all
Expenses of such Commitment Party (including, without limitation, fees and
disbursements of external counsel) incurred in connection with the enforcement
of any of its rights and remedies hereunder. You also agree to pay the fees set
forth herein, including in Annex A to Attachment A in accordance with the terms
and conditions set forth herein and therein. You agree that, once paid, all of
the foregoing fees and Expenses or any part thereof shall not be refundable
under any circumstances, regardless of whether the transactions or financings
contemplated hereby are consummated, and shall not be creditable against any
other amount payable in connection herewith or otherwise.

Upon Bankruptcy Court approval of this Commitment Letter, you agree to pay to
counsel to the Commitment Parties an expense deposit of $200,000 (the “Deposit”)
which counsel to the Commitment Parties may apply to the payment of Expenses
payable by you pursuant to the preceding paragraph from time to time.

Confidentiality

By accepting this Commitment Letter, you agree that, prior to the date on which
you file a motion to seek Bankruptcy Court approval of this Commitment Letter
(such date, the “Motion Date”), this Commitment Letter (including Attachment A)
are for your confidential use only and that neither their existence nor the
terms hereof or thereof will be disclosed by you to any person or circulated or
referred to publicly (other than to your officers, directors, employees,
accountants, attorneys and other advisors, in each case, on a “need-to-know”
basis in connection with the transactions contemplated hereby and who have been
informed by you of the confidential nature of this Commitment Letter and have
agreed to treat such information confidentially) without the prior written
consent of the Commitment Parties, which may be by email. The foregoing
notwithstanding, following the return to us of a counterpart of this Commitment
Letter executed by you and prior to the Motion Date, you may provide a copy
hereof to (a) your officers, directors, employees, accountants, attorneys and
other advisors, in each case, on a “need to know” basis in connection with the
transactions contemplated hereby and who have been informed by you of the
confidential nature of this Commitment Letter and have agreed to treat such
information confidentially, (b) to any statutorily appointed committee in the
Chapter 11 Proceedings and (c) as may be compelled in a judicial or
administrative proceeding or as otherwise required by law or requested by a
governmental authority (in which case you agree to the extent permitted under
applicable law to inform the Commitment Parties promptly thereof).

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Arm’s-Length Transaction

As you know, the Commitment Parties may be engaged, either directly or through
their respective affiliates, in a broad array of activities, including principal
investment, hedging, financing and other financial and non-financial activities
and services globally. In the ordinary course of their various business
activities, the Commitment Parties and funds or other entities which the
Commitment Parties manage or in which they invest or with which they co-invest,
may at any time purchase, sell, hold or vote long or short positions and
investments in securities, derivatives, loans, commodities, currencies, credit
default swaps and other financial instruments. Any of the aforementioned
activities may involve or relate to assets, securities and/or instruments of the
Issuer and/or other entities and persons which may (i) be involved in
transactions arising from or relating to the arrangement contemplated by this
Commitment Letter, (ii) have other relationships with the Issuer or its
affiliates or (iii) may be competitors of the Issuer. In addition, the
Commitment Parties may provide other services to such other entities and
persons. Although the Commitment Parties in the course of such other activities
and relationships may acquire information about the transaction contemplated by
this Commitment Letter or other entities and persons which may be the subject of
the financing contemplated by this Commitment Letter, the Commitment Parties
shall have no obligation to disclose such information, or the fact that the
Commitment Parties are in possession of such information, to you or to use such
information on your behalf.

The Commitment Parties may have economic interests that conflict with those of
the Issuer or its equity holders and/or its affiliates. In connection with all
aspects of each transaction contemplated by this Commitment Letter, you
acknowledge and agree that: (i) the Facility and any related arranging or other
services described in this Commitment Letter are an arm’s-length commercial
transaction between you and your affiliates, on the one hand, and the Commitment
Parties, on the other hand, and you are capable of evaluating and understanding
and understand and accept the terms, risks and conditions of the transactions
contemplated by this Commitment Letter; (ii) in connection with the process
leading to such transaction, the Commitment Parties are and have been acting
solely as principals and are not the financial advisor or fiduciary for you or
any of your management, subsidiaries or affiliates, stockholders, creditors or
employees or any other party; (iii) the Commitment Parties have not assumed nor
will they assume an advisory or fiduciary responsibility in your or your
subsidiaries’ or affiliates’ favor with respect to any of the transactions
contemplated hereby or the process leading thereto (irrespective of whether any
Commitment Party has advised or is currently advising you or your subsidiaries
or affiliates on other matters) and the Commitment Parties have no obligation to
you or your subsidiaries or affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth in this
Commitment Letter and the definitive loan documentation; (iv)
the Commitment Parties and their respective affiliates may be engaged in a broad
range of transactions that involve interests that differ from yours and your
subsidiaries and affiliates and the Commitment Parties have no obligation to
disclose any of such interests by virtue of any advisory, agency or fiduciary
relationship; and (v) the Commitment Parties have not provided any legal,
accounting, regulatory or tax advice with respect to any of the transactions
contemplated hereby and you have consulted your own legal, accounting,
regulatory and tax advisors to the extent you have deemed appropriate. You
hereby waive and release, to the fullest extent permitted by law, any claims
that you may have against the Commitment Parties with respect to any breach or
alleged breach of fiduciary duty arising hereunder or with respect hereto.

Information

You hereby represent and covenant that (i) all written information (other than
Projections and information of a general economic or industry specific nature)
that has been or will be made available directly or indirectly to us by you and
any of your representatives in connection with the transactions contemplated
hereby (the “Information”), when taken as a whole, is or will be complete and
correct in all material respects and does not or will not contain any untrue
statement of a material fact or omit to

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state a material fact necessary to make the statements contained therein, in
light of the circumstances under which such statements are made, not misleading
in any material respect, and (ii) all projections (“Projections”) that have been
or will be made available to us by you or your representatives in connection
with the transactions contemplated hereby, when taken as a whole, have been or
will be prepared in good faith based upon assumptions believed to be reasonable
by the preparer thereof at the time such Projections are furnished to the
Commitment Parties (it being understood that (i) the Projections are merely a
prediction as to future events and are not to be viewed as facts, (ii) the
Projections are subject to significant uncertainties and contingencies, many of
which are beyond the control of you and (iii) no assurance can be given that any
particular Projections will be realized and that actual results during the
period or periods covered by any such Projections may differ significantly from
the projected results and such differences may be material). In issuing this
Commitment Letter, the Commitment Parties are relying on the accuracy of the
Information, without independent verification thereof. You agree to (i)
supplement the Information and any Projections previously furnished, or that
will be furnished, from time to time upon reasonable request of the Commitment
Parties and (ii) promptly notify us of any changes in circumstances that could
be expected to call into question the continued reasonableness of any assumption
underlying any Projections previously furnished, or that will be furnished, by
or on behalf of the Issuer.

Exclusivity

From and after your acceptance hereof and up to and including the date of entry
by the Bankruptcy Court of the Commitment Approval Order (such period, the
“Exclusivity Period”), the Issuer hereby agrees to work exclusively with the
Commitment Parties to accomplish the Facility and agrees that neither it nor its
affiliates will, directly or indirectly (a) engage in any discussions with
another lender or funding source regarding an Alternative Transaction (as
defined in the Term Sheet), (b) solicit or accept a proposal or commitment from
another lender or funding source in connection with an Alternative Transaction,
or (c) otherwise permit or encourage another person to solicit a proposal or
conduct due diligence in connection with an Alternative Transaction. In
addition, the Issuer hereby agrees that during the term of this Commitment
Letter it will promptly provide the Commitment Parties with any proposals,
whether oral or written, received from any other lender or funding source in
connection with an Alternative Transaction to the extent that the Issuer has
entered into negotiations with respect thereto or otherwise in good faith
believes that any such proposal presents a reasonably viable Alternative
Transaction. Nothing in this paragraph shall prevent the Issuer from continuing
to pursue a sale of assets as required by the bid procedures order entered by
the Bankruptcy Court on July 1, 2016 at Docket Number 366 of the Chapter 11
Proceedings.

The Issuer hereby agrees that if, after July 25, 2016, the Issuer or any of its
affiliates directly or indirectly enter into a binding commitment letter, loan
agreement, indenture, or other binding agreement for debt or equity financing
with a third-party financing provider, or any definitive documentation with
respect to an Alternative Transaction or files a plan of reorganization seeking
to implement an Alternative Transaction (“Alternative Plan”), then
the Commitment Parties shall be entitled to receive a fee (the “Delayed
Commitment Fee”) equal to $2,000,0000 (which amount is in addition to any other
amount paid or payable hereunder). The Delayed Commitment Fee will be
immediately earned upon the occurrence of any of the events described in this
paragraph and immediately payable upon the closing of an Alternative Transaction
or upon consummation of the Alternative Plan. The Delayed Commitment Fee shall
be a joint and several obligation of the Obligors and shall constitute an
administrative expense claim against each Obligor under Bankruptcy Code § 503(b)
that is subject only to administrative claims of the Obligors’ professionals.
The Delayed Commitment Fee shall be paid out of the proceeds of an Alternative
Transaction or upon consummation of the Alternative Plan, and if such
Alternative Transaction is a sale of all or substantially all assets of the
Obligors, after payment in full of the outstanding obligations under the
existing Senior Credit Facility (as defined in the Filed Plan of
Reorganization).

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For the avoidance of doubt, you shall not have any obligation to pay the Delayed
Commitment Fee if the Commitment Parties fail to fund the Facility when required
to do so by the terms hereof.

Indemnification

You agree to indemnify and hold harmless the Commitment Parties, and each of
their respective affiliates and each of their respective and their respective
affiliates’ respective officers, directors, partners, shareholders, trustees,
controlling persons, employees, agents, advisors, attorneys and representatives
(each, an “Indemnified Party”) from and against any and all claims, damages,
losses, liabilities and expenses (including, without limitation, fees and
disbursements of counsel), that may be incurred by or asserted or awarded
against any Indemnified Party, in each case arising out of or in connection with
or relating to this Commitment Letter or the transactions contemplated hereby,
any use made or proposed to be made with the proceeds of the Facility, or any
claim, litigation, investigation or proceeding relating to any of the foregoing,
regardless of whether any Indemnified Party is a party thereto, and you shall
reimburse each Indemnified Party upon demand for all legal and other expenses
incurred by it in connection with investigating, preparing to defend or
defending, or providing evidence in or preparing to serve or serving as a
witness with respect to, any lawsuit, investigation, claim or other proceeding
relating to any of the foregoing (including, without limitation, in connection
with the enforcement of the indemnification obligations set forth herein),
irrespective of whether the transactions contemplated hereby are consummated,
except to the extent such claim, damage, loss, liability, or expense is found in
a final non-appealable judgment by a court of competent jurisdiction to have
resulted solely from such Indemnified Party’s gross negligence or willful
misconduct or from any claim by one Indemnified Party against another that does
not involve any act or omission by the Issuer. No Indemnified Party shall be
liable for any damages arising from the use by unintended recipients of
Information or other materials obtained through electronic, telecommunications
or other information transmission systems in connection with this Commitment
Letter, the Facility, the use of the proceeds thereof or any related
transaction.

You agree that no Indemnified Party shall have any liability (whether direct or
indirect, in contract, tort or otherwise) to the Issuer or any person asserting
claims on behalf of or in right of the Issuer or any other person for or in
connection with the transactions contemplated hereby, except in the case of the
Issuer to the extent such liability is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted solely from such
Indemnified Party’s gross negligence or willful misconduct. In no event,
however, shall any you or Indemnified Party be liable on any theory of liability
for any special, exemplary, indirect, consequential or punitive damages;
provided that nothing contained in this sentence shall limit your
indemnification obligations to the extent set forth in the immediately preceding
paragraph in respect of any third party claims alleging such special, exemplary,
indirect, consequential or punitive damages. You further agree that, without the
prior written consent of the Commitment Parties, you will not and will cause
your affiliates not to enter into any settlement of any lawsuit, claim or other
proceeding arising out of this Commitment Letter or the transactions
contemplated hereby unless such settlement (i) includes an explicit and
unconditional release from the party bringing such lawsuit, claim or other
proceeding of all Indemnified Parties and (ii) does not include a statement as
to or an admission of fault, culpability, or a failure to act by or on behalf of
any Indemnified Party. No Indemnified Party shall be liable for any damages
arising from the use by unauthorized persons of any information made available
to the Commitment Parties by you or any of your representatives through
electronic, telecommunications or other information transmission systems that is
intercepted by such persons.

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Governing Law, etc.

This Commitment Letter shall be governed by, and construed in accordance with,
the law of the State of New York. Each of the parties hereto irrevocably
consents to the exclusive jurisdiction and venue of the Bankruptcy Court, and,
if the Bankruptcy Court does not have or fails to exercise jurisdiction, the
federal and/or state courts located within the City of New York, Borough of
Manhattan. The parties hereto hereby waive, to the fullest extent permitted by
applicable law, any objection that they may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to the
provisions of this Commitment Letter brought in any such court, and any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. This Commitment Letter sets forth the entire
agreement between the parties with respect to the matters addressed herein and
supersedes all prior communications, written or oral, with respect hereto. This
Commitment Letter may be executed in any number of counterparts, each of which,
when so executed, shall be deemed to be an original and all of which, taken
together, shall constitute one and the same letter. Delivery of an executed
counterpart of a signature page to this Commitment Letter by fax or electronic
transmission shall be as effective as delivery of a manually executed
counterpart of this Commitment Letter. This Commitment Letter is not assignable
by you without our prior written consent (and any purported assignment without
such consent shall be null and void). This Commitment Letter may not be amended
or any term or provision hereof waived or otherwise modified except by an
instrument in writing signed by the Commitment Parties and you. This Commitment
Letter is intended to be solely for the benefit of the parties hereto, the
Indemnified Parties, and their respective successors and assigns. Nothing
herein, express or implied, is intended to or shall confer upon any other third
party any legal or equitable right, benefit, standing or remedy of any nature
whatsoever under or by reason of this Commitment Letter.

The Commitment Parties hereby notify you that, pursuant to the requirements of
the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law October 25,
2001), as amended (the “Patriot Act”), they may be required to obtain, verify
and record information that identifies the Issuer, which information includes
its name, address and tax identification number and other information regarding
it that will allow the Commitment Parties to identify it in accordance with the
Patriot Act. You agree to provide the Commitment Parties with all documentation
and other information required by bank regulatory authorities under the Patriot
Act and any other “know your customer” and anti-money laundering rules and
regulations. This notice is given in accordance with the requirements of the
Patriot Act and is effective for each of the Commitment Parties.

Waiver of Jury Trial

Each party hereto irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to this Commitment Letter or the transactions
contemplated by this Commitment Letter or the actions of the Commitment Parties
or any of their respective affiliates in the negotiation, performance, or
enforcement of this Commitment Letter.

Please indicate your acceptance of the provisions hereof by signing the enclosed
copy of this Commitment Letter and returning it to us at or before 5:00 p.m.
(Eastern Time) on or before July 25, 2016. All respective Commitments and
undertakings of the Commitment Parties under this Commitment Letter will expire
at 5:00 p.m. (Eastern Time) on July 25, 2016, unless you execute and return to
us this Commitment Letter at or prior to such time. Thereafter, all accepted
Commitments and undertakings of the Commitment Parties will terminate on the
earlier to occur of (i) 11:59 p.m. (Eastern Time) on September 15, 2016, unless
the closing of the Facility occurs on or prior thereto (provided that such date

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may be extended by the Debtors by 30 days in the event of delay caused by the
Bankruptcy Court’s docket or Bankruptcy Court process); provided that the
Debtors shall provide evidence reasonably satisfactory to the Commitment Parties
that the conditions to closing shall be satisfied within such extended time
frame and (ii) the occurrence of the Plan Effective Date without the use of the
Facility. In addition, all commitments and undertakings of each Commitment Party
hereunder may be terminated by such Commitment Party if (a) you fail in any
material respect to perform your obligations hereunder on a timely basis (which
failure shall include, without limitation, filing or supporting any filing in
the Bankruptcy Court which would be inconsistent with the terms of this
Commitment Letter), (b) any of the Chapter 11 Proceedings is dismissed or
converted to a case under chapter 7 of the Bankruptcy Code, or a trustee or
examiner with expanded powers is appointed with respect to any of the Debtors,
(c) you fail to file a motion to seek Bankruptcy Court approval of this
Commitment Letter within 24 hours of the execution hereof, (d) the Bankruptcy
Court fails to enter the Commitment Approval Order within ten business days of
the execution hereof or (e) the Bankruptcy Court prohibits or restricts your (or
any of your affiliates’) ability or the ability of the Debtors (or any of their
affiliates) to enter into, or perform your obligations under, this Commitment
Letter or the Facility. Notwithstanding anything to the contrary herein, all
commitments and undertakings of the Debtors and each Commitment Party hereunder
may be terminated by you if following your timely filing of a motion to seek
Bankruptcy Court approval of this Commitment Letter within 24 hours of the
execution hereof, the Bankruptcy Court declines to enter the Commitment Approval
Order after your use of commercially reasonable efforts to obtain such
Commitment Approval Order. Upon approval of this Commitment Letter by the
Bankruptcy Court, the provisions of this Commitment Letter regarding Costs, Fees
and Expenses (with respect to Expenses incurred on or prior to the date of the
expiration or termination of this Commitment Letter only), Confidentiality,
Indemnification, Exclusivity (with respect to payment of the Delayed Commitment
Fee only), Governing Law, etc., and Waiver of Jury Trial shall remain in full
force and effect regardless of whether any definitive documentation for the
Facility shall be executed and delivered and notwithstanding the expiration or
termination of this Commitment Letter or any commitment or undertaking of the
Commitment Parties hereunder. Except as provided in the preceding sentence, your
obligations hereunder shall automatically terminate and be superseded by the
provisions of the definitive loan documentation upon the initial funding
thereunder and the payment of all amounts owing at such time hereunder.

[Remainder of page intentionally left blank; signature page follows.]

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Very truly yours, SHENKMAN CAPITAL MANAGEMENT, INC., on behalf of certain of its
investment advisory clients By:  

/s/ Justin Slatky

Name:   Justin Slatky Title:   Executive Vice President

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CVC CAPITAL PARTNERS By:  

/s/ Scott Bynum

Title:   Managing Director

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J.P. MORGAN SECURITIES LLC By:  

/s/ Christopher Cestaro

Title:   Christopher Cestaro, Authorized Signatory

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FRANKLIN ADVISERS, INC., on behalf of certain funds and accounts  

/s/ Glenn Voyles

By:   Glenn Voyles Title:   VP / Director of Portfolio Management

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ACCEPTED AND AGREED TO

this 25th day of July, 2016

GOODRICH PETROLEUM CORPORATION By:  

/s/ Robert Turnham

Title:   President GOODRICH PETROLEUM COMPANY, L.L.C. By:  

/s/ Robert Turnham

Title:   President

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Schedule A

Commitments

 

Shenkman Capital Management, Inc.

   $ 14,000,000   

J.P. Morgan Securities LLC

   $ 11,000,000   

Franklin Advisers, Inc.

   $ 10,000,000   

CVC Capital Partners

   $ 5,000,000   

Total

   $ 40,000,000   

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Attachment A

[Term Sheet Attached]

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Indicative Summary of Terms and Conditions

For Proposed Exit Financing

 

Issuer:    Goodrich Petroleum Corporation, a Delaware corporation (the
“Issuer”). Guarantors:    Goodrich Petroleum Company, L.L.C., a Louisiana
limited liability company, and all other direct or indirect material
subsidiaries of the Issuer (the “Guarantors”, and together with the Issuer, the
“Obligors”). Purchasers:    Shenkman Capital Management, Inc. on behalf of
certain of its investment advisory clients (“Shenkman”), CVC Capital Partners
(“CVC”) and/or one or more of its managed funds, J.P. Morgan Securities LLC
(“JPMS”), Franklin Advisers, Inc., as investment manager on behalf of certain
funds and accounts (“Franklin”) and such other institutional investors as shall
be satisfactory to Shenkman, CVC, JPMS and Franklin) (collectively, the
“Purchasers”). Trustee:    TBD. Type and Amount:    A new issuance of
Convertible Senior Secured Second Lien Notes (the “New 2L Notes”) in an initial
aggregate principal amount of $40,000,000. Interest Rate and Fees:    Set forth
on Annex A hereto. Board Governance:    From and after the Closing Date, the
Purchasers shall have the right to appoint two members of the board of directors
of the reorganized Issuer; provided that at no time shall the directors
appointed by the Purchasers constitute less than 2/7 of the board of directors
of the reorganized Issuer. Conversion:    The aggregate outstanding principal
amount of the New 2L Notes (excluding any Additional PIK Principal) shall be
convertible at the option of the Purchasers at any time prior to the Scheduled
Maturity Date (the date of any such conversion, the “Conversion Date”) into a
number of common shares equal to 15% of the common stock of the reorganized
Issuer at closing calculated on a fully-diluted basis, including shares
allocated to (i) the holders of the Issuer’s 8.000% second lien senior secured
notes due 2018 and 8.875% second lien senior secured notes due 2018, (ii) the
management incentive plan (the “MIP”) as described in the previously filed
Restructuring Support Agreement, (iii) the conversion of the New 2L Notes, (iv)
the warrants granted to the Purchasers at closing and (v) any warrants or stock
granted to holders of the Issuer’s unsecured indebtedness (collectively, the
“Total New Equity”). The Additional PIK Principal, if any, shall not be
convertible and shall be earned on the Conversion Date and payable in cash on
the later of (x) the Conversion Date and (y) the date the RBL Exit Facility is
paid in full. Voting Stock:    If at any time JPMS shall hold in excess of 4.99%
of the voting power of the Total New Equity, the portion of JPMS’ Total New
Equity entitling JPMS to in excess of 4.99% of the voting power of the Total New
Equity (the “Excess Voting Stock”) shall, without further action on the part of
JPMS, be deemed to be non-voting stock; provided that if JPMS shall transfer
such Excess Voting Stock such Excess Voting Stock shall no longer be deemed to
be non-voting stock.

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Closing Date:    On the Effective Date of the Plan (as defined below) but in no
event later than September 15, 2016, provided that such date may be extended by
30 days in the event of delay caused by the Bankruptcy Court’s docket or
Bankruptcy Court process. Collateral:    Second priority lien (second only to
the liens of the RBL) on all assets of the Obligors. The Trustee and the Agent
for the RBL will enter into a satisfactory intercreditor agreement at closing in
substantially the same form as the existing intercreditor agreement but subject
to certain changes to be agreed and including the following changes (the
“Intercreditor Agreement”) (capitalized terms used but not defined below shall
have the meanings provided in the existing intercreditor agreement):    -(a) The
Priority Lien Cap shall be set at $50,000,000; provided that any Priority Lien
Debt in excess of $20,000,000 shall be incurred solely if the RBL Exit Facility
is refinanced in a manner permitted by the New 2L Notes and then only in
compliance with a customary borrowing base for a reserve based loan provided by
commercial banks; provided further that the principal amount of any DIP
Financing shall not exceed the amount of Priority Lien Debt outstanding on the
petition date being rolled up by such DIP Financing, if any, plus $10,000,000.
   -(b) The Priority Lien Secured Parties shall agree to refrain from exercising
remedies while the Second Lien Secured Parties are exercising the purchase
option (subject to exigent circumstances)    -(c) The prohibition on the Second
Lien Secured Parties’ objection to the DIP Financing shall be subject to
customary conditions, including (i) the DIP Financing may not require any
particular plan of reorganization, (ii) the DIP Financing may not expressly
require a liquidation, and (iii) if the Priority Lien Secured Parties are
granted adequate protection liens on post-petition assets of the debtors to
secure the Priority Lien Obligations in connection with the DIP Financing, the
Second Lien Secured Parties shall be granted adequate protection liens on
post-petition assets of the Obligors to secure the Second Lien Obligations in
connection with the DIP Financing (which shall be junior to the adequate
protection liens and prepetition liens of the Priority Lien Secured Parties).   
-(d) The Second Lien Secured Parties shall retain the right to object to the DIP
Financing on the same bases as an unsecured creditor so long as such opposition
or objection is not based on the Second Lien Secured Parties’ status as secured
creditors.    -(e) The Second Lien Secured Parties shall have the right to
provide DIP Financing if no Priority Lien Secured Party shall have offered to
provide DIP Financing on or before the date of the hearing to approve DIP
Financing, and the Priority Lien Secured Parties shall retain the right to
object to any such DIP Financing.

 

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   -(f) The restrictions on prepayments of Second Lien Obligations shall not
apply to (i) the conversion contemplated by this term sheet (but shall apply to
the payment of any Additional PIK Principal) or (ii) any mandatory prepayments
required by the terms of the New 2L Notes if such mandatory prepayments (x) have
been offered to and rejected by the lenders under the RBL Exit Facility or (y)
are not required to be so offered by the terms of the RBL Exit Facility.    -(g)
All references to Third Lien Obligations and any Additional Second Lien
Obligations shall be removed and the Intercreditor Agreement limited to the
relationship between the RBL Exit Facility and the New 2L Notes. Scheduled
Maturity Date:    The later of (i) August 30, 2019 and (ii) the date that is six
months after the scheduled maturity date (including after giving effect to the
exercise of the RBL Extension Option (as defined below) of the RBL Exit Facility
or any replacement RBL facility permitted by the terms of the New 2L Notes, but
in any event no later than March 30, 2020. Optional Prepayment:    The New 2L
Notes will be callable at any time prior to the Scheduled Maturity Date subject
to payment of the Applicable Prepayment Premium (as defined below). Mandatory
Prepayment:    Subject to the terms of the agreed Intercreditor Agreement and
any provisions of the RBL Exit Facility limiting prepayments agreed with the
Purchasers prior to closing, the New 2L Notes will be subject to mandatory
prepayment provisions, including the following: (i) net insurance or
condemnation/expropriation proceeds (subject to limited reinvestment rights to
be negotiated), (ii) net proceeds of asset sales (subject to limited
reinvestment rights to be negotiated) and (iii) any refinancing proceeds from a
refinancing of the New 2L Notes. Any mandatory prepayment shall be subject to
payment of the Applicable Prepayment Premium (as defined below). Applicable
Prepayment Premium:    “Applicable Prepayment Premium” means, as of any date of
determination, (a) during the period of time from and after the Closing Date and
up to and including the date that is the second anniversary of the Closing Date,
a make- whole premium (to be calculated on a T+100 basis), (b) during the period
of time from and after the calendar day after the second anniversary of the
Closing Date up to and including the date that is two years and six months after
the Closing Date, 106.75% of the principal amount being repaid and (c)
thereafter, zero.    Any payment of the New 2L Notes prior to the Scheduled
Maturity Date (whether voluntary or mandatory, including after acceleration for
any reason) shall be subject to payment of the Applicable Prepayment Premium.
Use of Proceeds:    The proceeds of the New 2L Notes shall be applied as
follows: (i) $20,000,000 to repay outstanding obligations under the existing RBL
facility and (ii) $20,000,000 to fund the initial development of the Haynesville
Shale drilling program as generally described in the previously delivered
Management Presentation dated as of June 2016.

 

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Documentation:    To be drafted by Counsel to the Purchasers. Registration:   
Reg. D offering with reg. rights and effective within 365 days. Plan of
Reorganization:    The Plan of Reorganization shall be consistent with (i) the
terms herein, (ii) the discharge and/or equitization of substantially all claims
against the Obligors upon exit from bankruptcy other than the RBL Exit Facility,
the New 2L Notes and claims that cannot be discharged or equitized pursuant to
applicable bankruptcy law and (iii) the MIP (the “Plan”). RBL Exit Facility   
The RBL Exit Facility shall mature on a date that is no earlier than March 30,
2018; provided that such date may be extended to September 30, 2018 in the
discretion of the Issuer by making a one-time payment of a fee equal to 3% of
the amount of the RBL Exit Facility then outstanding, and further provided that
such date may be extended to September 30, 2019 in the discretion of the Issuer
by making a one-time payment of a fee equal to 2% of the amount of the RBL Exit
Facility then outstanding, provided that outstandings as of September 30, 2018
do not exceed the lesser of (i) 3x PDP-PV10% coverage, or (ii) $15 million (such
extension options, the “RBL Extension Option”). The Issuer shall covenant to
exercise the RBL Extension Option. Conditions to Closing:    The closing of the
New 2L Notes is subject to satisfaction or waiver of conditions that are
customary for debt issuances of this type, including without limitation, the
following:   

1.      An RBL Exit Facility reasonably satisfactory to the Purchasers shall
have closed contemporaneously and no Default or Event of Default shall have
occurred and be continuing or would result therefrom under the RBL Exit Facility
or any other debt of the Obligors;

  

2.      The Issuer shall have delivered to the Purchasers and the Trustee
customary legal opinions, board resolutions, officers’ certificates and/or
reaffirmation agreements reasonably requested by the Purchasers or the Trustee;

  

3.      Payment of all fees and expenses payable by the Issuer on the Closing
Date;

  

4.      The Plan and plan supplement documents shall be consistent with this
term sheet and otherwise satisfactory to the Purchasers and shall have been
approved by the Bankruptcy Court pursuant to a Confirmation Order satisfactory
to the Purchasers which shall be in full force and effect and not subject to a
stay; and

  

5.      Others to be agreed, including all documentation and other information
required by regulatory authorities under applicable “know your customer” and
anti-money laundering rules and regulations, including the PATRIOT Act.

 

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Representations and Warranties:    The Documentation shall contain
representations and warranties customary for financings of this type and others
deemed appropriate by the Purchasers, acting reasonably, including: (1)
financial statements; (2) no material adverse change; (3) corporate existence;
(4) compliance with law; (5) corporate power and authority; (6) enforceability
of Documentation; (7) no conflict with law or contractual obligations; (8) no
material litigation; (9) no default; (10) ownership of property; (11) liens;
(12) intellectual property; (13) no burdensome restrictions; (14) Federal
Reserve regulations; (15) Investment Company Act; (16) subsidiaries; (17)
accuracy of disclosure; and (18) Sanctions Laws. Affirmative Covenants:    The
Documentation shall contain affirmative covenants that are substantially
consistent with the affirmative covenants set forth in the indentures governing
the Issuer’s 8.000% second lien senior secured notes due 2018 and 8.875% second
lien senior secured notes due 2018 with such changes as may be necessary or
desirable to reflect the changed capital structure of the Obligors and such
other changes as the Purchasers may reasonably require. Negative Covenants:   
The Documentation shall contain negative covenants that are substantially
consistent with the negative covenants set forth in the indentures governing the
Issuer’s 8.000% second lien senior secured notes due 2018 and 8.875% second lien
senior secured notes due 2018 with such changes as may be necessary or desirable
to reflect the changed capital structure of the Obligors and such other changes
as the Purchasers may reasonably require. Financial Covenants:    Asset Coverage
Ratio: (i) on each Test Date (as defined below) during the period from the Plan
Effective Date through March 31, 2017, the Asset Coverage Ratio (as defined
below) shall not be less than 1.10:1.00, (ii) on each Test Date during the
period from April 1, 2017 through September 30, 2017, the Asset Coverage Ratio
shall not be less than 1.35:1.00, and (iii) on each Test Date thereafter, the
Asset Coverage Ratio shall not be less than 1.50:1.00.    Limitation on G&A: The
Obligors shall not incur general and administrative expenses determined in
accordance with GAAP payable in cash in excess of (i) $3,575,000 during each of
the third fiscal quarter and the fourth fiscal quarter of fiscal year 2016 and
(ii) $2,775,000 during any fiscal quarter in 2017 or in excess of $10,100,000
for the fiscal year of 2017. G&A after fiscal year 2017 shall be determined by
the Obligor’s compensation committee. The Purchasers shall be entitled to
designate one of its two Board Members to serve on the Obligor’s compensation
committee.    Minimum Liquidity: The Obligors shall maintain minimum liquidity
from the Closing Date until April 1, 2018, of $7.5 million, and thereafter, of
$5.0 million; provided that any breach of the minimum liquidity covenant may be
waived with the consent of holders of more than 50% of the outstanding principal
amount of the New 2L Notes; provided further that if the holders of the New 2L
Notes shall waive any default with respect to the minimum liquidity covenant
such default shall not cause a cross default under the RBL Exit Facility.

 

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   “Test Date” means (A) each January 1 (based on the Issuer’s third party
prepared reserve report as of January 1) and July 1 (based on the Issuer’s mid-
year reserve report as of July 1 (as reasonably approved by the Trustee)) of
each year commencing with January 1, 2017 and (B) the date of any material
acquisition or material disposition of oil and gas properties.    “Asset
Coverage Ratio” means the ratio of the Total Proved PV10% as of such Test Date
to total debt under the RBL and the 2L Notes, net of cash not to exceed $10
million that is subject to deposit account control agreements, of the Obligors
as of such Test Date. Events of Default:    The Documentation shall contain
events of default that are substantially consistent with the events of default
set forth in the indentures governing the Issuer’s 8.000% second lien senior
secured notes due 2018 and 8.875% second lien senior secured notes due 2018 with
such changes as may be necessary or desirable to reflect the changed capital
structure of the Obligors and such other changes as the Purchasers may
reasonably require. Commitment Letter:    The Purchasers shall provide to the
Obligors on or before July 7, 2016 a draft commitment letter reflecting the
terms set forth in this term sheet. On or before July 25, 2016, the Purchasers
and the Obligors shall execute a binding commitment letter in form and substance
satisfactory to the Purchasers and the Obligors providing for the consummation
of the transactions described herein (the “Commitment Letter”). The Issuer shall
file a motion to seek Bankruptcy Court approval of such Commitment Letter within
24 hours of the execution thereof and shall obtain such approval within 10
business days of the execution thereof.    Notwithstanding anything to the
contrary herein, all obligations of the Purchasers and the Obligors shall be
terminable by the Purchasers or the Obligors if the Bankruptcy Court does not
enter an order approving this term sheet and the Commitment Letter. Prior to
Bankruptcy Court approval the Issuer shall not engage in any discussions or
solicit or accept any proposals with respect to an Alternative Transaction (as
defined below) or any financing other than the financing contemplated under this
term sheet. A breach of this provision shall entitle the Purchasers to the
Delayed Commitment Fee (as defined below). Nothing in this paragraph shall
prevent the Issuer from continuing to pursue a sale of assets as required by the
bid procedures order entered by the Bankruptcy Court on July 1, 2016 at Docket
Number 366 of the Chapter 11 Proceedings. Expenses and Exclusivity:    Issuer
shall reimburse each of the Purchasers for all reasonable out-of-pocket expenses
incurred by such Purchaser incurred on and after June 10, 2016 (including,
reasonable fees and expenses of Counsel to the Purchasers and any necessary
local counsel).    The Commitment Letter shall provide for (i) the expense
reimbursement as set forth in the preceding paragraph, (ii) an expense deposit
for Counsel to the Purchasers in an amount equal to $200,000 and (iii)
$2,000,000 cash fee (the “Delayed Commitment Fee”) to be paid to the Purchasers
in the event the Issuer enters into definitive documentation with respect to an
Alternative Transaction (as defined below).

 

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   The Delayed Commitment Fee shall be a joint and several obligation of the
Obligors and shall constitute an administrative expense claim against each
Obligor under Bankruptcy Code § 503(b) that is subject only to administrative
claims of the Obligors’ professionals. The Delayed Commitment Fee shall only be
payable out of the proceeds and upon closing of an Alternative Transaction and,
if such Alternative Transaction is a sale of all or substantially all assets of
the Obligors, after payment in full of the outstanding obligations under the
existing RBL facility.    “Alternative Transaction” means, other than the
transactions contemplated herein, a (i) sale, transfer or other disposition of
substantially all assets of any Obligor (in one or more transactions) to any
party or parties, including a liquidation of the assets of any Obligor or (ii)
issuance, sale, transfer or other disposition of substantially all equity
securities, ownership interests or voting securities of any Obligor (in one or
more transactions) or any merger, consolidation, recapitalization, business
combination or other similar transaction involving any Obligor that does not
include as a component of such transaction the consummation of the financing
contemplated under this term sheet. Governing Law:    New York. Counsel to the
Purchasers:    Milbank, Tweed, Hadley & McCloy LLP.

 

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   Annex A Interest Rate:    13.5% per annum payable quarterly. Interest will be
payable in cash, provided that the Issuer may elect at its sole discretion to
exercise its option to pay all or a portion of the interest in kind, provided
further that the Issuer may not elect to pay any portion of the interest in cash
while the RBL Exit Facility (but not any refinancing or replacement thereof) is
outstanding. Interest that the Issuer elects to pay in kind will be added to the
outstanding principal amount (the “Additional PIK Principal”) of the New 2L
Notes. Additional PIK Principal shall be considered principal for all purposes
and, without limiting the foregoing, the Additional PIK Principal of the New 2L
Notes shall bear interest at the rate applicable to the New 2L Notes beginning
on the date such interest is paid in kind and added to the principal amount of
the New 2L Notes and shall continue to accrue interest until the date such
Additional PIK Principal is paid in full in cash. Closing Fee:    At closing,
each Purchaser to receive its pro rata share of 10-year costless warrants for
common stock in the reorganized Issuer in an amount equal to 20% of the Issuer’s
Total New Equity.

 

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