Exhibit 10.2

Execution Version

 

 

 

BACKSTOP COMMITMENT AGREEMENT

AMONG

PENN VIRGINIA CORPORATION

AND

THE COMMITMENT PARTIES PARTY HERETO

Dated as of May 10, 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      17   

Section 2.3

  Commitment Party Default      17   

Section 2.4

  Escrow Account Funding      18   

Section 2.5

  Closing      19   

Section 2.6

  Designation and Assignment Rights      19    ARTICLE III BACKSTOP COMMITMENT
PREMIUM AND EXPENSE REIMBURSEMENT      21   

Section 3.1

  Premium Payable by the Company      21   

Section 3.2

  Payment of Premium      21   

Section 3.3

  Expense Reimbursement      22    ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
THE COMPANY      22   

Section 4.1

  Organization and Qualification      23   

Section 4.2

  Corporate Power and Authority      23   

Section 4.3

  Execution and Delivery; Enforceability      24   

Section 4.4

  Authorized and Issued Capital Stock      24   

Section 4.5

  Issuance      25   

Section 4.6

  No Conflict      25   

Section 4.7

  Consents and Approvals      25   

Section 4.8

  Arm’s-Length      26   

 

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TABLE OF CONTENTS (cont’d)

 

         Page  

Section 4.9

  Financial Statements      26   

Section 4.10

  Company SEC Documents and Disclosure Statement      26   

Section 4.11

  Absence of Certain Changes      27   

Section 4.12

  No Violation; Compliance with Laws      27   

Section 4.13

  Legal Proceedings      27   

Section 4.14

  Labor Relations      27   

Section 4.15

  Intellectual Property      27   

Section 4.16

  Title to Real and Personal Property      28   

Section 4.17

  No Undisclosed Relationships      28   

Section 4.18

  Licenses and Permits      29   

Section 4.19

  Environmental      29   

Section 4.20

  Tax Returns      30   

Section 4.21

  Employee Benefit Plans      30   

Section 4.22

  Internal Control Over Financial Reporting      31   

Section 4.23

  Disclosure Controls and Procedures      31   

Section 4.24

  Material Contracts      32   

Section 4.25

  No Unlawful Payments      32   

Section 4.26

  Compliance with Money Laundering Laws      32   

Section 4.27

  Compliance with Sanctions Laws      32   

Section 4.28

  No Broker’s Fees      33   

Section 4.29

  Takeover Statutes      33   

Section 4.30

  Investment Company Act      33   

Section 4.31

  Insurance      33   

Section 4.32

  Alternative Transactions      33   

 

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TABLE OF CONTENTS (cont’d)

 

         Page   ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMMITMENT
PARTIES      33   

Section 5.1

  Incorporation      33   

Section 5.2

  Corporate Power and Authority      33   

Section 5.3

  Execution and Delivery      34   

Section 5.4

  No Conflict      34   

Section 5.5

  Consents and Approvals      34   

Section 5.6

  No Registration      35   

Section 5.7

  Purchasing Intent      35   

Section 5.8

  Sophistication; Investigation      35   

Section 5.9

  No Broker’s Fees      35   

Section 5.10

  Note Claims      35   

Section 5.11

  Arm’s-Length      36    ARTICLE VI ADDITIONAL COVENANTS      36   

Section 6.1

  Orders Generally      36   

Section 6.2

  Confirmation Order; Plan and Disclosure Statement      37   

Section 6.3

  Conduct of Business      37   

Section 6.4

  Access to Information; Confidentiality      38   

Section 6.5

  Financial Information      39   

Section 6.6

  Commercially Reasonable Efforts      39   

Section 6.7

  Registration Rights Agreement; Reorganized Company Corporate Documents; Rights
Offering Procedures      40   

Section 6.8

  Blue Sky      41   

Section 6.9

  DTC Eligibility      41   

Section 6.10

  Use of Proceeds      41   

 

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TABLE OF CONTENTS (cont’d)

 

         Page  

Section 6.11

  Share Legend      41   

Section 6.12

  Antitrust Approval      42   

Section 6.13

  Alternative Transactions      43   

Section 6.14

  Hedging Arrangements      43    ARTICLE VII CONDITIONS TO THE OBLIGATIONS OF
THE PARTIES      44   

Section 7.1

  Conditions to the Obligations of the Commitment Parties      44   

Section 7.2

  Waiver of Conditions to Obligations of Commitment Parties      46   

Section 7.3

  Conditions to the Obligations of the Debtors      46    ARTICLE VIII
INDEMNIFICATION AND CONTRIBUTION      47   

Section 8.1

  Indemnification Obligations      47   

Section 8.2

  Indemnification Procedure      48   

Section 8.3

  Settlement of Indemnified Claims      49   

Section 8.4

  Contribution      49   

Section 8.5

  Treatment of Indemnification Payments      50   

Section 8.6

  No Survival      50    ARTICLE IX TERMINATION      50   

Section 9.1

  Consensual Termination      50   

Section 9.2

  Automatic Termination      50   

Section 9.3

  Termination by the Company      52   

Section 9.4

  Effect of Termination      53    ARTICLE X GENERAL PROVISIONS      54   

Section 10.1

  Notices      54   

Section 10.2

  Assignment; Third Party Beneficiaries      55   

Section 10.3

  Prior Negotiations; Entire Agreement      56   

 

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TABLE OF CONTENTS (cont’d)

 

         Page  

Section 10.4

  Governing Law; Venue      56   

Section 10.5

  Waiver of Jury Trial      57   

Section 10.6

  Counterparts      57   

Section 10.7

  Waivers and Amendments; Rights Cumulative; Consent      57   

Section 10.8

  Headings      57   

Section 10.9

  Specific Performance      58   

Section 10.10

  Damages      58   

Section 10.11

  No Reliance      58   

Section 10.12

  Publicity      58   

Section 10.13

  Settlement Discussions      58   

Section 10.14

  No Recourse      59   

SCHEDULES

 

Schedule 1    Backstop Commitment Percentages Schedule 2    Note Claims
Schedule 3    Consents

EXHIBITS

 

Exhibit A    Form of Rights Offering Procedures

 

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BACKSTOP COMMITMENT AGREEMENT

THIS BACKSTOP COMMITMENT AGREEMENT (this “Agreement”), dated as of May 10, 2016,
is made by and among Penn Virginia Corporation, a Virginia corporation and the
ultimate parent of each of the other Debtors (as the debtor in possession and a
reorganized debtor, as applicable, the “Company”), on behalf of itself and the
other Debtors, on the one hand, and the parties set forth on Schedule 1 hereto
(each referred to herein, individually, as a “Commitment Party” and,
collectively, as the “Commitment Parties”), on the other hand. The Company and
each Commitment Party is referred to herein, individually, as a “Party” and,
collectively, as the “Parties”. Capitalized terms that are used but not
otherwise defined in this Agreement shall have the meanings given to them in
Section 1.1 hereof or, if not defined therein, shall have the meaning given to
them in the Plan.

RECITALS

WHEREAS, the Debtors and the Commitment Parties have entered into a
Restructuring Support Agreement, dated as of May 10, 2016 (such agreement,
including all the exhibits thereto, as may be amended, supplemented or otherwise
modified from time to time, the “Restructuring Support Agreement”), which
(a) provides for the restructuring of the Debtors’ capital structure and
financial obligations pursuant to a “prearranged” plan of reorganization to be
filed in jointly administered cases (the “Chapter 11 Cases”) under Title 11 of
the United States Code, 11 U.S.C. §§ 101-1532 (as it may be amended from time to
time, the “Bankruptcy Code”), in the United States Bankruptcy Court for Eastern
District of Virginia, Richmond Division (the “Bankruptcy Court”), implementing
the terms and conditions of the Restructuring Transactions, including the terms
and conditions set forth in the Restructuring Term Sheet attached as Exhibit A
to the Restructuring Support Agreement (the “Restructuring Term Sheet”) and
(b) requires that the Plan be consistent with the Restructuring Support
Agreement.

WHEREAS, the Debtors plan to file with the Bankruptcy Court, in accordance with
the terms of the Restructuring Support Agreement, motions seeking entry of
(u) the Approval Order; (v) the Plan Solicitation Order; (w) an interim Order
authorizing use of cash collateral and debtor in-possession financing, on terms
consistent with the DIP Credit Agreement (the “Interim DIP Order”); (x) a final
Order authorizing use of cash collateral and debtor-in-possession financing on
terms consistent with the DIP Credit Agreement (the “Final DIP Order,” and
together with the Interim DIP Order, collectively, the “DIP Orders”); and
(y) the Confirmation Order.

WHEREAS, pursuant to the Plan and this Agreement, and in accordance with the
Rights Offering Procedures, the Company will conduct a rights offering for the
Rights Offering Shares in the Rights Offering Amount at an aggregate purchase
price of $50,000,000 and at the Per Share Purchase Price.

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, 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 or in the Plan, as applicable:

“Acceptable Hedging Program” has the meaning set forth in Section 6.14.

“Ad Hoc Committee” means that certain ad hoc committee of Noteholders (including
any Ultimate Purchaser(s) to which any member thereof or any of its Affiliates
has transferred all or a portion of its Backstop Commitment pursuant to
Section 2.6(b)) represented by Milbank, Tweed, Hadley & McCloy LLP.

“Affiliate” has the meaning set forth in section 101(2) of the Bankruptcy Code.
“Affiliated” has a correlative meaning.

“Affiliated Fund” means any investment fund the primary investment advisor to
which is such Commitment Party or an Affiliate thereof.

“Aggregate New Common Shares” means the total number of shares of New Common
Stock of the Reorganized Company outstanding as of the Closing Date (without
giving effect to the New Common Stock issued or issuable under the Rights
Offering or in respect of the Commitment Premium or in respect of the new
management incentive plan adopted in accordance with the Restructuring Term
Sheet).

“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.

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

“Antitrust Laws” means 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.

 

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

“Approval Order” means an Order of the Bankruptcy Court, approving the Debtors’
assumption of and entry into the Restructuring Support Agreement, including all
exhibits and other attachments thereto, including without limitation this
Agreement and the Exit Commitment Letters, pursuant to section 365 of the
Bankruptcy Code.

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

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

“Backstop Commitment Percentage” means, with respect to any Commitment Party,
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 1 (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 as
promulgated by the United States Supreme Court under section 2075 of title 28 of
the United States Code, 28 U.S.C. § 2075, as applicable to the Chapter 11 Cases
and the general, local, and chambers rules of the Bankruptcy Court.

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

“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 Restructuring
Support Agreement and in form and substance reasonably satisfactory to the
Requisite Commitment Parties and the Company.

“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 Restructuring Support Agreement and the Plan,
and otherwise be in form and substance reasonably satisfactory to the Requisite
Commitment Parties and the Company.

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

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

 

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

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

“Code” means the Internal Revenue Code of 1986.

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

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

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

“Commitment Premium Settlement Percentage” means the percentage determined by
multiplying (a) 100% by (b) the quotient determined by dividing (i) the
Commitment Premium by (ii) the Discounted Equity Plan Value.

“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 or 430 of the Code or Section 302
of ERISA, and (i) sponsored or maintained (at the time of determination or at
any time within the six years prior thereto) by the Company or any of its
Subsidiaries or any ERISA Affiliate, or with respect to which any such entity
has any liability or obligation 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” means all of the reports, schedules, forms, statements
and other documents (including exhibits and other information incorporated
therein) filed with the SEC by the Company.

“Confirmation Date” means the date on which the Bankruptcy Court enters the
Confirmation Order on the docket of the Chapter 11 Cases within the meaning of
Bankruptcy Rules 5003 and 9021.

 

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“Confirmation Order” means a Final Order of the Bankruptcy Court confirming the
Plan pursuant to section 1129 of the Bankruptcy Code.

“Consenting Noteholders” means each Noteholder that is party to the
Restructuring Support Agreement, solely in its capacity as such.

“Consenting RBL Lenders” means each RBL Lender that is party to the
Restructuring Support Agreement, solely in its capacity as such.

“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.

“Debtors” means, collectively, each of the following, as the debtors in
possession and reorganized debtors, as applicable: Penn Virginia Corporation;
Penn Virginia Holding Corporation; Penn Virginia MC Corporation; Penn Virginia
MC Energy L.L.C.; Penn Virginia MC Gathering Company L.L.C.; Penn Virginia MC
Operating Company L.L.C.; Penn Virginia Oil & Gas Corporation; Penn Virginia
Oil & Gas GP LLC; Penn Virginia Oil & Gas LP LLC; Penn Virginia Oil & Gas, L.P.;
and Penn Virginia Resource Holdings Corp.

“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 Restructuring
Support Agreement.

“DIP Agent” means Wells Fargo Bank, N.A., or any successor thereto, as
administrative agent under the DIP Facility, solely in its capacity as such.

“DIP Credit Agreement” means that certain senior secured debtor-in-possession
credit agreement, dated as of May 11, 2016, as amended, restated, modified,
supplemented, or replaced from time to time in accordance with its terms, by and
among the Debtors, the DIP Lenders, and the DIP Agent.

“DIP Facility” means that certain $25 million debtor-in-possession financing
facility provided by the DIP Lenders pursuant to the DIP Credit Agreement and
the DIP Orders.

“DIP Lenders” means certain RBL Lenders that have agreed to provide the DIP
Facility, solely in their capacity as such.

“DIP Orders” has the meaning set forth in the Recitals.

“Disclosure Statement” means the Disclosure Statement for the Joint Chapter 11
Plan of Reorganization of Penn Virginia Corporation and its Debtor Affiliates,
dated as of May 12, 2016, as may be amended, supplemented, or modified from time
to time, including all exhibits and schedules thereto and references therein
that relate to the Plan, that is prepared and distributed in accordance with the
Bankruptcy Code, the Bankruptcy Rules, and any other applicable law.

 

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“Discounted Equity Plan Value” means $95,100,000.

“Effective Date” means the date that is the first Business Day after the
Confirmation Date on which all conditions precedent to the occurrence of the
Effective Date set forth in Section 9.1 of the Plan have been satisfied or
waived in accordance with Section 9.2 of the Plan.

“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, or at any
relevant time during the past six years was, treated as a single employer under
any provision of 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, including the imposition of any Lien in
favor of the PBGC or 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 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

 

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the Code); (i) the conditions for imposition of a Lien under Section 303(k) of
ERISA or Section 430(k) of the Code shall have been met with respect to any
Company Plan; (j) the adoption of an amendment to a Company Plan requiring the
provision of security to such Company Plan pursuant to Section 307 of ERISA; or
(k) receipt from the IRS of notice of the failure of any Company Plan (or any
other employee benefit plan intended to be qualified under Section 401(a) of the
Code) to qualify under Section 401(a) of the Code, or the failure of any trust
forming part of any Company Plan to qualify for exemption from taxation under
Section 501(a) of the Code.

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

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

“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.

“Exit Commitment Letters” means the commitment letter and related fee letter
with respect thereto attached to the Restructuring Support Agreement as Exhibit
E setting forth the Exit Facility Lenders’ commitment to provide the Exit
Facility.

“Exit Facility” means the new reserve-based lending facility credit agreement on
the terms set forth in the Exit Facility Term Sheet and the Exit Commitment
Letters attached to the Restructuring Support Agreement as Exhibit D and Exhibit
E, respectively.

“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 Restructuring
Support Agreement 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 6.12(b).

“Final DIP Order” has the meaning set forth in the Recitals.

“Final Order” means, as applicable, an Order of the Bankruptcy Court or other
court of competent jurisdiction with respect to the relevant subject matter that
has not been reversed, stayed, 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, reargument, or rehearing shall have been
denied, resulted in no modification of such Order, or has otherwise been
dismissed with prejudice.

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

 

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

“Funding Notice” has the meaning set forth in the Subscription Agreement.

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

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

“Hazardous Materials” means all pollutants, contaminants, wastes, chemicals,
materials, substances and constituents, including explosive or radioactive
substances or petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls or radon gas, of any nature
subject to regulation or which can give rise to liability under any
Environmental Law.

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

“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.

“Indenture” means that certain Senior Indenture, dated as of June 15, 2009, as
amended, restated, modified, supplemented, or replaced from time to time prior
to the Petition Date, governing the Company’s 7.250% Senior Notes due 2019 and
the 8.500% Senior Notes due 2020, among the Company, each of the guarantors
party thereto, and the Indenture Trustee.

“Indenture Trustee” means Wilmington Savings Fund Society, FSB, or any successor
thereto, as trustee under the Indenture.

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

“Interim DIP Order” has the meaning set forth in the Recitals.

“IRS” means the United States Internal Revenue Service.

“Joint Filing Party” has the meaning set forth in Section 6.12(c).

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

 

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“Legend” has the meaning set forth in Section 6.11.

“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, 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 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 hostilities, acts of war, sabotage,
terrorism or military actions, or any escalation or material worsening of any
such hostilities, acts of war, sabotage, terrorism or military actions existing
or underway) or in the general business, market, financial or economic
conditions affecting the industries, regions and markets in which the Company
and its Subsidiaries operate, including any change in the United States or
foreign economies or securities, commodities or financial markets, or force
majeure events or “acts of God”; (ii) any changes after the date hereof in
applicable Law or GAAP, or in the interpretation or enforcement thereof;
(iii) the execution, announcement or performance of this Agreement or the other
Transaction Agreements or the transactions contemplated hereby or thereby
(including any act or omission of the Company or its Subsidiaries expressly
required or prohibited, as applicable, by this Agreement or consented to or
required by the Requisite Commitment Parties in writing); (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); (v) the departure of officers or directors of the
Company or any of its Subsidiaries (but not the underlying facts giving rise to
such departure unless such facts are otherwise excluded pursuant to the clauses
contained in this definition); (vi) the filing or pendency of the Chapter 11
Cases or actions taken in connection with the Chapter 11 Cases that are directed
by the Bankruptcy Court and made in compliance with the Bankruptcy Code;
(vii) declarations of national emergencies or natural disasters; (viii) the
effect of any action taken by Commitment Parties or their Affiliates with
respect to the DIP Facility or with respect to the Debtors (including through
such Persons’ participation in the Chapter 11 Cases); (ix) any matters expressly
disclosed in the Disclosure Statement or the Company Disclosure Schedules as
delivered on the date hereof; or (x) the occurrence of a Commitment Party
Default; provided, that the exceptions set forth in clauses (i) and (ii) shall
not apply to the extent that such Event is disproportionately adverse to the
Company and its Subsidiaries, taken as a whole, as compared to other companies
in the industries in which the Company and its Subsidiaries operate.

 

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“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,
(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, and (c) the Contracts described in
Section 1.1 of the Company Disclosure Schedules.

“Minimum Commitment Parties” means members of the Ad Hoc Committee holding at
least thirty-five percent (35%) of the Backstop Commitment that is held by the
Commitment Parties that are members of the Ad Hoc Committee as of the date on
which the consent or approval of such members is solicited; provided, that for
the purposes of this definition, each Commitment Party shall be deemed to hold
the Backstop Commitment held by such Commitment Party’s Related Purchasers.

“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
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 with respect to which any such entity has any liability or
obligation.

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

“Note Claims” means all claims against the Debtors arising on account of the
Indenture and the Notes.

“Noteholders” means all holders of the Notes.

“Notes” means the 7.250% Senior Notes due 2019 and the 8.500% Senior Notes due
2020, in each case issued pursuant to the Indenture.

“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 9.2(a).

“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 yet delinquent or
(ii) are being contested in good faith by appropriate proceedings and for which
adequate reserves have been made with respect thereto; (b) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s and other 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

 

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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, or, if for amounts that do materially detract from the value of,
or materially impair the use of, any of the Real Property or personal property
of the Company or any of its Subsidiaries, if such Lien is being contested in
good faith by appropriate proceedings and for which adequate reserves have been
made with respect thereto; (c) zoning, building codes and other land use Laws
regulating the use or occupancy of any Real Property or the activities conducted
thereon that are imposed by any Governmental Entity having jurisdiction over
such Real Property; provided, that no such zoning, building codes and other land
use Laws prohibit the use or occupancy of such Real Property; (d) easements,
covenants, conditions, restrictions on transfer and other similar matters
affecting title to any Real Property (including any title retention agreement)
and other title defects and encumbrances that do not or would not materially
impair the ownership, use or occupancy of such Real Property or the operation of
the Company’s or any of its Subsidiaries’ business; (e) Liens granted under any
Contracts (including joint operating agreements, oil and gas leases, farmout
agreements, joint development agreements, transportation agreements, marketing
agreements, seismic licenses and other similar operational oil and gas
agreements), in each case, to the extent the same are ordinary and customary in
the oil and gas business and do not or would not materially impair the
ownership, use or occupancy of any Real Property or the operation of the
Company’s or any of its Subsidiaries’ business; (f) Liens granted under the DIP
Credit Agreement and the DIP Orders; (g) from and after the occurrence of the
Effective Date, Liens granted in connection with the Exit Facility; and
(h) Liens that, pursuant to the Plan and the Confirmation Order, will be
discharged and released on the Effective Date.

“Per Share Purchase Price” means (a) the difference between the Discounted
Equity Plan Value and the Rights Offering Amount divided by (b) the Aggregate
New Common Shares.

“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” means the date on which each of the Debtors filed their
petitions for relief commencing the Chapter 11 Cases.

“Plan” means the Debtors’ joint plan of reorganization to be approved by the
Confirmation Order, including the Plan Supplement and all exhibits, supplements,
appendices and schedules thereto, in form and substance reasonably satisfactory
to each of the Requisite Commitment Parties and the Company, as may be amended,
supplemented, or modified from time to time in accordance with its terms and
with the Restructuring Support Agreement and in a manner that is reasonably
acceptable to the Requisite Commitment Parties and the Company.

“Plan Solicitation Motion” means the Debtors’ motion, in form and substance
reasonably satisfactory to the Requisite Commitment Parties and the Company, for
an order, among other things, (a) approving the Disclosure Statement;
(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 procedures for voting on the Plan;

 

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(f) establishing notice and objection procedures for the confirmation of the
Plan; (g) approving the Rights Offering Procedures; and (h) 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
approving the relief requested in the Plan Solicitation Motion, which Order
shall be in form and substance reasonably satisfactory to the Requisite
Commitment Parties and the Company.

“Plan Supplement” means the compilation of documents and forms of documents,
schedules, and exhibits to the Plan (as amended, supplemented, or modified from
time to time in accordance with the Plan, the Bankruptcy Code, the Bankruptcy
Rules, and the Restructuring Support Agreement), including without limitation
disclosure required under section 1129(a)(5) of the Bankruptcy Code, to be filed
by the Debtors no later than 14 days before the Confirmation Hearing, and
additional documents or amendments to previously filed documents, filed before
the Effective Date as amendments to the Plan Supplement, including the
following, as applicable: (a) the Exit Facility Documents; (b) the New
Organizational Documents; (c) a list of retained Causes of Action; (d) the New
Shareholders’ Agreement; (e) the Description of Transaction Steps; (f) the
Registration Rights Agreement; (g) the Schedule of Assumed Executory Contracts
and Unexpired Leases; (h) the Schedule of Rejected Executory Contracts and
Unexpired Leases; (i) the Agreement; and (j) any and all other documentation
necessary to effectuate the Restructuring Transactions or that is contemplated
by the Plan. The Debtors shall have the right to amend the documents contained
in, and exhibits to, the Plan Supplement through the Effective Date consistent
with and subject to the Restructuring Support Agreement.

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

“RBL Agent” means Wells Fargo Bank, N.A., or any successor thereto, as
administrative agent under the RBL Credit Agreement, solely in its capacity as
such.

“RBL Credit Agreement” means that certain Credit Agreement, dated as of
September 28, 2012, as amended, restated, modified, supplemented, or replaced
from time to time prior to the Petition Date, by and among Penn Virginia Holding
Corporation, as borrower, the Company, as parent, each of the guarantors party
thereto, the RBL Agent, and the RBL Lenders.

“RBL Lenders” means the lenders party to the RBL Credit Agreement, solely in
their capacity as such.

“Real Property” means, collectively, all right, title and interest (including
any leasehold estate) in and to any and all parcels of or interests in real
property owned in fee or leased by 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).

 

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

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

“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.
“Released” has a correlative meaning.

“Reorganized Company” means the Company, or any successors thereto, by merger,
consolidation, or otherwise, on and after the Effective Date.

“Reorganized Company Corporate Documents” means, collectively, 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.

“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 members of the Ad Hoc Committee holding at
least two-thirds of the Backstop Commitment that is held by the Commitment
Parties that are members of the Ad Hoc Committee as of the date on which the
consent or approval of such members is solicited; provided, that for the
purposes of this definition, each Commitment Party shall be deemed to hold the
Backstop Commitment held by such Commitment Party’s Related Purchasers.

“Restructuring Support Agreement” has the meaning set forth in the Recitals.

“Restructuring Support Parties” means, collectively, the Consenting Noteholders,
the DIP Lenders, the Commitment Parties, and the RBL Lenders in their capacity
as Consenting RBL Lenders, DIP Lenders and Exit Facility Lenders, in each case,
that are party to the Restructuring Support Agreement.

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

“Restructuring Transactions” has the meaning set forth in the Restructuring
Support Agreement.

 

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“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 Restructuring Support Agreement and
this Agreement, and in accordance with the Rights Offering Procedures.

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

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

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

“Rights Offering Procedures” means the procedures with respect to the Rights
Offering that are approved by the Bankruptcy Court pursuant to the Plan
Solicitation Order, which procedures shall be in form and substance
substantially as set forth on Exhibit A hereto, may be modified in a manner that
is reasonably acceptable to the Requisite Commitment Parties and the Company.

“Rights Offering Shares” means the shares of New Common Stock (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 Epiq Bankruptcy Solutions LLC or
another subscription agent appointed by the Company and satisfactory to the
Requisite Commitment Parties.

“RSA Effective Date” has the meaning set forth in the Restructuring Support
Agreement.

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

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

“Subscription Agreement” means that certain Subscription Agreement, by and
between the Company and the Subscriber (as defined therein).

“Subscription Rights” means the subscription rights to purchase Rights Offering
Shares.

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

 

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“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 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
security, withholding and other taxes, assessments, duties, levies or other
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. For the avoidance of doubt, such term shall exclude any tax,
penalties or interest thereon that result or have resulted from the non-payment
of royalties.

“Termination Date” has the meaning set forth in the Restructuring Support
Agreement.

“Termination Fee” means $2,000,000, which represents 4% of the Rights Offering
Amount.

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

“Transfer” means to 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, a Note Claim, a Rights
Offering Share or a share of New Common Stock). “Transfer” used as a noun has a
correlative meaning.

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

“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.

“Unlegended Shares” has the meaning set forth in Section 6.9.

“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 9.4(a).

 

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“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 Section 4203 of ERISA.

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

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

(b) 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 “$” refer to currency of the United States of
America, unless otherwise expressly provided.

 

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ARTICLE II

BACKSTOP COMMITMENT

Section 2.1 The Rights Offering; Subscription Rights. On and subject to the
terms and conditions hereof, including entry of the Approval Order, the Company
shall conduct the Rights Offering pursuant to and in accordance with the Rights
Offering Procedures and the Plan Solicitation Order. If reasonably requested by
the Requisite Commitment Parties from time to time prior to the Rights Offering
Expiration Time (and any 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.

Section 2.2 The Backstop Commitment. On and subject to the terms and conditions
hereof, including entry of the Approval 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 Commitment Party that
fails to comply with such obligations shall be liable to each non-Defaulting
Commitment Party as a result of such failure to comply. 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 applicable
aggregate Per Share 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 (provided that in no event shall such rounding reduce the
aggregate commitment of such Commitment Parties). The obligations of the
Commitment Parties to purchase the Unsubscribed Shares as described in this
Section 2.2 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
that are, or are Affiliated with, members of the Ad Hoc Committee (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 that is, or is Affiliated with, a member of
the Ad Hoc Committee (other than the Defaulting Commitment Party) to purchase
all or any portion of the Available Shares (such purchase, a “Commitment Party
Replacement”) on the terms and subject to the conditions set forth in this
Agreement and in such amounts 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, based upon the relative applicable Backstop
Commitment Percentages of any such Commitment Parties that are, or are
Affiliated with, members of the Ad Hoc Committee (other than the Defaulting
Commitment Party) (such Commitment Parties, the “Replacing Commitment Parties”).
Any such Available Shares purchased by a Replacing Commitment Party (and the
commitment and applicable aggregate Per Share Purchase Price associated
therewith) shall be included, among other things, in the determination of
(x) the Unsubscribed Shares of such Replacing Commitment Party for all

 

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purposes hereunder, (y) the Backstop Commitment Percentage of such Replacing
Commitment Party for purposes of Section 2.3(c) and Section 3.1 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.

(b) If a Commitment Party is a Defaulting Commitment Party, it shall not be
entitled to any of the Commitment Premium or Termination Fee hereunder.

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

(d) For the avoidance of doubt, notwithstanding anything to the contrary set
forth in Section 9.4 but subject to Section 10.10, no provision of this
Agreement shall relieve any Defaulting Commitment Party from liability
hereunder, or limit the availability of the remedies set forth in Section 10.9,
in connection with any such Defaulting Commitment Party’s Commitment Party
Default.

Section 2.4 Escrow Account Funding.

(a) Funding Notice. 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 the Funding Notice setting forth (i) the number
of Rights Offering Shares elected to be purchased by the Rights Offering
Participants and the aggregate Per Share Purchase Price therefor; (ii) the
aggregate number of Unsubscribed Shares, if any, and the aggregate Per Share
Purchase Price therefor; (iii) the aggregate number of Unsubscribed Shares
(based upon such Commitment Party’s Backstop Commitment Percentage) to be issued
and sold by the Company to such Commitment Party and the aggregate Per Share
Purchase Price therefor; and (iv) subject to the last sentence of
Section 2.4(b), the escrow account designated in escrow agreements mutually
satisfactory to each of the Parties, acting reasonably, to which such Commitment
Party shall deliver and pay the aggregate Per Share Purchase Price for such
Commitment Party’s Backstop Commitment Percentage of the Unsubscribed Shares
(the “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.

(b) Escrow Account Funding. At the Effective Date or such earlier date agreed
with the Requisite Commitment Parties pursuant to escrow agreements mutually
satisfactory to each of the Parties, acting reasonably (the “Escrow Account
Funding Date”), each Commitment Party shall deliver and pay the aggregate Per
Share Purchase Price for such Commitment Party’s Backstop Commitment Percentage
of the Unsubscribed Shares by wire transfer in immediately available funds in
U.S. dollars into the Escrow Account in satisfaction of such Commitment Party’s
Backstop Commitment. Notwithstanding the foregoing, if the Parties are unable to
agree to escrow agreements that are mutually acceptable to each of them, then
all payments contemplated to be made by the Noteholders to the Escrow Account
pursuant to this Section 2.4 shall instead be made to a Company bank account
designated by the Company in the Funding Notice and shall be delivered and paid
to such account on or prior to the Closing Date.

 

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Section 2.5 Closing.

(a) Subject to Article VII, unless otherwise mutually agreed in writing between
the Company and the Requisite Commitment Parties, the closing of the Backstop
Commitment (the “Closing”) shall take place at the offices of Milbank, Tweed,
Hadley & McCloy LLP, 28 Liberty Street, New York, New York 10005, at 10:00 a.m.,
New York City time, on 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 Escrow Account (and any amounts paid
to a Company bank account pursuant to the last sentence of Section 2.4(b))
shall, as applicable, be released and utilized 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 2.6(a)) against payment of the aggregate Per Share Purchase Price for
the Unsubscribed Shares of such Commitment Party, 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 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.

Section 2.6 Designation and Assignment Rights.

(a) Each Commitment Party shall have the right to designate by written notice to
the Company no later than two (2) Business Days prior to the Closing Date that
some or all of the Unsubscribed Shares that it is obligated to purchase
hereunder be issued in the name of, and delivered to, one or more of its
Affiliates or Affiliated Funds (other than any portfolio company of such
Commitment Party or its Affiliates) (each, a “Related Purchaser”) upon receipt
by the Company of payment therefor in accordance with the terms hereof, which
notice of designation shall (i) be addressed to the Company and signed by such
Commitment Party and each such Related Purchaser, (ii) specify the number of
Unsubscribed Shares 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 5.6 through 5.9 as applied
to such Related Purchaser; provided, that no such designation pursuant to this
Section 2.6(a) shall relieve such Commitment Party from its obligations under
this Agreement.

 

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

(c) Additionally, each Commitment Party shall have the right to Transfer all or
any portion of its Backstop Commitment to a Restructuring Support Party or any
other entity to whom such Commitment Party transfers its Note Claims in
accordance with the Restructuring Support Agreement, in each case, in full
compliance with all transfer restrictions set forth in the Restructuring Support
Agreement, including those contained in subclause (a) of Section 12 thereof,
provided, further, that in accordance with the Restructuring Support Agreement,
such transferee agrees in writing to be bound by the obligations of such
Commitment Party under this Agreement and is determined, after due inquiry and
investigation by the Restructuring Support Parties and the Debtors, to be
reasonably capable of fulfilling such obligations. Upon compliance with this
Section 2.6(c), the transferring Commitment Party shall be deemed to relinquish
its rights (and be released from its obligations, except for any claim for
breach of this Agreement that occurs prior to such Transfer) under this
Agreement to the extent of such transferred rights and obligations. Any Transfer
made in violation of this Section 2.6(c) 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 any obligation or
liability of any Debtor or any other Commitment Party to the purported
transferee.

(d) Each Commitment Party, severally and not jointly, agrees that it will not
Transfer, at any time prior to the Closing Date or the earlier termination of
this Agreement in accordance with its terms, any of its rights and obligations
under this Agreement to any Person other than in accordance with Sections 2.3,
2.6(a), 2.6(b) or 2.6(c). After the Closing Date, nothing in this Agreement
shall limit or restrict in any way the ability of any

 

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Commitment Party (or any permitted transferee thereof) to Transfer any of the
shares of New Common Stock or any interest therein; provided, that any such
Transfer shall be made pursuant to an effective registration statement under the
Securities Act or an exemption from the registration requirements thereunder and
pursuant to applicable securities Laws.

ARTICLE III

BACKSTOP COMMITMENT PREMIUM AND EXPENSE REIMBURSEMENT

Section 3.1 Premium Payable by the Company. Subject to Section 3.2, in
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 $3,000,000, which
represents 6% of the Rights Offering Amount, 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 based
upon their respective Backstop Commitment Percentages at the time the payment is
made (the “Commitment Premium”).

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 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 by, in lieu of any cash payments,
issuing the number of additional shares of New Common Stock (rounding down to
the nearest whole share solely to avoid fractional shares) to the Commitment
Parties that is required to be issued so that, after giving effect to the New
Common Stock issued or issuable under the Rights Offering and in respect of the
satisfaction of the Commitment Premium by way of issuance of such additional
shares of New Common Stock pursuant to this Section 3.2, the Commitment Parties
are issued, in satisfaction of the Company’s obligation to pay the Commitment
Premium, the Commitment Premium Settlement Percentage of the total number of
shares of New Common Stock of the Reorganized Company outstanding as of the
Closing Date (excluding from such total number of shares of New Common Stock any
shares of New Common Stock issued or issuable in respect of the new management
incentive plan adopted in accordance with the Restructuring Term Sheet);
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
Section 9.4.

 

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Section 3.3 Expense Reimbursement.

(a) The Debtors agree to pay, in accordance with Section 3.3(b) below, (A) the
reasonable and documented fees and expenses (including travel costs and
expenses) of Milbank, Tweed, Hadley & McCloy LLP (“Milbank”) as primary counsel,
one local counsel, W.D. Von Gonten & Co. as engineer consultants, and PJT
Partners LP, as financial advisor, for all Consenting Noteholders and Commitment
Parties, and Heidrick & Struggles as consultant, retained by Milbank, as counsel
to the Ad Hoc Committee, and any such other advisors or consultants as may be
reasonably determined by the Consenting Noteholders and the Commitment Parties,
in consultation with the Company, and (B) subject to entry of the Approval
Order, 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 expenses related thereto (such payment obligations set
forth in clauses (A) and (B) above, collectively, the “Expense Reimbursement”).
The Expense Reimbursement shall, pursuant to the Approval Order, constitute
allowed administrative expenses of the Debtors’ estate under sections 503(b)
and 507 of the Bankruptcy Code.

(b) The Expense Reimbursement described in Section 3.3(a)(A) shall be paid in
accordance with Section 14 of the Restructuring Support Agreement. The Expense
Reimbursement described in Section 3.3(a)(B) accrued through the date on which
the Approval Order is entered shall be paid in accordance with the DIP Orders,
and the Approval Order upon its entry by the Bankruptcy Court, and in no event
later than two Business Days after the date of the entry of the Approval Order.
The Expense Reimbursement described in Section 3.3(a)(B) shall thereafter be
payable by the Debtors in accordance with the DIP Orders and the Approval Order;
provided, that the Debtors’ final payment shall be made contemporaneously with
the Closing or the termination of this Agreement pursuant to Article IX. The
Commitment Parties shall promptly provide summary copies of all invoices
(redacted as necessary to protect privileges) to the Debtors and to the United
States Trustee.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except (i) as set forth in the corresponding section of the Company Disclosure
Schedules or (ii) as disclosed in the Company SEC Documents filed with the SEC
on or after December 31, 2015 and publicly available on the SEC’s Electronic
Data-Gathering, Analysis and Retrieval system prior to the date hereof
(excluding the exhibits, annexes and schedules thereto, any disclosures
contained in the “Forward-Looking Statements” or “Risk Factors” sections
thereof, or any other statements that are similarly predictive, cautionary or
forward looking in nature), the 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 (a) 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

 

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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),
(b) 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 (c) 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 (b) and (c) where the failure to have such
authority or qualifications would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

Section 4.2 Corporate Power and Authority.

(a) The Company has the requisite corporate power and authority (i) (A) subject
to entry of the Approval Order and 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 Approval Order and the Confirmation Order, to
perform each of its other obligations hereunder and (ii) subject to entry of the
Approval Order, 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 Restructuring Support
Agreement, the Registration Rights Agreement, the debtor-in-possession credit
agreement for the DIP Facility to be entered into in accordance with the DIP
Credit Agreement and the DIP Orders, the Exit Facility, and such other
agreements and any Plan supplements or documents referred to herein or therein
or hereunder or thereunder, 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 no other corporate proceedings on the part of the
Company 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.

(b) Subject to entry of the Approval Order, the Plan Solicitation Order, and the
Confirmation Order, each of the other Debtors has the requisite power and
authority (corporate or otherwise) to enter into, execute and deliver each
Transaction Agreement to which such other Debtor is a party and to perform its
obligations thereunder. Subject to entry of the Approval Order, the Plan
Solicitation Order, and the Confirmation Order, 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 action (corporate or otherwise) on behalf of each
other Debtor party thereto, and no other proceedings on the part of any other
Debtor party thereto 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.

 

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Section 4.3 Execution and Delivery; Enforceability. Subject to entry of the
Approval Order, this Agreement will have been, and subject to the entry of the
Approval Order, 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 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, to the extent applicable, the other
Debtors, enforceable against the Company and, to the extent applicable, the
other Debtors in accordance with their respective terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other similar Laws now or hereafter
in effect relating to creditor’s rights generally and subject to general
principles of equity. Upon entry of the Approval Order and assuming due and
valid execution and delivery of this Agreement and the other Transaction
Agreements by the Commitment Parties and, to the extent applicable, any other
parties hereof and thereof, each of the obligations of the Company and, to the
extent applicable, the other Debtors hereunder and thereunder will constitute
the valid and legally binding obligations of the Company and, to the extent
applicable, the other Debtors, enforceable against the Company and, to the
extent applicable, the other Debtors, in accordance with their respective terms,
subject to bankruptcy, insolvency, reorganization, moratorium and other similar
Laws now or hereafter in effect relating to creditor’s rights generally and
subject to general principles of equity.

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 New Common Shares plus the shares of New Common Stock
issued under the Rights Offering plus the shares of New Common Stock issued in
respect of the Commitment Premium pursuant to Article III, (ii) no shares of New
Common Stock will be held by the Company in its treasury, (iii) no shares of New
Common Stock will be reserved for issuance upon exercise of stock options and
other rights to purchase or acquire shares of New Common Stock granted in
connection with any employment arrangement entered into in accordance with
Section 6.3, except as reserved in respect of the new management incentive plan
adopted in accordance with the Restructuring Term Sheet, and (iv) no warrants to
purchase shares of New Common Stock will be issued and outstanding.

(b) As of the Closing Date, all issued and outstanding shares of New Common
Stock 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.

(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 and
this Agreement, as of the Closing Date, 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

 

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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. The shares of New Common Stock to be issued pursuant to
the Plan, including the shares of New Common Stock to be issued in connection
with the consummation of the Rights Offering and pursuant to the terms hereof,
will, when issued and delivered on the Closing Date in exchange for the
aggregate Per Share 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 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
(g) 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 specified in the Plan, in the
acceleration of, or the creation of any Lien under, or cause any payment or
consent to be required under any Contract to which the Company or any of its
Subsidiaries (including any Subsidiaries that are not Debtors) 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 (including any
Subsidiaries that are not Debtors) 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 (other than, for the avoidance of doubt, a
breach or default that would be triggered as a result of the Chapter 11 Cases or
the Company’s or any Debtor’s undertaking to implement the Restructuring
Transactions through the Chapter 11 Cases), or (c) result in any violation of
any Law or Order applicable to the Company or any of its Subsidiaries (including
any Subsidiaries that are not Debtors) or any of their properties, except in
each of the cases described in clause (a) or (c) for any conflict, breach,
modification, violation, default, acceleration or Lien which would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.

Section 4.7 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
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

 

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provisions hereof and thereof and the consummation of the transactions
contemplated herein and therein, except for (a) the entry of the Approval Order
authorizing the Company to assume this Agreement and perform the BCA Approval
Obligations, (b) entry of the Plan Solicitation Order, (c) 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; (d) the entry of the
Confirmation Order, (e) 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, (f) 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 New Common Stock as payment of the Commitment Premium, and
(g) any Applicable Consents that, if not made or obtained, would not reasonably
be expected to be material to the Company and its Subsidiaries taken as a whole.

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

Section 4.9 Financial Statements. 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 KPMG LLP (collectively, the “Financial Statements”), present
fairly 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 accordance with U.S.
generally accepted accounting principles (“GAAP”) applied consistently
throughout the periods involved (except as disclosed therein).

Section 4.10 Company SEC Documents and Disclosure Statement. Since December 31,
2014, the Company has filed all required reports, schedules, forms and
statements with the SEC. 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.

 

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Section 4.11 Absence of Certain Changes. Since December 31, 2015 to the date of
this Agreement, 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, 2013 in violation of any 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 as listed in Section 4.13 of the
Company Disclosure Schedules and other than the Chapter 11 Cases and any
adversary proceedings or contested motions commenced in connection therewith,
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.

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 threatened against the Company or
any of its Subsidiaries; (b) the hours worked and payments made to employees of
the Company or any of its Subsidiaries have not been in violation of the Fair
Labor Standards Act or any other applicable Law dealing with such matters; and
(c) all payments due from the Company or any of its Subsidiaries or for which
any claim may be made against the Company or any of its Subsidiaries on account
of wages and employee health and welfare insurance and other benefits have been
paid or accrued as a liability on the books of the Company 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,
mask works, domain names, and any and all applications or registrations for any
of the foregoing (collectively, “Intellectual Property

 

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Rights”) that are reasonably necessary for the operation of their respective
businesses, without conflict with the rights of any other Person, (b) to the
Knowledge of the Company, none of the Company or any of its Subsidiaries nor any
Intellectual Property Right, proprietary right, product, process, method,
substance, part, or other material now employed, sold or offered by or
contemplated to be employed, sold or offered by such Person, is interfering
with, infringing upon, misappropriating or otherwise violating any valid
Intellectual Property Rights of any Person, and (c) no claim or litigation
regarding any of the foregoing 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 its Real Properties 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 intended purposes and except where the failure to have such
title would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. To the Knowledge of the Company, all such
properties and assets are free and clear of Liens, other than Permitted Liens.

(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 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 would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

(c) Personal Property. Each of the Company and its Subsidiaries owns or
possesses the right to use, all Intellectual Property Rights and all licenses
and rights with respect to any of the foregoing used in the conduct of their
businesses, without any conflict (of which the Company or any of its
Subsidiaries has been notified in writing) with the rights of others, and free
from any burdensome restrictions on the present conduct of the Company and its
Subsidiaries, as the case may be, except where such conflicts and restrictions
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

Section 4.17 No Undisclosed Relationships. Other than Contracts or 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

 

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described, except for the transactions contemplated by this Agreement. Any
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 15, 2016 or another Company
SEC Document filed between March 15, 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 all declarations and filings with, the appropriate Governmental Entities
that are necessary for the ownership or lease of their respective properties and
the conduct of the business, 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. Neither the Company nor any of its
Subsidiaries (i) has received notice of any revocation or modification of any
such license, certificate, permit or authorization or (ii) has any reason 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. Except as to matters that would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect:
(a) 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 Environmental Laws, in each case relating to the
Company or any of its Subsidiaries, (b) the Company and each of its Subsidiaries
has all environmental permits, licenses and other approvals, and has maintained
all financial assurances, necessary for its operations to comply with all
applicable Environmental Laws and is, and during the term of all applicable
statutes of limitation, has been, in compliance with the terms of such permits,
licenses and other approvals and with all other applicable Environmental Laws,
(c) to the Knowledge of the Company, no Hazardous Material is located at, on or
under any property 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
Environmental Laws, (d) no Hazardous Material has been generated, owned,
treated, stored, handled or controlled by the Company or any of its Subsidiaries
and transported 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 Environmental Laws, and (e) there are no
agreements in which the Company or any of its Subsidiaries has expressly assumed
or undertaken responsibility for any known or reasonably likely liability or
obligation of any other Person arising under or relating to Environmental Laws,
which in any such case has not been made available to the Commitment Parties
prior to the date hereof.

 

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Section 4.20 Tax Returns.

(a) Except as would not reasonably be expected to be material to the Company and
its Subsidiaries taken as a whole, (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) taken as a
whole, each such Tax return is true and correct;

(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 assessments (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 or
assessments 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 with respect to
the Debtors only, except to the extent the non-payment thereof is permitted by
the Bankruptcy Code), which Taxes, if not paid or adequately provided for, would
reasonably be expected to be material to the Company and its Subsidiaries taken
as a whole; and

(c) 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 or
assessments that are being contested in good faith and are not expected to
result in significant negative adjustments that would be material to the Company
and its Subsidiaries taken as a whole, (i) there are no claims being asserted in
writing with respect to any Taxes, (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
material liability to the Company or any of its Subsidiaries: (i) each Company
Plan and each Multiemployer 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
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 “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;
(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 (vii) none of the Company or any of its Subsidiaries
or any ERISA Affiliate has incurred or is reasonably expected to incur any
Withdrawal Liability.

 

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(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 be reasonably 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
normal 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, all compensation and benefit arrangements
of the Company and its Subsidiaries comply and have complied in both form and
operation with their 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 Rules 13a-15(f) and 15d-15(f) promulgated
under the Exchange Act) that complies in all material respects with the
requirements of the Exchange Act and has been designed to provide reasonable
assurances regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with GAAP. To the
Knowledge of the Company, there are no material weaknesses in the Company’s
internal control over financial reporting as of the date hereof.

Section 4.23 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

 

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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 does not constitute a Material Adverse Effect), and no written
notice to terminate, in whole or part, any Material Contract has been delivered
to the Company or any of its Subsidiaries (except where such termination would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect). Other than as a result of the filing of the Chapter 11 Cases,
neither the Company nor any of its Subsidiaries nor, to the Knowledge of the
Company, any other party to any Material Contract, is in material default or
breach under the terms thereof, in each case, except for such instances of
material default or breach that would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

Section 4.25 No Unlawful Payments.

Since January 1, 2012, neither the Company nor any of its Subsidiaries nor, to
the Knowledge of the Company, 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; (c) violated or is in 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,
2013 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 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 Laws (collectively, the “Money Laundering Laws”) and no material Legal
Proceeding by or before any Governmental Entity or any arbitrator involving the
Company or any of its Subsidiaries with respect to Money Laundering Laws is
pending or, to the Knowledge of the Company, threatened.

Section 4.27 Compliance with Sanctions Laws.

Neither the Company nor any of its Subsidiaries nor, to the Knowledge of the
Company, any of their respective directors, officers, employees or other Persons
acting on their behalf with express authority to so act is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department. The Company will not directly or indirectly use the
proceeds of the Rights Offering, or lend, contribute or otherwise make available
such proceeds to any Subsidiary, joint venture partner or other Person, for the
purpose of financing the activities of any Person that, to the Knowledge of the
Company, is currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury Department.

 

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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. As of the entry of the Approval Order, the board of directors of
the Company shall have authorized and approved the issuance of the New Common
Stock, including the Rights Offering Shares, pursuant to this Agreement, the
Plan and the Rights Offering.

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.

Section 4.32 Alternative Transactions. As of the date hereof, neither the
Company nor any of its Subsidiaries is pursuing, or 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.

 

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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 Approval 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 Conflict. Assuming that the consents referred to in clauses (a)
and (b) of Section 5.5 are obtained, the execution and delivery by such
Commitment Party of this Agreement and each other Transaction Agreement to which
such Commitment Party is a party, the compliance by such Commitment Party with
all of the provisions hereof and thereof and the consummation of the
transactions contemplated herein and therein (a) will not conflict with, or
result in breach, modification, termination or violation of, any of the terms or
provisions of, or constitute a default under (with or without notice or lapse of
time or both), or result in the acceleration of, or the creation of any Lien
under, any Contract to which such Commitment Party is party or is bound or to
which any of the property or assets or such Commitment Party are subject,
(b) will not result in any violation of the provisions of the certificate of
incorporation or bylaws (or comparable constituent documents) of such Commitment
Party and (c) will not result in any material violation of any Law or Order
applicable to such Commitment Party or any of its properties, except in each of
the cases described in clauses (a) or (c), for any conflict, breach,
modification, violation, default, acceleration or Lien which would not
reasonably be expected, individually or in the aggregate, to prohibit or
materially and adversely impact such Commitment Party’s performance of its
obligations under this Agreement.

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

 

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Section 5.6 No Registration. Such Commitment Party understands that (a) the
Unsubscribed Shares and any shares of New Common Stock 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 foregoing shares cannot be sold unless subsequently
registered under the Securities Act or an exemption from registration is
available.

Section 5.7 Purchasing Intent. Such Commitment Party is acquiring the
Unsubscribed Shares and any shares of New Common Stock issued to such Commitment
Party in satisfaction of the Commitment Premium, for its own account or accounts
or funds over which it holds voting discretion, not otherwise as a nominee or
agent, and not otherwise with the view to, or for resale in connection with, any
distribution thereof not in compliance with applicable securities Laws, and such
Commitment Party has no present intention of selling, granting any other
participation in, or otherwise distributing the same, except in compliance with
applicable securities Laws.

Section 5.8 Sophistication; Investigation. Such Commitment Party has such
knowledge and experience in financial and business matters such that it is
capable of evaluating the merits and risks of its investment in the Unsubscribed
Shares and any shares of New Common Stock issued to such Commitment Party in
satisfaction of the Commitment Premium. 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. Such Commitment Party understands and is able to bear any
economic risks associated with such investment (including the necessity of
holding such shares for an indefinite period of time). Except for the
representations and warranties expressly set forth in this Agreement or any
other Transaction Agreement, such Commitment Party disclaims reliance on any
representations or warranties, either express or implied, by or on behalf of the
Company or any of its Subsidiaries.

Section 5.9 No Broker’s Fees. Such Commitment Party is not a party to any
Contract with any Person (other than the Transaction Agreements and any Contract
giving rise to the Expense Reimbursement hereunder) that would give rise to a
valid claim against the Company or any of its Subsidiaries for a brokerage
commission, finder’s fee or like payment in connection with the Rights Offering
or the sale of the Unsubscribed Shares.

Section 5.10 Note Claims.

(a) As of the date hereof, such Commitment Party and its Affiliates (to the
extent of such Commitment Party’s knowledge) were, collectively, the beneficial
owner of, or the investment advisor or manager for the beneficial owner of, at
least the aggregate principal amount of Note Claims as set forth opposite such
Commitment Party’s name under the column titled “Note Claims” on Schedule 2
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 Note Claims set forth opposite such Commitment Party’s
name under the column titled “Note Claims” on Schedule 2 attached hereto.

 

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(c) As of the date hereof, 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 Note Claims where such Transfer would prohibit such Commitment
Party from complying with the terms of this Agreement or the Restructuring
Support Agreement.

Section 5.11 Arm’s-Length. Such Commitment Party acknowledges and agrees that
(a) the Company and its Subsidiaries are acting solely in the capacities of
arm’s-length contractual counterparties to such Commitment Party 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, such Commitment Party and (b) neither the Company nor any of
its Subsidiaries is advising such Commitment Party as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction.

ARTICLE VI

ADDITIONAL COVENANTS

Section 6.1 Orders Generally. The Company shall support and make commercially
reasonable efforts, consistent with the Restructuring Support Agreement, to
(a) obtain the entry of the Approval Order, the Plan Solicitation Order, the
Confirmation Order, and the DIP Orders, and (b) cause the Approval Order, the
Plan Solicitation Order, the Confirmation Order, and the DIP Orders to become
Final Orders (and request that such Orders become Final Orders 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, consistent with the Bankruptcy Code, the Bankruptcy
Rules, and the Restructuring Support Agreement, 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 Approval Order, the Plan Solicitation Order, the
Confirmation Order, and the DIP Orders (together with the proposed Plan
Solicitation Order and the DIP 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 Order
must be in form and substance reasonably satisfactory to the Requisite
Commitment Parties and the Company. Unless otherwise determined by the Requisite
Commitment Parties, counsel to the Commitment Parties will provide the Company
and its counsel with copies of the proposed Approval Order, and a reasonable
opportunity to review and comment on such Orders prior to such Orders being
filed with the Bankruptcy Court, and such Orders 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 Approval Order,
Plan Solicitation Order, Confirmation Order, and DIP Orders, 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.

 

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Section 6.2 Confirmation Order; Plan and Disclosure Statement. The Debtors shall
use their commercially reasonable efforts 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 each of the Requisite Commitment Parties and the Company.

Section 6.3 Conduct of Business. Except as expressly set forth in this Agreement
or in the Restructuring Support Agreement or with the prior written consent of
Requisite Commitment Parties (requests for which, including related information,
shall be directed to the counsel and financial advisors to the Ad Hoc
Committee), during the period from the date of this Agreement to the earlier of
the Closing Date and the date on which this Agreement is terminated in
accordance with its terms (the “Pre-Closing Period”), (a) the Company shall, and
shall cause each of its Subsidiaries to, carry on its business in the ordinary
course and use its commercially reasonable 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) file
Company SEC Documents within the time periods required under the Exchange Act,
in each case in accordance with ordinary course practices, 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 to the extent necessary to conduct operations of
the Company and its Subsidiaries, as applicable, in a manner consistent with the
financial and business projections provided to the Commitment Parties prior to
the date hereof, (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 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 unless the same would
otherwise be permissible under the preceding clause (B) or (C): (1) any
amendment, modification, termination, waiver, supplement, restatement or other
change to any Material Contract or any assumption of any Material Contract in
connection with the Chapter 11 Cases (other than any Material Contracts that are
otherwise addressed by clause (3) below), (2) entry into, or any amendment,
modification, 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, and (3) the
adoption or amendment of any management incentive or equity plan by any of the
Debtors except for the new management incentive plan in accordance with the
Restructuring Term Sheet. Except as otherwise provided in this Agreement,
nothing in this Agreement shall give the Commitment Parties, directly or
indirectly, any right to control or direct the operations of the Company and its
Subsidiaries. Prior to the Closing Date, the Company and its Subsidiaries shall
exercise, consistent with the terms and conditions of this Agreement, complete
control and supervision of the business of the Company and its Subsidiaries.

 

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Section 6.4 Access to Information; Confidentiality.

(a) Subject to applicable Law and Section 6.4(b), upon reasonable notice during
the Pre-Closing Period, the Company shall (and shall cause its Subsidiaries to)
afford the Commitment Parties and their Representatives upon request reasonable
access, during normal business hours and without unreasonable disruption or
interference with the Company’s and its Subsidiaries’ business or operations, to
the Company’s and its Subsidiaries’ employees, properties, books, Contracts and
records and, during the Pre-Closing Period, the Company shall (and shall cause
its Subsidiaries to) furnish promptly to such parties all reasonable information
concerning the Company’s and its Subsidiaries’ business, properties and
personnel as may reasonably be requested by any such party, provided that the
foregoing shall not require the Company (i) to permit any inspection, or to
disclose any information, that in the reasonable judgment of the Company would
cause the Company or any of its Subsidiaries to violate any of their respective
obligations with respect to confidentiality to a third party if the Company
shall have used its commercially reasonable efforts to obtain, but failed to
obtain, the consent of such third party to such inspection or disclosure,
(ii) to disclose any legally privileged information of the Company or any of its
Subsidiaries or (iii) 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 an executive officer of the Company or such Person as may be
designated 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 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 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 such Commitment Party will remain
liable for any breach of such terms by any such Affiliate or Representative)),
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 (A) is now or subsequently becomes generally available to the
public through no violation of this Section 6.4(b), (B) 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, (C) 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
process, or (D) such Commitment Party or any Representative thereof is required
to disclose pursuant to judicial or administrative

 

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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,
further, that, in the event that such protective Order or other similar remedy
is not 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 commercially reasonable efforts (at the Company’s sole cost and
expense) to obtain assurance that confidential treatment will be accorded such
disclosed information or documents.

Section 6.5 Financial Information.

(a) During the Pre-Closing Period, the Company shall deliver to the counsel and
financial advisors to the Ad Hoc Committee, and to each Commitment Party that so
requests, all statements and reports the Company is required to deliver to the
DIP Agent pursuant to Section 5.01 of the DIP Credit Agreement (as in effect on
the date hereof) (the “Financial Reports”). Neither any waiver by the parties to
the DIP Credit Agreement of their right to receive the Financial Reports nor any
amendment or termination of the DIP Credit Agreement shall affect the Company’s
obligation to deliver the Financial Reports to the Commitment Parties in
accordance with the terms of this Agreement.

(b) Information required to be delivered pursuant to Section 5.01 of the DIP
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 Ad Hoc
Committee, 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 shall be subject to the provisions of
Section 6.4(b).

Section 6.6 Commercially Reasonable Efforts.

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

 

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(ii) defending any Legal Proceedings in any way challenging (A) this Agreement,
the Plan or any other Transaction Agreement, (B) the Approval Order, the Plan
Solicitation Order, the Confirmation Order or the DIP Orders 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) Subject to applicable Laws relating to the exchange of information, and in
accordance with the Restructuring Support Agreement, the Commitment Parties and
the Company shall have the right to review in advance, and to the extent
practicable each will consult with the other on all of the information relating
to Commitment Parties or the Company, as the case may be, and any of their
respective Subsidiaries, that appears in any filing made with, or written
materials submitted to, any third party and/or any Governmental Entity in
connection with the transactions contemplated by this Agreement or the Plan;
provided, however, that the Commitment Parties are not required to provide for
review in advance declarations or other evidence submitted in connection with
any filing with the Bankruptcy Court. In exercising the foregoing rights, the
Parties shall act as reasonably and as promptly as practicable.

(c) 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 accordance with the Restructuring
Support Agreement. All such motions, applications, pleadings, schedules, Orders,
reports and other material papers shall be in form and substance reasonably
satisfactory to each of the Requisite Commitment Parties and the Company.

(d) Nothing contained in this Section 6.6(d) 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 Restructuring Support Agreement.

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 Commitment
Party receiving New Common Stock 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 consistent with the
terms set forth in the Restructuring Term Sheet and otherwise 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 Supplement or an
amendment thereto.

 

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(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 Supplement or an amendment thereto.

Section 6.8 Blue Sky. 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,
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 DTC Eligibility. Unless otherwise requested by the Requisite
Commitment Parties, the Company shall use commercially reasonable efforts to
promptly make, when applicable from time to time after the Closing, all
Unlegended Shares eligible for deposit with The Depository Trust Company.
“Unlegended Shares” means any shares of New Common Stock acquired by the
Commitment Parties and their respective Affiliates (including any Related
Purchaser or Ultimate Purchaser in respect thereof) pursuant to this Agreement
and the Plan, including all shares issued to the Commitment Parties and their
respective Affiliates in connection with the Rights Offering, that do not
require, or are no longer subject to, the Legend.

Section 6.10 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 6.11 Share Legend. Each certificate evidencing all shares of New Common
Stock issued hereunder, including any certificate evidencing shares of New
Common Stock that may be issued in satisfaction of the Commitment Premium as
provided herein, and each certificate issued in exchange for or upon the
Transfer of any such shares, shall be stamped or otherwise imprinted with a
legend (the “Legend”) in substantially the following form:

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

 

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

Section 6.12 Antitrust Approval.

(a) Each Party agrees to use commercially reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary to
consummate and make effective the transactions contemplated by this Agreement,
the Plan and the other 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 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.

 

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(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
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 6.12 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 6.12 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.

Section 6.13 Alternative Transactions. The Company and the other Debtors shall
not seek, solicit, or support any Alternative Transaction; provided, however,
that nothing in this Section 6.13 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 RSA
Effective Date until the occurrence of a Termination Date, the Debtors shall
promptly notify counsel to the other parties to the Restructuring Support
Agreement 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 parties to the Restructuring
Support Agreement 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 parties to the Restructuring Support Agreement 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
parties to the Restructuring Support Agreement (under a reasonably acceptable
confidentiality agreement) the information contemplated under Section 6(b) of
the Restructuring Support Agreement.

Section 6.14 Hedging Arrangements. The Company (or its relevant Subsidiaries)
will use all good faith reasonable efforts necessary to implement a hedging
program that is reasonably acceptable to the Minimum Commitment Parties (an
“Acceptable Hedging Program”) as promptly as practicable and to maintain such
program through the Closing Date.

 

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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) Approval Order. The Bankruptcy Court shall have entered the Approval Order
and such Order shall be a Final Order.

(b) Plan Solicitation Order. The Bankruptcy Court shall have entered the Plan
Solicitation Order, and such Order shall be a Final Order.

(c) Confirmation Order. The Bankruptcy Court shall have entered the Confirmation
Order in form and substance reasonably satisfactory to the Requisite Commitment
Parties, and such Order shall be a Final Order.

(d) DIP Orders. The Bankruptcy Court shall have entered the DIP Orders, and such
Orders shall be Final Orders.

(e) 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 occurrence of the Closing) set forth in the Plan shall have been
satisfied or waived in accordance with the terms of the Plan.

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

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

(h) 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.

 

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(i) Expense Reimbursement. The Debtors shall have paid all Expense Reimbursement
accrued through the Closing Date pursuant to Section 3.3.

(j) Consents. All governmental and third-party notifications, filings, consents,
waivers and approvals set forth on Schedule 3 and required for the consummation
of the transactions contemplated by this Agreement and the Plan shall have been
made or received.

(k) 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.

(l) 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;

(m) Representations and Warranties.

(i) The representations and warranties of the Debtors contained in Sections 4.11
and 4.29 shall be true and correct in all respects on and as of the Closing Date
with the same effect as if made on and as of the Closing Date (except for such
representations and warranties made as of a specified date, which shall be true
and correct only as of the specified date).

(ii) The representations and warranties of the Debtors contained in
Sections 4.2, 4.3, 4.4, 4.5, and 4.6(b) shall be true and correct in all
material respects on and as of the Closing Date after giving effect to the Plan
with the same effect as if made on and as of the Closing Date after giving
effect to the Plan (except for such representations and warranties made as of a
specified date, which shall be true and correct in all material respects only as
of the specified date).

(iii) The 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 after giving effect to
the Plan (except for such representations and warranties made as of a specified
date, which shall be true and correct only as of the specified date), except
where the failure to be so true and correct does not constitute, individually or
in the aggregate, a Material Adverse Effect.

(n) Covenants. The 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.

 

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(o) Material Adverse Effect. Since the date of this Agreement, 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.

(p) 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(m), (n), and (o) have been satisfied.

(q) Funding Notice. The Noteholders shall have received the Funding Notice.

(r) Exit Facility Borrowing Base. The Exit Facility Term Sheet and the Exit
Facility Commitment Letters shall be in effect that provide for an initial
borrowing base limit in the Exit Facility of no less than $128,000,000.

(s) Key Contracts. The assumption or rejection (in each case, pursuant to
section 365 of the Bankruptcy Code) and/or amendment of the Contracts described
in Section 1.1 of the Company Disclosure Schedules as of the Closing Date and
the liabilities of the Reorganized Debtors with respect to such Contracts shall,
in the aggregate, be reasonably satisfactory to the Requisite Commitment
Parties.

Section 7.2 Waiver of Conditions to Obligations of Commitment Parties. All or
any of the conditions set forth in Section 7.1 may only be waived in whole or in
part with respect to all Commitment Parties by a written instrument executed by
the Requisite Commitment Parties in their sole discretion and if so waived, all
Commitment Parties shall be bound by such waiver.

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

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

(b) Plan Solicitation Order. The Bankruptcy Court shall have entered the Plan
Solicitation Order, and such Order shall be a Final Order.

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

(d) DIP Orders. The Bankruptcy Court shall have entered the DIP Orders, and such
Orders shall be Final Orders.

(e) Effective Date. The Effective Date shall have occurred in accordance with
the terms and conditions in the Plan and in the Confirmation Order.

 

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

(g) 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.

(h) 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.

(i) Representations and Warranties.

(i) The representations and warranties of the Commitment Parties contained in
this Agreement that are qualified by “materiality” or “material adverse effect”
or words or similar import shall be true and correct in all respects on and as
of the Closing Date with the same effect as if made on and as of the Closing
Date (except for such representations and warranties made as of a specified
date, which shall be true and correct in all respects only as of the specified
date).

(ii) The representations and warranties of the Commitment Parties contained in
this Agreement that are not qualified by “materiality” or “material adverse
effect” or words or similar import 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).

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

(k) Officer’s Certificate. Upon request of the Company, the Debtors shall have
received on and as of the Closing Date a certificate of an executive officer or
other authorized signatory of each of the Commitment Parties confirming that the
conditions set forth in Section 7.3(i) and (j) have been satisfied.

ARTICLE VIII

INDEMNIFICATION AND CONTRIBUTION

Section 8.1 Indemnification Obligations. Following the entry of the 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,

 

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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, the Plan and the transactions contemplated hereby and
thereby, 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 (with such documentation subject to
redaction to preserve attorney client and work product privileges) legal or
other third-party expenses incurred in connection with investigating, preparing
to defend or defending, or providing evidence in or preparing to serve or
serving as a witness with respect to, any lawsuit, investigation, claim or other
proceeding relating to any of the foregoing (including in connection with the
enforcement of the indemnification obligations set forth herein), irrespective
of whether or not the transactions contemplated by this Agreement or the Plan
are consummated or whether or not this Agreement is terminated; provided, that
the foregoing indemnity will not, as to any Indemnified Person, apply to Losses
(a) as to a Defaulting Commitment Party, its Related Parties or any Indemnified
Person related thereto, caused by a Commitment Party Default by such Commitment
Party, or (b) to the extent they are found by a final, non-appealable judgment
of a court of competent jurisdiction to arise from the bad faith, willful
misconduct or gross negligence of such Indemnified Person.

Section 8.2 Indemnification Procedure. Promptly after receipt by an Indemnified
Person of notice of the commencement of any claim, challenge, litigation,
investigation or proceeding (an “Indemnified Claim”), such Indemnified Person
will, if a claim is to be made hereunder against the Indemnifying Party in
respect thereof, notify the Indemnifying Party in writing of the commencement
thereof; provided, 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

 

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

Section 8.3 Settlement of Indemnified Claims. In connection with any Indemnified
Claim for which an Indemnified Person is assuming the defense in accordance with
this Article VIII, the Indemnifying Party shall not be liable for any settlement
of any Indemnified Claims effected by such Indemnified Person without the
written consent of the Indemnifying Party (which consent shall not be
unreasonably withheld, conditioned or delayed). If any settlement of any
Indemnified Claims is consummated with the written consent of the Indemnifying
Party or if there is a final judgment for the plaintiff in any such Indemnified
Claims, the Indemnifying Party agrees to indemnify and hold harmless each
Indemnified Person from and against any and all Losses by reason of such
settlement or judgment to the extent such Losses are otherwise subject to
indemnification by the Indemnifying Party hereunder in accordance with, and
subject to the limitations of, this Article VIII. 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

 

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the relative benefits received by the Indemnifying Party, on the one hand, and
such Indemnified Person, on the other hand, but also the relative fault of the
Indemnifying Party, on the one hand, and such Indemnified Person, on the other
hand, as well as any relevant equitable considerations. It is hereby agreed that
the relative benefits to the Indemnifying Party, on the one hand, and all
Indemnified Persons, on the other hand, shall be deemed to be in the same
proportion as (a) the total value received or proposed to be received by the
Company pursuant to the issuance and sale of the Unsubscribed Shares in the
Rights Offering contemplated by this Agreement and the Plan bears to (b) the
Commitment Premium paid or proposed to be paid to the Commitment Parties. The
Indemnifying Parties also agree that no Indemnified Person shall have any
liability based on their comparative or contributory negligence or otherwise to
the Indemnifying Parties, any Person asserting claims on behalf of or in right
of any of the Indemnifying Parties, or any other Person in connection with an
Indemnified Claim.

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

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. Notwithstanding anything to the contrary in
this Agreement, following the commencement of the Chapter 11 Cases and unless
and until there is an unstayed Order of the Bankruptcy Court providing that the
giving of notice under and/or termination of this Agreement in accordance with
its terms is not prohibited by the automatic stay imposed by section 362 of the
Bankruptcy Code, and except as otherwise provided in this Section 9.2, at which
point this Agreement may be terminated by the Requisite Commitment Parties upon
written notice to the Company upon the occurrence of any of the following
events, this Agreement shall terminate automatically without any further action
or notice by any Party at 5:00 p.m., New York City time on the fifth Business
Day following the occurrence of any of the following events; provided that the
Requisite Commitment Parties may waive such termination or extend any applicable
dates in accordance with Section 10.7:

 

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(a) the Closing Date has not occurred by 11:59 p.m., New York City time on the
date that is one hundred twenty (120) days after the Petition Date (as it may be
extended pursuant to this Section 9.2(a) 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 (i) may be waived or extended with
the prior written consent of the Requisite Commitment Parties and (ii) shall
automatically be extended to the extent the Termination Date (as defined in the
Exit Commitment Letters) is extended; provided, that, in no event shall the
Outside Date be extended pursuant to this Section 9.2(a)(ii) beyond 5:00 p.m.
(New York City time) on the date that is one hundred fifty (150) days after the
Petition Date;

(b) the obligations of the Consenting Noteholders under the Restructuring
Support Agreement are terminated in accordance with the terms of the
Restructuring Support Agreement;

(c) the Company, any of the other Debtors or any other Commitment Party files
any motion, application or adversary proceeding (or any of the Company, any of
the other Debtors or other Restructuring Support Party supports any such motion,
application, or adversary proceeding filed or commenced by any third party)
(A) challenging the validity, enforceability, perfection, or priority of, or
seeking avoidance or subordination of the Note Claims, or (B) asserting any
other cause of action against and/or with respect or relating to such claims or
the prepetition liens securing such claims;

(d) (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(m), (n), or (o) 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(m), (n), or (o) is not capable of being
satisfied; provided, that, this Agreement shall not terminate automatically
pursuant to this Section 9.2(d) if the Commitment Parties are then in willful or
intentional breach of this Agreement;

(e) any Law or final and non-appealable Order shall have been enacted, adopted
or issued by any Governmental Entity that prohibits the implementation of the
Plan or the Rights Offering or the transactions contemplated by this Agreement
or the other Transaction Agreements, and, by the tenth (10th) Business Day after
such Law or final and non-appealable Order shall have been enacted, adopted or
issued, no relief has been obtained allowing consummation of the Rights Offering
or the transactions contemplated by this Agreement and the other Transaction
Agreements in a manner that (i) does not prevent or diminish in a material way
compliance with the terms of the Plan and this Agreement, or (ii) is reasonably
acceptable to the Requisite Commitment Parties;

(f) (i) the Debtors have materially breached their obligations under
Section 6.13; (ii) the Bankruptcy Court approves or authorizes an Alternative
Transaction; or (iii) the Company or any of its Subsidiaries enters into any
Contract providing for the consummation of any Alternative Transaction or files
any motion or application seeking authority to propose, join in or participate
in the formation of, any actual or proposed Alternative Transaction;

 

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(g) an acceleration of the obligations or termination of commitments under the
DIP Facility;

(h) 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;

(i) any of the Approval Order, Plan Solicitation Order, Confirmation Order, or
DIP Orders is terminated, reversed, stayed, dismissed, vacated, or reconsidered,
or any such Order is modified or amended after entry without the prior written
consent of the Requisite Commitment Parties; or

(j) the Requisite Commitment Parties determine, in their reasonable discretion,
that either (i) at any time from and after May 19, 2016, the Company and its
Subsidiaries do not have an Acceptable Hedging Program in place; provided,
however, that such time period may be extended by the written consent of the
Minimum Commitment Parties or (ii) the condition set forth in Section 7.1(r) is
not capable of being satisfied prior to Closing.

Section 9.3 Termination by the Company.

This Agreement may be terminated by the Company upon written notice to each
Commitment Party upon the occurrence of any of the following events, subject to
the rights of the Company to fully and conditionally waive, in writing, on a
prospective or retroactive basis the occurrence of such event:

(a) any Law or final and non-appealable Order shall have been enacted, adopted
or issued by any Governmental Entity that prohibits the implementation of the
Plan or the Rights Offering or the transactions contemplated by this Agreement
or the other Transaction Agreements, and, by the tenth (10th) Business Day after
such Law or final and non-appealable Order shall have been enacted, adopted or
issued, no relief has been obtained allowing consummation of the Rights Offering
or the transactions contemplated by this Agreement and the other Transaction
Agreements in a manner that (i) does not prevent or diminish in a material way
compliance with the terms of the Plan and this Agreement, or (ii) is reasonably
acceptable to the Requisite Commitment Parties;

(b) 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 (b)),
(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 inaccurate and such breach
or inaccuracy would, individually or in the aggregate, cause a condition set
forth in Section 7.3(i) or Section 7.3(j) not to be satisfied, (ii) the Company
shall

 

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have delivered written notice of such breach or inaccuracy to such Commitment
Party, (iii) such breach or inaccuracy is not cured by such Commitment Party 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 Section 7.3(i) or
Section 7.3(j) is not capable of being satisfied; 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) the Company or any of its Subsidiaries determines, after receiving advice
from 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 9.4(b)(ii);

(d) the Restructuring Support Agreement is terminated in accordance with its
terms; or

(e) the Closing Date has not occurred by the Outside Date (as the same may be
extended pursuant to Section 9.2(a) 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(e) if it is then in willful or intentional breach of this
Agreement;

Section 9.4 Effect of Termination.

(a) Upon termination of this Agreement pursuant to this Article IX, this
Agreement shall forthwith become void and there shall be no further obligations
or liabilities on the part of the Parties; provided, that (i) 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 9.4(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 this
Section 9.4 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 9.4 shall relieve any Party from liability for its gross negligence or
any willful or intentional breach of this Agreement. For purposes of this
Agreement, “willful or intentional breach” 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) The Debtors shall make payments to the Commitment Parties or their designees
based upon their respective Backstop Commitment Percentages on the date of
payment, by wire transfer of immediately available funds to such accounts as the
Requisite Commitment Parties may designate, if this Agreement is terminated as
follows:

(i) upon termination pursuant to Section 9.2(d) or Section 9.2(f), or
Section 9.2(b) or Section 9.3(d) as a result of a termination of the
Restructuring Support Agreement pursuant to Section 8(c) thereof, then the
Company shall pay the Termination Fee, in cash, on or prior to the second
(2nd) Business Day following such termination;

 

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(ii) if the Company shall terminate this Agreement pursuant to Section 9.3(c),
then the Company shall pay the Termination Fee, in cash, concurrently with such
termination; and

(iii) if this Agreement shall be terminated pursuant to Section 9.2 (other than
clauses (d) or (f) of Section 9.2, or by the Company pursuant to
Section 9.3(c)), and, within twelve (12) months after the date of such
termination, any of the Debtors executes a definitive agreement with respect to,
or consummates, an Alternative Transaction, or the Bankruptcy Court approves or
authorizes an Alternative Transaction, then the Company shall pay the
Termination Fee, in cash, on or prior to the second (2nd) Business Day following
such execution or consummation.

To the extent that all amounts due in respect of the Termination Fee pursuant to
this Section 9.4(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 liability for gross negligence or willful or intentional breach of this
Agreement pursuant to Section 9.4(a). Except as set forth in this
Section 9.4(b), the Termination Fee shall not be payable upon the termination of
this Agreement. The Termination Fee shall, pursuant to the 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 any of the other Debtors:

Penn Virginia Corporation

Attn: Nancy Snyder

Four Radnor Corporate Center, Suite 200

100 Matsonford Road Radnor, PA 19087

Tel:        (610) 687-8900

Fax:       (610) 687-3688

Email: nancy.snyder@pennvirginia.com

 

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With a copy to:

Kirkland & Ellis LLP

Attn: Edward O. Sassower, P.C. and Brian Schartz

601 Lexington Avenue

New York, NY 10022-4611

Tel:        (212) 446-4800

Fax:       (212) 446-4900

Email: edward.sassower@kirkland.com

brian.schartz@kirkland.com

Kirkland & Ellis LLP

Attn: Justin Bernbrock and Benjamin Rhode

300 North LaSalle

Chicago, IL 60654

Tel:        (312) 862-2000

Fax:       (312) 862-2200

Email: justin.bernbrock@kirkland.com

  benjamin.rhode@kirkland.com

 

  (b) If to the Commitment Parties:

To each Commitment Party at the addresses or e-mail addresses set forth below
the Commitment Party’s signature page to this Agreement.

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn: Samuel Khalil, Brian Kinney and Bradley Friedman

28 Liberty Street

New York, NY 10005-1413

Tel:        (212) 530-5000

Fax:       (212) 530-5219

Email: skhalil@milbank.com

  bkinney@milbank.com bfriedman@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
2.6 and any purported assignment in violation of this Section 10.2 shall be void
ab initio. Except as provided in Article VIII with respect to the Indemnified
Persons, this Agreement (including the documents and instruments referred to in
this Agreement) is not intended to and does not confer upon any Person any
rights or remedies under this Agreement other than the Parties.

 

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Section 10.3 Prior Negotiations; Entire Agreement.

(a) This Agreement (including the agreements attached as Exhibits to and the
documents and instruments referred to in this Agreement) constitutes the entire
agreement of the Parties and supersedes all prior agreements, arrangements or
understandings, whether written or oral, among the Parties with respect to the
subject matter of this Agreement, except that the Parties hereto acknowledge
that any confidentiality agreements heretofore executed among the Parties and
the Restructuring Support Agreement (including the Restructuring 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, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO SUCH STATE’S CHOICE OF LAW PROVISIONS WHICH WOULD REQUIRE THE APPLICATION OF
THE LAW OF ANY OTHER JURISDICTION. BY ITS EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH PARTY IRREVOCABLY AND UNCONDITIONALLY AGREES FOR ITSELF THAT ANY
LEGAL ACTION, SUIT, OR PROCEEDING AGAINST IT WITH RESPECT TO ANY MATTER ARISING
UNDER OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR FOR RECOGNITION
OR ENFORCEMENT OF ANY JUDGMENT RENDERED IN ANY SUCH ACTION, SUIT, OR PROCEEDING,
MAY BE BROUGHT IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK, AND BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH OF THE PARTIES
IRREVOCABLY ACCEPTS AND SUBMITS ITSELF TO THE EXCLUSIVE JURISDICTION OF SUCH
COURT, GENERALLY AND UNCONDITIONALLY, WITH RESPECT TO ANY SUCH ACTION, SUIT OR
PROCEEDING. NOTWITHSTANDING THE FOREGOING CONSENT TO NEW YORK JURISDICTION, IF
THE CHAPTER 11 CASES ARE COMMENCED, EACH PARTY AGREES THAT THE BANKRUPTCY COURT
SHALL HAVE EXCLUSIVE JURISDICTION OF ALL MATTERS ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT. BY EXECUTING AND DELIVERING THIS AGREEMENT, AND UPON
COMMENCEMENT OF THE CHAPTER 11 CASES, EACH OF THE PARTIES IRREVOCABLY AND
UNCONDITIONALLY SUBMITS TO THE PERSONAL JURISDICTION OF THE BANKRUPTCY COURT
SOLELY FOR PURPOSES OF ANY ACTION, SUIT, PROCEEDING, OR OTHER CONTESTED MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT RENDERED OR ORDER ENTERED IN ANY SUCH ACTION, SUIT, PROCEEDING,
OR OTHER CONTESTED MATTER. THE PARTIES HEREBY AGREE THAT MAILING OF PROCESS OR
OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING TO AN ADDRESS
PROVIDED IN

 

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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.

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 Per Share 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 that was an original signatory hereto that is
still a Commitment Party as of such date of amendment shall be required for any
amendment to the definition of “Requisite Commitment Parties”. Notwithstanding
the foregoing, Schedule 1 shall be revised as necessary without requiring a
written instrument signed by the Company and the Requisite Commitment Parties to
reflect changes in the composition of the Commitment Parties and Backstop
Commitment Percentages as a result of Transfers permitted in accordance 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) 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.

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.

 

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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.

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.

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 Rules 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).

 

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Section 10.14 No Recourse. Notwithstanding anything that may be expressed or
implied in this Agreement, and notwithstanding the fact that certain of the
Parties may be partnerships or limited liability companies, each Party
covenants, agrees and acknowledges that no recourse under this Agreement or any
documents or instruments delivered in connection with this Agreement shall be
had against any Party’s Affiliates, or any of such Party’s Affiliates’ or
respective Related Parties in each case other than the Parties to this Agreement
and each of their respective successors and permitted assignees 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 the 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, prior to the Effective Date, 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.

[Signature Pages Follow]

 

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

 

PENN VIRGINIA CORPORATION By:  

/s/ R. Seth Bullock

  Name: R. Seth Bullock   Title: Chief Restructing Officer

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Anchorage Capital Master Offshore, Ltd.

By: Anchorage Capital Group, L.L.C., its investment manager

By:  

/s/ Natalie A. Birrell

 

Name: Natalie A. Birrell

Title:   Chief Operating Officer

[Signature Page to Backstop Commitment Agreement]

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If to Anchorage Capital Master Offshore, Ltd.:

Anchorage Capital Master Offshore, Ltd.

c/o Anchorage Capital Group, L.L.C

610 Broadway, 6th Floor

New York, NY 10012

Attn: Legal; Operations

Email: legal@anchoragecap.com; ops@anchoragecap.com

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn: Samuel Khalil, Brian Kinney and Bradley Friedman

28 Liberty Street

New York, NY 10005-1413

Tel:      (212) 530-5000

Fax:     (212) 530-5219

Email: skhalil@milbank.com

            bkinney@milbank.com

            bfriedman@milbank.com

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

Raptor Energy, LP

By: Anchorage Capital Group, L.L.C., its investment manager

By:  

/s/ Natalie A. Birrell

  Name: Natalie A. Birrell   Title:   Chief Operating Officer

[Signature Page to Backstop Commitment Agreement]

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If to Raptor Energy, LP:

Raptor Energy, LP

c/o Anchorage Capital Group, L.L.C

610 Broadway, 6th Floor

New York, NY 10012

Attn: Legal; Operations

Email: legal@anchoragecap.com; ops@anchoragecap.com

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn: Samuel Khalil, Brian Kinney and Bradley Friedman

28 Liberty Street

New York, NY 10005-1413

Tel:      (212) 530-5000

Fax:     (212) 530-5219

Email: skhalil@milbank.com

            bkinney@milbank.com

            bfriedman@milbank.com

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

Marathon Asset Management, LP, solely on behalf of certain of its affiliated
funds and managed accounts By:  

/s/ Peter Coppa

  Name: PETER COPPA   Title:   AUTHORIZED SIGNATORY

[Signature Page to Backstop Commitment Agreement]

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

If to Marathon Asset Management:

Marathon Asset Management

c/o Dan Pine

One Bryant Park

38th Floor

New York, NY 10036

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn: Samuel Khalil, Brian Kinney and Bradley Friedman

28 Liberty Street

New York, NY 10005-1413

Tel:      (212) 530-5000

Fax:      (212) 530-5219

Email:  skhalil@milbank.com

            bkinney@milbank.com

            bfriedman@milbank.com

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

Contrarian Capital Management, L.L.C., on behalf of various managed accounts and
affiliated entities By:  

/s/ Jon R. Bauer

  Name: Jon R. Bauer   Title:   Managing Member

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

If to Contrarian Capital Management, L.L.C.:

Contrarian Capital Management, L.L.C.

Attn: Jon Bauer, Graham Morris, & Josh Weisser

411 West Putnam Avenue, Suite 425

Greenwich, CT 06830

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn: Samuel Khalil, Brian Kinney and Bradley Friedman

28 Liberty Street

New York, NY 10005-1413

Tel:      (212) 530-5000

Fax:      (212) 530-5219

Email:   skhalil@milbank.com

              bkinney@milbank.com

              bfriedman@milbank.com

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

Global Credit Advisers, LLC as investment adviser By:  

/s/ Steven Hornstein

  Name: Steven Hornstein   Title:   Managing Member

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

If to Global Credit Advisers:

Global Credit Advisers

c/o Dan Kecskes

101 Park Avenue, 26th Floor

New York, NY 10178

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn: Samuel Khalil, Brian Kinney and Bradley Friedman

28 Liberty Street

New York, NY 10005-1413

Tel:      (212) 530-5000

Fax:     (212) 530-5219

Email: skhalil@milbank.com

            bkinney@milbank.com

            bfriedman@milbank.com

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

KLS Diversified Asset Management LP By:  

/s/ John Steinhardt

  Name: John Steinhardt   Title: Managing Partner

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

If to KLS Diversified:

KLS Diversified

c/o Michael Hanna

452 5th Avenue

22nd Floor

New York, NY 10018

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn: Samuel Khalil, Brian Kinney and Bradley Friedman

28 Liberty Street

New York, NY 10005-1413

Tel:     (212) 530-5000

Fax:     (212) 530-5219

Email: skhalil@milbank.com

            bkinney@milbank.com

            bfriedman@milbank.com

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

THE MANGROVE PARTNERS MASTER FUND, LTD.,   By: MANGROVE PARTNERS, its Investment
Manager     By:  

/s/ Ward Dietrich

      Name: Ward Dietrich       Title:   Authorized Person

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

If to Mangrove Partners:

Mangrove Partners

c/o Mangrove Partners

645 Madison Avenue

14th Floor

New York, NY 10022

212.897.9535

Ops@mangrovepartners.com

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn: Samuel Khalil, Brian Kinney and Bradley Friedman

28 Liberty Street

New York, NY 10005-1413

Tel:     (212) 530-5000

Fax:     (212) 530-5219

Email: skhalil@milbank.com

            bkinney@milbank.com

            bfriedman@milbank.com

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

Strategic Value Special Situations Offshore Fund III-A, L.P.

By: SVP Special Situations III-A LLC, its Investment Manager

By:  

/s/ James Dougherty

  Name: James Dougherty   Title:   Fund Chief Financial Officer

[Signature Page to Backstop Commitment Agreement]

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

Strategic Value Special Situations Master Fund III, L.P.

By: SVP Special Situations III LLC, its Investment Manager

By:  

/s/ James Dougherty

  Name: James Dougherty   Title:   Fund Chief Financial Officer

[Signature Page to Backstop Commitment Agreement]

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

Strategic Value Master Fund Ltd.

By: Strategic Value Partners, LLC, its Investment Manager

By:  

/s/ James Dougherty

  Name: James Dougherty   Title:   Fund Chief Financial Officer

[Signature Page to Backstop Commitment Agreement]

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

If to Strategic Value Partners:

Strategic Value Partners

c/o General Counsel’s Office

100 West Putnam Avenue, 2nd Floor

Greenwich, CT 06830

Email: legalnotices @svpglobal.com

Fax: 203-618-3501

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn: Samuel Khalil, Brian Kinney and Bradley Friedman

28 Liberty Street

New York, NY 10005-1413

Tel:      (212) 530-5000

Fax:     (212)530-5219

Email: skhalil@milbank.com

            bkinney@milbank.com

            bfriedman@milbank.com

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

Recipient: Certain Funds and Accounts that are Commitment Parties and advised by
T. Rowe Price Associates, Inc., severally and not jointly By:   T. Rowe Price
Associates, Inc., as investment adviser By:  

/s/ Mark Vaselkiv

  Name: Mark Vaselkiv   Title:   Portfolio Manager

[Signature Page to Backstop Commitment Agreement]

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

If to T. Rowe Price Associates, Inc.:

T. Rowe Price Associates, Inc.

c/o Andrew Baek

Vice President, Senior Legal Counsel

100 East Pratt Street

Mail Code BA-1020

Baltimore, MD 21202

Direct: 410-345-2090

Fax: 410-345-6575

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn: Samuel Khalil, Brian Kinney and Bradley Friedman

28 Liberty Street

New York, NY 10005-1413

Tel:     (212) 530-5000

Fax:     (212) 530-5219

Email: skhalil@milbank.com

            bkinney@milbank.com

            bfriedman@milbank.com

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

Wexford Spectrum Investors LLC By:  

/s/ Dante Domenichelli

Name:   Dante Domenichelli Title:   Vice President & Secretary

[Signature Page to Backstop Commitment Agreement]

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

Wexford Catalyst Investors LLC By:  

/s/ Dante Domenichelli

Name:   Dante Domenichelli Title:   Vice President & Secretary

[Signature Page to Backstop Commitment Agreement]

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

Debello Investors LLC By:  

/s/ Dante Domenichelli

Name:   Dante Domenichelli Title:   Vice President & Secretary

[Signature Page to Backstop Commitment Agreement]

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

If to Wexford Capital LP:

Wexford Capital LP

c/o Daniel J. Weiner and Marc McCarthy

411 West Putnam Avenue

Greenwich, CT 06830

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn: Samuel Khalil, Brian Kinney and Bradley Friedman

28 Liberty Street

New York, NY 10005-1413

Tel:      (212) 530-5000

Fax:     (212) 530-5219

Email: skhalil@milbank.com

bkinney@milbank.com

bfriedman@milbank.com

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

Pine River Baxter Fund Ltd. By:   Pine River Capital Management L.P. Its:  
Investment Manager By:  

/s/ Tim O’Brien

 

Name: Tim O’Brien

Title: General Counsel and Co-Chief Operating Officer

Pine River Fixed Income Master Fund Ltd. By:   Pine River Capital Management
L.P. Its:   Investment Manager By:  

/s/ Tim O’Brien

  Name: Tim O’Brien   Title: General Counsel and Co-Chief Operating Officer

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

Pine River Master Fund Ltd. By:   Pine River Capital Management L.P. Its:  
Investment Manager By:  

/s/ Tim O’Brien

 

Name: Tim O’Brien

Title: General Counsel and Co-Chief Operating Officer

LMA SPC for and on behalf of MAP 89 Segregated Portfolio By:   Pine River
Capital Management L.P. Its:   Investment Manager By:  

/s/ Tim O’Brien

  Name: Tim O’Brien   Title: General Counsel and Co-Chief Operating Officer

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

If to Pine River Capital Management, L.P.:

c/o Pine River Capital Management L.P.

601 Carlson Parkway, 7th Floor

Minnetonka, MN 55305

Attn: Legal Department

Fax: (612) 238-3301

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn: Samuel Khalil, Brian Kinney and Bradley Friedman

28 Liberty Street

New York, NY 10005-1413

Tel:      (212) 530-5000

Fax:     (212) 530-5219

Email: skhalil@milbank.com

 bkinney@milbank. com

 bfriedman@milbank.com

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

AMTRUST INTERNATIONAL INSURANCE, LTD. By:  

./s/ Stephen Unger

  Name: Stephen Unger   Title: Secretary

[Signature Page to Backstop Commitment Agreement]

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

If to AmTrust International Insurance, Ltd.:

AmTrust Financial Services Inc.

c/o Lawrence A. Heller and Harry Schlachter

59 Maiden Lane, 43rd Floor

New York, NY 10038

Email: lawrence.heller@amtrustgroup. com

Email: harry.schlachter@amtrustgroup. com

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn: Samuel Khalil, Brian Kinney and Bradley Friedman

28 Liberty Street

New York, NY 10005-1413

Tel:      (212) 530-5000

Fax:     (212) 530-5219

Email: skhalil@milbank.com

 bkinney@milbank. com

 bfriedman@milbank.com

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

NAT GEN RE LTD. By:  

/s/ Peter Rendall

  Name: Peter Rendall   Title: COO and Treasurer

[Signature Page to Backstop Commitment Agreement]

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

If to National General:

AmTrust Financial Services Inc.

c/o Jeffrey Weissman, Daron Skipper, and Susan Eylward

59 Maiden Lane, 43rd Floor

New York, NY 10038

Email: Jeffrey.weissmann@ngic.com

Email: susan.eylward@ngic.com

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn: Samuel Khalil, Brian Kinney and Bradley Friedman

28 Liberty Street

New York, NY 10005-1413

Tel:      (212) 530-5000

Fax:     (212) 530-5219

Email: skhalil@milbank.com

 bkinney@milbank. com

 bfriedman@milbank.com

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

GMO CREDIT OPPORTUNITIES FUND, L.P. By:  

/s/ Tim Lang

  Name: Tim Lang  

Title: Authorized Trader

Grantham, Mayo, Van Otterloo & Co. LLC, investment manager of

GMO Credit Opportunities Fund, L.P.

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

If to Grantham, Mayo, Van Otterloo & Co. LLC:

Grantham, Mayo, Van Otterloo & Co. LLC

c/o Kevin O’Brien and Jon Roiter

40 Rowes Wharf

Boston, MA 02110

Phone: 617-346-7518

Fax: 617-849-7243

Email: kevin. o’brien@gmo.com

Email: jon.roiter@gmo.com

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn: Samuel Khalil, Brian Kinney and Bradley Friedman

28 Liberty Street

New York, NY 10005-1413

Tel:      (212) 530-5000

Fax:     (212) 530-5219

Email: skhalil@milbank.com

 bkinney@milbank.com

 bfriedman@milbank.com

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

[COMMITMENT PARTIES] J.P. MORGAN INVESTMENT MANAGEMENT, INC. AS INVESTMENT
ADVISER AND AGENT FOR CERTAIN CLIENT ACCOUNTS By:  

/s/ Alexander P. Sammarco

  Name: Alexander P. Sammarco   Title: Executive Director

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

[COMMITMENT PARTIES] JP MORGAN CHASE BANK, N.A. AS TRUSTEE FOR CERTAIN CLIENT
ACCOUNTS By:  

/s/ Alexander P. Sammarco

  Name: Alexander P. Sammarco   Title: Executive Director

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

If to JP Morgan Asset Management:

J.P. Morgan Asset Management

Attn: Alexander Sammarco

Cc: Jim Shanahan and Laurie Whipkey

8044 Montgomery Road, Suite 555

Cincinnati, Ohio 45236

Phone: 513-699-4417

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn: Samuel Khalil, Brian Kinney and Bradley Friedman

28 Liberty Street

New York, NY 10005-1413

Tel:      (212) 530-5000

Fax:     (212) 530-5219

Email: skhalil@milbank.com

 bkinney@milbank.com

 bfriedman@milbank.com