Exhibit 10.2

 

 

 

BACKSTOP COMMITMENT AGREEMENT

AMONG

CHAPARRAL ENERGY, INC.

EACH OF THE OTHER CHAPARRAL PARTIES LISTED ON SCHEDULE 1 HERETO

AND

THE COMMITMENT PARTIES PARTY HERETO

Dated as of November [●], 2016

 

 

 

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TABLE OF CONTENTS            Page   ARTICLE I DEFINITIONS      2   

Section 1.1

  Definitions      2   

Section 1.2

  Construction      16    ARTICLE II BACKSTOP COMMITMENT      17   

Section 2.1

  The Rights Offering; Subscription Rights      17   

Section 2.2

  The Backstop Commitment      18   

Section 2.3

  Commitment Party Default      18   

Section 2.4

  Subscription Escrow Account Funding      19   

Section 2.5

  Closing      20   

Section 2.6

  Transfer of Backstop Commitments      21   

Section 2.7

  Designation Rights      22   

Section 2.8

  Consent to Transfers of Subscription Rights by Commitment Parties      22   
ARTICLE III BACKSTOP COMMITMENT PREMIUM AND EXPENSE REIMBURSEMENT      23   

Section 3.1

  Premium Payable by the Company      23   

Section 3.2

  Payment of Premium      23   

Section 3.3

  Expense Reimbursement      23    ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
THE COMPANY      24   

Section 4.1

  Organization and Qualification      24   

Section 4.2

  Corporate Power and Authority      24   

Section 4.3

  Execution and Delivery; Enforceability      25   

Section 4.4

  Authorized and Issued Capital Stock      25   

Section 4.5

  Issuance      26   

Section 4.6

  No Conflict      26   

Section 4.7

  Consents and Approvals      27   

Section 4.8

  Arm’s-Length      27   

Section 4.9

  Financial Statements      27   

Section 4.10

  Company SEC Documents and Disclosure Statements      28   

Section 4.11

  Absence of Certain Changes      28   

Section 4.12

  No Violation; Compliance with Laws      28   

Section 4.13

  Legal Proceedings      28   

 

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TABLE OF CONTENTS            Page  

Section 4.14

  Labor Relations      29   

Section 4.15

  Intellectual Property      29   

Section 4.16

  Title to Real and Personal Property      29   

Section 4.17

  No Undisclosed Relationships      30   

Section 4.18

  Licenses and Permits      30   

Section 4.19

  Environmental      30   

Section 4.20

  Tax Returns      31   

Section 4.21

  Employee Benefit Plans      31   

Section 4.22

  Internal Control Over Financial Reporting      32   

Section 4.23

  Disclosure Controls and Procedures      33   

Section 4.24

  Material Contracts      33   

Section 4.25

  No Unlawful Payments      33   

Section 4.26

  Compliance with Money Laundering Laws      33   

Section 4.27

  Compliance with Sanctions Laws      34   

Section 4.28

  No Broker’s Fees      34   

Section 4.29

  Takeover Statutes      34   

Section 4.30

  Investment Company Act      34   

Section 4.31

  Insurance      34   

Section 4.32

  Alternative Transactions      35   

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMMITMENT PARTIES

     35   

Section 5.1

  Incorporation      35   

Section 5.2

  Corporate Power and Authority      35   

Section 5.3

  Execution and Delivery      35   

Section 5.4

  No Registration      35   

Section 5.5

  Purchasing Intent      35   

Section 5.6

  Accredited Investor      36   

Section 5.7

  Unsecured Notes Claims      36   

Section 5.8

  No Conflict      36   

Section 5.9

  Legal Proceedings      36   

Section 5.10

  Sufficiency of Funds      36   

 

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TABLE OF CONTENTS            Page  

ARTICLE VI ADDITIONAL COVENANTS

     37   

Section 6.1

  Confirmation Order and Solicitation Order      37   

Section 6.2

  Confirmation Order; Plan and Disclosure Statement      37   

Section 6.3

  Conduct of Business      37   

Section 6.4

  Access to Information; Confidentiality; Cleansing Materials      38   

Section 6.5

  Financial Information      41   

Section 6.6

  Commercially Reasonable Best Efforts      42   

Section 6.7

 

Registration Rights Agreement; Reorganized Company Corporate Documents; Rights
Offering Procedures

     43   

Section 6.8

  Form D and Blue Sky      43   

Section 6.9

  No Integration; No General Solicitation      43   

Section 6.10

  DTC Eligibility      44   

Section 6.11

  Use of Proceeds      44   

Section 6.12

  Share Legend      44   

Section 6.13

  Antitrust Approval      44   

Section 6.14

  Alternative Transactions      45   

ARTICLE VII CONDITIONS TO THE OBLIGATIONS OF THE PARTIES

     46   

Section 7.1

  Conditions to the Obligations of the Commitment Parties      46   

Section 7.2

  Waiver of Conditions to Obligations of Commitment Parties      48   

Section 7.3

  Conditions to the Obligations of the Debtors      49   

ARTICLE VIII INDEMNIFICATION AND CONTRIBUTION

     50   

Section 8.1

  Indemnification Obligations      50   

Section 8.2

  Indemnification Procedure      51   

Section 8.3

  Settlement of Indemnified Claims      51   

Section 8.4

  Contribution      52   

Section 8.5

  Treatment of Indemnification Payments      52   

Section 8.6

  No Survival      52   

ARTICLE IX TERMINATION

     53   

Section 9.1

  Consensual Termination      53   

Section 9.2

  Automatic Termination      53   

Section 9.3

  Termination by the Company      53   

Section 9.4

  Termination by the Requisite Commitment Parties      54   

Section 9.5

  Termination by any Commitment Party.      56   

 

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TABLE OF CONTENTS            Page  

Section 9.6

  Effect of Termination      56   

ARTICLE X GENERAL PROVISIONS

     57   

Section 10.1

  Notices      57   

Section 10.2

  Assignment; Third-Party Beneficiaries      58   

Section 10.3

  Prior Negotiations; Entire Agreement      58   

Section 10.4

  Governing Law; Venue      58   

Section 10.5

  Waiver of Jury Trial      59   

Section 10.6

  Counterparts      59   

Section 10.7

  Waivers and Amendments; Rights Cumulative; Consent      59   

Section 10.8

  Headings      60   

Section 10.9

  Specific Performance      60   

Section 10.10

  Damages      60   

Section 10.11

  No Reliance      60   

Section 10.12

  Publicity      60   

Section 10.13

  Settlement Discussions      61   

Section 10.14

  No Recourse      61   

SCHEDULES

 

Schedule 1    Subsidiaries Schedule 2    Backstop Commitment Percentages
Schedule 3    Unsecured Notes Claims Schedule 4    Consents Schedule 5    Notice
Addresses for Commitment Parties

EXHIBITS

Exhibit A – Form of Rights Offering Procedures

Exhibit B – Form of Joinder Agreement for Related Purchaser

Exhibit C-1 – Form of Joinder Agreement for Existing Commitment Party Purchaser

Exhibit C-2 – Form of Amendment for Existing Commitment Party Purchaser

Exhibit D – Form of Joinder Agreement for Third-Party Purchaser

 

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BACKSTOP COMMITMENT AGREEMENT

THIS BACKSTOP COMMITMENT AGREEMENT (this “Agreement”), dated as of November [●],
2016, is made by and among (i) Chaparral Energy, Inc. (the “Company”) and each
of its subsidiaries listed on Schedule 1 hereto, as debtors in possession (such
subsidiaries and the Company, each a “Chaparral Party” and collectively, the
“Chaparral Parties”), on the one hand, and (ii) each of the Commitment Parties
set forth on Schedule 2 hereto as of the date hereof (the “Commitment Parties”),
on the other hand. Each of the Company, each other Chaparral Party and each
Commitment Party is referred to herein, individually, as a “Party” and,
collectively, as the “Parties”.

RECITALS

WHEREAS, on May 9, 2016 (the “Petition Date”), each of the Chaparral Parties
(each, individually, a “Debtor” and, collectively, the “Debtors”) commenced a
voluntary case under chapter 11 of title 11 of the United States Code, 11 U.S.C.
§§ 101–1532 (as amended, the “Bankruptcy Code”), in the United States Bankruptcy
Court for the District of Delaware (together with any court with jurisdiction
over the Chapter 11 Cases, the “Bankruptcy Court”), which cases are being
jointly administered under the case number 16-11144 (LSS) (together, the
“Chapter 11 Cases”);

WHEREAS, in connection with the Chapter 11 Cases, the Debtors have engaged in
good faith, arm’s-length negotiations with certain parties in interest regarding
the terms of the Plan, which Plan shall be consistent in all respects with the
plan term sheet setting forth the principal terms to be included in the Plan and
attached as Exhibit A to the PSA (the “Term Sheet”);

WHEREAS, the Debtors intend to seek entry of one or more orders of the
Bankruptcy Court, in each case, in form and substance reasonably satisfactory to
the Requisite Commitment Parties and the Company (x) confirming the Plan
pursuant to section 1129 of the Bankruptcy Code and (y) authorizing the
consummation of the transactions contemplated hereby, which order is expected to
take the form of, and be incorporated into, the Confirmation Order (such order
or orders, the “Confirmation Order”);

WHEREAS, pursuant to the Plan and this Agreement, and in accordance with the
Rights Offering Procedures, the Company will issue subscription rights to
holders of Unsecured Notes Claims (the “Subscription Rights”) and conduct a
rights offering for the Rights Offering Shares in the Rights Offering Amount at
the Purchase Price;

WHEREAS, pursuant to the Plan, on the Effective Date, the Company will issue
shares of its Class A common stock (the “Class A Shares”) and Class B common
stock (the “Class B Shares”) to holders of Unsecured Notes Claims in exchange
for cancellation of such Unsecured Notes Claims; and

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

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

ARTICLE I

DEFINITIONS

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

“2020 Indenture” means that certain indenture dated as of September 16, 2010 (as
amended, supplemented, restated or otherwise modified from time to time in
accordance with the terms thereof), among the Company, as issuer, each of the
guarantors party thereto and Wilmington Savings Fund Society, FSB (as successor
to Wells Fargo Bank, National Association), as trustee, related to the 2020
Notes, including all agreements, documents, notes, instruments and any other
agreements delivered pursuant thereto or in connection therewith (in each case,
as amended, supplemented, restated or otherwise modified from time to time in
accordance with the terms thereof).

“2020 Unsecured Notes Claims” means all Claims against the Company, as issuer,
or any other Debtor as guarantor, arising under or in connection with the 2020
Notes and the 2020 Indenture.

“2020 Notes” means the 9.875% Senior Notes due 2020, issued pursuant to the 2020
Indenture, in the aggregate principal amount of $300,000,000.

“2021 Indenture” means that certain indenture, dated as of February 22, 2011 (as
amended, supplemented, restated or otherwise modified from time to time in
accordance with the terms thereof), among the Company, as issuer, the guarantors
party thereto and Wilmington Savings Fund Society, FSB (as successor to Wells
Fargo Bank, National Association), as trustee, related to the 2021 Notes,
including all agreements, documents, notes, instruments and any other agreements
delivered pursuant thereto or in connection therewith (in each case, as amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms thereof).

“2021 Unsecured Notes Claims” means all Claims against the Company, as issuer,
or any other Debtor as guarantor, arising under or in connection with the 2021
Notes and the 2021 Indenture.

“2021 Notes” means the 8.25% Senior Notes due 2021, issued pursuant to the 2021
Indenture, in the original aggregate principal amount of $400,000,000.

“2022 Indenture” means that certain indenture, dated as of May 2, 2012 (as
amended and supplemented by the 2022 Supplemental Indenture and as amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms thereof), among the Company, as issuer, the guarantors party
thereto and Wilmington Savings Fund Society, FSB

 

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(as successor to Wells Fargo Bank, National Association), as trustee, related to
the 2022 Notes, including all agreements, documents, notes, instruments and any
other agreements delivered pursuant thereto or in connection therewith (in each
case, as amended, supplemented, restated or otherwise modified from time to time
in accordance with the terms thereof).

“2022 Unsecured Notes Claims” means all Claims against the Company, as issuer,
or any other Debtor as guarantor, arising under or in connection with the 2022
Notes and the 2022 Indenture.

“2022 Indenture Trustee” means Wilmington Savings Fund Society, FSB (as
successor to Wells Fargo Bank, National Association), in its capacity as trustee
under the 2022 Indenture.

“2022 Notes” means the 7.625% Senior Notes due 2022, issued pursuant to the 2022
Indenture, in the original aggregate principal amount of $550,000,000.

“2022 Supplemental Indenture” means that certain first supplemental indenture,
dated as of November 15, 2012, between the Company, the guarantors party thereto
and the 2022 Indenture Trustee, relating to the additional issuance of 2022
Notes.

“Advisors” means Milbank, Tweed, Hadley & McCloy LLP, PJT Partners LP, and Tudor
Pickering Holt & Co. in their capacities as legal, financial and strategic
advisors, respectively, to the Commitment Parties.

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

“Aggregate Pre-Closing Equity Interests” means the total number of shares of
Class A Shares and Class B Shares of the Company outstanding as of the Closing
Date (without giving effect to the Class A Shares issued or issuable under the
Rights Offering, in respect of the Commitment Premium and the Excluded Shares).

“Agreement” has the meaning set forth in the Preamble.

“Alternative Transaction” means any dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors, merger, transaction,
consolidation, business combination, joint venture, partnership, sale of assets,
financing (debt or equity), or restructuring of any of the Debtors, other than
the Restructuring Transactions.

 

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

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

“Applicable Consent” has the meaning set forth in Section 4.7.

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

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

“Backstop Commitment Percentage” means, with respect to any Commitment Party,
such Commitment Party’s percentage of the Backstop Commitment as set forth
opposite such Commitment Party’s name under the column titled “Backstop
Commitment Percentage” on Schedule 2 (as it may be amended, supplemented or
otherwise modified from time to time in accordance with this Agreement). Any
reference to “Backstop Commitment Percentage” in this Agreement means the
Backstop Commitment Percentage in effect at the time of the relevant
determination.

“Bankruptcy Code” has the meaning set forth in the Recitals.

“Bankruptcy Court” has the meaning set forth in the Recitals.

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

“BCA Approval Obligations” means the obligations of the Company and the other
Chaparral Parties under this Agreement.

“BCA Approval Order” means an Order entered by the Bankruptcy Court authorizing
the Debtors’ performance of the BCA Approval Obligations in form and substance
reasonably satisfactory to the Requisite Commitment Parties and the Company.

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

“Bylaws” means the amended and restated bylaws of the Company as of the Closing
Date, which shall be consistent with the terms set forth in the Term Sheet and
otherwise be in form and substance reasonably satisfactory to the Requisite
Commitment Parties and the Company.

 

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“Cash” means, collectively, cash, cash equivalents and marketable securities,
other than cash classified as restricted cash in accordance with GAAP.

“Certificate of Incorporation” means the amended and restated certificate of
incorporation of the Company as of the Closing Date, which shall be consistent
with the terms set forth in the Term Sheet and otherwise be in form and
substance reasonably satisfactory to the Requisite Commitment Parties and the
Company.

“Chaparral Party” and “Chaparral Parties” have the meanings set forth in the
Preamble.

“Chapter 11 Cases” has the meaning set forth in the Recitals.

“Claim” means any “claim” against any Debtor as defined in section 101(5) of the
Bankruptcy Code, including, without limitation, any Claim arising after the
Petition Date.

“Class A Shares” has the meaning set forth in the Recitals.

“Class B Shares” has the meaning set forth in the Recitals.

“Cleansing Materials” has the meaning set forth in Section 6.4(d).

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

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

“Code” means the Internal Revenue Code of 1986.

“Commitment Party” means each holder of the Backstop Commitments that is party
to this Agreement, including without limitation, any holder of Backstop
Commitments that is a Related Purchaser, Existing Commitment Party Purchaser or
a New Purchaser that has joined this Agreement pursuant to a joinder entered
into pursuant to Section 2.6(b)(ii), Section 2.6(c)(iii)(1) or Section
2.6(d)(iii), respectively.

“Commitment Party Default” means the failure by any Commitment Party to
(a) deliver and pay the aggregate Purchase Price for such Commitment Party’s
Backstop Commitment Percentage of any Unsubscribed Shares by the Subscription
Escrow Funding Date (as may be extended by the Company pursuant to the proviso
in Section 2.4(b)) in accordance with Section 2.4(b) or (b) fully exercise all
its Subscription Rights pursuant to and in accordance with the Plan in
accordance with Section 2.2(a).

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

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

“Commitment Party Withdrawal Replacement Period” has the meaning set forth in
Section 9.5(a).

 

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“Commitment Premium” has the meaning set forth in Section 3.1.

“Commitment Premium Share Amount” means, with respect to a Commitment Party, the
number of shares of Class A Shares equal to the product of (i) such Commitment
Party’s Backstop Commitment Percentage and (ii) the quotient obtained by
dividing (a) the Commitment Premium by (b) the Purchase Price.

“Common Equity Interests” means, collectively, the Class A Shares and the Class
B Shares.

“Company” has the meaning set forth in the Preamble.

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

“Company Plan” means any employee pension benefit plan, as such term is defined
in Section 3(2) of ERISA (other than a Multiemployer Plan), subject to the
provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of
ERISA, and (i) sponsored or maintained (at the time of determination or at any
time within the five years prior thereto) by the Company or any of its
Subsidiaries or any ERISA Affiliate, or for which any such entity has liability
or (ii) in respect of which the Company or any of its Subsidiaries or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Company SEC Documents” has the meaning set forth in Section 4.10.

“Complete Business Day” means on any Business Day, the time from 12:00 AM to
11:59 PM (inclusive) on such Business Day.

“Confirmation Order” has the meaning set forth in the Recitals.

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

“Credit Agreement” means that certain Eighth Restated Credit Agreement, dated as
of April 12, 2010 by and among the Company, the other Chaparral Party borrowers
thereunder, the Prepetition Agent and the other parties from time to time party
thereto (as amended, restated, modified, supplemented, or replaced from time to
time).

“Debtor” has the meaning set forth in the Recitals.

“Defaulting Commitment Party” means in respect of a Commitment Party Default
that is continuing, the applicable defaulting Commitment Party.

“Definitive Documentation” means the definitive documents and agreements
governing the Restructuring Transactions as set forth in the PSA.

 

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“Disclosure Information” has the meaning set forth in Section 6.4(d).

“Disclosure Notice” has the meaning set forth in Section 6.4(d).

“Disclosure Statement” means the Disclosure Statement for the Plan approved
pursuant to the Plan Solicitation Order (including all exhibits and schedules
thereto), in form and substance reasonably satisfactory to the Requisite
Commitment Parties and the Company and each as may be further amended,
supplemented or otherwise modified from time to time in a manner that is
reasonably satisfactory to the Requisite Commitment Parties and the Company.

“Disclosure Time” has the meaning set forth in Section 6.4(d).

“Discount to Equity Value” means 0.75.

“Effective Date” means the effective date under the Plan.

“Enterprise Value” means the lesser of (a) $1,000,000,000 and (b) the Plan Value
(as defined in the Disclosure Statement) set forth in the Disclosure Statement.

“Environmental Laws” means all applicable laws (including common law), rules,
regulations, codes, ordinances, orders in council, orders, decrees, treaties,
directives, judgments or legally binding agreements promulgated or entered into
by or with any Governmental Entity, relating in any way to the environment,
preservation or reclamation of natural resources, the generation, management,
Release or threatened Release of, or exposure to, any Hazardous Material or to
health and safety matters (to the extent relating to the environment or
Hazardous Materials).

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

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Company or any of its Subsidiaries, is treated as a
single employer under Section 414(b) or (c) of the Code, or, solely for purposes
of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.

“ERISA Event” means (a) any Reportable Event or the requirements of Section
4043(b) of ERISA apply with respect to a Company Plan; (b) any failure by any
Company Plan to satisfy the minimum funding standards (within the meaning of
Section 412 of the Code or Section 302 of ERISA) applicable to such Company
Plan, whether or not waived; (c) the filing pursuant to Section 412(c) of the
Code or Section 302(c) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Company Plan, the failure to make by its
due date a required installment under Section 430(j) of the Code with respect to
any Company Plan or the failure to make any required contribution to a
Multiemployer Plan; (d) the incurrence by the Company or any of its Subsidiaries
or any ERISA Affiliate of any liability under Title IV of ERISA with respect to
the termination of any Company Plan or Multiemployer Plan; (e) a determination
that any Company Plan is, or is expected to be, in “at-risk” status (within the
meaning of Section 303 of ERISA or Section 430 of the Code); (f) the receipt by
the Company or any of its Subsidiaries or any ERISA Affiliate from the PBGC or a
plan administrator of any notice relating to an intention to terminate any
Company Plan or to appoint a trustee to

 

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administer any Company Plan under Section 4042 of ERISA; (g) the incurrence by
the Company or any of its Subsidiaries or any ERISA Affiliate of any liability
with respect to the withdrawal or partial withdrawal from any Company Plan or
Multiemployer Plan; (h) the receipt by the Company or any of its Subsidiaries or
any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from
the Company or any of its Subsidiaries or any ERISA Affiliate of any notice,
concerning the impending imposition of Withdrawal Liability or a determination
that a Multiemployer Plan is, or is expected to be, “insolvent” (within the
meaning of Section 4245 of ERISA), or in “endangered” or “critical status ”
(within the meaning of Section 305 of ERISA or Section 432 of the Code); or
(i) the conditions for imposition of a lien under Section 303(k) of ERISA shall
have been met with respect to any Company Plan.

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

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Shares” means any shares of the Company issued in respect of either
the new management incentive plan adopted in accordance with the Term Sheet or
the Excluded Warrants.

“Excluded Warrants” has the meaning given to the term “Warrants” in the Term
Sheet.

“Existing Commitment Party Purchaser” has the meaning set forth in
Section 2.6(c).

“Exit Facility” means the new reserve-based lending facility credit agreement on
terms set forth in the Exit Facility Term Sheet.

“Exit Facility Lender” means any lender under the Exit Facility, solely in its
capacity as such.

“Exit Facility Term Sheet” means the term sheet attached to the PSA as Exhibit D
setting forth the terms and conditions of the Exit Facility.

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

“Filing Party” has the meaning set forth in Section 6.13(b).

“Final Order” means, as applicable, an Order of the Bankruptcy Court or other
court of competent jurisdiction, which has not been reversed, stayed,
reconsidered, readjudicated, modified or amended, and as to which the time to
appeal or seek certiorari has expired and no appeal or petition for certiorari
has been timely taken, or as to which any appeal that has been taken or any
petition for certiorari that has been or may be filed has been resolved by the
highest court to which the Order could be appealed or from which certiorari
could be sought or the new trial, re-argument or rehearing shall have been
denied, resulted in no modification of such Order or has otherwise been
dismissed with prejudice; provided, that the possibility that a motion under
Rule 60 of the Federal Rules of Civil Procedure, as made applicable by Rule 9024
of the Bankruptcy Rules, may be filed relating to such Order shall not cause
such Order to not be a Final Order.

 

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“Final Outside Date” has the meaning set forth in Section 9.4(h).

“Financial Statements” has the meaning set forth in Section 4.9(a).

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

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

“GAAP” has the meaning set forth in Section 4.9(a).

“Governmental Entity” means any U.S. or non-U.S. international, regional,
federal, state, municipal or local governmental, judicial, administrative,
legislative or regulatory authority, entity, instrumentality, agency,
department, commission, court or tribunal of competent jurisdiction (including
any branch, department or official thereof).

“Hazardous Materials” means all pollutants, contaminants, wastes, chemicals,
materials, substances and constituents, exposure to which or release of which
can pose a hazard to human health or the environment or are listed, regulated or
defined as hazardous, toxic, pollutants or contaminants under any Environmental
Laws, including materials defined as “hazardous substances” under the
Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.
§§ 9601 et seq., and any radioactive substances or petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls or radon gas.

“Highly Confidential Information” has the meaning set forth in Section 6.4(c).

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

“Indebtedness” of a Person means (a) indebtedness for borrowed money;
(b) liabilities evidenced by bonds, debentures, notes, or other similar
instruments or debt securities; (c) liabilities under or in connection with
drawn letters of credit or bankers’ acceptances or similar items; (d)
liabilities under or in connection with interest rate swaps, collars, caps and
similar hedging arrangements; (e) liabilities under or in connection with off
balance sheet financing arrangements or synthetic leases; (f) the amount of all
capitalized lease obligations of such Person that are required to appear on a
balance sheet prepared in accordance with GAAP; and (g) any amounts guaranteed
in any manner by such Person (including guarantees in the form of an agreement
to repurchase or reimburse) or other amounts for which such Person is indirectly
liable as guarantor, surety or otherwise.

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

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

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

 

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“Indentures” means, collectively, the 2020 Indenture, the 2021 Indenture and the
2022 Indenture.

“Intellectual Property Rights” has the meaning set forth in Section 4.15.

“IRS” means the United States Internal Revenue Service.

“Joint Filing Party” has the meaning set forth in Section 6.13(c).

“Knowledge of the Company” means (i) the actual knowledge, after reasonable
inquiry of their direct reports, of the chief executive officer, chief financial
officer and chief operating officer and (ii) the actual knowledge of the
associate general counsel of the Company. As used herein, “actual knowledge”
means information that is personally known by the listed individual(s).

“Law” means any law (statutory or common), statute, regulation, rule, code or
ordinance enacted, adopted, issued or promulgated by any Governmental Entity.

“Legal Proceedings” has the meaning set forth in Section 4.13.

“Legend” has the meaning set forth in Section 6.12.

“Lien” means any lien, adverse claim, charge, option, right of first refusal,
servitude, security interest, mortgage, pledge, deed of trust, easement,
encumbrance, restriction on transfer, conditional sale or other title retention
agreement, defect in title, lien or judicial lien as defined in sections 101(36)
and (37) of the Bankruptcy Code or other restrictions of a similar kind.

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

“Material Adverse Effect” means any Event after September 30, 2016 which
individually, or together with all other Events, has had or would reasonably be
expected to have a material and adverse effect on (a) the business, assets,
liabilities, finances, properties, results of operations or condition (financial
or otherwise) of the Company and its Subsidiaries, taken as a whole, or (b) the
ability of the Company and its Subsidiaries, taken as a whole, to perform their
respective obligations under, or to consummate the transactions contemplated by,
the Transaction Agreements, including the Rights Offering, in each case, except
to the extent such Event results from, arises out of, or is attributable to, the
following (either alone or in combination): (i) any change after the date hereof
in global, national or regional political conditions (including acts of war,
terrorism or natural disasters) or in the general business, market, financial or
economic conditions affecting the industries, regions and markets in which the
Company and its Subsidiaries operate; (ii) any changes after the date hereof in
applicable Law or GAAP, or in the interpretation or enforcement thereof;
(iii) the execution, announcement or performance of this Agreement or the other
Transaction Agreements or the transactions contemplated hereby or thereby,
including, without limitation, the Restructuring Transactions; (iv) changes in
the market price or trading volume of the claims or equity or debt securities of
the Company or any of its Subsidiaries (but not the underlying facts giving rise
to such changes unless such facts are otherwise excluded pursuant to the clauses
contained in this definition); or

 

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(v) the filing or pendency of the Chapter 11 Cases or actions taken in
connection with the Chapter 11 Cases in compliance with the Bankruptcy Code and
Bankruptcy Rules; provided, that the exceptions set forth in clauses (i) and
(ii) of this definition shall not apply to the extent that such Event is
disproportionately adverse to the Company and its Subsidiaries, taken as a
whole, as compared to other companies comparable in size and scale to the
Company and its Subsidiaries operating in the industries in which the Company
and its Subsidiaries operate.

“Material Contracts” means (a) all “plans of acquisition, reorganization,
arrangement, liquidation or succession” and “material contracts” (as such terms
are defined in Items 601(b)(2) and 601(b)(10) of Regulation S-K under the
Exchange Act) to which the Company or any of its Subsidiaries is a party and (b)
any Contracts to which the Company or any of its Subsidiaries is a party that is
likely to reasonably involve consideration of more than $5,000,000, in the
aggregate, over a twelve-month period.

“Maximum Backstop Funding Amount” means, with respect to any Commitment Party,
the amount of cash equal to the product of (a) such Commitment Party’s Backstop
Commitment Percentage and (b) the Rights Offering Amount.

“Maximum Unsubscribed Shares Amount” means, with respect to any Commitment
Party, the amount of Class A Shares equal to the product of (a) such Commitment
Party’s Backstop Commitment Percentage and (b) the quotient of (i) the Rights
Offering Amount, divided by (ii) the Purchase Price.

“MNPI” has the meaning set forth in Section 6.4(c).

“Money Laundering Laws” has the meaning set forth in Section 4.26.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA to which the Company or any of its Subsidiaries or any ERISA Affiliate
(other than one considered an ERISA Affiliate only pursuant to subsection (m) or
(o) of Code Section 414) is making or accruing an obligation to make
contributions, has within any of the preceding six plan years made or accrued an
obligation to make contributions, or each such plan for which any such entity
has liability.

“Net Debt Amount” means the aggregate amount of Indebtedness of the Company and
its Subsidiaries, less the aggregate amount of Cash of the Company and its
Subsidiaries, in each case that are projected to exist as of the time
immediately following the Effective Date as provided in the Plan, provided, that
the calculation of the Net Debt Amount shall (i) be made no more than seven (7)
days prior to the Rights Offering Commencement Time and (ii) be reasonably
acceptable to PJT Partners LP in its capacity as financial advisor to the
Commitment Parties.

“New Purchaser” has the meaning set forth in Section 2.6(d).

“Non-PSA Breaching Commitment Parties” has the meaning set forth in Section
9.3(c).

“Notice of Proposed Deficiency” has the meaning set forth in Section 6.4(d).

 

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

“Outside Date” has the meaning set forth in Section 9.4(h).

“Party” has the meaning set forth in the Preamble.

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

“Permitted Liens” means (a) Liens for Taxes that (i) are not due and payable or
(ii) are being contested in good faith by appropriate proceedings and for which
adequate reserves have been made with respect thereto; (b) mechanics Liens and
similar Liens for labor, materials or supplies provided with respect to any Real
Property or personal property incurred in the ordinary course of business
consistent with past practice and as otherwise not prohibited under this
Agreement, for amounts that do not materially detract from the value of, or
materially impair the use of, any of the Real Property or personal property of
the Company or any of its Subsidiaries; (c) zoning, building codes and other
land use Laws regulating the use or occupancy of any Real Property or the
activities conducted thereon that are imposed by any Governmental Entity having
jurisdiction over such Real Property; provided, that no such zoning, building
codes and other land use Laws prohibit the use or occupancy of such Real
Property; (d) easements, covenants, conditions, restrictions and other similar
matters adversely affecting title to any Real Property and other title defects
that do not or would not materially impair the use or occupancy of such Real
Property or the operation of the Company’s or any of its Subsidiaries’ business;
(e) from and after the occurrence of the Effective Date, Liens granted in
connection with the Exit Facility; (f) Liens listed on Section 1.1 of the
Company Disclosure Schedules; and (g) Liens that, pursuant to the Confirmation
Order, will not survive beyond the Effective Date.

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

“Petition Date” has the meaning set forth in the Recitals.

“Plan” means the Debtors’ joint plan of reorganization, which shall provide for
the release and exculpation of each Commitment Party and its Affiliates and
Representatives, in each case solely in their capacity as such, from liability
in connection with the Chapter 11 Cases and the Transaction Agreements, shall be
consistent with the terms set forth in the Term Sheet and shall otherwise be in
form and substance reasonably satisfactory to the Requisite Commitment Parties
and the Debtors (as the same may be amended, supplemented or otherwise modified
from time to time in a manner that is reasonably satisfactory to the Requisite
Commitment Parties and the Company).

“Plan Solicitation Motion” means the Debtors’ motion for an Order, in form and
substance reasonably satisfactory to the Requisite Commitment Parties and the
Company and among other things, (a) approving the Disclosure Statement and the
Rights Offering Procedures; (b) establishing a voting record date for the Plan;
(c) approving solicitation packages and procedures for the distribution thereof;
(d) approving the forms of ballots; (e) establishing

 

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procedures for voting on the Plan; (f) establishing notice and objection
procedures for the confirmation of the Plan; and (g) establishing procedures for
the assumption and/or assignment of executory Contracts and unexpired leases
under the Plan.

“Plan Solicitation Order” means an Order entered by the Bankruptcy Court,
substantially in the form attached to the Plan Solicitation Motion, which Order
shall, among other things, seek approval of the Disclosure Statement and the
commencement of a solicitation of votes to accept or reject the Plan, and which
Order shall be in form and substance reasonably satisfactory to the Requisite
Commitment Parties and the Company.

“Pre-Closing Period” has the meaning set forth in Section 6.3.

“Prepetition Agent” means JPMorgan Chase Bank, N.A.

“PSA” means that certain Plan Support Agreement entered into by and among the
Company, the other Chaparral Parties, the Consenting Noteholders (as defined
therein) and the Consenting Prepetition Lenders (as defined therein), dated as
of November [•], 2016 (as amended, supplemented, restated or otherwise modified
from time to time in accordance with the terms thereof), including the exhibits
and schedules thereto.

“PSA Approval Order” means an Order entered by the Bankruptcy Court, in form and
substance reasonably satisfactory to the Requisite Commitment Parties and the
Company, approving the PSA and its execution by the Company.

“Purchase Price” means a price per share of Class A Shares equal to (a)(i) the
Enterprise Value minus (ii) the Net Debt Amount, multiplied by (b) the Discount
to Equity Value, and then divided by (c) the Total Outstanding Shares.

“Q3 Financial Statements” has the meaning set forth in Section 4.9(b).

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

“Registration Rights Agreement” has the meaning set forth in Section 6.7(a).

“Related Fund” means (i) any investment funds who are advised by the same
investment advisor and (ii) any investment advisor referred to in clause (i) of
this definition.

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

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

 

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“Release” means any spilling, leaking, seepage, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, emanating or migrating in, into, onto or through the environment.

“Reorganized Company Corporate Documents” means the Bylaws and the Certificate
of Incorporation.

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

“Reportable Event” means any reportable event as defined in Section 4043(c) of
ERISA or the regulations issued thereunder, other than those events as to which
the 30-day notice period referred to in Section 4043(c) of ERISA has been
waived, with respect to a Company Plan (other than a Company Plan maintained by
an ERISA Affiliate that is considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Section 414 of the Code).

“Reports” has the meaning set forth in Section 6.5(a).

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

“Requisite Commitment Parties” means the Commitment Parties holding at least a
majority of the aggregate Backstop Commitments as of the date on which the
consent or approval is solicited.

“Restructuring Transactions” has the meaning set forth in the PSA.

“Review Period” has the meaning set forth in Section 6.4(d).

“Rights Offering” means the rights offering that is backstopped by the
Commitment Parties in connection with the Restructuring Transactions
substantially on the terms reflected in the PSA and this Agreement, and in
accordance with the Rights Offering Procedures.

“Rights Offering Amount” means an aggregate amount equal to $50,000,000.

“Rights Offering Commencement Time” means the time and date set forth in the
Rights Offering Procedures under the definition of “Subscription Commencement
Date”.

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

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

“Rights Offering Procedures” means the procedures with respect to the Rights
Offering that are approved by the Bankruptcy Court pursuant to the BCA Approval
Order, which

 

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procedures shall be in form and substance substantially as set forth in Exhibit
A hereto, as may be amended or modified in a manner that is reasonably
acceptable to the Requisite Commitment Parties and the Company.

“Rights Offering Shares” means the Class A Shares (including all Unsubscribed
Shares purchased by the Commitment Parties pursuant to this Agreement)
distributed pursuant to and in accordance with the Rights Offering Procedures.

“Rights Offering Subscription Agent” means Kurtzman Carson Consultants LLC or
another subscription agent appointed by the Company and reasonably satisfactory
to the Requisite Commitment Parties.

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Significant Terms” means, collectively, (i) the definitions of Alternative
Transaction, Enterprise Value, Discount to Equity Value, Net Debt Amount,
Purchase Price, Requisite Commitment Parties, Significant Terms, (ii) the terms
of Section 2.3, Section 2.6, Section 2.7, Section 3.1, Section 3.2 and
Section 6.14.

“Subscription Amount” has the meaning set forth in Error! Reference source not
found.(ii).

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

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

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

“Subscription Rights” has the meaning set forth in the Recitals.

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

“Takeover Statute” means any restrictions contained in any “fair price,”
“moratorium,” “control share acquisition,” “business combination” or other
similar anti-takeover statute or regulation.

“Taxes” means all taxes, assessments, duties, levies or other similar mandatory
governmental charges paid to a Governmental Entity, including all federal,
state, local, foreign and other income, franchise, profits, gross receipts,
capital gains, capital stock, transfer, property, sales, use, value-added,
occupation, excise, severance, windfall profits, stamp, payroll, social

 

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security, withholding and other taxes, assessments, duties, levies or other
similar mandatory governmental charges of any kind whatsoever paid to a
Governmental Entity (whether payable directly or by withholding and whether or
not requiring the filing of a return), all estimated taxes, deficiency
assessments, additions to tax, penalties and interest thereon and shall include
any liability for such amounts as a result of being a member of a combined,
consolidated, unitary or affiliated group.

“Term Sheet” has the meaning set forth in the Recitals.

“Termination Date” has the meaning set forth in the PSA.

“Termination Fee” means $4,375,000.

“Total Outstanding Shares” means the total number of shares of the Company’s
Class A Shares and Class B Shares outstanding immediately following the Closing,
as provided in the Plan, including shares issued in satisfaction of Unsecured
Notes Claims and Rights Offering Shares, and shares issued in accordance with
this Agreement (including those issued as payment of the Commitment Premium) but
excluding any Excluded Shares.

“Transaction Agreements” has the meaning set forth in Section 4.2(a).

“Transfer” means sell, transfer, assign, pledge, hypothecate, participate,
donate or otherwise encumber or dispose of, directly or indirectly (including
through derivatives, options, swaps, pledges, forward sales or other
transactions in which any Person receives the right to own or acquire any
current or future interest in) a Subscription Right, an Unsecured Notes Claim, a
Rights Offering Share, or a share of Common Equity Interests.

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

“Unsecured Notes Claims” means, collectively, the 2020 Unsecured Notes Claims,
the 2021 Unsecured Notes Claims and the 2022 Unsecured Notes Claims.

“Unsubscribed Shares” means the Rights Offering Shares that have not been duly
purchased by the Rights Offering Participants in accordance with the Rights
Offering Procedures and the Plan.

“willful or intentional breach” has the meaning set forth in Section 9.6(a).

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

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

 

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

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

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

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

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

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

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

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

(i)    unless otherwise specified, references to a statute means such statute as
amended from time to time and includes any successor legislation thereto and any
rules or regulations promulgated thereunder in effect from time to time; and

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

ARTICLE II

BACKSTOP COMMITMENT

Section 2.1    The Rights Offering; Subscription Rights. (a) On and subject to
the terms and conditions hereof, including entry of the BCA Approval Order by
the Bankruptcy Court, the Company shall conduct the Rights Offering pursuant to
and in accordance with the Rights Offering Procedures, this Agreement and the
Plan.

(b)    Upon request from the Requisite Commitment Parties from time to time
prior to the Rights Offering Expiration Time (and any permitted extensions
thereto), the Company shall notify, or cause the Rights Offering Subscription
Agent to notify, the Commitment Parties of the aggregate number of Subscription
Rights known by the Company or the Rights Offering Subscription Agent to have
been exercised pursuant to the Rights Offering as of the most recent practicable
time before such request.

 

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Section 2.2    The Backstop Commitment. (a) On and subject to the terms and
conditions hereof, including entry of the Confirmation Order, each Commitment
Party agrees, severally and not jointly, to fully exercise all Subscription
Rights that are issued to it pursuant to the Rights Offering and duly purchase
all Rights Offering Shares issuable to it pursuant to such exercise, in
accordance with the Rights Offering Procedures and the Plan; provided that any
such Commitment Party that fails to fully comply with such obligations shall be
liable to the Company and each non-Defaulting Commitment Party as a result of
such failure to comply.

(b)    On and subject to the terms and conditions hereof, including entry of the
Confirmation Order, each Commitment Party agrees, severally and not jointly, to
purchase, and the Company agrees to sell to such Commitment Party, on the
Closing Date for the Purchase Price, the number of Unsubscribed Shares equal to
(a) such Commitment Party’s Backstop Commitment Percentage multiplied by (b) the
aggregate number of Unsubscribed Shares, rounded among the Commitment Parties
solely to avoid fractional shares as the Commitment Parties may determine in
their sole discretion. The obligations of the Commitment Parties to purchase
such Unsubscribed Shares as described in this Section 2.2(b) shall be referred
to as the “Backstop Commitment”.

Section 2.3    Commitment Party Default. (a) Upon the occurrence of a Commitment
Party Default, the Commitment Parties and their respective Related Funds (other
than any Defaulting Commitment Party) shall have the right, but not the
obligation, within five (5) Business Days after receipt of written notice from
the Company to all Commitment Parties of such Commitment Party Default, which
notice shall be given promptly following the occurrence of such Commitment Party
Default and to all Commitment Parties substantially concurrently (such five (5)
Business Day period, the “Commitment Party Replacement Period”), to make
arrangements for one or more of the Commitment Parties (other than any
Defaulting Commitment Party) to purchase all or any portion of the Available
Shares (such purchase, a “Commitment Party Replacement”) on the terms and
subject to the conditions set forth in this Agreement and in such amounts as may
be agreed upon by all of the Commitment Parties electing to purchase all or any
portion of the Available Shares, or, if no such agreement is reached within the
Commitment Party Replacement Period, the division of the purchased Available
Shares among such electing Commitment Parties shall be based upon the relative
applicable Backstop Commitment Percentages of any such electing Commitment
Parties (other than any Defaulting Commitment Party) (such Commitment Parties,
the “Replacing Commitment Parties”). Any such Available Shares purchased by a
Replacing Commitment Party shall be included, among other things, in the
determination of (x) the Unsubscribed Shares to be purchased by such Replacing
Commitment Party for all purposes hereunder, (y) the Backstop Commitment
Percentage of such Replacing Commitment Party for all purposes hereunder and (z)
the Backstop Commitment of such Replacing Commitment Party for purposes of the
definition of Requisite Commitment Parties. If a Commitment Party Default
occurs, the Outside Date shall be delayed only to the extent necessary to allow
for the Commitment Party Replacement to be completed within the Commitment Party
Replacement Period.

 

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(b)    The amount of the Commitment Premium payable by the Company to a
Replacing Commitment Party with respect to any Available Shares purchased by
such Replacing Commitment Party in a Commitment Party Replacement pursuant to
Error! Reference source not found. shall be multiplied by 150%.

(c)    Notwithstanding anything in this Agreement to the contrary, if a
Commitment Party is a Defaulting Commitment Party, it shall not be entitled to
any of the Commitment Premium, Termination Fee, expense reimbursement applicable
to such Defaulting Commitment Party (including the Expense Reimbursement) or
indemnification provided, or to be provided, under or in connection with this
Agreement.

(d)    Nothing in this Agreement shall be deemed to require a Commitment Party
to purchase more than its Backstop Commitment Percentage of the Unsubscribed
Shares.

(e)    For the avoidance of doubt, notwithstanding anything to the contrary set
forth in Section 9.6, but subject to Section 10.10, no provision of this
Agreement shall relieve any Defaulting Commitment Party from any liability
hereunder, or limit the availability of the remedies set forth in Section 10.9,
in connection with any such Defaulting Commitment Party’s Commitment Party
Default.

Section 2.4    Subscription Escrow Account Funding. (a) No later than the fifth
(5th) Business Day following the Rights Offering Expiration Time, the Rights
Offering Subscription Agent shall deliver to each Commitment Party a written
notice (the “Funding Notice”) of:

(i)    the number of Rights Offering Shares elected to be purchased by the
Rights Offering Participants and the aggregate Purchase Price therefor;

(ii)    the number of Rights Offering Shares to be issued and sold by the
Company to such Commitment Party and the aggregate Purchase Price therefor (the
“Subscription Amount”);

(iii)    the aggregate number of Unsubscribed Shares, if any, and the aggregate
Purchase Price required for the purchase thereof;

(iv)    the number of Unsubscribed Shares (based upon such Commitment Party’s
Backstop Commitment Percentage) to be issued and sold by the Company to such
Commitment Party (as it relates to each Commitment Party, such Commitment
Party’s “Unsubscribed Share Amount”) and the aggregate Purchase Price therefor
(as it relates to each Commitment Party, such Commitment Party’s “Funding
Amount”); and

(v)    the account information (including wiring instructions) for the escrow
account to which such Commitment Party shall deliver and pay the Subscription
Amount and the Funding Amount (the “Subscription Escrow Account”).

The Company shall promptly direct the Rights Offering Subscription Agent to
provide any written backup, information and documentation relating to the
information contained in the applicable Funding Notice as any Commitment Party
may reasonably request.

 

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(b)    No earlier than the fourth (4th) Complete Business Day following receipt
of the Funding Notice and no later than two (2) Business Days prior to the
Effective Date (such date, the “Subscription Escrow Funding Date”), each
Commitment Party shall deliver and pay its Funding Amount by wire transfer in
immediately available funds in U.S. dollars into the Subscription Escrow Account
in satisfaction of such Commitment Party’s Backstop Commitment, provided that,
notwithstanding the foregoing, with respect to any Commitment Party, the Company
may consent to such Commitment Party delivering its Funding Amount on the date
is that is one (1) Business Day prior to the Effective Date (such date, the
“Extended Funding Date”) and in such case the Subscription Escrow Funding Date
for such Commitment Party shall be deemed to be the Extended Funding Date for
purposes of the definition of Commitment Party Default. The Subscription Escrow
Account shall be established with an escrow agent reasonably satisfactory to the
Requisite Commitment Parties and the Company pursuant to an escrow agreement in
form and substance reasonably satisfactory to the Requisite Commitment Parties
and the Company (the “Subscription Escrow Agreement”). If this Agreement is
terminated in accordance with its terms, the funds held in the Subscription
Escrow Account shall be released, and each Commitment Party shall receive from
the Subscription Escrow Account the cash amount actually funded to the
Subscription Escrow Account by such Commitment Party, without any interest,
promptly following such termination. Each Commitment Party shall have the option
to fund its Maximum Backstop Funding Amount in an escrow account at any time
prior to the Rights Offering Commencement Time, provided that, on the Closing
Date, to the extent that such Commitment Party’s Maximum Backstop Funding Amount
is in excess of such Commitment Party’s Funding Amount, such excess funds shall
be returned to such Commitment Party.

Section 2.5    Closing. (a) Subject to Article VII, unless otherwise mutually
agreed in writing between the Company and the Requisite Commitment Parties, the
closing of the Backstop Commitments (the “Closing”) shall take place at the
offices of Milbank, Tweed, Hadley & McCloy LLP, 28 Liberty Street, New York, New
York 10005, at 11:00 a.m., New York City time, within three (3) Business Days of
the date on which all of the conditions set forth in Article VII shall have been
satisfied or waived in accordance with this Agreement (other than conditions
that by their terms are to be satisfied at the Closing, but subject to the
satisfaction or waiver of such conditions). The date on which the Closing
actually occurs shall be referred to herein as the “Closing Date”.

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

(c)    At the Closing, issuance of the Unsubscribed Shares will be made by the
Company to each Commitment Party (or to its designee in accordance with Section
2.7) against payment of such Commitment Party’s Funding Amount, in satisfaction
of such Commitment Party’s Backstop Commitment. Unless a Commitment Party
requests delivery of a physical stock certificate, the entry of any Unsubscribed
Shares to be delivered pursuant to this Section 2.5(c) into the account of a
Commitment Party through the facilities of The Depository Trust Company and
pursuant to the Company’s book entry procedures and delivery to such Commitment
Party of an account statement reflecting the book entry of such Unsubscribed
Shares shall be deemed delivery of such Unsubscribed Shares for purposes of this
Agreement. Notwithstanding anything to the contrary in this Agreement, all
Unsubscribed Shares will be delivered with all issue, stamp, transfer, sales and
use, or similar transfer Taxes or duties that are due and payable (if any) in
connection with such delivery duly paid by the Company.

 

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Section 2.6    Transfer of Backstop Commitments. (a) Other than as expressly set
forth in this Section 2.6, no Commitment Party shall be permitted to Transfer
its Backstop Commitment.

(b)    Subject to Section 2.6(e), each Commitment Party shall have the right to
Transfer all or any portion of its Backstop Commitment to any creditworthy
Affiliate or Related Fund (other than any portfolio company of such Commitment
Party or its Affiliates) (each, a “Related Purchaser”), provided, that such
Commitment Party shall (i) provide written notice to the Company of such
Transfer as far in advance thereof as practicable and (ii) deliver to the
Company and the Rights Offering Subscription Agent a joinder to this Agreement,
substantially in the form attached hereto as Exhibit B, executed by such
Commitment Party and such Related Purchaser.

(c)    Subject to Section 2.6(e), each Commitment Party shall have the right to
Transfer all or any portion of its Backstop Commitment to any other Commitment
Party or such other Commitment Party’s Related Purchaser (each, an “Existing
Commitment Party Purchaser”), provided, that (i) such Transfer shall have been
consented to by the Requisite Commitment Parties (such consent shall not to be
unreasonably withheld or conditioned and shall be deemed to have been given
after two (2) Complete Business Days following notification in writing to
Milbank, Tweed, Hadley & McCloy LLP and the Company of a proposed Transfer by
such Commitment Party), (ii) such Existing Commitment Party Purchaser or such
Existing Commitment Party Purchaser’s Affiliate or Related Fund shall have been
a Commitment Party as of immediately prior to such Transfer and (iii)(1) to the
extent such Existing Commitment Party Purchaser is not a Commitment Party
hereunder, such Commitment Party shall deliver to the Company and the Rights
Offering Subscription Agent a joinder to this Agreement, substantially in the
form attached hereto as Exhibit C-1, executed by such Commitment Party and such
Existing Commitment Party Purchaser and (2) to the extent such Existing
Commitment Party Purchaser is already a Commitment Party hereunder, such
Commitment Party shall deliver to the Company and the Rights Offering
Subscription Agent an amendment to this Agreement, substantially in the form
attached hereto as Exhibit C-2, executed by such Commitment Party and such
Existing Commitment Party Purchaser.

(d)    Subject to Section 2.6(e), each Commitment Party shall have the right to
Transfer all or any portion of its Backstop Commitment to any Person that is not
an Existing Commitment Party Purchaser (each of the Persons to whom a Transfer
is made, a “New Purchaser”), provided, that (i) such Transfer shall have been
consented to by the Requisite Commitment Parties (such consent shall not be
unreasonably withheld or conditioned and shall be deemed to have been given
after two (2) Complete Business Days following notification in writing to
Milbank, Tweed, Hadley & McCloy LLP of a proposed Transfer by such Commitment
Party); (ii) such Transfer shall have been consented to by the Company in
writing (such consent shall not be unreasonably withheld or conditioned and
shall be deemed to have been given after two (2) Business Days following written
notification of a proposed Transfer by such Commitment Party to the Company,
unless any written objection is provided by the Company to such Commitment Party
during such two Business Day period), and (iii) such Commitment Party

 

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shall deliver to the Company and the Rights Offering Subscription Agent a
joinder to this Agreement, substantially in the form attached hereto as Exhibit
D executed by such Commitment Party, such New Purchaser and the Company.

(e)    No Commitment Party shall have the right to Transfer all or any portion
of its Backstop Commitment to the Company or any of the Company’s Affiliates. No
Commitment Party shall have the right to Transfer all or any portion of its
Backstop Commitment to any other Person unless it also agrees to (and does)
concurrently Transfer a corresponding number and amount of the Unsecured Notes
Claims to such Person, provided that, the Company may consent to Transfers of a
Commitment Party’s Backstop Commitment absent a simultaneous transfer of a
corresponding amount of the Unsecured Notes Claims. No Commitment Party shall
have the right to Transfer all or any portion of its Backstop Commitment to any
other Person following receipt of the Funding Notice pursuant to, and in
accordance with, Section 2.4. Any Commitment Party seeking to Transfer its
Backstop Commitment to any other Person must provide the Company, the
Subscription Agent and Milbank, Tweed, Hadley & McCloy LLP with prior written
notice of such proposed Transfer no less than two (2) Complete Business Days
prior to the date of the consummation of such proposed Transfer. Any Transfer
made (or attempted to be made) in violation of this Agreement shall be deemed
null and void ab initio and of no force or effect, regardless of any prior
notice provided to the Parties or any Commitment Party, and shall not create (or
be deemed to create) any obligation or liability of any other Commitment Party
or any Debtor to the purported transferee or limit, alter or impair any
agreements, covenants, or obligations of the proposed transferor under this
Agreement. After the Closing Date, nothing in this Agreement shall limit or
restrict in any way the ability of any Commitment Party (or any permitted
transferee thereof) to Transfer any of the shares of the Common Equity Interests
or any interest therein.

Section 2.7    Designation Rights. Each Commitment Party shall have the right to
designate by written notice to the Company no later than two (2) Business Days
prior to the Closing Date that some or all of the Unsubscribed Shares that it is
obligated to purchase hereunder be issued in the name of, and delivered to a
Related Purchaser of such Commitment Party upon receipt by the Company of
payment therefor in accordance with the terms hereof, which notice of
designation shall (i) be addressed to the Company and signed by such Commitment
Party and each such Related Purchaser, (ii) specify the number of Unsubscribed
Shares to be delivered to or issued in the name of such Related Purchaser and
(iii) contain a confirmation by each such Related Purchaser of the accuracy of
the representations set forth in Sections 5.4 through 5.6 as applied to such
Related Purchaser; provided, that no such designation pursuant to this
Section 2.7 shall relieve such Commitment Party from its obligations under this
Agreement.

Section 2.8    Consent to Transfers of Subscription Rights by Commitment
Parties. The Company hereby consents to any transfer of the Subscription Rights
held by any Commitment Party to any such Commitment Party’s Related Purchaser,
which, for the avoidance of doubt, shall not require an accompanying transfer of
such Commitment Party’s interest in the corresponding Unsecured Notes Claims.

 

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ARTICLE III

BACKSTOP COMMITMENT PREMIUM AND EXPENSE REIMBURSEMENT

Section 3.1    Premium Payable by the Company. Subject to Section 3.2, as
consideration for the Backstop Commitment and the other agreements of the
Commitment Parties in this Agreement, the Debtors shall pay or cause to be paid
a nonrefundable aggregate premium in an amount equal to $4,375,000 (the
“Commitment Premium”). The Commitment Premium shall be payable, in accordance
with Section 3.2, to the Commitment Parties (including any Replacing Commitment
Party, but excluding any Defaulting Commitment Party) or their designees in
proportion to their respective Backstop Commitment Percentages at the time the
payment of the Commitment Premium is made.

The provisions for the payment of the Commitment Premium, the Termination Fee
and Expense Reimbursement, and the indemnification provided herein, are an
integral part of the transactions contemplated by this Agreement and without
these provisions the Commitment Parties would not have entered into this
Agreement.

Section 3.2    Payment of Premium. The Commitment Premium shall be fully earned,
nonrefundable and non-avoidable upon entry of the BCA Approval Order and shall
be paid by the Debtors, free and clear of any withholding or deduction for any
applicable Taxes, on the Closing Date as set forth above. For the avoidance of
doubt, to the extent payable in accordance with the terms of this Agreement, the
Commitment Premium will be payable regardless of the amount of Unsubscribed
Shares (if any) actually purchased. The Company shall satisfy its obligation to
pay the Commitment Premium on the Closing Date, in lieu of any cash payment, by
issuing the number of additional Class A Shares (rounding down to the nearest
whole share solely to avoid fractional shares) to each Commitment Party equal to
such Commitment Party’s Commitment Premium Share Amount; provided, that if the
Closing does not occur, the Termination Fee shall be payable (in lieu of the
Commitment Premium) in cash, to the extent provided in (and in accordance with)
Section 9.6. The Commitment Premium and the Termination Fee shall, pursuant to
the BCA Approval Order, constitute allowed administrative expenses of the
Debtors’ estate under sections 503(b) and 507 of the Bankruptcy Code.

Section 3.3    Expense Reimbursement. (a) Until the earlier to occur of (i) the
Closing and (ii) the termination of this Agreement in accordance with its terms,
the Debtors agree to pay in accordance with Section 3.3(b): (A) the reasonable
and documented out-of-pocket fees and expenses (including reasonable travel
costs and expenses) of Milbank, Tweed, Hadley & McCloy LLP as primary counsel to
the Commitment Parties, one local counsel, financial advisors, and consultants
and other professionals for specialized areas of expertise as circumstances
warrant retained by the Commitment Parties and any other advisors or consultants
as may be reasonably determined by the Commitment Parties, in consultation with
the Company, in each case that have been and are actually incurred in connection
with (x) the negotiation, preparation and implementation of the Transaction
Agreements and the other agreements and transactions contemplated thereby and
(y) the Restructuring Transactions and the Chapter 11 Cases; (B) up to $350,000
(in the aggregate) of the reasonable and documented fees and out-of-pocket
expenses of the Commitment Parties, including the reasonable and documented
out-of-pocket fees and expenses of professionals, including consultants,
retained by each Commitment

 

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Party as circumstances warrant as may be reasonably determined by such
Commitment Party; (C) all filing fees, if any, required by the HSR Act or any
other Antitrust Law in connection with the transactions contemplated by this
Agreement and all reasonable and documented out-of-pocket expenses related
thereto; and (D) all reasonable and documented out-of-pocket fees and expenses
incurred in connection with any required regulatory filings in connection with
the transactions contemplated by this Agreement (including, without limitation,
filings done on Schedule 13D, Schedule 13G, Form 3 or Form 4, in each case,
promulgated under the Exchange Act), in each case, that have been paid or are
payable by the Commitment Parties (such payment obligations set forth in clauses
(A), (B), (C) and (D) above, collectively, the “Expense Reimbursement”). The
Expense Reimbursement shall, pursuant to the BCA Approval Order, constitute
allowed administrative expenses of the Debtors’ estate under sections 503(b)
and 507 of the Bankruptcy Code.

(b)    The Expense Reimbursement accrued through the date on which the BCA
Approval Order is entered shall be paid within three (3) Business Days of the
Company’s receipt of invoices therefor. The Expense Reimbursement accrued
thereafter shall be payable by the Debtors within five (5) Business Days after
receipt of monthly invoices therefor; provided, that the Debtors’ final payment
shall be made contemporaneously with the Closing or the termination of this
Agreement, as applicable, pursuant to Article IX.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as set forth in the corresponding section of the Company Disclosure
Schedules, the Debtors, jointly and severally, hereby represent and warrant to
the Commitment Parties (unless otherwise set forth herein, as of the date of
this Agreement and as of the Closing Date) as set forth below.

Section 4.1    Organization and Qualification. The Company and each of its
Subsidiaries (i) is a duly organized and validly existing corporation, limited
liability company or limited partnership, as the case may be, and, if
applicable, in good standing (or the equivalent thereof) under the Laws of the
jurisdiction of its incorporation or organization (except where the failure to
be in good standing (or the equivalent) would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect), (ii) has the
corporate or other applicable power and authority to own its property and assets
and to transact the business in which it is currently engaged and presently
proposes to engage and (iii) is duly qualified and is authorized to do business
and is in good standing in each jurisdiction where the conduct of its business
as currently conducted requires such qualifications, except in the cases of
clauses (ii) and (iii) of this Section 4.1 where the failure to have such power
and authority or qualification would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

Section 4.2    Corporate Power and Authority. Each of the Company and the other
Chaparral Parties has the requisite corporate power and authority
(i) (A) subject to entry of the Confirmation Order, to enter into, execute and
deliver this Agreement and to perform the BCA Approval Obligations and
(B) subject to entry of the Confirmation Order, to perform each

 

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of its other obligations hereunder and (ii) subject to entry of the Plan
Solicitation Order and the Confirmation Order, to consummate the transactions
contemplated herein and in the Plan, to enter into, execute and deliver the
Registration Rights Agreement and all other agreements to which it will be a
party as contemplated by this Agreement and the Plan (this Agreement, the Plan,
the Disclosure Statement, the PSA, the Registration Rights Agreement, the Exit
Facility and any documentation or agreements relating to the Registration Rights
Agreement and the Exit Facility and such other agreements and any Plan
supplements or documents referred to herein or therein, collectively, the
“Transaction Agreements”) and to perform its obligations under each of the
Transaction Agreements (other than this Agreement). Subject to the receipt of
the foregoing Orders, as applicable, the execution and delivery of this
Agreement and each of the other Transaction Agreements and the consummation of
the transactions contemplated hereby and thereby have been or will be duly
authorized by all requisite corporate action on behalf of the Company and the
other Chaparral Parties, as applicable, and no other corporate proceedings on
the part of the Company or the other Chaparral Parties are or will be necessary
to authorize this Agreement or any of the other Transaction Agreements or to
consummate the transactions contemplated hereby or thereby.

Section 4.3    Execution and Delivery; Enforceability. Subject to entry of the
BCA Approval Order, this Agreement will have been, and subject to entry of the
Plan Solicitation Order and the Confirmation Order, each other Transaction
Agreement will be, duly executed and delivered by the Company and each of the
other Debtors party thereto. Upon entry of the BCA Approval Order and assuming
due and valid execution and delivery hereof by the Commitment Parties, the BCA
Approval Obligations will constitute the valid and legally binding obligations
of the Company and the other Chaparral Parties enforceable against the Company
and the other Chaparral Parties in accordance with their respective terms. Upon
entry of the Confirmation Order and assuming due and valid execution and
delivery of this Agreement and the other Transaction Agreements by the
Commitment Parties, each of the obligations hereunder and thereunder will
constitute the valid and legally binding obligations of the Company and the
other Chaparral Parties, enforceable against the Company and, to the extent
applicable, the other Chaparral Parties, in accordance with their respective
terms.

Section 4.4    Authorized and Issued Capital Stock. (a) On the Closing Date,
(i) the total issued capital stock of the Company will consist of the Aggregate
Pre-Closing Equity Interests, plus the Class A Shares issued under the Rights
Offering, plus the Class A Shares in respect of the Commitment Premium pursuant
to Article III, plus the Excluded Shares, (ii) no shares of Common Equity
Interests will be held by the Company in its treasury, (iii) no shares of Common
Equity Interests will be reserved for issuance upon exercise of stock options
and other rights to purchase or acquire shares of Common Equity Interests
granted in connection with any employment arrangement entered into in accordance
with Section 6.3, and (iv) no warrants to purchase shares of Common Equity
Interests, other than the Excluded Warrants, will be issued and outstanding.

(b)    As of the Closing Date, all issued and outstanding shares of Common
Equity Interests will have been duly authorized and validly issued and will be
fully paid and non-assessable, and will not be subject to any preemptive rights.

 

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(c)    Except as set forth in this Section 4.4, as of the Closing Date, no
shares of capital stock or other equity securities or voting interest in the
Company will have been issued, reserved for issuance or outstanding.

(d)    Except as described in this Section 4.4 and except as set forth in the
Registration Rights Agreement, the Reorganized Company Corporate Documents or
the Exit Facility, upon the Closing, neither the Company nor any of its
Subsidiaries will be party to or otherwise bound by or subject to any
outstanding option, warrant, call, right, security, commitment, Contract,
arrangement or undertaking (including any preemptive right) that (i) obligates
the Company or any of its Subsidiaries to issue, deliver, sell or transfer, or
repurchase, redeem or otherwise acquire, or cause to be issued, delivered, sold
or transferred, or repurchased, redeemed or otherwise acquired, any shares of
the capital stock of, or other equity or voting interests in, the Company or any
of its Subsidiaries or any security convertible or exercisable for or
exchangeable into any capital stock of, or other equity or voting interest in,
the Company or any of its Subsidiaries, (ii) obligates the Company or any of its
Subsidiaries to issue, grant, extend or enter into any such option, warrant,
call, right, security, commitment, Contract, arrangement or undertaking,
(iii) restricts the Transfer of any shares of capital stock of the Company or
any of its Subsidiaries (other than any restrictions included in the Exit
Facility or any corresponding pledge agreement) or (iv) relates to the voting of
any shares of capital stock of the Company.

Section 4.5    Issuance. Subject to entry of the BCA Approval Order and the
Confirmation Order, the shares of Common Equity Interests, including the shares
of Common Equity Interests to be issued in connection with the consummation of
the Rights Offering and pursuant to the terms hereof, will, when issued and
delivered on the Closing Date in exchange for the aggregate Purchase Price
therefor, be duly and validly authorized, issued and delivered and shall be
fully paid and non-assessable, and free and clear of all Taxes, Liens (other
than Permitted Liens and Transfer restrictions imposed hereunder or under the
Reorganized Company Corporate Documents or by applicable Law), preemptive
rights, subscription and similar rights (other than any rights set forth in the
Reorganized Company Corporate Documents, and the Registration Rights Agreement).

Section 4.6    No Conflict. Assuming the consents described in clauses (a)
through (f) of Section 4.7 are obtained, the execution and delivery by the
Company and, if applicable, its Subsidiaries, of this Agreement, the Plan and
the other Transaction Agreements, the compliance by the Company and, if
applicable, its Subsidiaries, with the provisions hereof and thereof and the
consummation of the transactions contemplated herein and therein will not (a)
conflict with, or result in a breach, modification or violation of, any of the
terms or provisions of, or constitute a default under (with or without notice or
lapse of time, or both), or result, except to the extent contemplated by the
Plan, in the acceleration of, or the creation of any Lien under, or cause any
payment or consent to be required under any Contract to which the Company or any
of its Subsidiaries will be bound as of the Closing Date after giving effect to
the Plan or to which any of the property or assets of the Company or any of its
Subsidiaries will be subject as of the Closing Date after giving effect to the
Plan, (b) result in any violation of the provisions of the Reorganized Company
Corporate Documents or any of the organization documents of any of the Company’s
Subsidiaries, or (c) result in any violation of any Law or Order applicable to
the Company or any of its Subsidiaries or any of their properties, except in
each of the cases described in clauses (a) and (c) of this Section 4.6, which
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

 

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Section 4.7    Consents and Approvals. No consent, approval, authorization,
order, registration or qualification of or with any Governmental Entity having
jurisdiction over the Company or any of its Subsidiaries or any of their
respective properties (each, an “Applicable Consent”) is required for the
execution and delivery by the Company and, to the extent relevant, its
Subsidiaries, of this Agreement, the Plan and the other Transaction Agreements,
the compliance by the Company and, to the extent relevant, its Subsidiaries with
the provisions hereof and thereof and the consummation of the transactions
contemplated herein and therein, except for (a) the entry of the BCA Approval
Order authorizing the Company and the other Chaparral Parties to execute and
deliver this Agreement and perform the BCA Approval Obligations, (b) the entry
of the Confirmation Order authorizing the Company and the other Chaparral
Parties to perform each of their respective obligations hereunder, (c) the entry
of the Confirmation Order, (d) the entry of the Plan Solicitation Order, (e)
entry by the Bankruptcy Court, or any other court of competent jurisdiction, of
orders as may be necessary in the Chapter 11 Cases from time to time,
(f) filings, notifications, authorizations, approvals, consents, clearances or
termination or expiration of all applicable waiting periods under any Antitrust
Laws in connection with the transactions contemplated by this Agreement,
(g) such consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or “Blue Sky” Laws in connection with the
purchase of the Unsubscribed Shares by the Commitment Parties, the issuance of
the Subscription Rights, the issuance of the Rights Offering Shares pursuant to
the exercise of the Subscription Rights, the issuance of Common Equity Interests
in satisfaction of Unsecured Notes Claims pursuant to the Plan and the issuance
of Class A Shares as payment of the Commitment Premium and (h) any Applicable
Consents that, if not made or obtained, would not reasonably be expected to have
a Material Adverse Effect.

Section 4.8    Arm’s-Length. The Company and the other Chaparral Parties
acknowledge and agree that (a) each of the Commitment Parties is acting solely
in the capacity of an arm’s-length contractual counterparty to the Company and
the other Chaparral Parties with respect to the transactions contemplated hereby
(including in connection with determining the terms of the Rights Offering) and
not as a financial advisor or a fiduciary to, or an agent of, the Company or any
of its Subsidiaries and (b) no Commitment Party is advising the Company or any
of its Subsidiaries as to any legal, tax, investment, accounting or regulatory
matters in any jurisdiction.

Section 4.9    Financial Statements. (a) The audited consolidated balance sheets
of the Company as at December 31, 2015 and the related consolidated statements
of operations and of cash flows for the fiscal year then ended, accompanied by a
report thereon by Grant Thornton LLP (collectively, the “Financial Statements”),
present fairly, in all material respects, the consolidated financial condition
of the Company as at such date, and the consolidated results of its operations
and its consolidated cash flows for the fiscal year then ended. All such
Financial Statements, including the related schedules and notes thereto, have
been prepared, in all material respects, in accordance with U.S. generally
accepted accounting principles (“GAAP”) applied consistently throughout the
periods involved (except as disclosed therein).

 

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(b)    The unaudited consolidated balance sheet of the Company as at September
30, 2016 and the related consolidated statements of operations and of cash flows
(collectively, the “Q3 Financial Statements”), that the Company filed with the
SEC shall present fairly, in all material respects, the consolidated financial
condition of the Company as at September 30, 2016, and the consolidated results
of its operations and its consolidated cash flows for the quarter then ended.

Section 4.10    Company SEC Documents and Disclosure Statements Since January 1,
2014, the Company has filed all required reports, schedules, forms and
statements with the SEC (the “Company SEC Documents”). As of their respective
dates, and giving effect to any amendments or supplements thereto filed prior to
the date of this Agreement, each of the Company SEC Documents that have been
filed as of the date of this Agreement complied in all material respects with
the requirements of the Securities Act or the Exchange Act applicable to such
Company SEC Documents. The Company has filed with the SEC all Material Contracts
that are required to be filed as exhibits to the Company SEC Documents that have
been filed as of the date of this Agreement. No Company SEC Document that has
been filed prior to the date of this Agreement, after giving effect to any
amendments or supplements thereto and to any subsequently filed Company SEC
Documents, in each case filed prior to the date of this Agreement, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. The Disclosure
Statement as approved by the Bankruptcy Court will conform in all material
respects with section 1125 of the Bankruptcy Code.

Section 4.11    Absence of Certain Changes. Since September 30, 2016, no event,
development, occurrence or change has occurred or exists that constitutes,
individually or in the aggregate, a Material Adverse Effect.

Section 4.12    No Violation; Compliance with Laws (i) The Company is not in
violation of its charter or Bylaws and (ii) no Subsidiary of the Company is in
violation of its respective charter or Bylaws or similar organizational document
in any material respect. Neither the Company nor any of its Subsidiaries is or
has been at any time since January 1, 2014 in violation of any applicable Law or
Order, except for any such violations that have not had and would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.

Section 4.13    Legal Proceedings. Other than the Chapter 11 Cases, any
adversary proceedings or contested motions commenced in connection therewith and
any Legal Proceedings (as defined below) set forth on Schedule 4.13, there are
no material legal, governmental, administrative, judicial or regulatory
investigations, audits, actions, suits, claims, arbitrations, demands, demand
letters, claims, notices of noncompliance or violations, or proceedings (“Legal
Proceedings”) pending or, to the Knowledge of the Company, threatened to which
the Company or any of its Subsidiaries is a party or to which any property of
the Company or any of its Subsidiaries is the subject, in each case that in any
manner draws into question the validity or enforceability of this Agreement, the
Plan or the other Transaction Agreements or that would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.

 

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Section 4.14    Labor Relations. Except as would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect: (a) there are
no strikes or other labor disputes pending or, to the Knowledge of the Company,
threatened against the Company or any of its Subsidiaries; and (b) all material
payments due from the Company or any of its Subsidiaries or for which any claim
may be made against the Company or any of its Subsidiaries on account of wages
and employee health and welfare insurance and other benefits have been paid or
accrued as a liability on the books of the Company or such Subsidiaries to the
extent required by GAAP. Except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, the consummation of
the transactions contemplated by the Transaction Agreements will not give rise
to a right of termination or right of renegotiation on the part of any union
under any material collective bargaining agreement to which the Company or any
of its Subsidiaries (or any predecessor) is a party or by which the Company or
any of its Subsidiaries (or any predecessor) is bound.

Section 4.15    Intellectual Property. Except as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect,
(a) each of the Company and its Subsidiaries owns, or possesses the right to
use, all of the patents, patent rights, trademarks, service marks, trade names,
copyrights, and domain names (collectively, “Intellectual Property Rights”) that
are necessary for the operation of their respective businesses, (b) to the
Knowledge of the Company, none of the Company or any of its Subsidiaries nor any
Intellectual Property Right is interfering with, infringing upon,
misappropriating or otherwise violating in any material respect any valid
Intellectual Property Rights of any Person, and (c) no claim or litigation
regarding any of the foregoing that is (or would be) reasonably expected to have
a Material Adverse Effect is pending or, to the Knowledge of the Company,
threatened.

Section 4.16    Title to Real and Personal Property. (a) Real Property. Each of
the Company and its Subsidiaries has valid fee simple title to, or valid
leasehold interests in, or easements or other limited property interests in all
easements, rights of way, and other Real Property interests relating to the
Company or its Subsidiaries’ operations, and has valid title to its personal
property and assets, in each case, except for Permitted Liens and except for
defects in title that do not materially interfere with its ability to conduct
its business as currently conducted or to utilize such properties and assets for
their respective intended purposes and except where the failure to have such
valid title would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

(b)    Leased Real Property. Each of the Company and its Subsidiaries is in
compliance with all obligations under all leases to which it is a party that
have not been rejected in the Chapter 11 Cases, except where the failure to
comply would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, and all such leases are in full force and
effect, except for leases in respect of which the failure to be in full force
and effect would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. Each of the Company and its Subsidiaries
enjoys peaceful and undisturbed possession under all such leases, other than
leases in respect of which the failure to enjoy peaceful and undisturbed
possession of the Real Property thereunder would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.

 

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Section 4.17    No Undisclosed Relationships. Other than Contracts other direct
or indirect relationships between or among the Company and its Subsidiaries or
between the Subsidiaries of the Company and each other, there are no Contracts
or other direct or indirect relationships existing as of the date hereof between
or among the Company or any of its Subsidiaries, on the one hand, and any
director, officer or greater than five percent (5%) stockholder of the Company
or any of its Subsidiaries, on the other hand, that is required by the Exchange
Act to be described in the Company’s filings with the SEC and that is not so
described, except for the transactions contemplated by this Agreement. Any
material Contract existing as of the date hereof between or among the Company or
any of its Subsidiaries, on the one hand, and any director, officer or greater
than five percent (5%) stockholder of the Company or any of its Subsidiaries, on
the other hand, that is required by the Exchange Act to be described in the
Company’s filings with the SEC is filed as an exhibit to, or incorporated by
reference as indicated in, the Annual Report on Form 10-K for the year ended
December 31, 2015 that the Company filed on March 30, 2016 or another Company
SEC Document filed between March 30, 2016 and the date hereof.

Section 4.18    Licenses and Permits. The Company and its Subsidiaries possess
all licenses, certificates, permits and other authorizations issued by, and have
made since January 1, 2014, in all material respects, all declarations and
filings with, the appropriate Governmental Entities, in each case, that are
necessary for the ownership or lease of their respective properties and the
conduct of the business of the Company and its Subsidiaries, except where the
failure to possess, make or give the same would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect. Since January
1, 2014, neither the Company nor any of its Subsidiaries (i) has received
written notice of any revocation or modification of any such license,
certificate, permit or authorization from the applicable Governmental Entity
with authority with respect thereto or (ii) has a reasonable basis to believe
that any such license, certificate, permit or authorization will not be renewed
in the ordinary course, except to the extent that any of the foregoing would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

Section 4.19    Environmental. (a) Except as to matters that would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, since January 1, 2014, no written notice, claim, demand, request
for information, order, complaint or penalty has been received by the Company or
any of its Subsidiaries, and there are no judicial, administrative or other
actions, suits or proceedings pending or, “to the Knowledge of the Company,
threatened which allege a violation of or liability under any applicable
Environmental Laws, in each case relating to the Company or any of its
Subsidiaries, (b) except as to matters that would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, since January
1, 2014, the Company and each of its Subsidiaries has been in compliance with
all applicable Environmental Laws; (c) except as to matters that would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, the Company and each of its Subsidiaries has all environmental
permits, licenses and other approvals to the operations of the business of the
Company and its Subsidiaries, and since January 1, 2014 has maintained all
financial assurances, necessary for its operations to comply, in all respects,
with all applicable Environmental Laws and is, and since January 1, 2014, to the
Knowledge of the Company, has been, in compliance with the terms of such
permits, licenses and other approvals, (d) to the Knowledge of the Company, no
Hazardous Material is located at, on or under any property

 

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currently owned, operated or leased by the Company or any of its Subsidiaries
that would reasonably be expected to give rise to any cost, liability or
obligation of the Company or any of its Subsidiaries under any applicable
Environmental Laws other than costs, liabilities or obligations related to asset
retirement obligations incurred or anticipated to be incurred pursuant to
Environmental Laws or costs liabilities or obligations that would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect, and (e) to the Knowledge of the Company, January 1, 2014, no Hazardous
Material has been generated, owned, treated, stored, handled or controlled by
the Company or any of its Subsidiaries and transported by (or on behalf of) the
Company or any of its Subsidiaries to or Released at any location in a manner
that would reasonably be expected to give rise to any cost, liability or
obligation of the Company or any of its Subsidiaries under any applicable
Environmental Laws that would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.

Section 4.20    Tax Returns. (a) Except as would not reasonably be expected to
result, individually or in the aggregate, in a Material Adverse Effect, (i) each
of the Company and its Subsidiaries has filed or caused to be filed all U.S.
federal, state, provincial, local and non-U.S. Tax returns required to have been
filed by it and (ii) each such Tax return is true and correct in all material
respects.

(b)    Each of the Company and its Subsidiaries has timely paid or caused to be
timely paid all Taxes shown to be due and payable by it on the returns referred
to in clause (a) and all other Taxes (or made adequate provision (in accordance
with GAAP) for the payment of all Taxes due) with respect to all periods or
portions thereof ending on or before the date hereof (except Taxes (i) that are
being contested in good faith by appropriate proceedings and for which the
Company and its Subsidiaries (as the case may be) has set aside on its books
adequate reserves in accordance with GAAP or (ii) with respect to the Debtors
only, that the non-payment thereof is permitted by the Bankruptcy Code), which
Taxes, if not paid or adequately provided for, would reasonably be expected to
result, individually or in the aggregate, in a Material Adverse Effect.

(c)    Except as would not reasonably be expected to result, individually or in
the aggregate, in a Material Adverse Effect, as of the date hereof, with respect
to the Company and its Subsidiaries, other than in connection with the Chapter
11 Cases and other than Taxes that are being contested in good faith by
appropriate proceedings and for which the Company and its Subsidiaries (as the
case may be) has set aside on their respective books adequate reserves in
accordance with GAAP, (i) no claims for deficiency have been asserted in writing
by a Governmental Authority with respect to any Taxes, which claims have not
been satisfied, settled or withdrawn, (ii) no presently effective waivers or
extensions of statutes of limitation with respect to Taxes have been given or
requested and (iii) no Tax returns are being examined by, and no written
notification of intention to examine has been received from, the IRS or any
other Governmental Entity.

Section 4.21    Employee Benefit Plans. (a) Except for the filing and pendency
of the Chapter 11 Cases or otherwise as would not reasonably be expected to
result, individually or in the aggregate, in a Material Adverse Effect: (i) each
Company Plan is in compliance with the applicable provisions of ERISA and the
Code; (ii) no Reportable Event has occurred during the past six years (or is
reasonably likely to occur); (iii) no Company Plan has any Unfunded

 

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Pension Liability in excess of $2,000,000 with respect to any single Company
Plan and in excess of $3,000,000 with respect to all Company Plans in the
aggregate; (iv) no ERISA Event has occurred or is reasonably expected to occur;
(v) none of the Company or any of its Subsidiaries has engaged in a non-exempt
“prohibited transaction” (as defined in Section 406 of ERISA and Section 4975 of
the Code) in connection with any employee pension benefit plan (as defined in
Section 3(2) of ERISA) that would subject the Company or any of its Subsidiaries
to Tax; and (vi) no employee welfare plan (as defined in Section 3(1) of ERISA)
maintained or contributed to by the Company or any of its Subsidiaries provides
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) and other than for post-separation benefits provided
under individual employment agreements.

(b)    Neither the Company nor any of its Subsidiaries has established,
sponsored or maintained, or has any liability with respect to, any employee
pension benefit plan or other employee benefit plan, program, policy, agreement
or arrangement governed by or subject to the Laws of a jurisdiction other than
the United States of America.

(c)    Except as would not reasonably be expected to result, individually or in
the aggregate, in a Material Adverse Effect, there are no pending, or to the
Knowledge of the Company, threatened claims, sanctions, actions or lawsuits,
asserted or instituted against any Company Plan or any Person as fiduciary or
sponsor of any Company Plan, in each case other than claims for benefits in the
ordinary course.

(d)    Within the last six years, no Company Plan has been terminated, whether
or not in a “standard termination” as that term is used in Section 4041(b)(1) of
ERISA, except as would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect nor has any Company Plan with Unfunded
Pension Liabilities been transferred outside of the “controlled group” (within
the meaning of Section 4001(a)(14) of ERISA).

(e)    Except as would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect, each employee benefit plan within the
meaning of Section 3(3) of ERISA that is sponsored, maintained or contributed to
by the Company or its Subsidiaries (other than any Multiemployer Plan) complies
and has complied in both form and operation with its terms and all applicable
Laws and legal requirements, and neither the Company, nor any of its
Subsidiaries, could reasonably be expected to have any obligation to provide any
individual with a “gross up” or similar payment in respect of any Taxes that may
become payable under Section 409A or 4999 of the Code.

(f)    Except as would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect, (i) the Company and each of its
Subsidiaries has complied and is currently in compliance with all Laws and legal
requirements in respect of personnel, employment and employment practices; (ii)
all service providers of the Company or its Subsidiaries are correctly
classified as employees, independent contractors, or otherwise for all purposes
(including any applicable tax and employment policies or law); and (iii) the
Company and its Subsidiaries have not and are not engaged in any unfair labor
practice.

Section 4.22    Internal Control Over Financial Reporting. The Company has
established and maintains a system of internal control over financial reporting
(as defined in

 

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Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act) that complies
in all material respects with the requirements of the Exchange Act and has been
designed to provide reasonable assurances regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with GAAP. The Company’s management concluded that the Company’s
internal control over financial reporting was effective as of December 31, 2015,
and no changes in the Company’s internal control over financial reporting
occurred from December 31, 2015 through September 30, 2016 that have materially
affected, or were, as of those dates, reasonably likely to materially affect,
the Company’s internal control over financial reporting.

Section 4.23    Disclosure Controls and Procedures. The Company maintains
disclosure controls and procedures (within the meaning of Rules 13a-15(e)
and 15d-15(e) promulgated under the Exchange Act) designed to ensure that
information required to be disclosed by the Company in the reports that it files
and submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC’s rules and forms,
including that information required to be disclosed by the Company in the
reports that it files and submits under the Exchange Act is accumulated and
communicated to management of the Company as appropriate to allow timely
decisions regarding required disclosure.

Section 4.24    Material Contracts. All Material Contracts are valid, binding
and enforceable by and against the Company or its relevant Subsidiary and, to
the Knowledge of the Company, each other party thereto (except where the failure
to be valid, binding or enforceable would not constitute a Material Adverse
Effect), and, since September 30, 2016, no written notice to terminate, in whole
or a material portion thereof, any Material Contract has been delivered to the
Company or any of its Subsidiaries (except where such termination would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect). Other than as a result of the filing of the Chapter 11 Cases,
neither the Company nor any of its Subsidiaries nor, to the Knowledge of the
Company, any other party to any Material Contract, is in material default or
breach under the terms thereof.

Section 4.25    No Unlawful Payments. Since January 1, 2014, to the Knowledge of
the Company, none of the Company, any of its Subsidiaries or any of their
respective directors, officers or employees has in any material
respect: (a) used any funds of the Company or any of its Subsidiaries for any
unlawful contribution, gift, entertainment or other unlawful expense, in each
case relating to political activity; (b) made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from
corporate funds of the Company or any of its Subsidiaries; (c) violated or is in
violation, other than in immaterial violation, of any provision of the U.S.
Foreign Corrupt Practices Act of 1977; or (d) made any bribe, rebate, payoff,
influence payment, kickback or other similar unlawful payment.

Section 4.26    Compliance with Money Laundering Laws. The operations of the
Company and its Subsidiaries are and, since January 1, 2014 have been at all
times, conducted in compliance in all material respects with applicable
financial recordkeeping and reporting requirements of the U.S. Currency and
Foreign Transactions Reporting Act of 1970, the money

 

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laundering statutes of all jurisdictions in which the Company and its
Subsidiaries operate (and the rules and regulations promulgated thereunder) and
any related or similar applicable Laws (collectively, the “Money Laundering
Laws”) and no material Legal Proceeding by or before any Governmental Entity or
any arbitrator involving the Company or any of its Subsidiaries with respect to
Money Laundering Laws which is (or would be) reasonably expected to have a
Material Adverse Effect is pending or, to the Knowledge of the Company,
threatened.

Section 4.27    Compliance with Sanctions Laws. To the Knowledge of the Company,
none of the Company, any of its Subsidiaries or any of their respective
directors, officers, employees or other Persons acting on their behalf with
express authority to so act is currently the subject or target of any
U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department or the U.S. Department of State. Neither the Company
nor any of the other Chaparral Parties will directly or indirectly use the
proceeds of the Rights Offering, or lend, contribute or otherwise make available
such proceeds to any Subsidiary, joint venture partner or other Person, for the
purpose of financing the activities of any Person that, to the Knowledge of the
Company, is currently the subject or target of any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury Department or the
U.S. Department of State.

Section 4.28    No Broker’s Fees. Neither the Company nor any of its
Subsidiaries is a party to any Contract with any Person (other than this
Agreement) that would give rise to a valid claim against the Commitment Parties
for a brokerage commission, finder’s fee or like payment in connection with the
Rights Offering or the sale of the Unsubscribed Shares.

Section 4.29    Takeover Statutes. No Takeover Statute is applicable to this
Agreement, the Backstop Commitment and the other transactions contemplated by
this Agreement.

Section 4.30    Investment Company Act. Neither the Company nor any of its
Subsidiaries is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940, as amended.

Section 4.31    Insurance. The Company and its Subsidiaries have insured their
properties and assets against such risks and in such amounts as are customary
for companies engaged in similar businesses. All premiums due and payable in
respect of material insurance policies maintained by the Company and its
Subsidiaries have been paid. The Company reasonably believes that the insurance
maintained by or on behalf of the Company and its Subsidiaries is adequate in
all material respects. As of the date hereof, to the Knowledge of the Company,
neither the Company nor any of its Subsidiaries has received notice from any
insurer or agent of such insurer with respect to any material insurance policies
of the Company and its Subsidiaries of cancellation or termination of such
policies, other than such notices which are received in the ordinary course of
business or for policies that have expired in accordance with their terms.

 

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Section 4.32    Alternative Transactions. As of the date hereof, neither the
Company nor any of its Subsidiaries is pursuing, or is in discussions regarding,
any solicitation, offer or proposal from any Person concerning any actual or
proposed Alternative Transaction.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE COMMITMENT PARTIES

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

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

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

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

Section 5.4    No Registration. Such Commitment Party understands that (a) the
Unsubscribed Shares and any shares of Class A Shares issued to such Commitment
Party in satisfaction of the Commitment Premium have not been registered under
the Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act, the availability of which depends on, among
other things, the bona fide nature of the investment intent and the accuracy of
such Commitment Party’s representations as expressed herein or otherwise made
pursuant hereto, and (b) the Unsubscribed Shares cannot be sold unless
subsequently registered under the Securities Act or an exemption from
registration is available.

Section 5.5    Purchasing Intent. Such Commitment Party is acquiring the
Unsubscribed Shares and any Class A Shares issued to such Commitment Party in
satisfaction of the Commitment Premium for its own account, not as a nominee or
agent, and not with the view to, or for resale in connection with, any
distribution thereof not in compliance with applicable securities Laws, and such
Commitment Party has no present intention of selling, granting any participation
in, or otherwise distributing the same, except in compliance with applicable
securities Laws.

 

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Section 5.6    Accredited Investor. Such Commitment Party is an “accredited
investor” within the meaning of Rule 501(a) of the Securities Act and a
“qualified institutional buyer” within the meaning of Rule 144A of the
Securities Act.

Section 5.7    Unsecured Notes Claims. (a) As of the date hereof, such
Commitment Party and its Affiliates were, collectively, the beneficial owner of,
or the investment advisor or manager for the beneficial owner of, the aggregate
principal amount of Unsecured Notes Claims as set forth opposite such Commitment
Party’s name under the column titled “Unsecured Notes Claims” on Schedule 3
attached hereto.

(b)    As of the date hereof, such Commitment Party or its applicable Affiliates
has the full power to vote, dispose of and compromise at least the aggregate
principal amount of the Unsecured Notes Claims set forth opposite such
Commitment Party’s name under the column titled “Unsecured Notes Claims” on
Schedule 3 attached hereto.

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

Section 5.8    No Conflict. The execution and delivery by such Commitment Party
of this Agreement and the other Transaction Agreements to which it is a party,
the compliance by such Commitment Party with the provisions hereof and thereof
and the consummation of the transactions contemplated herein and therein will
not (a) result in any violation of the provisions of the organization or
governing documents of such Commitment Party, or (b) result in any violation of
any Law or Order applicable to such Commitment Party or any of its properties.

Section 5.9    Legal Proceedings. There are no Legal Proceedings pending or, to
the knowledge of such Commitment Party, threatened to which the Commitment Party
or any of its Subsidiaries is a party or to which any property of the Commitment
Party or any of its Subsidiaries is the subject, in each case that will (or
would be reasonably likely to) prohibit, delay, or adversely impact such
Commitment Party’s performance of its obligations under this Agreement or the
other Transaction Agreements.

Section 5.10    Sufficiency of Funds. Such Commitment Party has, or will have as
of the Closing, sufficient available funds to fulfill its obligations under this
Agreement and the other Transaction Agreements (including the Rights
Offering). For the avoidance of doubt, such Commitment Party acknowledges that
its obligations under this Agreement and the other Transaction Agreements are
not conditioned in any manner upon its obtaining financing.

 

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ARTICLE VI

ADDITIONAL COVENANTS

Section 6.1    Confirmation Order and Solicitation Order. The Company shall use
its commercially reasonable best efforts, consistent with the PSA, to (a) obtain
the entry of the BCA Approval Order, PSA Approval Order, Plan Solicitation Order
and the Confirmation Order and (b) cause the Plan Solicitation Order, PSA
Approval Order and Confirmation Order to become a Final Order (and request that
such Orders be effective immediately upon entry by the Bankruptcy Court pursuant
to a waiver of Rules 3020 and 6004(h) of the Bankruptcy Rules, as applicable),
in each case, as soon as reasonably practicable, and in a manner consistent with
the PSA, following the filing of the respective motion seeking entry of such
Orders. The Company shall provide to each of the Commitment Parties and its
counsel copies of the proposed motions seeking entry of the BCA Approval Order,
PSA Approval Order, Plan Solicitation Order and Confirmation Order and a copy of
such proposed Orders, and a reasonable opportunity to review and comment on such
motions and such Orders prior to such motions and such Orders being filed with
the Bankruptcy Court, and such motions and such Orders must be in form and
substance reasonably satisfactory to the Requisite Commitment Parties and the
Company. Counsel to the Commitment Parties will provide the Company and its
counsel with copies of the proposed BCA Approval Order and a reasonable
opportunity to review and comment on such Order prior to such Order being filed
with the Bankruptcy Court, and such Order shall be in form and substance
reasonably satisfactory to the Requisite Commitment Parties and the Company. Any
amendments, modifications, changes or supplements to any of the BCA Approval
Order, PSA Approval Order, Plan Solicitation Order and Confirmation Order, and
any of the motions seeking entry of such Orders, shall be in form and substance
reasonably satisfactory to the Requisite Commitment Parties and the Company.

Section 6.2    Confirmation Order; Plan and Disclosure Statement. The Debtors
shall use their commercially reasonable best efforts, consistent with the PSA,
to obtain entry of the Confirmation Order. The Company shall provide to each of
the Commitment Parties and its counsel a copy of the proposed Plan and the
Disclosure Statement and any proposed amendment, modification, supplement or
change to the Plan or the Disclosure Statement, and a reasonable opportunity to
review and comment on such documents, and each such amendment, modification,
supplement or change to the Plan or the Disclosure Statement must be in form and
substance reasonably satisfactory to each of the Requisite Commitment Parties
and the Company. The Company shall provide to each of the Commitment Parties and
its counsel a copy of the proposed Confirmation Order (together with copies of
any briefs, pleadings and motions related thereto) and a reasonable opportunity
to review and comment on such Order, briefs, pleadings and motions prior to such
Order, briefs, pleadings and motions being filed with the Bankruptcy Court, and
such Order, briefs, pleadings and motions must be in form and substance
reasonably satisfactory to the Requisite Commitment Parties and the Company.

Section 6.3    Conduct of Business. Except as set forth in this Agreement or the
PSA or with the prior written consent of Requisite Commitment Parties, which
consent shall not to be unreasonably withheld, conditioned or delayed (requests
for which, including related information, shall be directed to the counsel and
financial advisors to the Commitment Parties), during the period from the date
of this Agreement to the earlier of (1) the Closing Date and (2)

 

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the date on which this Agreement is terminated in accordance with its terms (the
“Pre-Closing Period”), (a) the Company shall, and shall cause each of its
Subsidiaries to, carry on its business in the ordinary course and, consistent
with the PSA, use its commercially reasonable best efforts to: (i) preserve
intact its business; (ii) keep available the services of its officers and
employees; (iii) preserve its material relationships with customers, suppliers,
licensors, licensees, distributors and others having material business dealings
with the Company or its Subsidiaries in connection with their business; and (iv)
with respect to the Company, file Company SEC Documents (including, without
limitation, its financial statements) with the SEC within the time periods
required under the Exchange Act; and (b) the Company shall not, and shall not
permit any of its Subsidiaries to, enter into any transaction that is material
to their business other than: (A) transactions in the ordinary course of
business; (B) other transactions after prior notice to the Commitment Parties to
implement tax planning which transactions are not reasonably expected to
materially adversely affect any Commitment Party and (C) transactions expressly
contemplated by the PSA or the Transaction Agreements.

For the avoidance of doubt, the following shall be deemed to occur outside of
the ordinary course of business of the Company and shall require the prior
written consent of the Requisite Commitment Parties to the extent not
contemplated by the PSA or the Transaction Agreements: (1) any material
amendment, material modification, termination, material waiver, material
supplement, material restatement or other material change to any Material
Contract (other than any Material Contracts that are otherwise addressed by
clause (3) below); (2) entry into, or any amendment, modification, termination
(other than for cause), waiver, supplement or other change to, any employment
agreement to which the Company or any of its Subsidiaries is a party or any
assumption of any such employment agreement in connection with the Chapter 11
Cases; or (3) the adoption or material amendment of any management incentive or
equity plan by any of the Debtors except for the new management incentive plan
in accordance with the Term Sheet. Except as otherwise expressly provided in
this Agreement, nothing in this Agreement shall give the Commitment Parties,
directly or indirectly, any right to control or direct the operations of the
Company and its Subsidiaries. Prior to the Closing Date, the Company and its
Subsidiaries shall exercise, consistent with the terms and conditions of this
Agreement and the PSA, complete control and supervision of the business of the
Company and its Subsidiaries.

Section 6.4    Access to Information; Confidentiality; Cleansing
Materials. (a) Subject to applicable Law, Section 6.4(b) and Section 6.4(c),
upon reasonable notice during the Pre-Closing Period, the Company shall (and
shall cause its Subsidiaries to) (i) afford the Commitment Parties and their
Representatives, reasonably promptly upon their written request, reasonable
access, during normal business hours and without unreasonable disruption or
interference with the Company’s and its Subsidiaries’ business or operations, to
the Company’s and its Subsidiaries’ employees, properties, books, Contracts and
records and, (ii) furnish reasonably promptly to the Commitment Parties and
their Representatives all reasonably relevant information concerning the
Company’s and its Subsidiaries’ business, properties and personnel as may
reasonably be requested by any such party, provided that the foregoing shall not
require the Company (a) to permit any inspection, or to disclose any
information, that in the reasonable judgment of the Company could reasonably
likely cause the Company or any of its Subsidiaries to violate any of their
respective obligations with respect to confidentiality to a third party if the
Company, or such Subsidiary, as applicable, shall have used commercially
reasonable efforts to obtain, but failed to obtain, the consent of such third
party to such inspection or disclosure; (b) to

 

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disclose any legally or otherwise privileged information of the Company or any
of its Subsidiaries; or (c) to violate any applicable Laws or Orders. All
requests for information and access made in accordance with this Section 6.4
shall be directed to Latham & Watkins LLP, as counsel for the Company, or such
other Person as may be designated in writing by the Company’s executive
officers.

(b)    From and after the date hereof until the date that is one (1) year after
the expiration of the Pre-Closing Period, each Commitment Party shall, and shall
cause its Representatives to, (i) keep confidential and not provide or disclose
to any Person any documents or information received or otherwise obtained by
such Commitment Party or its Representatives pursuant to or in connection with
this Agreement (including pursuant to Section 6.4(a), Section 6.5 or in
connection with a request for approval pursuant to Section 6.3), except that
provision or disclosure of such documents or information may be made to any
Affiliate or Representative of such Commitment Party who needs to know such
information for purposes of this Agreement or the other Transaction Agreements
and who agrees to observe the terms of this Section 6.4(b), and (ii) not use
such documents or information for any purpose other than in connection with this
Agreement or the other Transaction Agreements or the transactions contemplated
hereby or thereby. Notwithstanding the foregoing, the immediately preceding
sentence shall not apply in respect of documents or information that (1) is now
or subsequently becomes generally available to the public through no violation
or breach of this Agreement by a Commitment Party or its Representatives; (2)
becomes available to a Commitment Party or its Representatives on a
non-confidential basis from a source other than the Company or any of its
Subsidiaries or any of their respective Representatives, which is not, to the
actual knowledge of such applicable recipient, after reasonable inquiry,
prohibited from disclosing such document or information to the applicable
recipient; (3) becomes available to a Commitment Party or its Representatives
through document production or discovery in connection with the Chapter 11 Cases
or other judicial or administrative process, but subject to any confidentiality
restrictions imposed by the Chapter 11 Cases or other such document production
or discovery process; or (4) such Commitment Party or any Representative thereof
is required to disclose pursuant to applicable judicial, administrative or
regulatory process (including, but not limited to, by court order, deposition,
interrogatory, request for documents, subpoena, inspection, audit, civil
investigative demand, legal, regulatory, or similar formal or informal process)
or pursuant to applicable law or applicable securities exchange rules; provided,
that, such Commitment Party or such Representative shall provide the Company
with prompt written notice of such legal compulsion and cooperate with the
Company to obtain a protective order or similar remedy to cause such information
or documents not to be disclosed, including interposing all available objections
thereto, at the Company’s sole cost and expense; provided, however, that
notwithstanding the foregoing, no such notice shall be required in the case of a
routine supervisory examination or routine audit by a banking, governmental, or
other financial regulatory or self-regulatory authority not specifically related
to the Company or the transaction; provided, further, that in the event that no
such protective order or other similar remedy is obtained, the disclosing party
shall furnish only that portion of such information or documents that is legally
required to be disclosed and shall exercise its reasonable best efforts (at the
Company’s sole cost and expense) to obtain assurance that confidential treatment
will be accorded such disclosed information or documents.

 

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(c)    Notwithstanding anything to the contrary in this Agreement, the
Commitment Parties acknowledge and agree that the Company may, in its sole
discretion, mark any document or information to be provided pursuant to or in
connection with this Agreement, prior to providing such document or information,
as “Limited Distribution Information; For Professional Eyes Only” (such marked
document or information, the “Highly Confidential Information”). Highly
Confidential Information shall be provided solely to the Advisors, and the
Commitment Parties and their respective Representatives will not be entitled to
review the Highly Confidential Information. None of the Highly Confidential
Information shall be subject to disclosure pursuant to Section 6.4(d), and such
Highly Confidential Information will only be disclosed to the public in the sole
discretion of the Company; provided, however, that if any Highly Confidential
Information is provided by the Company to any Commitment Party or any of their
respective Representatives (other than the Advisors) without such Commitment
Party’s express prior written consent (given in its sole discretion), then such
Highly Confidential Information shall be subject to disclosure pursuant to
Section 6.4(d), provided, further, that the Company agrees (i) to reasonably
cooperate with the Commitment Parties to create summary forms of any Highly
Confidential Information that constitutes material non-public information
(“MNPI”) and (ii) that such summary forms are subject to disclosure pursuant to
Section 6.4(d). The Company shall not provide to the Commitment Parties or any
of their respective Representatives (other than the Advisors) any Highly
Confidential Information without such Commitment Party’s express prior written
consent given in its sole discretion. The Commitment Parties acknowledge and
agree that the Advisors are not permitted, pursuant to separate confidentiality
agreements with the Company, to send to them, or otherwise share with them, any
of the Highly Confidential Information (unless otherwise agreed in writing by
the Company in its sole discretion). The Company acknowledges and agrees that
the Commitment Parties shall not, solely by virtue of the Advisors having such
Highly Confidential Information, be deemed to have received any Highly
Confidential Information unless and until such Highly Confidential Information
is provided to them.

(d)    During the Pre-Closing Period, upon, and within forty eight (48) hours
of, the written request (such time, the “Disclosure Time”) of the Required
Commitment Parties, the Company shall make public such document or documents
(the “Cleansing Materials”) as may be required to disclose any information (or
an appropriate summary that, at a minimum, includes the material portions
thereof), in each case that constitutes MNPI that was provided by the Company or
the Company Representatives pursuant to this Agreement to the Commitment Parties
or to the Commitment Parties’ respective Representatives (the “Disclosure
Information”); provided, however, notwithstanding the foregoing, subject to the
second proviso in Section 6.4(c), the Highly Confidential Information shall not
be subject to this Section 6.4(d), shall not constitute part of the Cleansing
Materials and/or the Disclosure Information, and shall not be disclosed without
the Company’s prior written consent given in its sole discretion. Cleansing
Materials shall be on Form 8-K or any periodic report required or permitted to
be filed under the Exchange Act with the SEC or, if the SEC’s EDGAR filing
system is not available, in such other manner that the Company reasonably
determines results in public dissemination of such information. The Company
shall provide the Commitment Parties and the Advisors with (i) a draft of the
Cleansing Materials at least twelve (12) hours prior to the Disclosure Time and
(ii) the opportunity to review and comment on such Cleansing Materials during
such twelve (12) hour period (the “Review Period”). The Company will in good
faith incorporate the reasonable requests of the Commitment Parties for
additions to or other modifications of the Cleansing

 

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Materials (including any descriptions, summaries or other supplemental
disclosure materials proposed by the Advisors for inclusion in the Cleansing
Materials, whether provided to the Company before or during the Review
Period). During the Review Period, the Commitment Parties may, to the extent
applicable, provide written notice (the “Notice of Proposed Deficiency”) by
email to the Company of the Commitment Parties’ determination, in their
reasonable judgment, in good faith, after consultation with internal or outside
counsel, of the Disclosure Information, if any, required hereunder to be
included in the Cleansing Materials but not included in the proposed Cleansing
Materials, and the Commitment Parties’ reasonable requests for additions to or
other modifications of the Cleansing Materials. Upon the Company’s disclosure of
the Cleansing Materials pursuant to this Section 6.4(d), the Company shall
deliver a letter signed by a senior officer of the Company in which the Company
represents and warrants to the Commitment Parties that, at such time and to the
Knowledge of the Company, there is no MNPI (within the meaning of Regulation FD
of the Exchange Act) that the Company has provided to the Commitment Parties or
to the Commitment Parties’ respective Representatives (other than, subject to
the second proviso of Section 6.4(c), the Highly Confidential Information
provided exclusively to the Advisors) that has not been publicly disclosed in
the Cleansing Materials such that the Commitment Parties and the Commitment
Parties’ respective Representatives will no longer be restricted from trading
securities or loans of, or related to, the Company pursuant to applicable
securities laws or otherwise solely on account of such MNPI. The Company further
agrees that, in the event that the Company fails to disclose the Cleansing
Materials by the Disclosure Time or, in the reasonable judgment of the
Commitment Parties, in good faith, after consultation with internal or outside
counsel, such Cleansing Materials do not contain all of the Disclosure
Information that is required in this Section 6.4(d) to be included in the
Cleansing Materials, and identified in writing during the Review Period in the
Notice of Proposed Deficiency (to the extent that the Company meets its
obligations with regard to the Review Period), the Commitment Parties are
authorized, subject to the conditions described in this Section 6.4(d), to make
and disclose to the public such Cleansing Materials. The Company acknowledges
and agrees that neither the Commitment Parties nor any of the Commitment
Parties’ respective Representatives shall have any liability at law or equity,
including without limitation for any special, indirect, punitive, or
consequential damages in contract, tort, warranty, strict liability or
otherwise, for the disclosure of Cleansing Materials by the Commitment Parties
or the Commitment Parties’ respective Representatives to the extent such
disclosure is made in compliance with the requirements of this
Section 6.4(d). Without limiting the foregoing, in the event that a Commitment
Party chooses to make such a disclosure, then, at least forty-eight (48) hours
prior to such disclosure, such Commitment Party shall give the Company and each
other Commitment Party a written notice (which may be via email) of intent to
disclose (the “Disclosure Notice”), which Disclosure Notice shall also contain
such Commitment Party’s proposed form, content, and manner of disclosure of the
applicable Disclosure Information to be disclosed in the Cleansing
Materials. Such Commitment Party will in good faith incorporate the Company’s
reasonable requests for additions to or other modifications of the Cleansing
Materials prior to such Commitment Party’s disclosure thereof.

Section 6.5    Financial Information. (a) During the Pre-Closing Period, the
Company shall deliver to the counsel and financial advisors to the Commitment
Parties, and to each Commitment Party that so requests in writing, all
statements and reports the Company is required to deliver to the Prepetition
Agent pursuant to Sections 8.01 and 8.02 of the Credit Agreement (as in effect
on the date hereof) (the “Reports”). Neither any waiver by the parties to

 

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the Credit Agreement of their right to receive the Reports nor any amendment or
termination of the Credit Agreement shall affect the Company’s obligation to
deliver the Reports to the Commitment Parties in accordance with the terms of
this Agreement.

(b)    Information required to be delivered pursuant to Sections 8.01 and 8.02
of the Credit Agreement (as in effect on the date hereof) shall be deemed to
have been delivered in accordance with Section 6.5(a) on the date on which the
Company provides written notice to the counsel and financial advisors to the
Commitment Parties, and to each Commitment Party that so requests, such
information that such information is available via the EDGAR system of the SEC
on the internet (to the extent such information has been posted or is available
as described in such notice).

(c)    Each Commitment Party agrees that all information and reports delivered
pursuant to this Section 6.5 (except to the extent provided pursuant to
Section 6.5(b)) shall be subject to the provisions of Section 6.4(b).

Section 6.6    Commercially Reasonable Best Efforts. (a) Without in any way
limiting any other respective obligation of the Company or any Commitment Party
in this Agreement, each Party shall, consistent with the PSA, use commercially
reasonable best efforts to take or cause to be taken all actions, and do or
cause to be done all things, reasonably necessary, proper or advisable in order
to consummate and make effective the transactions contemplated by this Agreement
and the Plan, including using commercially reasonable best efforts in:

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

(ii)    defending any Legal Proceedings in any way challenging (A) this
Agreement, the Plan or any other Transaction Agreement, (B) the BCA Approval
Order, PSA Approval Order, Plan Solicitation Order or Confirmation Order or (C)
the consummation of the transactions contemplated hereby and thereby, including
seeking to have any stay or temporary restraining Order entered by any
Governmental Entity vacated or reversed; and

(iii)    working together in good faith to finalize the Reorganized Company
Corporate Documents, Transaction Agreements and all other documents relating
thereto for timely inclusion in the Plan and filing with the Bankruptcy Court.

(b)    Without limitation to Sections 6.1 and 6.2, to the extent exigencies
permit, the Company shall provide or cause to be provided a draft of all
motions, applications, pleadings, schedules, Orders, reports or other material
papers (including all material memoranda, exhibits, supporting affidavits and
evidence and other supporting documentation) in the Chapter 11 Cases relating to
or affecting the Transaction Agreements in advance of filing the same with the
Bankruptcy Court. All such motions, applications, pleadings, schedules, Orders,
reports and other material papers shall be in form and substance reasonably
satisfactory to the Requisite Commitment Parties and the Company.

 

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(c)    Nothing contained in this Section 6.6 shall limit the ability of any
Commitment Party to consult with the Debtors, to appear and be heard, or to file
objections, concerning any matter arising in the Chapter 11 Cases to the extent
not inconsistent with the PSA.

Section 6.7    Registration Rights Agreement; Reorganized Company Corporate
Documents; Rights Offering Procedures. (a) The Plan will provide that from and
after the Closing Date each holder of Common Equity Interests that are “control”
or “restricted” securities shall be entitled to registration rights pursuant to
a registration rights agreement, which agreement shall be in form and substance
reasonably acceptable to the Requisite Commitment Parties and the Company (the
“Registration Rights Agreement”). A form of the Registration Rights Agreement
shall be filed with the Bankruptcy Court as part of the Plan or an amendment or
supplement thereto.

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

(c)    The Parties will use their commercially reasonable best efforts to
finalize the form of Rights Offering Procedures and file them with the
Bankruptcy Court.

Section 6.8    Form D and Blue Sky. Following the Closing, the Company shall
timely file a Form D with the SEC with respect to the Unsubscribed Shares issued
hereunder to the extent required under Regulation D of the Securities Act and
shall provide, upon request, a copy thereof to each Commitment Party. The
Company shall, on or before the Closing Date, take such action as the Company
shall reasonably determine is necessary in order to obtain an exemption for, or
to qualify the Unsubscribed Shares issued hereunder for sale to the Commitment
Parties at the Closing Date pursuant to this Agreement under applicable
securities and “Blue Sky” Laws of the states of the United States (or to obtain
an exemption from such qualification) and any applicable foreign jurisdictions,
and shall provide evidence of any such action so taken to the Commitment Parties
on or prior to the Closing Date. The Company shall timely make all filings and
reports relating to the offer and sale of the Unsubscribed Shares issued
hereunder required under applicable securities and “Blue Sky” Laws of the states
of the United States following the Closing Date. The Company shall pay all fees
and expenses in connection with satisfying its obligations under this
Section 6.8.

Section 6.9    No Integration; No General Solicitation. Neither the Company nor
any of its affiliates (as defined in Rule 501(b) of Regulation D promulgated
under the Securities Act) will, directly or through any agent, sell, offer for
sale, solicit offers to buy or otherwise negotiate in respect of, any security
(as defined in the Securities Act), that is or will be integrated with the sale
of the Unsubscribed Shares in a manner that would require registration of the
Unsubscribed Shares to be issued by the Company on the Effective Date under the
Securities Act. None of the Company or any of its affiliates or any other Person
acting on its or their behalf

 

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will solicit offers for, or offer or sell, any Unsubscribed Shares by means of
any form of general solicitation or general advertising within the meaning of
Rule 502(c) of Regulation D promulgated under the Securities Act or in any
manner involving a public offering within the meaning of Section 4(a)(2) of the
Securities Act.

Section 6.10    DTC Eligibility. Unless otherwise requested by the Requisite
Commitment Parties, the Company shall use commercially reasonable best efforts
to promptly make all Common Equity Interests deliverable to the Commitment
Parties eligible for deposit with The Depository Trust Company.

Section 6.11    Use of Proceeds. The Debtors will apply the proceeds from the
exercise of the Subscription Rights and the sale of the Unsubscribed Shares for
the purposes identified in the Disclosure Statement and the Plan.

Section 6.12    Share Legend. Each certificate evidencing all Unsubscribed
Shares that are issued in connection with this Agreement, shall be stamped or
otherwise imprinted with a legend (the “Legend”) in substantially the following
form:

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

In the event that any such Unsubscribed Shares are uncertificated, such
Unsubscribed Shares shall be subject to a restrictive notation substantially
similar to the Legend in the stock ledger or other appropriate records
maintained by the Company or agent and the term “Legend” shall include such
restrictive notation.

For the avoidance of doubt, Class A Shares issued pursuant to the Rights
Offering and shares issued in satisfaction of the Commitment Premium shall not
include the Legend. The Company shall remove the Legend (or restrictive
notation, as applicable) set forth above from the certificates evidencing any
such shares (or the stock ledger or other appropriate Company records, in the
case of uncertified shares) at any time after the restrictions described in such
Legend cease to be applicable, including, as applicable, when such shares may be
sold under Rule 144 of the Securities Act. The Company may reasonably request
such opinions, certificates or other evidence that such restrictions no longer
apply as a condition to removing the Legend.

Section 6.13    Antitrust Approval. (a) Each Party agrees to use commercially
reasonable best efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary to consummate and make effective the
transactions contemplated by this Agreement, the Plan and the other Transaction
Agreements, including (i) if applicable, filing, or causing to be filed, the
Notification and Report Form pursuant to the HSR Act with respect to the
transactions contemplated by this Agreement with the Antitrust Division of the
United States Department of Justice and the United States Federal Trade
Commission and any filings (or, if

 

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required by any Antitrust Authority, any drafts thereof) under any other
Antitrust Laws that are necessary to consummate and make effective the
transactions contemplated by this Agreement as soon as reasonably practicable
and no later than fifteen (15) Business Days following the date hereof and
(ii) promptly furnishing documents or information reasonably requested by any
Antitrust Authority.

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

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

(d)    The Company and each Filing Party shall use their commercially reasonable
best efforts to obtain all authorizations, approvals, consents, or clearances
under any applicable Antitrust Laws or to cause the termination or expiration of
all applicable waiting periods under any Antitrust Laws in connection with the
transactions contemplated by this Agreement at the earliest possible date after
the date of filing. The communications contemplated by this Section 6.13 may be
made by the Company or a Filing Party on an outside counsel-only basis or
subject to other agreed upon confidentiality safeguards. The obligations in this
Section 6.13 shall not apply to filings, correspondence, communications or
meetings with Antitrust Authorities unrelated to the transactions contemplated
by this Agreement, the Plan or the other Transaction Agreements.

 

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Section 6.14    Alternative Transactions. Except as expressly provided by the
PSA, the Company and the other Debtors shall not seek, solicit, or support any
Alternative Transaction; provided, however, that nothing in this Section 6.14
shall limit the Parties’ ability to engage in marketing efforts, discussions,
and/or negotiations with any party regarding refinancing of the Exit Facility to
be consummated following the Effective Date; provided, further, that (i) if any
of the Debtors receive a proposal or expression of interest regarding any
Alternative Transaction from the Effective Date until the occurrence of a
Termination Date, the Debtors shall promptly notify counsel to the Commitment
Parties of any such proposal or expression of interest, with such notice to
include the material terms thereof, including (unless prohibited by a separate
agreement) the identity of the person or group of persons involved, and (ii) the
Debtors shall promptly furnish counsel to the Commitment Parties with copies of
any written offer, oral offer, or any other information that they receive
relating to the foregoing and shall promptly inform counsel to the Commitment
Parties of any material changes to such proposals. The Debtors shall not enter
into any confidentiality agreement with a party interested in an Alternative
Transaction unless such party consents to identifying and providing to counsel
to the Commitment Parties (under a reasonably acceptable confidentiality
agreement) the information contemplated under the proviso to the final paragraph
of Section 6 of the PSA.

ARTICLE VII

CONDITIONS TO THE OBLIGATIONS OF THE PARTIES

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

(a)    BCA Approval Order; PSA Approval Order. The Bankruptcy Court shall have
entered the BCA Approval Order and the PSA Approval Order, and such Orders shall
be Final Orders.

(b)    Plan Solicitation Order. The Bankruptcy Court shall have entered the Plan
Solicitation Order, and such Order shall be in full force and effect.

(c)    Confirmation Order. The Bankruptcy Court shall have entered the
Confirmation Order, and such Order shall be a Final Order.

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

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

 

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

(g)    Registration Rights Agreement; Reorganized Company Corporate Documents.

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

(ii)    The Reorganized Company Corporate Documents shall duly have been
approved and adopted and shall be in full force and effect.

(h)    Expense Reimbursement. The Debtors shall have paid (or such amounts shall
be paid concurrently with the Closing) all Expense Reimbursement invoiced
through the Closing Date pursuant to Section 3.3.

(i)    Consents. All governmental and third-party notifications, filings,
consents, waivers and approvals set forth on Schedule 5 and required for the
consummation of the transactions contemplated by this Agreement and the Plan
shall have been made or received.

(j)    Antitrust Approvals. All waiting periods imposed by any Governmental
Entity or Antitrust Authority in connection with the transactions contemplated
by this Agreement shall have terminated or expired and all authorizations,
approvals, consents or clearances under the Antitrust Laws in connection with
the transactions contemplated by this Agreement shall have been obtained.

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

(l)    Representations and Warranties.

(i)    The representations and warranties of the Debtors contained in Sections
4.1, 4.2, 4.3, 4.5, 4.25, 4.26, 4.27 and 4.30 shall be true and correct in all
respects on and as of the Closing Date after giving effect to the Plan with the
same effect as if made on and as of the Closing Date after giving effect to the
Plan (except for such representations and warranties made as of a specified
date, which shall be true and correct only as of the specified date).

(ii)    The representations and warranties of the Debtors contained in
Sections 4.4, 4.7, 4.12, 4.13, 4.18, 4.24, and 4.32 shall be true and correct in
all material respects on and as of the Closing Date, or will be true and correct
in all material respects on and as of the Closing Date with the same effect as
if made on and as of the Closing Date after giving effect to the Plan (except
for such representations and warranties made as of a specified date, which shall
be true and correct in all material respects only as of the specified date).

 

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

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

(n)    Material Adverse Effect. Since September 30, 2016, there shall not have
occurred, and there shall not exist, any event, development, occurrence or
change that constitutes, individually or in the aggregate, a Material Adverse
Effect.

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

(p)    Minimum Liquidity. The amount, determined on a pro forma basis after
giving effect to the occurrence of the Effective Date and the transactions
contemplated by the Transaction Agreements, of (i) the initial availability in
the Exit Facility, plus (ii) Cash of the Company shall be no less than
$100,000,000.

(q)    Exit Facility. The Exit Facility shall be in effect with the terms set
forth in the Term Sheet, as in effect on the date hereof.

(r)    PSA. The PSA shall not have terminated, and no material default
thereunder by any Chaparral Party shall have occurred and be continuing, unless
waived in accordance with the PSA or cured within the time period specified in,
and otherwise in accordance with the PSA.

(s)    Commitment Premium. The Chaparral Parties shall have paid (or such
amounts shall be paid concurrently with the Closing) to each Commitment Party
the applicable Commitment Premium as set forth in Section 3.2.

(t)    Funding Notice. The Commitment Parties shall have received the Funding
Notice in accordance with the terms of this Agreement.

Section 7.2    Waiver of Conditions to Obligations of Commitment Parties. All or
any of the conditions set forth in Sections 7.1(d), (e), (g), (i), (j), (l),
(m), (n), (o) and (p) may only be waived in whole or in part with respect to all
Commitment Parties by a written instrument executed by the Requisite Commitment
Parties in their sole discretion and if so

 

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waived, all Commitment Parties shall be bound by such waiver. Any of the
conditions not listed in the preceding sentence may only be waived in whole or
in part with respect to all Commitment Parties by a written instrument executed
by all Commitment Parties.

Section 7.3    Conditions to the Obligations of the Debtors. The obligations of
the Debtors to consummate the transactions contemplated hereby with any
Commitment Party is subject to (unless waived by the Company in writing in its
sole discretion) the satisfaction of each of the following conditions:

(a)    BCA Approval Order; PSA Approval Order. The Bankruptcy Court shall have
entered the BCA Approval Order and the PSA Approval Order, and such Orders shall
be Final Orders.

(b)    Plan Solicitation Order. The Bankruptcy Court shall have entered the Plan
Solicitation Order, and such Order shall be in full force and effect.

(c)    Confirmation Order. The Bankruptcy Court shall have entered the
Confirmation Order, and such Order shall be a Final Order.

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

(e)    Rights Offering. The Rights Offering Expiration Time shall have occurred,
and the Debtors shall have received the Rights Offering Amount in full in cash
pursuant to the Rights Offering.

(f)    Antitrust Approvals. All waiting periods imposed by any Governmental
Entity or Antitrust Authority in connection with the transactions contemplated
by this Agreement shall have terminated or expired and all authorizations,
approvals, consents or clearances under the Antitrust Laws in connection with
the transactions contemplated by this Agreement shall have been obtained.

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

(h)    Representations and Warranties. The representations and warranties of the
Commitment Parties contained in this Agreement shall be true and correct in all
material respects on and as of the Closing Date with the same effect as if made
on and as of the Closing Date (except for such representations and warranties
made as of a specified date, which shall be true and correct in all material
respects only as of the specified date).

(i)    Consents. All governmental and third-party notifications, filings,
consents, waivers and approvals set forth on Schedule 5 and required for the
consummation of the transactions contemplated by this Agreement and the Plan
shall have been made or received.

 

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

(k)    Exit Facility. The Exit Facility shall be in effect with the terms set
forth in the Term Sheet, as in effect on the date hereof.

(l)    PSA. The PSA shall not have terminated, and no material default
thereunder by any Commitment Party thereto shall have occurred and be
continuing, unless waived in accordance with the PSA or cured within the time
period specified in, and otherwise in accordance with the PSA.

ARTICLE VIII

INDEMNIFICATION AND CONTRIBUTION

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

 

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Section 8.2    Indemnification Procedure. Promptly after receipt by an
Indemnified Person of notice of the commencement of any claim, challenge,
litigation, investigation or proceeding (an “Indemnified Claim”), such
Indemnified Person will, if a claim is to be made hereunder against the
Indemnifying Party in respect thereof, notify the Indemnifying Party promptly in
writing of the commencement thereof; provided, that (a) the omission to so
notify the Indemnifying Party will not relieve the Indemnifying Party from any
liability that it may have hereunder except to the extent it has been materially
prejudiced by such failure and (b) the omission to so notify the Indemnifying
Party will not relieve the Indemnifying Party from any liability that it may
have to such Indemnified Person otherwise than on account of this
Article VIII. In case any such Indemnified Claims are brought against any
Indemnified Person and it notifies the Indemnifying Party of the commencement
thereof, the Indemnifying Party will be entitled to participate therein, and, at
its election by providing written notice to such Indemnified Person, the
Indemnifying Party will be entitled to assume the defense thereof, with counsel
reasonably acceptable to such Indemnified Person; provided, that if the parties
(including any impleaded parties) to any such Indemnified Claims include both
such Indemnified Person and the Indemnifying Party and based on advice of such
Indemnified Person’s counsel there are legal defenses available to such
Indemnified Person that are different from or additional to those available to
the Indemnifying Party, such Indemnified Person shall have the right to select
separate counsel to assert such legal defenses and to otherwise participate in
the defense of such Indemnified Claims. Upon receipt of notice from the
Indemnifying Party to such Indemnified Person of its election to so assume the
defense of such Indemnified Claims with counsel reasonably acceptable to the
Indemnified Person, the Indemnifying Party shall not be liable to such
Indemnified Person for expenses incurred by such Indemnified Person in
connection with the defense thereof or participation therein (other than
reasonable documented out-of-pocket costs of investigation) unless (i) such
Indemnified Person shall have employed separate counsel (in addition to any
local counsel) in connection with the assertion of legal defenses in accordance
with the proviso to the immediately preceding sentence (it being understood,
however, that the Indemnifying Party shall not be liable for the expenses of
more than one separate counsel representing the Indemnified Persons who are
parties to such Indemnified Claims (in addition to one local counsel in each
jurisdiction in which local counsel is required)), (ii) the Indemnifying Party
shall not have employed counsel reasonably acceptable to such Indemnified Person
to represent such Indemnified Person within a reasonable time after the
Indemnifying Party has received notice of commencement of the Indemnified Claims
from, or delivered on behalf of, the Indemnified Person, (iii) after the
Indemnifying Party assumes the defense of the Indemnified Claims, the
Indemnified Person determines in good faith that the Indemnifying Party has
failed or is failing to defend such claim and provides written notice of such
determination and the basis for such determination, and such failure is not
reasonably cured within ten (10) Business Days following receipt of such notice
by the Indemnifying Party, or (iv) the Indemnifying Party shall have authorized
in writing the employment of counsel for such Indemnified
Person. Notwithstanding anything herein to the contrary, the Company and its
Subsidiaries shall have sole control over any Tax controversy or Tax audit and
shall be permitted to settle any liability for Taxes of the Company and its
Subsidiaries.

Section 8.3    Settlement of Indemnified Claims. In connection with any
Indemnified Claim for which an Indemnified Person is assuming the defense in
accordance with this Article VIII, the Indemnifying Party shall not be liable
for any settlement of any Indemnified Claims effected by such Indemnified Person
without the written consent of the Indemnifying

 

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Party (which consent shall not be unreasonably withheld, conditioned or
delayed). If any settlement of any Indemnified Claims is consummated with the
written consent of the Indemnifying Party or if there is a final judgment for
the plaintiff in any such Indemnified Claims, the Indemnifying Party agrees to
indemnify and hold harmless each Indemnified Person from and against any and all
Losses by reason of such settlement or judgment to the extent such Losses are
otherwise subject to indemnification by the Indemnifying Party hereunder in
accordance with, and subject to the limitations of, this Article VIII. The
Indemnifying Party shall not, without the prior written consent of an
Indemnified Person (which consent shall be granted or withheld, conditioned or
delayed in the Indemnified Person’s sole discretion), effect any settlement of
any pending or threatened Indemnified Claims in respect of which indemnity or
contribution has been sought hereunder by such Indemnified Person unless
(i) such settlement includes an unconditional release of such Indemnified Person
in form and substance satisfactory to such Indemnified Person from all liability
on the claims that are the subject matter of such Indemnified Claims and
(ii) such settlement does not include any statement as to or any admission of
fault, culpability or a failure to act by or on behalf of any Indemnified
Person.

Section 8.4    Contribution. If for any reason the foregoing indemnification is
unavailable to any Indemnified Person or insufficient to hold it harmless from
Losses that are subject to indemnification pursuant to Section 8.1, then the
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Person as a result of such Loss in such proportion as is appropriate
to reflect not only the relative benefits received by the Indemnifying Party, on
the one hand, and such Indemnified Person, on the other hand, but also the
relative fault of the Indemnifying Party, on the one hand, and such Indemnified
Person, on the other hand, as well as any relevant equitable considerations. It
is hereby agreed that the relative benefits to the Indemnifying Party, on the
one hand, and all Indemnified Persons, on the other hand, shall be deemed to be
in the same proportion as (a) the total value received or proposed to be
received by the Company pursuant to the issuance and sale of the Class A Shares
in the Rights Offering contemplated by this Agreement and the Plan bears to
(b) the Commitment Premium paid or proposed to be paid to the Commitment
Parties. Subject to Section 9.6, the Indemnifying Parties also agree that no
Indemnified Person shall have any liability based on their comparative or
contributory negligence to the Indemnifying Parties in connection with an
Indemnified Claim.

Section 8.5    Treatment of Indemnification Payments. All amounts paid by an
Indemnifying Party to an Indemnified Person under this Article VIII shall, to
the extent permitted by applicable Law, be treated as adjustments to the
Purchase Price solely for Tax purposes. The provisions of this Article VIII are
an integral part of the transactions contemplated by this Agreement and without
these provisions the Commitment Parties would not have entered into this
Agreement. The BCA Approval Order shall provide that the obligations of the
Company under this Article VIII shall constitute allowed administrative expenses
of the Debtors’ estate under sections 503(b) and 507 of the Bankruptcy Code and
are payable without further Order of the Bankruptcy Court, and that the Company
may comply with the requirements of this Article VIII without further Order of
the Bankruptcy Court.

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

 

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ARTICLE IX

TERMINATION

Section 9.1    Consensual Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing Date by mutual written consent of the Company and the Requisite
Commitment Parties.

Section 9.2    Automatic Termination. Except as otherwise provided in this
Article IX, this Agreement shall terminate automatically without further action
or notice by any Party if any of the following occurs:

(a)    the PSA is terminated in accordance with its terms;

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

(c)    (i) any of the Chapter 11 Cases shall have been dismissed or converted to
a chapter 7 case or (ii) a chapter 11 trustee with plenary powers or an examiner
with enlarged powers relating to the operation of the businesses of the Debtors
beyond those set forth in section 1106(a)(3) and (4) of the Bankruptcy Code
shall have been appointed in any of the Chapter 11 Cases or the Debtors shall
file a motion or other request for such relief.

Section 9.3    Termination by the Company. This Agreement may be terminated by
the Company upon written notice to each Commitment Party if:

(a)    the Bankruptcy Court denies entry of the BCA Approval Order or the PSA
Approval Order;

(b)    the Closing Date has not occurred by the Outside Date (as the same may be
extended pursuant to Section 9.4(h) or Section 2.3(a)), unless prior thereto the
Effective Date occurs and the Rights Offering has been consummated; provided,
that the Company shall not have the right to terminate this Agreement pursuant
to this Section 9.3(b) if it is then in willful or intentional breach of this
Agreement;

(c)    one or more of the Consenting Noteholders (as defined in the PSA)
materially breaches its obligations under the PSA, such that the Commitment
Party or the Commitment Parties not then in breach of the PSA (the “Non-PSA
Breaching Commitment Parties”) at any time hold collectively less than sixty-six
and two-thirds percent (66-2/3%) of the principal amount of all Unsecured Notes
Claims;

(d)    subject to the right of the Commitment Parties to arrange a Commitment
Party Replacement in accordance with Section 2.3(a) (which will be deemed to
cure any breach by the replaced Commitment Party pursuant to this subsection
(d), (i) any Commitment Party shall have breached any representation, warranty,
covenant or other agreement made by such Commitment Party in this Agreement or
any such representation or warranty shall have become

 

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inaccurate and such breach or inaccuracy would or would reasonably be expected
to, individually or in the aggregate, cause a condition set forth in
Section 7.3(h) or Section 7.3(i) not to be satisfied, (ii) the Company shall
have delivered written notice of such breach or inaccuracy to such Commitment
Party, and (iii) such breach or inaccuracy is not cured by such Commitment Party
by the fifth (5th) Business Day after receipt of such notice; provided, that the
Company shall not have the right to terminate this Agreement pursuant to this
Section 9.3(d) if it is then in willful or intentional breach of this Agreement;
or

(e)    the Company or any of its Subsidiaries determines, based upon advice of
counsel, that proceeding with the Restructuring Transactions (including, without
limitation, the Plan or solicitation of the Plan) would be inconsistent with the
exercise of the fiduciary duties of the board of directors or analogous
governing body of the Company or such Subsidiary; provided, that concurrently
with such termination, the Company pays the Termination Fee pursuant to Section
9.6(b)(ii) to the extent such Termination Fee is otherwise payable under this
Agreement.

Section 9.4    Termination by the Requisite Commitment Parties. This Agreement
may be terminated by the Requisite Commitment Parties upon written notice to the
Company if:

(a)    any of the BCA Approval Order, PSA Approval Order, Plan Solicitation
Order or the Confirmation Order is reversed, stayed, dismissed, vacated,
reconsidered or is modified or amended in any material respect after entry
without the prior written consent of the Requisite Commitment Parties;

(b)    any of this Agreement, the PSA, Rights Offering Procedures, Disclosure
Statement, Plan or any documents related to the Plan, including notices,
exhibits or appendices, or any of the Definitive Documentation (as defined in
the PSA) is amended or modified in any material respect without the prior
written consent of the Requisite Commitment Parties;

(c)    the Company, any of the other Debtors or any other Commitment Party files
any cause of action against and/or seeking to restrict the enforcement rights of
holders of Unsecured Notes Claims in their capacity as such (or if any of the
Company, any of the Debtors or other Commitment Party supports any such motion,
application or adversary proceeding commenced by any third party or consents to
the standing of any such third party);

(d)    (i) (A) the Debtors have materially breached their obligations under
Section 6.14, (B) a Commitment Party delivers written notice of such breach to
the Company, and (C) such breach is not cured by the Company by the fifth
(5th) Business Day after receipt of such notice, (ii) the Bankruptcy Court
approves or authorizes an Alternative Transaction or (iii) the Company or any of
its Subsidiaries enters into any Contract or written agreement in principle
providing for the consummation of any Alternative Transaction;

(e)    the Company or any other Debtor (i) amends or modifies, or files a
pleading seeking authority to amend or modify, the Definitive Documentation in a
manner that is materially inconsistent with this Agreement; (ii) suspends or
revokes the Transaction Agreements; or (iii) publicly announces its intention to
take any such action listed in sub-clauses (i) and (ii) of this subsection;

 

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(f)    [Reserved]

(g)    except as provided by the PSA, the modification or amendment of any
interim or final cash collateral Order entered in the Chapter 11 Cases that is
not satisfactory, in their sole discretion, to the Requisite Commitment Parties;

(h)    the Closing Date has not occurred by 11:59 p.m., New York City time on
the date that is one hundred thirty (130) days after the date hereof (as it may
be extended pursuant to this Section 9.4(h) or Section 2.3(a), the “Outside
Date”), unless prior thereto the Effective Date occurs and the Rights Offering
has been consummated provided, that, the Outside Date may be waived or extended
with the prior written consent of the Company and the Requisite Commitment
Parties up to the date that is one hundred eighty (180) days after the date
hereof (the “Final Outside Date”);

(i)    the Bankruptcy Court has not entered the BCA Approval Order or the PSA
Approval Order on or prior to December 8, 2016;

(j)    the Bankruptcy Court has not entered the Plan Solicitation Order on or
prior to the date that is forty-five (45) days after entry of the BCA Approval
Order and PSA Approval Order;

(k)    the Bankruptcy Court has not entered the Confirmation Order on or prior
to the date that is ninety (90) days after the entry of the BCA Approval Order
and PSA Approval Order;

(l)    (i) the Company or the other Debtors shall have breached any
representation, warranty, covenant or other agreement made by the Company or the
other Debtors in this Agreement or any such representation or warranty shall
have become inaccurate and such breach or inaccuracy would, individually or in
the aggregate, cause a condition set forth in Sections 7.1(l), 7.1(m) or 7.1(n)
not to be satisfied, (ii) the Commitment Parties shall have delivered written
notice of such breach or inaccuracy to the Company, (iii) such breach or
inaccuracy is not cured by the Company or the other Debtors by the tenth
(10th) Business Day after receipt of such notice, and (iv) as a result of such
failure to cure, any condition set forth in Sections 7.1(l), 7.1(m) or 7.1(n) is
not capable of being satisfied; provided, that, this Agreement shall not
terminate pursuant to this Section 9.4(l) if the Requisite Commitment Parties
are then in willful or intentional breach of this Agreement;

(m)    since September 30, 2016, there shall have occurred any event,
development, occurrence or change that, individually, or together with all other
Events, has had or would reasonably be expected to have a Material Adverse
Effect; or

(n)    the amount of Cash of the Company shall, at any time, be less than
$25,000,000.

 

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Section 9.5    Termination by any Commitment Party. (a) This Agreement may be
terminated by any Commitment Party, as to itself only, upon written notice to
the Company if the Closing Date has not occurred by the Final Outside Date.

(b)    Upon the occurrence of any termination by a Commitment Party (the
“Withdrawing Commitment Party”) pursuant to Section 9.5(a), the remaining
Commitment Parties and their respective Affiliated Funds (other than any
Withdrawing Commitment Party) shall have the right, but not the obligation,
within the five (5) Business Days after receipt of written notice from the
Company Party Withdrawal (such five (5) Business Day period, the “Commitment
Party Withdrawal Replacement Period”), to make arrangements for one or more of
the Commitment Parties (other than the Withdrawing Commitment Party) to purchase
the Withdrawing Commitment Party’s Backstop Commitment Percentage in amounts as
may be agreed upon by all Commitment Parties electing to purchase such Backstop
Commitment Percentage, or, if no such agreement is reached, based upon the
relative applicable Backstop Commitment Percentages of any such Commitment
Parties (such Commitment Parties, the “Withdrawal Replacing Commitment
Parties”). Any such Backstop Commitment Percentage purchased by a Withdrawal
Replacing Commitment Party shall be included, among other things, in the
determination of (x) the Unsubscribed Shares to be purchased by such Withdrawal
Replacing Commitment Party for all purposes hereunder, (y) the Backstop
Commitment Percentage of such Withdrawal Replacing Commitment Party for all
purposes hereunder and (z) the Backstop Commitment of such Withdrawal Replacing
Commitment Party for purposes of the definition of Requisite Commitment Parties.

(c)    If after giving effect to the provisions in Section 9.5(b), no agreement
can be reached for acquisition of a Withdrawing Commitment Party’s Backstop
Commitment Percentage within the Commitment Party Withdrawal Replacement Period,
this Agreement shall terminate with respect to all Parties.

Section 9.6    Effect of Termination. (a) Upon termination of this Agreement
pursuant to this Article IX, this Agreement shall forthwith become void and of
no force or effect and there shall be no further obligations or liabilities on
the part of the Parties; provided, that (i) subject to Section 2.3(c), the
obligations of the Debtors to pay the Expense Reimbursement pursuant to
Article III, to satisfy their indemnification obligations pursuant to
Article VIII and to pay the Termination Fee pursuant to Section 9.6(b) shall
survive the termination of this Agreement and shall remain in full force and
effect, in each case, until such obligations have been satisfied, (ii) the
provisions set forth in Section 6.4(b), this Section 9.6 and Article X shall
survive the termination of this Agreement in accordance with their terms and
(iii) subject to Section 10.10, nothing in this Section 9.6 shall relieve any
Party from liability for its gross negligence, willful misconduct or any willful
or intentional breach of this Agreement. For purposes of this Agreement,
“willful or intentional breach” means a breach of this Agreement that is a
consequence of an act undertaken by the breaching party with the knowledge that
the taking of such act would, or would reasonably be expected to, cause a breach
of this Agreement.

(b)    If this Agreement shall be terminated for any reason other than by the
Company under Section 9.3(a), (c) (only in the case such Consenting Noteholder
is also a Commitment Party hereunder) or (d), then the Debtors shall, promptly
after the date of such termination, pay the Termination Fee entirely in cash to
the Commitment Parties or their

 

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designees in accordance with Section 3.2. To the extent that all amounts due in
respect of the Termination Fee pursuant to this Section 9.6(b) have actually
been paid by the Debtors to the Commitment Parties in connection with a
termination of this Agreement, the Commitment Parties shall not have any
additional recourse against the Debtors for any obligations or liabilities
relating to or arising from this Agreement, except for, subject to Section
10.10, liability for gross negligence, willful misconduct or any willful or
intentional breach of this Agreement pursuant to Section 9.6(a). Except as
expressly set forth in this Section 9.6(b), the Termination Fee shall not be
payable upon the termination of this Agreement. The Termination Fee shall,
pursuant to the BCA Approval Order, constitute allowed administrative expenses
of the Debtors’ estate under sections 503(b) and 507 of the Bankruptcy Code.

ARTICLE X

GENERAL PROVISIONS

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

(a)    If to the Company or the other Chaparral Parties:

Chaparral Energy, Inc.

701 Cedar Lake Boulevard

Oklahoma City, Oklahoma 73114

Facsimile:        (405) [478]-[8770]

Attention:        Mark Fischer

Email: markf@chaparralenergy.com

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

Latham & Watkins LLP

885 Third Avenue

New York, NY 10022-4834

Facsimile:        (212) 751-4864

Attention:        Keith Simon

Email: keith.simon@lw.com

(b)    If to the Commitment Parties (or to any of them) or any other Person to
which notice is to be delivered hereunder, to the address set forth opposite
each such Commitment Party’s name on Schedule 5,

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

Milbank, Tweed, Hadley & McCloy LLP

Attn: Evan Fleck

 

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28 Liberty Street

New York, New York 10005

Tel:      (212) 530-5567

Fax:     (212) 822-5567

Email: efleck@milbank.com

Section 10.2    Assignment; Third-Party Beneficiaries. Neither this Agreement
nor any of the rights, interests or obligations under this Agreement shall be
assigned by any Party (whether by operation of Law or otherwise) without the
prior written consent of the Company and the Requisite Commitment Parties, other
than an assignment by a Commitment Party expressly permitted by Section 2.3 or
Section 2.6 and any purported assignment in violation of this Section 10.2 shall
be void ab initio and of no force or effect. Except as expressly provided in
Article VIII with respect to the Indemnified Persons, this Agreement (including
the documents and instruments referred to in this Agreement) is not intended to
and does not confer upon any Person any rights or remedies under this Agreement
other than the Parties.

Section 10.3    Prior Negotiations; Entire Agreement. (a) This Agreement
(including the agreements attached as Exhibits to and the documents and
instruments referred to in this Agreement) constitutes the entire agreement of
the Parties and supersedes all prior agreements, arrangements or understandings,
whether written or oral, among the Parties with respect to the subject matter of
this Agreement, except that the Parties hereto acknowledge that any
confidentiality agreements heretofore executed between or among the Parties and
the PSA (including the Term Sheet) will each continue in full force and effect.

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

Section 10.4    Governing Law; Venue. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH (A) THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD FOR ANY CONFLICTS OF LAW PRINCIPLES THAT WOULD APPLY THE LAWS OF ANY
OTHER JURISDICTION, AND (B) TO THE EXTENT APPLICABLE, THE BANKRUPTCY CODE. THE
PARTIES CONSENT AND AGREE THAT ANY ACTION TO ENFORCE THIS AGREEMENT OR ANY
DISPUTE, WHETHER SUCH DISPUTES ARISE IN LAW OR EQUITY, ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE AGREEMENTS, INSTRUMENTS AND DOCUMENTS
CONTEMPLATED HEREBY SHALL BE BROUGHT EXCLUSIVELY IN THE BANKRUPTCY COURT (OR,
SOLELY TO THE EXTENT THE BANKRUPTCY COURT DECLINES JURISDICTION OVER SUCH ACTION
OR DISPUTE, IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK OR ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY). THE PARTIES CONSENT
TO AND AGREE TO SUBMIT TO THE EXCLUSIVE JURISDICTION

 

58

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OF THE BANKRUPTCY COURT. EACH OF THE PARTIES HEREBY WAIVES AND AGREES NOT TO
ASSERT IN ANY SUCH DISPUTE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY CLAIM THAT (I) SUCH PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF
THE BANKRUPTCY COURT, (II) SUCH PARTY OR SUCH PARTY’S PROPERTY IS IMMUNE FROM
ANY LEGAL PROCESS ISSUED BY THE BANKRUPTCY COURT OR (III) ANY LITIGATION OR
OTHER PROCEEDING COMMENCED IN THE BANKRUPTCY COURT IS BROUGHT IN AN INCONVENIENT
FORUM. THE PARTIES HEREBY AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN
CONNECTION WITH ANY SUCH ACTION OR PROCEEDING TO AN ADDRESS PROVIDED IN WRITING
BY THE RECIPIENT OF SUCH MAILING, OR IN SUCH OTHER MANNER AS MAY BE PERMITTED BY
LAW, SHALL BE VALID AND SUFFICIENT SERVICE THEREOF AND HEREBY WAIVE ANY
OBJECTIONS TO SERVICE ACCOMPLISHED IN THE MANNER HEREIN PROVIDED.

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

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

Section 10.7    Waivers and Amendments; Rights Cumulative; Consent. This
Agreement may be amended, restated, modified or changed only by a written
instrument signed by the Company and the Requisite Commitment Parties; provided,
that (a) any Commitment Party’s prior written consent shall be required for any
amendment that would, directly or indirectly: (i) modify such Commitment Party’s
Backstop Commitment Percentage, (ii) increase the Purchase Price to be paid in
respect of the Unsubscribed Shares, or (iii) have a materially adverse and
disproportionate effect on such Commitment Party and (b) the prior written
consent of each Commitment Party shall be required for any amendment that would,
directly or indirectly modify a Significant Term. Notwithstanding the foregoing,
Schedule 2 shall be revised as necessary without requiring a written instrument
signed by the Company and the Requisite Commitment Parties to reflect conforming
changes in the composition of the Backstop Parties and Backstop Commitment
Percentages as a result of Transfers permitted and consummated in compliance
with the terms and conditions of this Agreement. The terms and conditions of
this Agreement (other than the conditions set forth in Sections 7.1 and 7.3, the
waiver of which shall be governed solely by Article VII, the waiver of which
shall be governed by their respective terms) may be waived (A) by the Debtors
only by a written instrument executed by the Company and (B) by the Requisite
Commitment Parties only by a written instrument executed by the Requisite
Commitment Parties. No delay on the part of any Party in exercising any right,
power or privilege pursuant to this Agreement will operate as a waiver thereof,
nor will any waiver on the part of any Party of any right, power or privilege
pursuant to this Agreement, nor will any single or partial exercise of any
right, power or privilege pursuant to this Agreement, preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
pursuant to this Agreement.

 

59

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

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

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

Section 10.11    No Reliance. No Commitment Party or any of its Related Parties
shall have any duties or obligations to the other Commitment Parties in respect
of this Agreement, the Plan or the transactions contemplated hereby or thereby,
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) no Commitment Party or any of its Related Parties shall be
subject to any fiduciary or other implied duties to the other Commitment
Parties, (b) no Commitment Party or any of its Related Parties shall have any
duty to take any discretionary action or exercise any discretionary powers on
behalf of any other Commitment Party, (c) no Commitment Party or any of its
Related Parties shall have any duty to the other Commitment Parties to obtain,
through the exercise of diligence or otherwise, to investigate, confirm, or
disclose to the other Commitment Parties any information relating to the Company
or any of its Subsidiaries that may have been communicated to or obtained by
such Commitment Party or any of its Affiliates in any capacity, (d) no
Commitment Party may rely, and confirms that it has not relied, on any due
diligence investigation that any other Commitment Party or any Person acting on
behalf of such other Commitment Party may have conducted with respect to the
Company or any of its Affiliates or any of their respective securities, and
(e) each Commitment Party acknowledges that no other Commitment Party is acting
as a placement agent, initial purchaser, underwriter, broker or finder with
respect to its Unsubscribed Shares or Backstop Commitment Percentage of its
Backstop Commitment.

Section 10.12    Publicity. At all times prior to the Closing Date or the
earlier termination of this Agreement in accordance with its terms, the Company
and the Commitment Parties shall consult with each other prior to issuing any
press releases (and provide each other a reasonable opportunity to review and
comment upon such release) or otherwise making public announcements with respect
to the transactions contemplated by this Agreement, it being understood that
nothing in this Section 10.12 shall prohibit any Party from filing any motions
or other pleadings or documents with the Bankruptcy Court in connection with the
Chapter 11 Cases.

 

60

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Section 10.13    Settlement Discussions. This Agreement and the transactions
contemplated herein are part of a proposed settlement of a dispute between the
Parties. Nothing herein shall be deemed an admission of any kind. Pursuant to
Section 408 of the U.S. Federal Rule of Evidence and any applicable state rules
of evidence, this Agreement and all negotiations relating thereto shall not be
admissible into evidence in any Legal Proceeding, except to the extent filed
with, or disclosed to, the Bankruptcy Court in connection with the Chapter 11
Cases (other than a Legal Proceeding to approve or enforce the terms of this
Agreement). The Parties agree that any valuations of the Company’s or other
Debtor’s assets or estates, whether implied or otherwise, arising from this
Agreement shall not be binding for any other purpose, including determining
recoveries under the Plan, and that this Agreement does not limit the Parties’
rights regarding valuation in the Chapter 11 Cases.

Section 10.14    No Recourse. Notwithstanding anything that may be expressed or
implied in this Agreement, and notwithstanding the fact that certain of the
Parties may be partnerships or limited liability companies, each Party
covenants, agrees and acknowledges that no recourse under this Agreement or any
documents or instruments delivered in connection with this Agreement shall be
had against any Party’s Affiliates or any of the respective Related Parties of
such Party or of the Affiliates of such Party (in each case other than the
Parties to this Agreement and each of their respective successors and permitted
assignees under this Agreement), whether by the enforcement of any assessment or
by any legal or equitable proceeding, or by virtue of any applicable Law, it
being expressly agreed and acknowledged that no personal liability whatsoever
shall attach to, be imposed on or otherwise be incurred by any of such Related
Parties, as such, for any obligation or liability of any Party under this
Agreement or any documents or instruments delivered in connection herewith for
any claim based on, in respect of or by reason of such obligations or
liabilities or their creation; provided, however, nothing in this Section 10.14
shall relieve or otherwise limit the liability of any Party hereto or any of
their respective successors or permitted assigns for any breach or violation of
its obligations under this Agreement or such other documents or instruments. For
the avoidance of doubt, none of the Parties will have any recourse, be entitled
to commence any proceeding or make any claim under this Agreement or in
connection with the transactions contemplated hereby except against any of the
Parties or their respective successors and permitted assigns, as applicable.

Section 10.15.    Severability. In the event that any one or more of the
provisions contained in this Agreement is held invalid, illegal or unenforceable
in any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions contained
herein will not be in any way impaired thereby, it being intended that all of
the rights and privileges of the parties hereto will be enforceable to the
fullest extent permitted by law.

[Signature Pages Follow]

 

61

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

 

CHAPARRAL ENERGY, INC. By:  

 

Name:   Title:   Guarantors: CHAPARRAL RESOURCES, L.L.C. By:  

 

Name:   Title:   CHAPARRAL REAL ESTATE, L.L.C. By:  

 

Name:   Title:   CHAPARRAL CO2, L.L.C. By:  

 

Name:   Title:   CEI PIPELINE, L.L.C. By:  

 

Name:   Title:  

[SIGNATURE PAGE TO BACKSTOP COMMITMENT AGREEMENT]

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

CHAPARRAL ENERGY, L.L.C. By:  

 

Name:   Title:   CEI ACQUISITION, L.L.C. By:  

 

Name:   Title:   GREEN COUNTY SUPPLY, INC. By:  

 

Name:   Title:   CHAPARRAL BIOFUELS, L.L.C. By:  

 

Name:   Title:   CHAPARRAL EXPLORATION, L.L.C. By:  

 

Name:   Title:   ROADRUNNER DRILLING, L.L.C. By:  

 

Name:   Title:  

[SIGNATURE PAGE TO BACKSTOP COMMITMENT AGREEMENT]

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

    [COMMITMENT PARTY]     By:  

 

    Name:       Title:  

[SIGNATURE PAGE TO BACKSTOP COMMITMENT AGREEMENT]

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

SCHEDULE 1 –SUBSIDIARIES

Chaparral Resources, L.L.C.

Chaparral Real Estate, L.L.C.

Chaparral CO2, L.L.C.

CEI Pipeline, L.L.C.

Chaparral Energy, L.L.C.

CEI Acquisition, L.L.C.

Green Country Supply, Inc.

Chaparral Biofuels, L.L.C.

Chaparral Exploration, L.L.C.

Roadrunner Drilling, L.L.C

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

SCHEDULE 2 – BACKSTOP COMMITMENT PERCENTAGES

[To come]

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

SCHEDULE 3 – UNSECURED NOTES CLAIMS

 

Beneficial Holder

 

Debt Instrument

 

Principal Amount of Claims
Thereunder

[  ]

  2010 Indenture     2011 Indenture     2012 Indenture     Total Claims:  

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

SCHEDULE 4 – CONSENTS

[To come]

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

SCHEDULE 5 – NOTICE ADDRESSES FOR COMMITMENT PARTIES

[To come]

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

EXHIBIT A – FORM OF RIGHTS OFFERING PROCEDURES

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EXHIBIT B – FORM OF JOINDER FOR RELATED PURCHASER

Joinder to BACKSTOP COMMITMENT AGREEMENT

JOINDER TO BACKSTOP COMMITMENT AGREEMENT (this “Joinder”) dated as of
[            ], 2016, by and among [                    ] (the “Transferor”) and
[                    ] (the “Transferee”).

W I T N E S S E T H:

WHEREAS, Chaparral Energy, Inc. (the “Company”), the other Chaparral Parties
party thereto and the Commitment Parties party thereto have heretofore executed
and delivered a Backstop Commitment Agreement, dated as of November [●], 2016
(as amended, supplemented restated or otherwise modified from time to time, the
“Agreement”);

WHEREAS, pursuant to Section 2.6(b) of the Agreement, each Commitment Party
shall have the right to Transfer all or any portion of its Backstop Commitment
to any creditworthy Affiliate or Related Fund (other than any portfolio company
of such Commitment Party or its Affiliates), subject to the terms and conditions
set forth in the Agreement;

WHEREAS, Transferor desires to sell to Transferee and Transferee desires to
purchase from Transferor the percentage of its Backstop Commitment set forth
beneath its signature in the signature page hereto (the “Subject Transfer”);

NOW, THEREFORE, in consideration of the foregoing and for good and valuable
consideration, the receipt of which his hereby acknowledged, the Transferor, the
Transferee and the Company covenant and agree as follows:

1.    Defined Terms. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in the Agreement. The “General
Provisions” set forth in Article X of the Agreement shall be deemed to apply to
this Joinder and is incorporated herein by reference, mutatis mutandis.

2.    Agreement to Transfer. The Transferor hereby agrees to Transfer to the
Transferee, pursuant and subject to the terms and conditions set forth in the
Agreement and the BCA Approval Order, the Backstop Commitment Percentage set
forth beneath its signature in the signature page hereto (and Schedule 2 to the
Agreement shall be deemed to have been revised in accordance with the
Agreement).

3.    Agreement to be Bound. The Transferee hereby agrees (a) to become a party
to the Agreement as a Commitment Party and Party and as such will have all the
rights and be subject to all of the obligations and agreements of a Commitment
Party under the Agreement and (b) to purchase, pursuant and subject to the terms
and conditions set forth in the Agreement and the BCA Approval Order, such
number of Unsubscribed Shares as corresponds to the Transferee’s Backstop
Commitment Percentage. For the avoidance of doubt, the Transferee’s Backstop
Commitment Percentage as of the date hereof is set forth on the signature page
hereto (and Schedule 2 to the Agreement shall be deemed to have been revised in
accordance with the Agreement); provided, however, that such Transferee’s
Backstop Commitment Percentage may be increased or decreased after the date
hereof as provided in the Agreement and the BCA Approval Order.

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

4.    Representations and Warranties of the Transferor. The Transferor hereby
represents and warrants that (a) the Transferee is an Affiliate or a Related
Fund of the Transferor; (b) the Transferee is not a portfolio company of the
Transferor or the Transferor’s Affiliates and (c) the Subject Transfer does not
violate any of the provisions contained in Section 2.6(e) of the Agreement.

5.    Representations and Warranties of the Transferee. The Transferee hereby
makes, to each of the other Parties, as to itself only and (unless otherwise set
forth therein) as of the date hereof and as of the Closing Date, the
representations and warranties set forth in Article V of the Agreement;
provided, however, for purposes of Sections 5.7(a) and 5.7(b) of the Agreement,
the Transferee’s aggregate principal amount of Unsecured Notes Claims as of the
date hereof is as set forth on the signature page hereto.

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

7.    Notice. All notices and other communications given or made to the
Transferee in connection with the Agreement shall be made in accordance with
Section 10.1 of the Agreement, to the address set forth under the Transferee’s
signature in the signature pages hereto (and the Agreement shall be deemed to
have been updated to include such notice information for the Transferee).

[Signature pages follow]

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

IN WITNESS WHEREOF, each of the undersigned parties has caused this Joinder to
be executed as of the date first written above.

 

TRANSFEROR: [                    ] By:  

 

  Name:   Title:   Address 1:   Address 2:   Attention:   Facsimile:   Backstop
Commitment Percentage:   Unsecured Notes Claims: TRANSFEREE:
[                    ] By:  

 

  Name:   Title:   Address 1:   Address 2:   Attention:   Facsimile:   Backstop
Commitment Percentage:   Unsecured Notes Claims:

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

Acknowledged and Agreed to:

 

CHAPARRAL ENERGY, INC. By:  

 

Name:   Title:  

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

EXHIBIT C-1 – FORM OF JOINDER FOR EXISTING COMMITMENT PARTY PURCHASER

JOINDER TO BACKSTOP COMMITMENT AGREEMENT

JOINDER TO BACKSTOP COMMITMENT AGREEMENT (this “Joinder”) dated as of
[            ], 2016, by and among [                    ] (the “Transferor”) and
[                    ] (the “Transferee”).

W I T N E S S E T H:

WHEREAS, Chaparral Energy, Inc. (the “Company”), the other Chaparral Parties
party thereto and the Commitment Parties party thereto have heretofore executed
and delivered a Backstop Commitment Agreement, dated as of November [●], 2016
(as amended, supplemented restated or otherwise modified from time to time, the
“Agreement”);

WHEREAS, pursuant to Section 2.6(c) of the Agreement, each Commitment Party
shall have the right to Transfer all or any portion of its Backstop Commitment
to any other Commitment Party or such other Commitment Party’s Affiliate or
Related Fund (other than any portfolio company of such other Commitment Party or
its Affiliates), subject to the terms and conditions set forth in the Agreement;

WHEREAS, the Subject Transfer has been consented to be the Requisite Commitment
Parties; and

WHEREAS, Transferor desires to sell to Transferee and Transferee desires to
purchase from Transferor the percentage of its Backstop Commitment set forth
beneath its signature in the signature page hereto (the “Subject Transfer”);

NOW, THEREFORE, in consideration of the foregoing and for good and valuable
consideration, the receipt of which his hereby acknowledged, the Transferor, the
Transferee and the Company covenant and agree as follows:

1.    Defined Terms. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in the Agreement. The “General
Provisions” set forth in Article X of the Agreement shall be deemed to apply to
this Joinder and is incorporated herein by reference, mutatis mutandis.

2.    Agreement to Transfer. The Transferor hereby agrees to Transfer to the
Transferee, pursuant and subject to the terms and conditions set forth in the
Agreement and the BCA Approval Order, the Backstop Commitment Percentage set
forth beneath its signature in the signature page hereto (and Schedule 2 to the
Agreement shall be deemed to have been revised in accordance with the
Agreement).

3.    Agreement to be Bound. The Transferee hereby agrees (a) to become a party
to the Agreement as a Commitment Party and Party and as such will have all the
rights and be subject to all of the obligations and agreements of a Commitment
Party under the Agreement and (b) to purchase, pursuant and subject to the terms
and conditions set forth in the Agreement and

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

the BCA Approval Order, such number of Unsubscribed Shares as corresponds to the
Transferee’s Backstop Commitment Percentage. For the avoidance of doubt, the
Transferee’s Backstop Commitment Percentage as of the date hereof is set forth
on the signature page hereto (and Schedule 2 to the Agreement shall be deemed to
have been revised in accordance with the Agreement); provided, however, that
such Transferee’s Backstop Commitment Percentage may be increased or decreased
after the date hereof as provided in the Agreement and the BCA Approval Order.

4.    Release of Obligations of Transferor. Upon consummation of the Subject
Transfer, the Transferor shall be deemed to relinquish its rights (and be
released from its obligations, except for any claim for breach of the Agreement
that occurs prior to consummation of the Subject Transfer) under the Agreement
to the extent of the Backstop Commitment Transferred in the Subject Transfer.

5.    Representations and Warranties of the Transferor. The Transferor hereby
represents and warrants that (a) the Subject Transfer has been approved by the
Requisite Commitment Parties; (b) the Transferee is not a portfolio company of
the Transferor or the Transferor’s Affiliates and (c) the Subject Transfer does
not violate any of the provisions contained in Section 2.6(e) of the Agreement.

6.    Representations and Warranties of the Transferee. The Transferee hereby
makes, to each of the other Parties, as to itself only and (unless otherwise set
forth therein) as of the date hereof and as of the Closing Date, the
representations and warranties set forth in Article V of the Agreement;
provided, however, for purposes of Sections 5.7(a) and 5.7(b) of the Agreement,
the Transferee’s aggregate principal amount of Unsecured Notes Claims as of the
date hereof is as set forth on the signature page hereto.

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

8.    Notice. All notices and other communications given or made to the
Transferee in connection with the Agreement shall be made in accordance with
Section 10.1 of the Agreement, to the address set forth under the Transferee’s
signature in the signature pages hereto (and the Agreement shall be deemed to
have been updated to include such notice information for the Transferee).

[Signature pages follow]

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

IN WITNESS WHEREOF, each of the undersigned parties has caused this Joinder to
be executed as of the date first written above.

 

TRANSFEROR: [                    ] By:  

 

Name:   Title:     Address 1:   Address 2:   Attention:   Facsimile:   Backstop
Commitment Percentage:   Unsecured Notes Claims: TRANSFEREE:
[                    ] By:  

 

Name:   Title:     Address 1:   Address 2:   Attention:   Facsimile:   Backstop
Commitment Percentage:   Unsecured Notes Claims:

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

Acknowledged and Agreed to:

 

CHAPARRAL ENERGY, INC. By:  

 

Name:   Title:  

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

EXHIBIT C-2 – FORM OF AMENDMENT FOR EXISTING COMMITMENT PARTY PURCHASER

AMENDMENT TO BACKSTOP COMMITMENT AGREEMENT

AMENDMENT TO BACKSTOP COMMITMENT AGREEMENT (this “Amendment”) dated as of
[            ], 2016, by and among [                    ] (the “Transferor”) and
[                    ] (the “Transferee”).

W I T N E S S E T H:

WHEREAS, Chaparral Energy, Inc. (the “Company”), the other Chaparral Parties
party thereto and the Commitment Parties party thereto have heretofore executed
and delivered a Backstop Commitment Agreement, dated as of November [●], 2016
(as amended, supplemented restated or otherwise modified from time to time, the
“Agreement”);

WHEREAS, pursuant to Section 2.6(c) of the Agreement, each Commitment Party
shall have the right to Transfer all or any portion of its Backstop Commitment
to any other Commitment Party or such other Commitment Party’s Affiliate or
Related Fund (other than any portfolio company of such other Commitment Party or
its Affiliates), subject to the terms and conditions set forth in the Agreement;

WHEREAS, the Subject Transfer has been consented to be the Requisite Commitment
Parties; and

WHEREAS, Transferor desires to sell to Transferee and Transferee desires to
purchase from Transferor the percentage of its Backstop Commitment set forth
beneath its signature in the signature page hereto (the “Subject Transfer”);

NOW, THEREFORE, in consideration of the foregoing and for good and valuable
consideration, the receipt of which his hereby acknowledged, the Transferor, the
Transferee and the Company covenant and agree as follows:

1.    Defined Terms. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in the Agreement. The “General
Provisions” set forth in Article X of the Agreement shall be deemed to apply to
this Amendment and is incorporated herein by reference, mutatis mutandis.

2.    Agreement to Transfer. The Transferor hereby agrees to Transfer to the
Transferee, pursuant and subject to the terms and conditions set forth in the
Agreement and the BCA Approval Order, the Backstop Commitment Percentage set
forth beneath its signature in the signature page hereto (and Schedule 2 to the
Agreement shall be deemed to have been revised in accordance with the
Agreement).

3.    Agreement to be Bound. The Transferee hereby agrees to purchase, pursuant
and subject to the terms and conditions set forth in the Agreement and the BCA
Approval Order, such number of Unsubscribed Shares as corresponds to the
Transferee’s Backstop Commitment Percentage. For the avoidance of doubt, the
Transferee’s Backstop Commitment Percentage as

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

of the date hereof is set forth on the signature page hereto (and Schedule 2 to
the Agreement shall be deemed to have been revised in accordance with the
Agreement); provided, however, that such Transferee’s Backstop Commitment
Percentage may be increased or decreased after the date hereof as provided in
the Agreement and the BCA Approval Order.

4.    Release of Obligations of Transferor. Upon consummation of the Subject
Transfer, the Transferor shall be deemed to relinquish its rights (and be
released from its obligations, except for any claim for breach of the Agreement
that occurs prior to consummation of the Subject Transfer) under the Agreement
to the extent of the Backstop Commitment Transferred in the Subject Transfer.

5.    Representations and Warranties of the Transferor. The Transferor hereby
represents and warrants that (a) the Subject Transfer has been approved by the
Requisite Commitment Parties; (b) the Transferee is not a portfolio company of
the Transferor or the Transferor’s Affiliates and (c) the Subject Transfer does
not violate any of the provisions contained in Section 2.6(e) of the Agreement.

6.    Representations and Warranties of the Transferee. The Transferee hereby
makes, to each of the other Parties, as to itself only and (unless otherwise set
forth therein) as of the date hereof and as of the Closing Date, the
representations and warranties set forth in Article V of the Agreement;
provided, however, for purposes of Sections 5.7(a) and 5.7(b) of the Agreement,
the Transferee’s aggregate principal amount of Unsecured Notes Claims as of the
date hereof is as set forth on the signature page hereto.

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

8.    Notice. All notices and other communications given or made to the
Transferee in connection with the Agreement shall be made in accordance with
Section 10.1 of the Agreement, to the address set forth under the Transferee’s
signature in the signature pages hereto (and the Agreement shall be deemed to
have been updated to include such notice information for the Transferee).

[Signature pages follow]

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

IN WITNESS WHEREOF, each of the undersigned parties has caused this Amendment to
be executed as of the date first written above.

 

TRANSFEROR: [                    ] By:  

 

Name:   Title:     Address 1:   Address 2:   Attention:   Facsimile:   Backstop
Commitment Percentage:   Unsecured Notes Claims: TRANSFEREE:
[                    ] By:  

 

Name:   Title:     Address 1:   Address 2:   Attention:   Facsimile:   Backstop
Commitment Percentage:   Unsecured Notes Claims:

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

Acknowledged and Agreed to:

CHAPARRAL ENERGY, INC.

 

By:  

 

Name:   Title:  

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

EXHIBIT D – FORM OF JOINDER FOR NEW PURCHASER

JOINDER TO BACKSTOP COMMITMENT AGREEMENT

JOINDER TO BACKSTOP COMMITMENT AGREEMENT (this “Joinder”) dated as of
[            ], 2016, by and among [                    ] (the “Transferor”),
[                    ] (the “Transferee”) and Chaparral Energy, Inc. (the
“Company”).

W I T N E S S E T H:

WHEREAS, the Company, the other Chaparral Parties party thereto and the
Commitment Parties party thereto have heretofore executed and delivered a
Backstop Commitment Agreement, dated as of November [●], 2016 (as amended,
supplemented, restated or otherwise modified from time to time, the
“Agreement”);

WHEREAS, pursuant to Section 2.6(d) of the Agreement, each Commitment Party
shall have the right to Transfer all or any portion of its Backstop Commitment
to any Person, subject to the terms and conditions set forth in the Agreement;

WHEREAS, Transferor desires to sell to Transferee and Transferee desires to
purchase from Transferor the percentage of its Backstop Commitment set forth
beneath its signature in the signature page hereto (the “Subject Transfer”);

WHEREAS, the Subject Transfer has been consented to be the Requisite Commitment
Parties; and

WHEREAS, [the Subject Transfer has been consented to by the Company]/[the
Transferor has agreed to remain obligated to fund the portion of the Backstop
Commitment to be Transferred in the Subject Transfer;]

NOW, THEREFORE, in consideration of the foregoing and for good and valuable
consideration, the receipt of which is hereby acknowledged, the Transferor, the
Transferee and the Company covenant and agree as follows:

1.    Defined Terms. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in the Agreement. The “General
Provisions” set forth in Article X of the Agreement shall be deemed to apply to
this Joinder and is incorporated herein by reference, mutatis mutandis.

2.    Agreement to Transfer. The Transferor hereby agrees to Transfer to the
Transferee, pursuant and subject to the terms and conditions set forth in the
Agreement and the BCA Approval Order, the Backstop Commitment Percentage set
forth beneath its signature in the signature page hereto (and Schedule 2 to the
Agreement shall be deemed to have been revised in accordance with the
Agreement).

3.    Agreement to be Bound. The Transferee hereby agrees (a) to become a party
to the Agreement as a Commitment Party and Party and as such will have all the
rights and be subject to all of the obligations and agreements of a Commitment
Party under the Agreement and

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(b) to purchase, pursuant and subject to the terms and conditions set forth in
the Agreement and the BCA Approval Order, such number of Unsubscribed Shares as
corresponds to the Transferee’s Backstop Commitment Percentage. For the
avoidance of doubt, the Transferee’s Backstop Commitment Percentage as of the
date hereof is set forth on the signature page hereto (and Schedule 2 to the
Agreement shall be deemed to have been revised in accordance with the
Agreement); provided, however, that such Transferee’s Backstop Commitment
Percentage may be increased or decreased after the date hereof as provided in
the Agreement and the BCA Approval Order.

4.    [Continuing Obligations of Transferor. Nothing in this Joinder shall be
construed to relieve the Transferor from any of its obligations under the
Agreement.]/[Release of Obligations of Transferor. Upon consummation of the
Subject Transfer, the Transferor shall be deemed to relinquish its rights (and
be released from its obligations, except for any claim for breach of the
Agreement that occurs prior to consummation of the Subject Transfer) under the
Agreement to the extent of the Backstop Commitment Transferred in the Subject
Transfer.]

5.    Representations and Warranties of the Transferor. The Transferor hereby
represents and warrants that (a) the Subject Transfer has been approved by the
Requisite Commitment Parties; (b) [the Subject Transfer has been consented to by
the Company]/[it has agreed to remain obligated to fund the Backstop Commitment
to be Transferred in the Subject Transfer] and (c) the Subject Transfer does not
violate any of the provisions contained in Section 2.6(e) of the Agreement.

6.    Representations and Warranties of the Transferee. The Transferee hereby
makes, to each of the other Parties, as to itself only and (unless otherwise set
forth therein) as of the date hereof and as of the Closing Date, the
representations and warranties set forth in Article V of the Agreement;
provided, however, for purposes of Sections 5.7(a) and 5.7(b) of the Agreement,
the Transferee’s aggregate principal amount of Unsecured Notes Claims as of the
date hereof is as set forth on the signature page hereto.

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

8.    Notice. All notices and other communications given or made to the
Transferee in connection with the Agreement shall be made in accordance with
Section 10.1 of the Agreement, to the address set forth under the Transferee’s
signature in the signature pages hereto (and the Agreement shall be deemed to
have been updated to include such notice information for the Transferee).

[Signature pages follow]

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IN WITNESS WHEREOF, each of the undersigned parties has caused this Joinder to
be executed as of the date first written above.

 

TRANSFEROR: [                    ] By:  

 

Name:   Title:     Address 1:   Address 2:   Attention:   Facsimile:   Backstop
Commitment Percentage:   Unsecured Notes Claims: TRANSFEREE:
[                    ] By:  

 

Name:   Title:     Address 1:   Address 2:   Attention:   Facsimile:   Backstop
Commitment Percentage:   Unsecured Notes Claims:

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ACKNOWLEDGED:

CHAPARRAL ENERGY, INC.

 

By:  

 

Name:   Title: