KE 41460169

Edward O. Sassower, P.C. (pro hac vice admission pending) Michael A. Condyles (VA 27807)

Joshua A. Sussberg, P.C. Peter J. Barrett (VA 46179)

Brian E. Schartz (pro hac vice admission pending) Jeremy S. Williams (VA 77469)

KIRKLAND & ELLIS LLP KUTAK ROCK LLP

KIRKLAND & ELLIS INTERNATIONAL LLP Bank of America Center

601 Lexington Avenue 1111 East Main Street, Suite 800

New York, New York 10022 Richmond, Virginia 23219

Telephone: (212) 446-4800 Telephone: (804) 644-1700

Facsimile: (212) 446-4900 Facsimile: (804) 783-6192

- and -

James H.M. Sprayregen, P.C. 

Justin R. Bernbrock (pro hac vice admission pending)

Benjamin M. Rhode (pro hac vice admission pending)

KIRKLAND & ELLIS LLP

KIRKLAND & ELLIS INTERNATIONAL LLP

300 North LaSalle

Chicago, Illinois 60654

Telephone: (312) 862-2000

Facsimile: (312) 862-2200

Proposed Co-Counsel to the Debtors 

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

RICHMOND DIVISION

)

In re: ) Chapter 11

)

PENN VIRGINIA CORPORATION, et al.,

1 ) Case No. 16-32395 (___)

)

Debtors. ) (Joint Administration Requested)

)

DEBTORS’ MOTION FOR ENTRY 

OF AN ORDER (I) AUTHORIZING THE 

DEBTORS TO ASSUME (A) THE RESTRUCTURING 

SUPPORT AGREEMENT, (B) THE BACKSTOP COMMITMENT 

AGREEMENT, AND (C) THE EXIT COMMITMENT LETTERS,

(II) AUTHORIZING THE DEBTORS TO PAY CERTAIN FEES IN 

CONNECTION THEREWITH, AND (III) GRANTING RELATED RELIEF

 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification 

number, include: Penn Virginia Corporation (4320); Penn Virginia Holding Corp. (7384); Penn Virginia MC 

Corporation (0458); Penn Virginia MC Energy L.L.C. (0462); Penn Virginia MC Operating Company L.L.C.

(0466); Penn Virginia Oil & Gas Corporation (7929); Penn Virginia Oil & Gas GP LLC (3686); Penn Virginia 

Oil & Gas LP LLC (8109); Penn Virginia Oil & Gas, L.P. (9487). The location of the Debtors’ service address 

is: Four Radnor Corporate Center, Suite 200, 100 Matsonford Road, Radnor, Pennsylvania 19087.

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Penn Virginia Corporation (“Penn Virginia”) and its debtor affiliates, as debtors and 

debtors in possession in the above-captioned chapter 11 cases (collectively, the “Debtors”), 

respectfully submit the Declaration of R. Seth Bullock, Chief Restructuring Officer of Penn 

Virginia Corporation, in Support of the Debtors’ Motion for Entry of an Order (I) Authorizing 

the Debtors to Assume (A) the Restructuring Support Agreement, (B) the Backstop Commitment 

Agreement, and (C) the Exit Commitment Letters, (II) Authorizing the Debtors to Pay Certain 

Fees in Connection Therewith, and (III) Granting Related Relief (the “Bullock Declaration”),

attached hereto as Exhibit B, and state the following in support of this motion:2

Relief Requested

1. The Debtors seek entry of an order, substantially in the form attached hereto as 

Exhibit A (the “Order”): (a) authorizing the Debtors to assume (i) that certain restructuring 

support agreement, dated as of May 10, 2016, a copy of which is annexed as Exhibit 1 to 

Exhibit A attached hereto (together with all exhibits and schedules attached thereto, as each may 

be amended, restated, supplemented, or otherwise modified from time to time in accordance with 

the terms thereof, the “Restructuring Support Agreement”),

3

(ii) the Backstop Commitment 

Agreement, a copy of which is attached as Exhibit C to the Restructuring Support Agreement, 

and (iii) the Exit Commitment Letters, copies of which are attached as Exhibit E to the 

Restructuring Support Agreement; (b) authorizing the Debtors to pay certain fees, expenses, and 

premiums in connection with the Restructuring Support Agreement, the Backstop Commitment 

Agreement, and the Exit Commitment Letters; and (c) granting related relief.

 2 In further support of the relief requested herein, the Debtors submit the Declaration of R. Seth Bullock, Chief 

Restructuring Officer of Penn Virginia Corporation, in Support of Chapter 11 Petitions and First Day Motions

(the “First Day Declaration”), filed contemporaneously herewith.

3

Capitalized terms used in this Motion but not otherwise defined have the meanings given to them in the 

Restructuring Support Agreement.

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Jurisdiction and Venue

2. The United States Bankruptcy Court for the Eastern District of Virginia 

(the “Court”) has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. This 

matter is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2).

3. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409.

4. The bases for the relief requested in this motion are sections 362(d), 363(b), and 

365(a) of title 11 of the United States Code, 11 U.S.C. §§ 101–1532 (the “Bankruptcy Code”),

and Rules 6006 and 9014 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy 

Rules”).

Preliminary Statement

5. The Debtors are an oil and gas company primarily engaged in the acquisition, 

development, and production of oil and natural gas reserves in the United States, and rank among 

the nation’s leading businesses in this sector. The Debtors’ business is fundamentally strong, 

with valuable working interests in the Eagle Ford Shale and Marcellus Shale formations—two of 

the largest and most prolific unconventional shale resource plays in the United States. But, as 

with many of the Debtors’ peers, the current decline in the commodities market has impaired the 

Debtors’ ability to capitalize on their business and proven reserves, resulting in a nearly 

60 percent decrease in total revenues over the last year. Thus, having skipped their most-recent 

interest payments on their outstanding Notes, and facing imminent liquidity constraints, the 

Debtors commenced these chapter 11 cases.

6. Before doing so, however, the Debtors and holders of approximately 87 percent in 

principal amount of the Debtors’ outstanding funded debt obligations—approximately $1 billion 

of the Debtors’ $1.2 billion of outstanding funded-debt obligations—have negotiated a 

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comprehensive restructuring that provides for the Debtors’ swift exit from chapter 11. The 

global deal embodied in the Restructuring Support Agreement has four key components:

• a $25 million DIP Financing to be provided by the RBL

Lenders as DIP Lenders;

• a $128 million committed Exit Facility provided by the 

RBL Lenders as Exit Facility Lenders; 

• a $50 million rights offering (the “Rights Offering”) 

backstopped by certain of the Noteholders as Backstop 

Parties (the “Backstop Commitment”); and

• a commitment by each of the parties to the Restructuring 

Support Agreement to compromise their existing claims in 

service of achieving a consensual restructuring. 

These new sources of liquidity—more than $200 million in total—collectively form the 

foundation of a restructuring that will deleverage the Debtors’ balance sheet, permit the Debtors 

to weather the current upheaval in the oil and gas industry, and position the Debtors to emerge 

from chapter 11 as a strong, competitive company. And, the commitments that the Debtors have 

obtained via hard-fought, arm’s-length negotiations in the context of the Restructuring Support 

Agreement are unprecedented in the current market environment. On a macro level, domestic 

exploration and production (“E&P”) companies are presently experiencing significant levels of 

distress—indeed, more than fifteen E&P companies have filed for chapter 11 protection in the 

last year alone. Against this backdrop, the Debtors are poised to achieve something that no other 

distressed E&P company in recent years has achieved: entering chapter 11 with committed, 

bank-funded revolving-based exit financing in hand.

7. As is evident from the foregoing summary, the DIP Financing, the Backstop 

Commitment, the Rights Offering, and the Exit Facility are of substantial benefit to the Debtors 

and drive recoveries (in both quantum and form of consideration) for the Debtors’ stakeholders. 

The availability of the Exit Facility is particularly significant—traditional banks have become 

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increasingly unwilling to lend to upstream producers like the Debtors under current market 

conditions. The Backstop Parties’ commitment to backstop the Rights Offering—the terms of 

which are set forth in the Backstop Commitment Agreement—goes hand-in-hand with the Exit 

Facility. The Exit Facility Lenders would likely not have committed to fund the Exit Facility 

absent a commitment for some source of post-emergence, non-Exit Facility working capital. 

Similarly, the Noteholders would likely have been unwilling to backstop the Rights Offering 

without the assurance of the fully committed Exit Facility.

8. Further, the compromises and settlements embodied in the Restructuring Support 

Agreement, and to be implemented pursuant to the Plan, preserve value by enabling the Debtors 

to avoid protracted, value-destructive litigation that would delay their emergence from 

chapter 11. Instead of litigating with the RBL Lenders and Noteholders over potential 

recoveries, the RBL Lenders have agreed to (a) become parties to the Restructuring Support 

Agreement, (b) fund the Proposed DIP Financing, and (c) participate in the Exit Facility and 

certain of the Noteholders have agreed to backstop the Rights Offering—each of which 

commitments provide significant value to the Debtors. This is the best result for the Debtors.

9. In short, the Restructuring Support Agreement, along with the Backstop 

Commitment, the Rights Offering, and Exit Facility, collectively provide the Debtors with the 

resources and flexibility, both during these chapter 11 cases and post-emergence, to pursue and 

implement a value-maximizing restructuring transaction. To capture the full benefit of the 

compromises embodied in the Restructuring Support Agreement, the Debtors must move 

efficiently through chapter 11. The Restructuring Support Parties’ various commitments are 

contingent upon the Debtors’ executing the Restructuring Support Agreement’s restructuring in 

accordance with certain milestones (the “Milestones”). Under the agreed Milestones, the 

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Debtors must confirm the Plan in fewer than 100 days. In light of the tumultuous market 

backdrop, the Restructuring Support Parties’ various concessions, and their commitments to fund 

post-emergence sources of liquidity—which would almost certainly be unavailable to the 

Debtors from any other source—the Debtors believe the Milestones are reasonable and are 

prepared to execute their restructuring in accordance therewith. Indeed, in addition to this 

motion and a panoply of traditional “first day” pleadings, the Debtors filed the Plan and related 

disclosure statement on the first day of these chapter 11 cases and are prepared to proceed 

efficiently toward Plan confirmation.

10. As described below, in the Bullock Declaration, and in the First Day Declaration, 

the Debtors and their advisors tirelessly explored various restructuring alternatives in the months

preceding the Petition Date. In addition to weighing the costs and benefits of attempting to fund 

a non-consensual chapter 11 proceeding with proceeds from their Swap Contracts, the Debtors 

engaged in a third-party marketing process, ultimately considering non-binding term sheets from 

four outside parties (the “Third-Party Proposals”). After a thorough, comparative analysis of 

their alternatives, the Debtors concluded that the consensual path contemplated by the 

Restructuring Support Agreement maximizes value for all stakeholders. Accordingly, 

assumption of the Restructuring Support Agreement, including certain prepetition agreements 

annexed thereto—most significantly the Backstop Commitment Agreement and Exit 

Commitment Letters—is a reasonable exercise of the Debtors’ business judgment.

Background

I. The Debtors’ Prepetition Capital Structure.

11. As of the date hereof, the Debtors’ funded debt is comprised of (a) approximately 

$113 million outstanding under the RBL Facility and (b) approximately $1,075 million in 

principal and approximately $47 million in unpaid interest outstanding under the Notes. The 

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Debtors further have approximately 3,864 shares and 17,152 shares, respectively, outstanding in 

Series A Preferred Stock and Series B Preferred Stock, each with a stated liquidation preference 

of $10,000 per share.

Funded Debt Maturity Principal Amount

RBL Facility September 2017 $113 million

2019 Notes April 15, 2019 $300 million

2020 Notes May 1, 2020 $775 million

Total: $1,188 million

Preferred Equity Shares Liquidation Preference

Series A Preferred Stock 3,864 $39 million

Series B Preferred Stock 17,152 $172 million

Total: $211 million

A. RBL Facility and RBL Facility Amendments.

12. In the months leading up to the Petition Date, the Debtors and the RBL Agent 

agreed to the terms of (a) that certain Tenth Amendment to the RBL Facility (the “Tenth RBL 

Amendment”), dated as of January 8, 2016, (b) that certain Eleventh Amendment to the RBL 

Facility (the “Eleventh RBL Amendment”), dated as of March 15, 2016, and (c) that certain 

Amendment to the Eleventh RBL Amendment (the “Amended Eleventh RBL Amendment,” and 

together with the Tenth RBL Amendment and Eleventh RBL Amendment, the “RBL 

Amendments”), dated as of May 6, 2016.

13. Importantly, the Debtors’ availability under the RBL Facility is the lesser of the 

borrowing base and the “commitment amount.” As of the last borrowing base redetermination in 

November 2015, the borrowing base for the RBL Facility was $275 million. But, under the 

terms of the Eleventh RBL Amendment, the commitment amount was reduced to amounts 

outstanding—approximately $113 million as of the Petition Date. Thus, there is no incremental 

availability under the RBL Facility.

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B. Notes.

14. The Notes are comprised of two series of senior unsecured notes: 

(a) $300 million in principal in senior unsecured notes bearing an annual coupon of 7.25% 

payable on April 15 and October 15 of each year and that mature on April 15, 2019 (the “2019 

Notes”); and (b) $775 million in principal in senior unsecured notes bearing an annual coupon of 

8.50% payable on May 1 and November 1 of each year and that mature on May 1, 2020 (the 

“2020 Notes”). As of the Petition Date, approximately $12 million and $35 million, 

respectively, in unpaid interest remains outstanding under the 2019 Notes and 2020 Notes.

C. Preferred and Common Stock.

15. The terms of Penn Virginia’s outstanding preferred stock require quarterly cash 

dividend payments at a rate of 6.0 percent per annum to be paid on January 15, April 15, July 15, 

and October 15 of each year. As part of its ongoing efforts to preserve liquidity while exploring 

strategic alternatives, Penn Virginia suspended quarterly dividends on the Series A Preferred 

Stock and Series B Preferred Stock for the quarter ended September 30, 2015. The Debtors 

subsequently extended such suspension through March 31, 2016.

16. Until recently, Penn Virginia’s common stock was publicly traded on the New 

York Stock Exchange (the “NYSE”) under the symbol “PVA.” On January 12, 2016, the NYSE 

delisted Penn Virginia’s common stock, which is now publicly traded over the counter under the 

symbol “PVAH.”

II. Circumstances Leading to These Chapter 11 Cases.

17. As described more fully in the First Day Declaration, the Debtors’ success is tied 

closely to commodities prices—in particular oil and gas prices. In response to the recent market 

contraction, the Debtors commenced various cost-saving initiatives and other strategic 

restructuring efforts in late 2015, including: (a) selling certain non-core assets for aggregate net 

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proceeds of approximately $73 million; (b) reducing employee headcount by approximately 40

percent from year-end 2014 levels; (c) suspending preferred stock dividend payments beginning 

the quarter ended September 30, 2015; and (c) implementing various other operational,

liquidity-enhancing measures. Recognizing the need for a more comprehensive restructuring of 

their liabilities, the Debtors sought external strategic advice and assistance, engaging Jefferies, 

LLC (“Jefferies”), as investment banker, Kirkland & Ellis LLP (“K&E”) as legal advisor, and 

Alvarez & Marsal North America, LLC (“A&M”) as restructuring advisor in January 2016 to 

assist with exploring strategic alternatives to resolve their highly leveraged balance sheet and a 

related liquidity crunch. Additionally, on March 22, 2016, the Debtors appointed R. Seth 

Bullock of A&M as Chief Restructuring Officer.

18. The challenges the Debtors face came to a head in early 2016 when the Debtors’ 

registered independent public accountants issued an opinion with an explanatory paragraph 

expressing substantial doubt as to the Debtors’ ability to continue as a “going concern.” Such a 

qualification constituted a breach under the RBL Facility and resulted in a breach under the 

Notes due to certain cross-default provisions applicable thereto. Accordingly, the Debtors 

classified all of their total outstanding funded-debt obligations—more than $1.2 billion—as 

short-term as of December 31, 2015. Such classification gave rise to a breach of the “current 

ratio” covenant under the RBL Facility. 

19. Accordingly, over the first four months of 2016, the Debtors engaged the RBL 

Agent, the RBL Lenders, and an ad hoc committee of the Noteholders (the “Ad Hoc 

Committee”) regarding restructuring alternatives. As described in more detail in the First Day 

Declaration, during this time, the Debtors negotiated the terms of the RBL Amendments, under 

which the RBL Lenders agreed that the above-described defaults would not become events of 

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default until a future, specified date—which date was ultimately extended through the Petition 

Date. In return, the Debtors agreed to liquidate intermittently certain of their Swap Contracts 

and apply a share of the proceeds to pay down the outstanding RBL Facility balance. Ultimately, 

the Debtors liquidated all six of their prepetition Swap Contracts, applying approximately $49.8

million of the proceeds to pay down the RBL Facility balance. Under the terms of the RBL 

Amendments, the Debtors were permitted to retain $11 million of the proceeds in the aggregate

to fund ongoing liquidity needs, including the administration of these chapter 11 cases.

20. The Debtors’ Swap Contract decision-making is a direct reflection of the 

successful negotiations with the Ad Hoc Committee and the RBL Lenders leading up to these 

chapter 11 cases. The counterparties to all six of the Debtors’ prepetition Swap Contracts were 

also RBL Lenders or affiliates of RBL Lenders and would have argued for setoff rights with 

respect to the proceeds from the Swap Contracts, although the Debtors felt they had certain 

arguments to the contrary. The Debtors’ agreement, in consultation with the advisors to the Ad 

Hoc Committee, to liquidate their six prepetition Swap Contracts incorporated their assessment 

of the relative strength of such arguments and the benefits of proceeding toward a consensual 

resolution.

21. The Debtors and their advisors took full advantage of the runway afforded by the 

RBL Amendments. In addition to engaging with the RBL Agent and RBL Lenders, the Debtors 

engaged in substantial negotiations with the Ad Hoc Committee. The RBL Lenders were 

hesitant to proceed with a restructuring absent an agreement with the Ad Hoc Committee and 

some source of post-emergence, non-Exit Facility working capital. Accordingly, the Debtors 

negotiated the debt-for-equity swap with the Ad Hoc Committee, the terms of the $50 million 

backstopped Rights Offering, and brokered a resolution under which significant stakeholders 

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ultimately made both concessions and accommodations for post-emergence liquidity. The terms 

of this resolution are embodied in the Restructuring Support Agreement.

22. On May 10, 2016, the Debtors, lenders holding 100 percent of the principal 

amount loans arising under the RBL Facility, and holders of approximately 86 percent of the 

principal amount of the Notes executed the Restructuring Support Agreement. On the Petition 

Date, in accordance with the Milestones, the Debtors commenced these chapter 11 cases.

III. Marketing Process.

23. Parallel to the Restructuring Support Agreement negotiations, the Debtors and 

their advisors engaged in a marketing process to test the market for the highest and otherwise 

best restructuring alternative. Starting in mid-2015 through late 2015, Jefferies began exploring 

various strategic alternatives on the Debtors’ behalf, including exploring alternative sources of 

financing and the sale of some or all of the Debtors’ assets. In connection with this process a 

number of third parties conducted substantial diligence regarding the Debtors and their assets.

24. In January 2016, the Debtors announced the engagement of Jefferies, K&E, and 

A&M to assist the Debtors with exploring more comprehensive restructuring alternatives. The 

Debtors and their advisors continued to explore various third-party restructuring alternatives in 

the months preceding the Petition Date. Due to its efforts on the Debtors’ behalf over the second 

half of 2015, Jefferies had a well-defined population of potential interested investors, both 

strategic and financial, that were familiar with the Debtors’ assets and liquidity constraints. With 

the assistance of Jefferies, the Debtors contacted 16 potential third-party investors, including 

both strategic and financial investors, specifically requesting restructuring proposals. A number 

of these parties conducted further due diligence in connection with their analysis of whether to 

submit such a proposal. Because of the 2015 process, the Debtors were well-positioned to 

provide any information third-party investors may have requested. The Debtors ultimately 

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received four Third-Party Proposals. Additionally, while the Debtors brokered the joint 

resolution among the RBL Lenders and Noteholders embodied in the Restructuring Support 

Agreement, over the course of their prepetition marketing process, the Debtors received and 

considered separate proposals from the RBL Agent and the Ad Hoc Committee. 

25. The Third-Party Proposals generally contemplated outside investments in the 

form of junior debtor-in-possession financing and post-emergence equity rights offerings (or 

similar equity investments) in return for the majority of reorganized Penn Virginia’s equity. 

Noteholders were generally left with significantly less than half of reorganized Penn Virginia’s 

equity. The Debtors and their management team, advisors, and board of directors (the “Board”)

closely considered the Third-Party Proposals and, as set forth below, ultimately determined that 

the Restructuring Support Agreement embodies the best alternative to maximize value for all of 

the Debtors’ stakeholders. Further, the Debtors presented the Third-Party Proposals to both the 

RBL Lenders and the Ad Hoc Committee and the overwhelming majority—holding 

approximately 87 percent in principal of the Debtors’ aggregate prepetition funded-debt 

obligations—elected to support the RSA.

IV. Board Consideration.

26. The Board was actively engaged in the above-described negotiations and thirdparty marketing process. Over the course of the first four months of 2016, the Board met 

regularly and consistently to receive updates and authorize various actions, including, for 

example, entry into the RBL Amendments. Prior to entry into the Restructuring Support 

Agreement, the Board met to receive a comprehensive presentation from the Debtors’ advisors 

regarding the final terms of the Restructuring Support Agreement, the relative benefits of the 

transactions contemplated thereby, the legal and financial ramifications of entry therein, and the 

chapter 11 process generally. Ultimately, on May 9, 2016, the Board unanimously authorized 

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the Debtors’ entry into the Restructuring Support Agreement and commencement of these 

chapter 11 cases, subject to the resolution of certain remaining open issues that were 

subsequently resolved.

Restructuring Support Agreement

I. Restructuring Term Sheet.

27. The Restructuring Term Sheet attached as Exhibit A to the Restructuring Support 

Agreement contemplates a swift restructuring financed by: (a) the consensual use of cash 

collateral, including funds retained from the Debtors prepetition Swap Contracts liquidations; (b) 

the DIP Financing; (c) the Exit Facility; and (d) the Rights Offering. The Restructuring Term 

Sheet contemplates consummation of a chapter 11 plan (i.e., the Plan) that, if approved, will 

result in the following recoveries:

• holders of administrative and priority claims shall be paid 

in full, in cash on the effective date (the “Effective Date”) 

of the Plan;

• holders of DIP Claims shall be paid in full, in cash on the 

Effective Date, funded from cash on hand and proceeds of 

the Exit Facility and the Rights Offering;

• holders of other secured claims shall receive such treatment 

as to render their claims unimpaired;

• holders of RBL Claims shall be paid in full, in cash on the 

Effective Date, funded from cash on hand and proceeds of 

the Exit Facility and the Rights Offering;

• holders of Note Claims and holders of general unsecured 

claims, collectively, shall each receive their pro rata share 

of an aggregate of 100% of the New Common Stock on the 

Effective Date, subject to dilution on account of the 

Management Incentive Plan Equity, any fees payable in 

New Common Stock under the terms of the Backstop 

Commitment Agreement (including the Commitment 

Premium), and the New Common Stock issued in the 

Rights Offering; 

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• holders of Note Claims shall also be entitled to participate 

in the Rights Offering in accordance with the Backstop 

Commitment Agreement, the Restructuring Support 

Agreement, the Plan, and the Rights Offering Procedures; 

and

• all existing equity interests in Penn Virginia will be 

canceled, extinguished, and discharged.

28. The Restructuring Term Sheet contemplates a swift restructuring consummated in 

accordance with the following Milestones:

• no later than 8:00 a.m. on May 12, 2016, the PVA Entities 

shall commence the Chapter 11 Cases by filing bankruptcy 

petitions with the Bankruptcy Court;

• on, or no later than 24 hours after, the Petition Date, the 

Debtors shall file with the Bankruptcy Court a motion 

seeking entry of the Interim DIP Order and the Final DIP 

Order;

• no later than three days after the Petition Date, the Debtors

shall file with the Bankruptcy Court (a) the Plan and the 

Disclosure Statement and (b) this motion;

• no later than three days after the Petition Date, the 

Bankruptcy Court shall have entered the Interim DIP 

Order;

• no later than fifteen days after the Petition Date, the 

Debtors shall file with the Bankruptcy Court (a) a motion to 

establish a bar date for filing proofs of claim and (b) the 

schedules of assets and liabilities and statements of 

financial affairs for each Debtor; 

• no later than thirty days after the Petition Date, (a) the 

Bankruptcy Court shall have entered the Final DIP Order, 

(b) the Bankruptcy Court shall have entered an order 

granting this motion, and (c) the Debtors shall have 

delivered a proposal with regard to the treatment of 

material contracts to the Majority Consenting Noteholders;

• no later than forty-five days after the Petition Date, the 

Bankruptcy Court shall have entered an order 

(the “Disclosure Statement Order”) approving the adequacy 

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of the Disclosure Statement and related solicitation 

procedures (including the Rights Offering Procedures);

• no later than forty-five days after the entry of the 

Disclosure Statement Order, the Bankruptcy Court shall 

commence a hearing to confirm the Plan 

(the “Confirmation Hearing”);

• no later than five days after the commencement of the 

Confirmation Hearing, the Bankruptcy Court shall enter an 

order (the “Confirmation Order”) confirming the Plan; and

• no later than twenty-five days after entry of the 

Confirmation Order, the Debtors shall consummate the 

transactions contemplated by the Plan.

29. The Restructuring Term Sheet further sets forth resolutions with respect to certain 

ancillary matters, including conditions precedent to emergence, the release and exculpation 

provisions contained in the Plan, employee retention and severance programs, indemnification, 

and release of avoidance actions.

II. Restructuring Support Agreement.

30. The Restructuring Support Agreement contains a number of provisions that will

impact the administration of these chapter 11 cases. First, in addition to certain other 

commitments, under the Restructuring Support Agreement, each of the Restructuring Support 

Parties agreed to “use commercially reasonable efforts to support and cooperate with the 

[Debtors] to take all commercially reasonable actions necessary to consummate the 

Restructuring Transactions in accordance with the Plan and the terms and conditions of this 

Agreement and the Restructuring Term Sheet.”4

 Similarly, in addition to certain other 

commitments, the Debtors agreed to “support and make commercially reasonable efforts to 

 4 Restructuring Support Agreement § 5(a).

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complete the Restructuring Transactions set forth in the Plan and this Agreement.”5 Further, the 

Debtors agreed, subject to certain conditions, that they will not “seek, solicit, or support 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 the [Debtors], other than the” restructuring 

contemplated by the Restructuring Support Agreement.6

31. Further, the Restructuring Support Agreement sets forth certain termination 

events exercisable by the Restructuring Support Parties and the Debtors, respectively. With 

respect to the Restructuring Support Parties, each of the (a) Majority Consenting RBL Lenders 

and (b) the Majority Consenting Noteholders shall have the right, but not the obligation, to 

terminate its obligations under the Restructuring Support Agreement upon notice to the other 

Parties thereto upon the occurrence of certain defined events. For the sake of brevity, each 

Restructuring Support Party termination event is not described in detail herein, but such 

termination events generally mandate that the Debtors diligently pursue consummation of the 

restructuring contemplated by the Restructuring Support Agreement in accordance with the 

terms thereof. 

32. The Debtors may, upon notice to the Restructuring Support Parties, terminate 

their obligations under the Restructuring Support Agreement upon: (a) certain defined breaches

by a Restructuring Support Party of its obligations under the Restructuring Support Agreement; 

(b) if the Definitive Documents do not comply with the Restructuring Support Agreement; and 

(c) importantly, “if the board of directors or board of managers, as applicable, of any [Debtor]

 5 Restructuring Support Agreement § 6(a)(i).

6 Restructuring Support Agreement § 6(b).

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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 its fiduciary duties” (often referred to as a “fiduciary out”).7

33. Finally, pursuant to the Restructuring Support Agreement, the Debtors have 

agreed to pay or reimburse all reasonable and documented fees of certain professionals 

(the “Professional Fees”) employed by the Consenting RBL Lenders and Consenting 

Noteholders. Such professionals include one primary counsel, one local counsel, and one 

financial advisor for each of the Consenting RBL Lenders and the Consenting Noteholders, plus 

certain consultants employed by the Consenting Noteholders, and “any such other advisors or 

consultants as may be reasonably determined by the Consenting Noteholders and Backstop 

Parties, in consultation with [the Debtors].”8

III. Backstop Commitment Agreement and Exit Commitment Letters.

34. Certain of the Restructuring Support Agreement exhibits are agreements that the 

Debtors entered into prior to the Petition Date to facilitate the restructuring transactions 

contemplated by the Restructuring Support Agreement and provide certainty during these 

chapter 11 cases. By this motion the Debtors seek authority to assume these agreements as part 

and parcel of the Restructuring Support Agreement. Most significantly, the Backstop 

Commitment Agreement attached as Exhibit C to the Restructuring Support Agreement and the 

Exit Commitment Letters attached as Exhibit E to the Restructuring Support Agreement.

35. The Debtors and certain of the Noteholders, as Backstop Parties, executed the 

Backstop Commitment Agreement prior to the Petition Date to facilitate the Rights Offering. As 

 7 Restructuring Support Agreement § 8(c).

8 Restructuring Support Agreement § 14.

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described above, under the terms of the Restructuring Support Agreement, on the Effective Date, 

the Debtors will consummate the Rights Offering, which is backstopped by the Backstop Parties. 

The terms of the Backstop Parties’ backstop commitment are set forth in the Backstop 

Commitment Agreement. Under the terms of the Backstop Commitment Agreement, in addition 

to agreeing to exercise fully all Subscription Rights issued to them pursuant to the Plan, the 

Backstop Parties have agreed to purchase all unsubscribed shares under the Rights Offering, at a

Per Share Purchase Price that reflects a discount of 25 percent to the total settled plan equity 

value of $125 million. Additionally, under the terms of the Backstop Commitment Agreement, 

the Debtors will pay the Backstop Parties either (a) a premium in an amount equal to $3,000,000 

(which represents 6% of the $50 million aggregate Rights Offering amount) upon consummation 

of the Rights Offering, or (b) a termination fee in an amount equal to $2,000,000 (which 

represents 4% of the $50 million aggregate Rights Offering amount) (collectively, the “Backstop 

Fees”). The Backstop Parties may terminate their obligations under the Backstop Commitment 

Agreement upon written notice if the closing date of the Rights Offering has not occurred within 

120 days after the Petition Date, which date may be extended with the requisite support of the 

Backstop Parties.

36. In addition, certain of the RBL Lenders, in their capacities as Exit Facility 

Lenders, executed the Exit Commitment Letters prior to the Petition Date, which were agreed to 

and accepted by the Debtors. Under the Exit Commitment Letters, the Exit Facility Lenders, 

subject to certain conditions, committed to fund their respective portions of the initial borrowing 

base limit of up to $128 million under the Exit Facility. The Exit Commitment Letters also 

provide that the Debtors will pay, as applicable: (a) a structuring fee to the RBL Agent, in its 

capacity as Exit Agent, on the closing date of the Exit Facility; (b) administrative fees to the Exit 

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19

Agent both on and continuing after the closing date of the Exit Facility; (c) “upfront fees” in an 

aggregate amount equal to $1.28 million to the Exit Facility Lenders on the closing date of the 

Exit Facility; and (d) a termination fee in an aggregate amount equal to $1.28 million to the Exit 

Facility Lenders in the event that the Debtors are required to pay the termination fee under the 

Backstop Commitment Agreement (collectively, the “Exit Commitment Fees”). Similar to the 

Backstop Commitment Agreement, the Exit Facility Lenders may terminate their obligations 

under the Exit Commitment Letters if the closing date of the Exit Facility has not occurred 

within 120 days after the Petition Date, which date may be extended with the requisite support of 

the Exit Facility Lenders.

Basis for Relief

I. Assumption of the Restructuring Support Agreement.

37. Section 365(a) of the Bankruptcy Code provides that a debtor in possession, 

“subject to the court’s approval, may assume or reject an executory contract or unexpired lease 

of the debtor.” 11 U.S.C. § 365(a). “Unlike many other sections of the Bankruptcy Code, 

§ 365(a) of the Bankruptcy Code does not require a showing of ‘cause’ to support a Debtors 

decision to assume or reject an executory contract.” In re Circuit City Stores, Inc., No. 08-

35653, 2010 WL 2425957, at *3 (Bankr. E.D. Va. June 9, 2010). “Rather, the debtor’s 

determination to [assume or] reject an executory contract is governed by the ‘business judgment’

standard.” Id. (citing Lubrizol Enterprises, Inc. v. Richmond Metal Finishers, Inc., 756 F.2d 

1043, 1046–47 (4th Cir.1985)); see also NLRB v. Bildisco & Bildisco, 465 U.S. 513, 523 (1984) 

(business judgment is the “traditional” standard); In re US Airways Grp., Inc., 287 B.R. 643, 645 

(Bankr. E.D. Va. 2002) (“The standard in [the Fourth] Circuit for approving a request to [assume 

or reject an executory contract] is whether the trustee or debtor in possession has exercised sound 

business judgment.”). In addition, courts outside this district have specifically held that 

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decisions to assume restructuring support agreements are governed by the business judgment 

standard. See, e.g., In re Genco Shipping & Trading Ltd., 509 B.R. 455, 462-63 (Bankr. 

S.D.N.Y. 2014); In re Caribbean Petroleum Corp., 444 B.R. 263, 268 (Bankr. D. Del. 2010).

38. The business judgment standard is exceedingly deferential—“[o]nce the 

Debtors articulate a valid business justification, ‘[t]he business judgment rule becomes a 

presumption that in making a business decision the directors of a corporation acted on an 

informed basis, in good faith and in honest belief that the action taken was in the best interests of 

the company.’” Circuit City, 2010 WL 2425957, at *3 (quoting Official Comm. of Subordinated 

Bondholders v. Integrated Res., Inc., 147 B.R. 650, 656 (S.D.N.Y. 1992)). “The Court should 

defer to the business judgment of the Debtors, unless ‘the decision of the [Debtors] that 

[assumption or] rejection will be advantageous is so manifestly unreasonable that it could not be 

based on sound business judgment, but only on bad faith, or whim or caprice.’” Id. (quoting 

Lubrizol, 756 F.3d at 1047).

39. The Debtors’ assumption of the Restructuring Support Agreement is a reasonable 

exercise of their business judgment. The restructuring contemplated by the Restructuring 

Support Agreement positions the Debtors to accomplish a critical deleveraging that will 

maximize the value of the Debtors’ enterprise for the benefit all of the Debtors’ stakeholders. As 

set forth in the Bullock Declaration, the Restructuring Support Agreement is the product of 

good-faith, arms’-length negotiations among the Debtors and the Restructuring Support Parties, 

each of whom had separate, sophisticated legal counsel and financial advisors and whom, 

collectively, represent the overwhelming majority of the holders of the Debtors’ prepetition 

funded-debt obligations. 

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40. Without the benefits and protections provided by the Restructuring Support 

Agreement, the Debtors could potentially face a prolonged stay in bankruptcy. In light of the 

Debtors’ prepetition defaults under the RBL Facility, they likely could not have navigated a soft 

landing in chapter 11 absent the RBL Lenders’ support. The RBL Lenders’ support was, in turn, 

ultimately contingent upon the participation of the Noteholders—the RBL Lenders specifically 

stated that they would not fund a restructuring process that the Noteholders did not support. 

Based on the Debtors’ intensive prepetition negotiations and in the professional judgment of 

their advisors, the swift, consensual process contemplated by the Restructuring Support 

Agreement presents far less execution risk than any available alternative and better preserves 

estate assets for the benefit of the Debtors’ stakeholders.

41. Moreover, as set forth in more detail in the Bullock Declaration, the Backstop 

Fees and the Exit Commitment Fees are reflective of market terms—i.e., such fees are in line 

with similar fees paid to new capital providers in both in- and out-of-court transactions similar to 

the Rights Offering and Exit Facility. Even under normal operating conditions, the Debtors 

would expect to pay certain fees in connection with such transactions. In light of market 

conditions, and the lack of traditional sources of capital for E&P companies, the Debtors are 

satisfied that the Backstop Fees and Exit Commitment Fees represent the market rate. Further, 

locking in these commitments through the assumption of the Restructuring Support Agreement 

will solidify these chapter 11 cases by eliminating uncertainty with respect to the Debtor’s ability 

to fund their current and post-emergence operations. In light of these considerations, the 

Backstop Fees and the Exit Commitment Fees are reasonable and appropriate under the 

circumstances and the Debtors’ decision to assume and pay such fees is a reasonable exercise of 

their business judgment.

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42. The Third-Party Proposals, on the other hand, were non-binding and had higher

execution risk and associated costs to the Debtors. First, it is not clear that the Debtors would 

have had the support of the RBL Lenders under any of the Third-Party Proposals. Even with the 

RBL Lenders’ support, if the Debtors had proceeded with one of the Third-Party Proposals, they 

almost certainly would have faced postpetition litigation with the Noteholders, who are by far the 

Debtors’ largest unsecured creditor constituency. Ultimately, the all-in economics of the ThirdParty Proposals were simply not as favorable as those of the Restructuring Support Agreement, 

especially in light of the additional costs and uncertainty attendant to the non-consensual process 

contemplated by the Third-Party Proposals. Further, the Debtors negotiated a full fiduciary out 

as part of the Restructuring Support Agreement in the event that proceeding with the transactions 

contemplated thereby would be inconsistent with the Debtors’ fiduciary duties to maximize value 

for their stakeholders.

43. In short, the restructuring contemplated by the Restructuring Support Agreement 

maximizes value. The RBL Lenders will be paid in full and the Noteholders and general 

unsecured claim holders will, subject to dilution by the Rights Offering, Commitment Premium,

and Management Incentive Plan, receive 100 percent of the equity in reorganized Penn Virginia. 

The Restructuring Support Agreement further contemplates substantial sources of postemergence liquidity in the form of the Exit Facility and the Rights Offering. Assumption of the 

Backstop Commitment Agreement and Exit Commitment Letters as part of the Restructuring 

Support Agreement minimizes the risk associated with these chapter 11 cases by locking in the 

Backstop Parties’ and Exit Facility Lenders’ commitments.

44. Finally, as stated above, Debtors shared the Third-Party Proposals with both the 

RBL Lenders, 100 percent of which signed the Restructuring Support Agreement, and Ad Hoc 

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23

Committee, which represents holders of approximately 86 percent in principal amount of the 

Notes and the Debtors’ largest unsecured creditor constituency. The RBL Lenders and the Ad 

Hoc Committee chose to support the Restructuring Support Agreement and its more consensual 

path.

45. As set forth in the Bullock Declaration, the Debtors engaged in an intense analysis 

of the Restructuring Support Agreement vis-à-vis the Third-Party Proposals and determined that 

the Restructuring Support Agreement represents the value-maximizing transaction. Further, as 

set forth above, the obligations of the Debtors under the Restructuring Support Agreement are 

subject to a full fiduciary out, thus preserving the Debtors’ flexibility to pursue an alternative 

value-maximizing transaction, should one arise. Accordingly, the Court should authorize the 

Debtors to assume the Restructuring Support Agreement.

II. Payment of Professional Fees is 

Warranted under Section 363(b) of the Bankruptcy Code.

46. The Bankruptcy Code authorizes the use of property outside the ordinary course 

of business with court approval and given a valid business reason. Specifically, the Bankruptcy 

Code authorizes a debtor in possession to “use, sell, or lease, other than in the ordinary course of 

business, property of the estate,” after notice and a hearing. 11 U.S.C. § 363(b)(1). “Courts 

apply the deferential business judgment test when analyzing transactions under § 363(b)(1).” In 

re Alpha Nat. Res., Inc., 546 B.R. 348, 356 (Bankr. E.D. Va. 2016) (citing Comm. of Equity 

Security Holders v. Lionel Corp. (In re Lionel Corp.), 722 F.2d 1063, 1071 (2d Cir. 1983)). 

“The business judgment test asks whether the debtor has proved that the transaction at issue is 

‘within the fair and reasonable business judgment of the Debtors and thus within the zone of 

acceptability.’” Id.; see also In re Gordon Properties, LLC, 504 B.R. 415, 419 (Bankr. E.D. Va. 

2013) (applying a “sound business judgment” standard).

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47. Here, the Debtors have articulated a clear business justification for entering into 

the Restructuring Support Agreement and paying the Professional Fees. By securing the support 

and cooperation of the Restructuring Support Parties, the Debtors have significantly reduced the 

potential cost and duration of their chapter 11 cases. Further, payment of the Professional Fees

pursuant to the Restructuring Support Agreement was a negotiated component of the agreements

and a material inducement for the Restructuring Support Parties’ various concessions and 

commitments thereunder. Finally, as set forth in the Bullock Declaration, payment of the 

Professional Fees under the Restructuring Support Agreement is a market-based term that courts 

frequently approve in similar circumstances. Consummation of the transactions contemplated by 

the Restructuring Support Agreement will be hugely beneficial to the Debtors. Accordingly, the 

Debtors respectfully submit that payment of the Professional Fees is a proper exercise of their 

reasonable business judgment and should be approved pursuant to section 363(b) of the 

Bankruptcy Code.9

III. The Debtors Seek a Waiver of the 

Automatic Stay to Effectuate the Relief Requested in this Motion.

48. Section 362(a) of the Bankruptcy Code operates to stay:

[T]he commencement or continuation, including the issuance or 

employment of process of a judicial, administrative, or other action 

or proceeding against the debtor that was or could have been 

commenced before the commencement of the case under this title, 

or to receive a claim against the debtor that arose before the 

commencement of the case under this title . . . .

11 U.S.C. § 362(a)(1). Section 362, however, permits a debtor or other parties in interest to 

request a modification or termination of the automatic stay for “cause.” Id. at § 362(d)(1).

 9 Furthermore, such fees and expenses constitute “necessary costs and expenses of preserving the estate” and 

should be awarded administrative expense status under sections 503(b)(1) and 507(a)(2) of the Bankruptcy 

Code. Administrative expense claims are paid in full under the terms of the Plan. Accordingly, allowing the 

Debtors to pay the fees and expenses contemplated by the Restructuring Support Party would affect only the 

timing, not the amount, of such payments.

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49. The Debtors seek authorization, under section 362(d) of the Bankruptcy Code, to 

modify the automatic stay to the extent necessary to permit the relief requested in this Motion 

and, for the reasons described herein, believe this relief is appropriate in the context of assuming 

the Restructuring Support Agreement and Backstop Commitment Agreement.

Waiver of Bankruptcy Rules 6004(h) and 6006(d)

50. To implement the foregoing successfully, the Debtors seek a waiver of the 14-day 

stay of an order authorizing the use, sale, or lease of property under Bankruptcy Rule 6004(h) 

and, to the extent applicable, the 14-day stay of an order applicable to assignment of an 

unexpired executory contract under Bankruptcy Rule 6006(d).

Waiver of Memorandum of Points and Authorities

51. The Debtors respectfully request that this Court treat this Motion as a written 

memorandum of points and authorities or waive any requirement that this Motion be 

accompanied by a written memorandum of points and authorities as described in Local 

Bankruptcy Rule 9013-1(G).

Notice

52. The Debtors will provide notice of this motion to: (a) the Office of the United 

States Trustee for the Eastern District of Virginia; (b) the holders of the 50 largest unsecured 

claims against the Debtors (on a consolidated basis); (c) the administrative agent under the 

Debtors’ prepetition secured credit agreement; (d) the indenture trustee under the Debtors’ 

7.25% senior notes due 2019; (e) the indenture trustee under the Debtors’ 8.500% senior notes 

due 2020; (f) counsel to certain holders of the 2019 and 2020 senior notes; (g) counsel to the 

agent under the Debtors’ debtor-in-possession credit facility; (h) co-counsel to the agent under 

the Debtors’ debtor-in-possession credit facility; (i) the United States Attorney’s Office for the 

Eastern District of Virginia and for the states in which the Debtors operate; (j) the Internal 

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26

Revenue Service; (k) the Environmental Protection Agency and similar state environmental 

agencies for states in which the Debtors conduct business; (l) the office of the attorneys general 

for the states in which the Debtors operate; (m) the Securities and Exchange Commission; and 

(n) any party that has requested notice pursuant to Bankruptcy Rule 2002. The Debtors submit 

that, in light of the nature of the relief requested, no other or further notice need be given.

No Prior Request

53. No prior request for the relief sought in this motion has been made to this or any 

other court.

[Remainder of page intentionally left blank]

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WHEREFORE, the Debtors respectfully request that the Court enter the Order, granting 

the relief requested herein and such other relief as the Court deems appropriate under the 

circumstances.

Dated: May 12, 2016

Richmond, Virginia

/s/ Michael A. Condyles

Michael A. Condyles (VA 27807) Edward O. Sassower, P.C. (pro hac vice admission pending)

Peter J. Barrett (VA 46179) Joshua A. Sussberg, P.C.

Jeremy S. Williams (VA 77469) Brian E. Schartz (pro hac vice admission pending)

KUTAK ROCK LLP KIRKLAND & ELLIS LLP

Bank of America Center KIRKLAND & ELLIS INTERNATIONAL LLP

1111 East Main Street, Suite 800 601 Lexington Avenue

Richmond, Virginia 23219 New York, New York 10022

Telephone: (804) 644-1700 Telephone: (212) 446-4800

Facsimile: (804) 783-6192 Facsimile: (212) 446-4900

Michael.Condyles@KutakRock.com edward.sassower@kirkland.com

Peter.Barrett@KutakRock.com joshua.sussberg@kirkland.com

Jeremy.Williams@KutakRock.com brian.schartz@kirkland.com

- and -

James H.M. Sprayregen, P.C. 

Justin R. Bernbrock (pro hac vice admission pending)

Benjamin M. Rhode (pro hac vice admission pending)

KIRKLAND & ELLIS LLP

KIRKLAND & ELLIS INTERNATIONAL LLP

300 North LaSalle

Chicago, Illinois 60654

Telephone: (312) 862-2000

Facsimile: (312) 862-2200

james.sprayregen@kirkland.com 

justin.bernbrock@kirkland.com

benjamin.rhode@kirkland.com

Proposed Co-Counsel to the Debtors and Debtors in Possession

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EXHIBIT A

Proposed Order

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Edward O. Sassower, P.C. (pro hac vice admission pending) Michael A. Condyles (VA 27807)

Joshua A. Sussberg, P.C. Peter J. Barrett (VA 46179)

Brian E. Schartz (pro hac vice admission pending) Jeremy S. Williams (VA 77469)

KIRKLAND & ELLIS LLP KUTAK ROCK LLP

KIRKLAND & ELLIS INTERNATIONAL LLP Bank of America Center

601 Lexington Avenue 1111 East Main Street, Suite 800

New York, New York 10022 Richmond, Virginia 23219

Telephone: (212) 446-4800 Telephone: (804) 644-1700

Facsimile: (212) 446-4900 Facsimile: (804) 783-6192

- and -

James H.M. Sprayregen, P.C. 

Justin R. Bernbrock (pro hac vice admission pending)

Benjamin M. Rhode (pro hac vice admission pending)

KIRKLAND & ELLIS LLP

KIRKLAND & ELLIS INTERNATIONAL LLP

300 North LaSalle

Chicago, Illinois 60654

Telephone: (312) 862-2000

Facsimile: (312) 862-2200

Proposed Co-Counsel to the Debtors 

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

RICHMOND DIVISION

)

In re: ) Chapter 11

)

PENN VIRGINIA CORPORATION, et al.,

1 ) Case No. 16-32395 (___)

)

Debtors. ) (Joint Administration Requested)

)

ORDER (I) AUTHORIZING THE DEBTORS 

TO ASSUME (A) THE RESTRUCTURING SUPPORT 

AGREEMENT, (B) THE BACKSTOP COMMITMENT 

AGREEMENT, AND (C) THE EXIT COMMITMENT LETTERS, 

(II) AUTHORIZING THE DEBTORS TO PAY CERTAIN FEES IN 

CONNECTION THEREWITH, AND (III) GRANTING RELATED RELIEF

Upon the motion (the “Motion”)

2

of the above-captioned debtors and debtors in 

possession (collectively, the “Debtors”), for entry of an order (this “Order”), (a) authorizing the 

 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification 

number, include: Penn Virginia Corporation (4320); Penn Virginia Holding Corp. (7384); Penn Virginia MC 

Corporation (0458); Penn Virginia MC Energy L.L.C. (0462); Penn Virginia MC Operating Company L.L.C.

(0466); Penn Virginia Oil & Gas Corporation (7929); Penn Virginia Oil & Gas GP LLC (3686); Penn Virginia 

Oil & Gas LP LLC (8109); Penn Virginia Oil & Gas, L.P. (9487). The location of the Debtors’ service address 

is: Four Radnor Corporate Center, Suite 200, 100 Matsonford Road, Radnor, Pennsylvania 19087.

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2

Debtors to assume (i) the Restructuring Support Agreement attached hereto as Exhibit 1, (ii) the

Backstop Commitment Agreement attached as Exhibit C to the Restructuring Support 

Agreement, and (iii) the Exit Commitment Letters attached as Exhibit E to the Restructuring 

Support Agreement; (b) authorizing the Debtors to pay certain fees in connection with the 

Restructuring Support Agreement, the Backstop Commitment Agreement, and the Exit 

Commitment Letters; and (c) granting related relief, all as more fully set forth in the Motion; and 

upon the Bullock Declaration and the First Day Declaration; and this Court having jurisdiction 

over this matter pursuant to 28 U.S.C. §§ 157 and 1334; and this Court having found that this is a

core proceeding pursuant to 28 U.S.C. § 157(b)(2); and this Court having found that this Court 

may enter a final order consistent with Article III of the United States Constitution; and it 

appearing that venue of this proceeding and the Motion in this district is proper pursuant to 28 

U.S.C. §§ 1408 and 1409; and this Court having found that the relief requested in the Motion is 

in the best interests of the Debtors’ estates, their stakeholders, and other parties in interest; and 

this Court having found that the Debtors’ notice of the Motion and opportunity for a hearing on 

the Motion were appropriate under the circumstances and no other notice need be provided; and 

this Court having reviewed the Motion and having heard the statements in support of the relief 

requested therein at a hearing before this Court (the “Hearing”); and this Court having 

determined that the legal and factual bases set forth in the Motion and at the Hearing establish 

just cause for the relief granted herein; and upon all of the proceedings had before this Court; and 

after due deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT:

1. The Motion is granted as set forth herein.

 2

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

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3

2. The Debtors are authorized to: (a) assume the Restructuring Support Agreement 

in its entirety, including, for the avoidance of doubt, the Backstop Commitment Agreement and 

Exit Commitment Letters; (b) comply with the terms of the Restructuring Support Agreement; 

(c) effect the relief granted herein; and (d) take any and all actions necessary to implement the 

terms of the Restructuring Support Agreement (except for actions that require further orders of 

the Court).

3. Effective as of the date of entry of this Order, the Restructuring Support 

Agreement, including, for the avoidance of doubt, the Backstop Commitment Agreement and 

Exit Commitment Letters, is hereby assumed pursuant to section 365(a) of the Bankruptcy Code.

4. The Restructuring Support Agreement shall be binding and specifically 

enforceable against the parties thereto in accordance with its terms.

5. The failure to describe specifically or include any particular provision of the 

Restructuring Support Agreement in the Motion or this Order shall not diminish or impair the 

effectiveness of such provision, it being the intent of the Court that the Restructuring Support 

Agreement be assumed by the Debtors in its entirety.

6. So long as the Restructuring Support Agreement is in effect and has not been 

terminated in accordance with its terms, the Debtors are authorized to pay all of the Professional 

Fees in accordance with the terms of the Restructuring Support Agreement. Under no 

circumstances shall such fees and expenses be subject to any otherwise applicable setoff, 

counterclaim or recoupment. None of such fees and expenses shall be subject to further approval 

of the Court and no recipient of any such fees and expenses shall be required to file any interim 

or final application with the Court as a condition precedent to the Debtors’ obligation to pay such 

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4

fees and expenses. None of such fees and expenses shall be subject to avoidance under sections 

542, 547, or 548 of the Bankruptcy Code.

7. The Debtors are authorized, but not directed, to enter into amendments to the 

Restructuring Support Agreement from time to time as necessary, subject to the terms and 

conditions set forth in the Restructuring Support Agreement and without further order of the 

Court. Within two business days of the effective date of each such amendment, the Debtors will 

file a notice attaching a copy of any such amendments with the Court.

8. The requirement under Local Bankruptcy Rule 9013-1(G) to file a memorandum 

of law in connection with the Motion is waived.

9. Notice of the Motion as provided therein is good and sufficient notice of such 

Motion and the requirements of Bankruptcy Rule 6004(a) and the Local Bankruptcy Rules are 

satisfied by such notice.

10. The Restructuring Support Agreement shall be solely for the benefit of the parties 

thereto and no other person or entity shall be a third-party beneficiary thereof. No entity, other 

than the parties to the Restructuring Support Agreement shall have any right to seek or enforce 

specific performance of the Restructuring Support Agreement.

11. For the avoidance of doubt, to the extent the automatic stay provisions of 

section 362 of the Bankruptcy Code would otherwise apply, such provisions are vacated and 

modified to effectuate all of the terms and provisions of the Restructuring Support Agreement

and this Order, including permitting the parties to the Restructuring Support Agreement to 

exercise all rights and remedies under the Restructuring Support Agreement in accordance with 

each of their respective terms, and deliver any notice contemplated thereunder, in each case, 

without further order of the Court.

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5

12. The failure of any party to seek relief or otherwise exercise its rights and remedies 

under this Order, the Restructuring Support Agreement, or applicable law, as the case may be, 

shall not constitute a waiver of any of the rights hereunder, thereunder, or otherwise of any of the 

Parties.

13. Notwithstanding the possible applicability of Bankruptcy Rules 6004(h), 6006(d), 

7062, and 9014 or otherwise, the terms and conditions of this Order shall be immediately 

effective and enforceable upon its entry.

14. The Debtors are authorized to take all actions necessary to effectuate the relief 

granted pursuant to this Order in accordance with the Motion.

15. All objections to the Motion or relief requested therein that have not been 

withdrawn, waived or settled, and any reservations of rights included therein, are overruled on 

the merits.

16. This Court retains exclusive jurisdiction with respect to all matters arising from or 

related to the implementation, interpretation, and enforcement of this Order.

Richmond, Virginia UNITED STATES BANKRUPTCY JUDGE

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WE ASK FOR THIS:

/s/ Michael A. Condyles 

Michael A. Condyles (VA 27807)

Peter J. Barrett (VA 46179)

Jeremy S. Williams (VA 77469)

KUTAK ROCK LLP

Bank of America Center

1111 East Main Street, Suite 800

Richmond, Virginia 23219

Telephone: (804) 644-1700

Facsimile: (804) 783-6192

- and -

Edward O. Sassower, P.C. (pro hac vice admission pending)

Joshua A. Sussberg, P.C.

Brian E. Schartz (pro hac vice admission pending)

KIRKLAND & ELLIS LLP

KIRKLAND & ELLIS INTERNATIONAL LLP

601 Lexington Avenue

New York, New York 10022

Telephone: (212) 446-4800

Facsimile: (212) 446-4900

- and -

James H.M. Sprayregen, P.C.

Justin R. Bernbrock (pro hac vice admission pending)

Benjamin M. Rhode (pro hac vice admission pending)

KIRKLAND & ELLIS LLP

KIRKLAND & ELLIS INTERNATIONAL LLP

300 North LaSalle

Chicago, Illinois 60654

Telephone: (312) 862-2000

Facsimile: (312) 862-2200

Proposed Co-Counsel to the Debtors 

CERTIFICATION OF ENDORSEMENT 

UNDER LOCAL BANKRUPTCY RULE 9022-1(C)

Pursuant to Local Bankruptcy Rule 9022-1(C), I hereby certify that the foregoing proposed order 

has been endorsed by or served upon all necessary parties.

 /s/ Michael A. Condyles

 

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EXHIBIT 1

Restructuring Support Agreement

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Execution Version

KE 40339630

PENN VIRGINIA CORPORATION

RESTRUCTURING SUPPORT AGREEMENT

May 10, 2016

This Restructuring Support Agreement (together with the exhibits and schedules attached 

hereto, as each may be amended, restated, supplemented, or otherwise modified from time to 

time in accordance with the terms hereof, this “Agreement”),1 dated as of May 10, 2016, is 

entered into by and among: (i) Penn Virginia Corporation (“Penn Virginia”); 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.; Penn Virginia Resource Holdings Corp. (such subsidiaries 

and Penn Virginia, each a “PVA Entity,” and such subsidiaries together with Penn Virginia,

collectively, the “PVA Entities”); (ii) the lenders party to that certain Credit Agreement, dated as 

of September 28, 2012 (as amended, restated, modified, supplemented, or replaced from time to 

time in accordance with its terms, the “RBL Credit Facility Agreement”), by and among Penn 

Virginia Holding Corporation, as borrower, each of the guarantors party thereto, Wells Fargo 

Bank, N.A., as administrative agent and issuing bank (the “RBL Agent”), and the lenders party 

thereto (the “RBL Lenders”) that are (and any RBL Lender that may become in accordance with 

Section 12 hereof) signatories hereto (collectively, solely in their capacity as RBL Lenders with 

respect to the holdings of debt under the RBL Credit Facility identified below their respective 

names on the signature pages hereto, the “Consenting RBL Lenders”); (iii) the holders of notes 

(the “Noteholders”) issued pursuant to that certain Senior Indenture, dated as of June 15, 2009

(as amended, restated, modified, supplemented, or replaced from time to time, the “Indenture”), 

for the 7.250% Senior Notes due 2019 and the 8.500% Senior Notes due 2020 among Penn 

Virginia, as issuer, each of the guarantors party thereto, Wilmington Savings Fund Society, FSB, 

as indenture trustee (the “Indenture Trustee”), that are (and any Noteholder that may become in 

accordance with Section 12 hereof) signatories hereto (collectively, the “Consenting 

Noteholders”); and (iv) each of the DIP Lenders, the Backstop Parties, and the Exit Facility 

Lenders (each as defined below and, collectively with the Consenting RBL Lenders and the 

Consenting Noteholders, the “Restructuring Support Parties”). This Agreement collectively 

refers to the PVA Entities and the Restructuring Support Parties as the “Parties” and each 

individually as a “Party.” For the avoidance of doubt, the Indenture Trustee is not a Party to this 

Agreement.

 1 Unless otherwise noted, capitalized terms used but not immediately defined have the meanings given to such 

terms elsewhere in this Agreement or in the Restructuring Term Sheet (including any exhibits thereto), as 

applicable.

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RECITALS

WHEREAS, the Parties have engaged in good faith, arm’s-length negotiations regarding 

certain restructuring transactions (the “Restructuring Transactions”) pursuant to the terms and 

conditions set forth in this Agreement, including a joint prearranged plan of reorganization for 

the PVA Entities reflecting the terms and conditions of the term sheet attached hereto as

Exhibit A (the “Restructuring Term Sheet”) (as may be amended, restated, supplemented, or 

otherwise modified from time to time in accordance with its terms and this Agreement, the 

“Plan”);

WHEREAS, it is anticipated that the Restructuring Transactions will be implemented 

through jointly administered voluntary cases commenced by the PVA Entities (the “Chapter 11 

Cases”) under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101–1532 

(the, “Bankruptcy Code”), in the United States Bankruptcy Court for the Eastern District of 

Virginia, Richmond Division (the “Bankruptcy Court”), pursuant to the Plan, which will be filed 

by the PVA Entities in the Chapter 11 Cases; 

WHEREAS, on March 15, 2016, the PVA Entities entered into that certain Eleventh

Amendment to the RBL Credit Facility Agreement (the “RBL Amendment”) with the RBL 

Lenders and the RBL Agent, which RBL Amendment amends, to the extent set forth therein, the 

RBL Credit Facility Agreement and pursuant to which the RBL Lenders and the RBL Agent 

agreed inter alia to extend the time before certain defaults would become events of default under 

the RBL Credit Facility Agreement;

WHEREAS, on May 9, 2016, the PVA Entities entered into that certain Amendment to 

the RBL Amendment (the “Amendment”) with the RBL Lenders and the RBL Agent, which 

Amendment further amends, to the extent set forth therein, the RBL Credit Facility Agreement

and pursuant to which the RBL Lenders and the RBL Agent agreed inter alia to further extend 

the time before certain defaults would become events of default under the RBL Credit Facility 

Agreement;

WHEREAS, (i) certain RBL Lenders or affiliates of RBL Lenders (in their capacities as 

such, the “DIP Lenders”) have agreed to provide a $25 million debtor-in-possession financing 

facility (the “DIP Financing”) and otherwise extend credit to the PVA Entities during the 

pendency of the Chapter 11 Cases, with the RBL Agent acting as the agent under the DIP 

Financing (in its capacity as such, the “DIP Agent”) and (ii) the Consenting RBL Lenders and 

the RBL Agent have agreed to the PVA Entities’ use of cash collateral, which DIP Financing and 

use of cash collateral will be in accordance with the terms and conditions set forth in the term 

sheet attached hereto as Exhibit B (the “DIP Term Sheet”);

WHEREAS, certain Noteholders (collectively, the “Backstop Parties”) have agreed to 

fund a $50 million rights offering in connection with the Restructuring Transactions substantially 

on the terms reflected in the Restructuring Term Sheet, pursuant to the Backstop Commitment 

Agreement attached hereto as Exhibit C (the “Backstop Commitment Agreement”), and in 

accordance with the rights offering procedures attached to the Backstop Commitment Agreement 

(the “Rights Offering Procedures”);

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WHEREAS, certain parties or affiliates thereof (in their capacities as such, the “Exit 

Facility Lenders”) have committed to provide the reorganized PVA Entities with a new reservebased lending facility (the “Exit Facility”) on the terms and conditions set forth in the term sheet 

attached hereto as Exhibit D (the “Exit Facility Term Sheet”) and the commitment letter 

attached hereto as Exhibit E and related fee letters with respect thereto (the “Exit Commitment 

Letters”); and

NOW, THEREFORE, in consideration of the promises, mutual covenants, and 

agreements set forth herein, and for other good and valuable consideration, the receipt and 

sufficiency of which are hereby acknowledged, each of the Parties, intending to be legally 

bound, hereby agrees as follows:

AGREEMENT

1. RSA Effective Date. This Agreement shall become effective, and the obligations 

contained herein shall become binding upon the Parties, upon the first date (such date, 

the “RSA Effective Date”) that:

(a) each of the Backstop Commitment Agreement and the Exit Commitment 

Letters has been executed and is effective in accordance with its respective 

terms;

(b) this Agreement has been executed by all of the following:

(i) each PVA Entity;

(ii) Consenting RBL Lenders (A) holding, in aggregate, at least 

66.67% in principal amount of all claims outstanding under the

RBL Credit Facility Agreement (the “RBL Claims”) and (B) 

comprising, in aggregate, at least one-half in number of all RBL 

Lenders;

(iii) the RBL Agent; and

(iv) Consenting Noteholders holding, in aggregate, at least 66.67% in 

principal amount of all claims outstanding under the Indenture 

(the “Note Claims”);

(c) each Swap Agreement (as defined in the RBL Credit Facility Agreement) 

shall, before the Petition Date, have been terminated and the proceeds 

thereof received by the RBL Agent as a payment of the obligations under 

the RBL Credit Facility Agreement; provided, that, prior to such payment, 

the RBL Agent shall, before the Petition Date, deposit $5 million of such 

proceeds (but in no event more than all such proceeds) in a deposit 

account of a PVA Entity, which amount shall be made available for the 

PVA Entities, subject to the terms of the DIP Orders.

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2. Exhibits and Schedules Incorporated by Reference. Each of the exhibits attached 

hereto and any schedules to such exhibits (collectively, the “Exhibits and Schedules”) is 

expressly incorporated herein and made a part of this Agreement, and all references to this 

Agreement shall include the Exhibits and Schedules. In the event of any inconsistency between 

this Agreement (excluding the Exhibits and Schedules) and the Exhibits and Schedules, this 

Agreement (excluding the Exhibits and Schedules) shall govern.

3. Definitive Documentation. 

(a) The definitive documents and agreements governing the Restructuring 

Transactions (collectively, the “Definitive Documentation”) shall include:

(i) the Plan (and all exhibits thereto) and the Plan Supplement;

(ii) the confirmation order with respect to the Plan (the “Confirmation 

Order”); 

(iii) the related disclosure statement (and all exhibits thereto) with 

respect to the Plan (the “Disclosure Statement”); 

(iv) the solicitation materials with respect to the Plan (collectively, 

the “Solicitation Materials”);

(v) the order of the Bankruptcy Court approving the Disclosure 

Statement and the Solicitation Materials;

(vi) (A) the interim order authorizing use of cash collateral and 

debtor-in-possession financing, on terms consistent with the DIP 

Term Sheet (the “Interim DIP Order”) and (B) the final order 

authorizing use of cash collateral and debtor-in-possession 

financing on terms consistent with the DIP Term Sheet (the “Final 

DIP Order” and together with the Interim DIP Order, collectively,

the “DIP Orders”);

(vii) the debtor-in-possession credit agreement for the DIP Financing

(the “DIP Credit Agreement”) to be entered into in accordance 

with the DIP Term Sheet and the DIP Orders, including any 

amendments or modifications thereto;

(viii) the Exit Facility Term Sheet and the Exit Facility Commitment 

Letters; and

(ix) the order of the Bankruptcy Court approving the PVA Entities’ 

assumption of this Agreement and the Backstop Commitment 

Agreement (the “Approval Order”).

(b) Except as set forth herein, the Definitive Documentation identified in 

Section 3(a) will, after the RSA Effective Date, remain subject to 

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negotiation and shall, upon completion, contain terms, conditions, 

representations, warranties, and covenants consistent with the terms of this 

Agreement (including the Exhibits and Schedules) and be in form and 

substance reasonably satisfactory to each of: (i) the PVA Entities; 

(ii) Consenting Noteholders who hold, in the aggregate, at least 66.67%% 

in principal amount outstanding of all Note Claims held by Consenting 

Noteholders (the “Majority Consenting Noteholders”); and

(iii) Consenting RBL Lenders who hold, in the aggregate, at least 66.67% 

in principal amount outstanding of all RBL Claims held by Consenting 

RBL Lenders (the “Majority Consenting RBL Lenders,” and together with 

the Majority Consenting Noteholders, collectively, the “Required 

Consenting Creditors”); provided, however, any Plan exhibits (including 

those documents included in the Plan Supplement) related solely to the 

allocation or ownership of the New Common Stock and/or corporate 

governance matters shall be satisfactory to the Majority Consenting 

Noteholders only. For the avoidance of doubt, when used herein, the term 

“Required Consenting Creditors” shall require the independent approval of 

the Majority Consenting RBL Lenders and the Majority Consenting 

Noteholders.

4. Milestones. As provided in and subject to Section 6, the PVA Entities shall 

implement the Restructuring Transactions in accordance with the milestones set forth in the 

Restructuring Term Sheet (the “Milestones”). The PVA Entities may extend a Milestone only

with the express prior written consent of the Required Consenting Creditors.

5. Commitment of Restructuring Support Parties. Each Restructuring Support Party 

shall (severally and not jointly), from the RSA Effective Date until the occurrence of a 

Termination Date (as defined in Section 10) applicable to such Restructuring Support Party:

(a) use commercially reasonable efforts to support and cooperate with the 

PVA Entities to take all commercially reasonable actions necessary to 

consummate the Restructuring Transactions in accordance with the Plan 

and the terms and conditions of this Agreement and the Restructuring

Term Sheet (but without limiting consent and approval rights provided in 

this Agreement and the Definitive Documentation), including by: 

(i) voting all of its claims against, or interests in, as applicable, the PVA 

Entities now or hereafter owned by such Restructuring Support Party (or 

for which such Restructuring Support Party now or hereafter serves as the 

nominee, investment manager, or advisor for holders thereof, provided

that if a Restructuring Support Party acts as an investment manager or 

advisor with respect to any Note Claims acquired after the date hereof, 

such Restructuring Support Party may exercise its voting and dispositive 

power in connection with any fiduciary obligation it may have as 

investment manager or advisor for holders thereof without regard to such 

Restructuring Support Party’s commitments hereto) to accept the Plan in 

accordance with the applicable procedures set forth in the Disclosure 

Statement and the Solicitation Materials upon receipt of the Disclosure 

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Statement and Solicitation Materials approved by the Bankruptcy Court;

(ii) timely returning a duly-executed ballot and/or master ballot, as 

applicable, in connection therewith; and (iii) not “opting out” of any 

releases under the Plan;

(b) not withdraw, amend, or revoke (or cause to be withdrawn, amended, or 

revoked) its tender, consent, or vote with respect to the Plan; provided

however, that all votes tendered by the Restructuring Support Parties in 

support of the Plan shall be immediately revoked and deemed void ab 

initio upon the occurrence of a Termination Date;

(c) use commercially reasonable efforts to support and not object to, delay, 

impede, or take any other action to interfere, directly or indirectly, with 

the Restructuring Transactions; and

(d) use commercially reasonable efforts to support and not object to, delay, 

impede, or take any other action to interfere with, directly or indirectly, 

and use commercially reasonable efforts to support the entry by the 

Bankruptcy Court of any of the DIP Orders, or propose, file or support, 

directly or indirectly, any use of cash collateral or debtor-in-possession 

financing other than as proposed in each of the DIP Orders.

Notwithstanding the foregoing, nothing in this Agreement and neither a vote to accept the 

Plan by any Restructuring Support Party nor the acceptance of the Plan by any Restructuring 

Support Party shall (x) be construed to prohibit any Restructuring Support Party from contesting 

whether any matter, fact, or thing is a breach of, or is inconsistent with, this Agreement or the 

Definitive Documentation, or exercising rights or remedies specifically reserved herein; (y) be 

construed to prohibit or limit any Restructuring Support Party from appearing as a party-ininterest in any matter to be adjudicated in the Chapter 11 Cases, so long as, as, from the RSA 

Effective Date until the occurrence of a Termination Date, such appearance and the positions 

advocated in connection therewith are not materially inconsistent with this Agreement and are 

not for the purpose of hindering, delaying, or preventing the consummation of the Restructuring

Transactions, provided, however, that any delay or other impact on consummation of the 

Restructuring Transactions contemplated by the Plan caused by a Restructuring Support Party’s 

opposition to (i) any relief that is inconsistent with such Restructuring Transactions; (ii) a motion 

by the Debtors to enter into a material executory contract, lease, or other arrangement outside of 

the ordinary course of its business without obtaining the prior written consent of the Required

Consenting Creditors; or (iii) any relief that is adverse to interests of the Restructuring Support 

Parties sought by the Debtors (or any other party), shall not constitute a violation of this 

Agreement; or (z) impair or waive the rights of any Restructuring Support Party to assert or raise 

any objection permitted under this Agreement in connection with any hearing on confirmation of 

the Plan or in the Bankruptcy Court.

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6. Commitment of the PVA Entities. 

(a) Subject to Sub-Clause (b) of this Section 6, the PVA Entities shall, from 

the RSA Effective Date until the occurrence of a Termination Date 

(as defined in Section 10):

(i) (A) support and make commercially reasonable efforts to complete 

the Restructuring Transactions set forth in the Plan and this 

Agreement, (B) negotiate in good faith all Definitive 

Documentation that is subject to negotiation as of the RSA 

Effective Date and take any and all necessary and appropriate 

actions in furtherance of the Plan and this Agreement, and 

(C) make commercially reasonable efforts to complete the 

Restructuring Transactions set forth in the Plan in accordance with 

each Milestone set forth in the Restructuring Term Sheet;

(ii) timely file a formal objection, in form and substance reasonably 

acceptable to the Required Consenting Creditors, to any motion 

filed with the Bankruptcy Court by a party seeking the entry of an 

order (A) directing the appointment of a trustee or examiner (with 

expanded powers beyond those set forth in section 1106(a)(3) and 

(4) of the Bankruptcy Code), (B) converting any of the Chapter 11 

Cases to a case under chapter 7 of the Bankruptcy Code, or 

(C) dismissing any of the Chapter 11 Cases;

(iii) timely file a formal objection, in form and substance reasonably 

acceptable to the Required Consenting Creditors, to any motion 

filed with the Bankruptcy Court by a party seeking the entry of an 

order modifying or terminating the PVA Entities’ exclusive right 

to file and/or solicit acceptances of a plan of reorganization, as 

applicable; and

(iv) timely file a formal objection, in form and substance reasonably 

acceptable to the Required Consenting Creditors, to any motion 

filed with the Bankruptcy Court by a party seeking the formation 

and appointment of an official committee of equity interest 

holders.

(b) The PVA Entities’ shall not seek, solicit, or support 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 the PVA Entities, other than the Restructuring 

Transactions (each, an “Alternative Transaction”); provided, however, that 

nothing in this section 6(b) shall limit the Parties’ ability to engage in 

marketing efforts, discussions, and/or negotiations with any party 

regarding the refinancing of the Exit Facility to be consummated 

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following the Effective Date (as defined in the Term Sheet); provided, 

further, that (i) if any of the PVA Entities receive a proposal or expression 

of interest regarding any Alternative Transaction from the RSA Effective 

Date until the occurrence of a Termination Date, the PVA Entities shall 

promptly notify counsel to the other Parties of any such proposal or 

expression of interest, with such notice to include the material terms 

thereof, including (unless prohibited by a separate agreement) the identity 

of the person or group of persons involved, and (ii) the PVA Entities shall 

promptly furnish counsel to the other Parties with copies of any written 

offer, oral offer, or any other information that they receive relating to the 

foregoing and shall promptly inform counsel to the other Parties of any 

material changes to such proposals. The PVA Entities 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 (under a reasonably acceptable confidentiality 

agreement) the information contemplated under this Section 6(b). 

7. Restructuring Support Party Termination Events. Each of the (a) Majority 

Consenting RBL Lenders and (b) the Majority Consenting Noteholders (each such group, 

a “Terminating Support Group”) shall have the right, but not the obligation, upon notice to the 

other Parties, to terminate the obligations of the Consenting RBL Lenders or the Consenting 

Noteholders, respectively, under this Agreement upon the occurrence of any of the following 

events, unless waived, in writing, by the Required Consenting Creditors on a prospective or 

retroactive basis (each, a “Restructuring Support Party Termination Event”):

(a) the failure to meet any of the Milestones unless (i) such failure is the result 

of any act, omission, or delay on the part of any Restructuring Support 

Parties, whose Terminating Support Group is seeking termination, in 

violation of its obligations under this Agreement or (ii) such Milestone is 

waived in accordance with Section 4 of this Agreement;

(b) the occurrence of a material breach of this Agreement by any PVA Entity

that has not been cured (if susceptible to cure) within five business days 

after written notice to the PVA Entities of such material breach by the 

Terminating Support Group asserting such termination;

(c) the conversion of one or more of the Chapter 11 Cases to a case under 

chapter 7 of the Bankruptcy Code;

(d) the appointment of a trustee, receiver, or examiner with expanded powers 

beyond those set forth in section 1106(a)(3) and (4) of the Bankruptcy 

Code in one or more of the Chapter 11 Cases;

(e) the Definitive Documentation does not comply with Section 3 of this 

Agreement or any other document or agreement necessary to consummate 

the Restructuring Transactions is not reasonably satisfactory to the 

Majority Consenting Creditors;

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(f) any PVA Entity (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 Restructuring Transactions; or (iii) publicly announces its 

intention to take any such action listed in Sub-Clauses (i) and (ii) of this 

subsection;

(g) any PVA Entity files or announces that it will file any plan of 

reorganization other than the Plan, or files any motion or application 

seeking authority to sell any material assets (other than as provided for in 

the Plan), without the prior written consent of the Required Consenting 

Creditors;

(h) the issuance by any governmental authority, including the Bankruptcy 

Court, any regulatory authority, or any other court of competent 

jurisdiction, of any ruling or order enjoining the substantial consummation 

of the Restructuring Transactions; provided, however, that the PVA 

Entities shall have five business days after issuance of such ruling or order 

to obtain relief that would allow consummation of the Restructuring

Transactions 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 Required Consenting Creditors;

(i) the Bankruptcy Court enters any order authorizing the use of cash 

collateral or post-petition financing that is not in the form of the DIP 

Orders or otherwise consented to by the Required Consenting Creditors;

(j) the occurrence of any Event of Default under the DIP Credit Agreement

(as defined therein) that has not been cured (if susceptible to cure) in 

accordance with the terms of the DIP Credit Agreement;

(k) a breach by any PVA Entity of any representation, warranty, or covenant 

of such PVA Entity set forth in Section 16 of this Agreement that could 

reasonably be expected to have a material adverse impact on the 

consummation of the Restructuring Transactions that (to the extent 

curable) remains uncured for a period of 5 business days after the receipt 

by the PVA Entities of written notice and description of such breach from 

any other Party;

(l) either (i) any PVA Entity or any Restructuring Support Party files a 

motion, application, or adversary proceeding (or any PVA Entity or 

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 RBL Claims or 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 

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claims; or (ii) the Bankruptcy Court (or any court with jurisdiction over 

the Chapter 11 Cases) enters an order providing relief adverse to the 

interests of any Restructuring Support Party with respect to any of the 

foregoing causes of action or proceedings;

(m) any PVA Entity terminates its obligations under and in accordance with 

Section 8 of this Agreement;

(n) if the Bankruptcy Court enters an order in the Chapter 11 Cases 

terminating any of the PVA Entities’ exclusive right to file a plan or plans 

of reorganization or to solicit acceptances thereof pursuant to section 1121 

of the Bankruptcy Code; 

(o) Mr. Bullock ceases to be the Chief Restructuring Officer prior to the 

Effective Date of the Plan, unless Mr. Bullock no longer holds such 

position on account of his (i) removal by the Board of Directors of Penn 

Virginia for gross mismanagement or willful misconduct or (ii) death;

(p) if the DIP Orders, any of the orders approving assumption of this 

Agreement, the Exit Commitment Letters, or the Backstop Commitment 

Agreement, or any of the orders confirming the Plan or approving the

Disclosure Statement are reversed, stayed, dismissed, vacated, 

reconsidered, modified, or amended without the consent of the Required 

Consenting Creditors or a motion for reconsideration, reargument, or 

rehearing with respect to such orders has been filed and the PVA Entities 

have failed to timely object to such motion;

(q) the termination by another Terminating Support Group upon the 

occurrence of a Restructuring Support Party Termination Event;

(r) a breach by a Restructuring Support Party of any representation, warranty, 

or covenant of such Restructuring Support Party set forth in this 

Agreement that could reasonably be expected to have a material adverse 

impact on the consummation of the Restructuring Transactions that (to the 

extent curable) remains uncured for a period of five business days after 

notice to all Parties of such breach and a description thereof; or

(s) the occurrence of the Maturity Date (as defined in the DIP Credit 

Agreement).

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 (the “Automatic Stay”), the occurrence of any Restructuring Support Party 

Termination Event shall result in an automatic termination of this Agreement five business days 

following such occurrence unless waived in writing by the Required Consenting Creditors.

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8. The PVA Entities’ Termination Events. Each PVA Entity may, upon notice to the 

Restructuring Support Parties, terminate its obligations under this Agreement upon the 

occurrence of any of the following events (each a “Company Termination Event,” and together 

with the Restructuring Support Party Termination Events, the “Termination Events”), subject to 

the rights of the PVA Entities to fully or conditionally waive, in writing, on a prospective or 

retroactive basis, the occurrence of a Company Termination Event:

(a) a breach by a Restructuring Support Party of any representation, warranty, 

or covenant of such Restructuring Support Party set forth in this 

Agreement that could reasonably be expected to have a material adverse 

impact on the consummation of the Restructuring Transactions that (to the 

extent curable) remains uncured for a period of five business days after 

notice to all Restructuring Support Parties of such breach and a description 

thereof;

(b) the occurrence of a breach of this Agreement by any Restructuring 

Support Party that has the effect of materially impairing any of the PVA 

Entities’ ability to effectuate the Restructuring Transactions and has not 

been cured (if susceptible to cure) within five business days after notice to 

all Restructuring Support Parties of such breach and a description thereof;

(c) upon notice to the Restructuring Support Parties, if the board of directors

or board of managers, as applicable, of any PVA Entity 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 its fiduciary duties;

(d) the issuance by any governmental authority, including the Bankruptcy 

Court, any regulatory authority, or any other court of competent 

jurisdiction, of any ruling or order enjoining the substantial consummation 

of the Restructuring Transactions; provided, however, that the PVA 

Entities have made commercially reasonable, good faith efforts to cure, 

vacate, or have overruled such ruling or order prior to terminating this 

Agreement;

(e) any Terminating Support Group terminates its obligations under and in 

accordance with Section 7 of this Agreement; or

(f) the Definitive Documentation does not comply with Section 3 of this 

Agreement.

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9. Mutual Termination; Automatic Termination. This Agreement and the 

obligations of all Parties hereunder may be terminated by mutual written agreement by and 

among Penn Virginia, on behalf of itself and each other PVA Entity, and all of the Restructuring 

Support Parties. Notwithstanding anything in this Agreement to the contrary, this Agreement 

shall terminate automatically upon the occurrence of the Effective Date.

10. Effect of Termination. The earliest date on which termination of this Agreement 

as to a Party is effective in accordance with Sections 7, 8, or 9 of this Agreement shall be 

referred to, with respect to such Party, as a “Termination Date.” Upon the occurrence of a 

Termination Date, the terminating Party’s obligations and, in the case of a Termination Date in 

accordance with Section 9 of this Agreement, all Parties’ obligations under this Agreement shall 

be terminated effective immediately, and such Party or Parties shall be released from its 

commitments, undertakings, and agreements; provided, however, that each of the following shall 

survive any such termination: (a) any claim for breach of this Agreement that occurs prior to 

such Termination Date, and all rights and remedies with respect to such claims shall not be 

prejudiced in any way; (b) the PVA Entities’ obligations under Section 14 of this Agreement 

accrued up to and including such Termination Date; and (c) Sections 10, 15, 17, 18, 19, 22, 23, 

25, 27, 31, 33, and 34 hereof. The Automatic Stay shall not prohibit a Party from taking any 

action necessary to effectuate the termination of this Agreement pursuant to and in accordance 

with the terms hereof.

11. Cooperation and Support. Penn Virginia shall provide draft copies of all “first 

day” motions, applications, and other documents that any PVA Entity intends to file with the 

Bankruptcy Court in the Chapter 11 Cases to counsel for each Restructuring Support Party at 

least two business days (or as soon thereafter as is reasonably practicable under the 

circumstances) prior to the date when such PVA Entity intends to file such document, and shall 

consult in good faith with such counsel regarding the form and substance of any such proposed 

filing. Penn Virginia will use reasonable efforts to provide draft copies of all other material 

pleadings any PVA Entity intends to file with the Bankruptcy Court to counsel to each 

Restructuring Support Party at least two business days prior to filing such pleading, to the extent 

practicable, and shall consult in good faith with such counsel regarding the form and substance 

of any such proposed pleading. For the avoidance of doubt, the Parties agree, consistent with 

Sub-Clause (b) of Section 3 hereof, (a) to negotiate in good faith the Definitive Documentation 

that is subject to negotiation and completion on the RSA Effective Date and (b) that, 

notwithstanding anything herein to the contrary, the Definitive Documentation, including any 

motions or orders related thereto, shall be consistent with this Agreement and otherwise shall be 

in form and substance reasonably satisfactory to the Required Consenting Creditors. Penn 

Virginia shall (i) provide to the Restructuring Support Parties’ advisors, and shall direct its 

employees, officers, advisors, and other representatives to provide the Restructuring Support 

Parties’ advisors, (A) reasonable access (without any material disruption to the conduct of the 

PVA Entities’ businesses) during normal business hours to the PVA Entities’ books and records;

(B) reasonable access during normal business hours to the management and advisors of the PVA 

Entities; and (C) timely and reasonable responses to all reasonable diligence requests, in each 

case for the purposes of evaluating the PVA Entities’ assets, liabilities, operations, businesses, 

finances, strategies, prospects, and affairs; and (ii) promptly notify the Restructuring Support 

Parties of any newly commenced material governmental or third party litigations, investigations,

or hearings against any of the PVA Entities.

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12. Transfers of Claims and Interests.

(a) Each Restructuring Support Party shall not (i) sell, transfer, assign, pledge, 

grant a participation interest in, or otherwise dispose of, directly or 

indirectly, its right, title, or interest in respect of any of such Restructuring 

Support Party’s claims against, or interests in, any PVA Entity, as 

applicable, in whole or in part, or (ii) deposit any of such Restructuring 

Support Party’s claims against or interests in any PVA Entity, as 

applicable, into a voting trust, or grant any proxies, or enter into a voting 

agreement with respect to any such claims or interests (the actions 

described in clauses (i) and (ii) are collectively referred to herein as a 

“Transfer” and the Restructuring Support Party making such Transfer is 

referred to herein as the “Transferor”), unless such Transfer is to another 

Restructuring Support Party or any other entity that (x) first agrees in 

writing to be bound by the terms of this Agreement by executing and 

delivering to Penn Virginia a Transferee Joinder substantially in the form 

attached hereto as Exhibit F (the “Transferee Joinder”), and (y) solely 

with respect to any Transferor that is a Backstop Party, agrees in writing to 

be bound by the obligations of the applicable Transferor under the 

Backstop Commitment Agreement and is determined, after due inquiry 

and investigation by the Restructuring Support Parties and the PVA 

Entities, to be reasonably capable of fulfilling such obligations. Upon 

compliance with the foregoing, the Transferor 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 Sub-Clause (a) of this 

Section 12 shall be deemed null and void ab initio and of no force or 

effect, regardless of any prior notice provided to the PVA Entities and/or 

any Restructuring Support Party, and shall not create any obligation or 

liability of any PVA Entity or any other Restructuring Support Party to the 

purported transferee.

(b) Notwithstanding Sub-Clause (a) of this Section 12, (i) an entity that is 

acting in its capacity as a Qualified Marketmaker shall not be required to 

be or become a Restructuring Support Party to effect any transfer (by 

purchase, sale, assignment, participation, or otherwise) of any claim 

against, or interest in, any PVA Entity, as applicable, by a Restructuring 

Support Party to a transferee; provided, that, such transfer by a 

Restructuring Support Party to a transferee shall be in all other respects in 

accordance with and subject to Sub-Clause (a) of this Section 12; and 

(ii) to the extent that a Restructuring Support Party, acting in its capacity 

as a Qualified Marketmaker, acquires any claim against, or interest in, any 

PVA Entity from a holder of such claim or interest who is not a 

Restructuring Support Party, it may transfer (by purchase, sale, 

assignment, participation, or otherwise) such claim or interest without the 

requirement that the transferee be or become a Restructuring Support 

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Party in accordance with this Section 12. For purposes of this 

Sub-Clause (b), a “Qualified Marketmaker” means an entity that (x) holds 

itself out to the market as standing ready in the ordinary course of its 

business to purchase from customers and sell to customers claims against, 

or interests in, the PVA Entities (including debt securities or other debt) or 

enter with customers into long and short positions in claims against, or 

interests in, the PVA Entities (including debt securities or other debt), in 

its capacity as a dealer or market maker in such claims against, or interests 

in, the PVA Entities, and (y) is in fact regularly in the business of making 

a market in claims against issuers or borrowers (including debt securities 

or other debt).

13. Further Acquisition of Claims or Interests. Except as set forth in Section 12, 

nothing in this Agreement shall be construed as precluding any Restructuring Support Party or 

any of its affiliates from acquiring additional claims arising from the DIP Financing (the “DIP 

Claims”), RBL Claims, Note Claims, Penn Virginia’s existing common stock or existing Series 

A 6% Convertible Perpetual Preferred Stock or Series B 6% Convertible Perpetual Preferred 

Stock (such common stock and preferred stock, collectively, the “Existing Equity Interests”), or 

interests in the instruments underlying the DIP Claims, RBL Claims, Note Claims, or Existing 

Equity Interests; provided, however, that any such additional DIP Claims, RBL Claims, Note 

Claims, Existing Equity Interests, or interests acquired by any Restructuring Support Party or by 

any affiliate of a Consenting Noteholder, shall automatically be subject to the terms and 

conditions of this Agreement and, if such acquiring Restructuring Support Party is a Backstop 

Party to the terms and conditions of the Backstop Commitment Agreement. Upon any such 

further acquisition by a Restructuring Support Party or any affiliates of a Consenting Noteholder, 

such Restructuring Support Party shall promptly notify counsel to Penn Virginia, who will then 

promptly notify the counsel to the other Restructuring Support Parties.

14. Fees and Expenses. Subject to Section 10, and in accordance with and subject to 

the DIP Orders and the Approval Order, which orders shall provide for the payment of all of the 

Fees and Expenses described in this Agreement and the Backstop Commitment Agreement, as 

applicable, Penn Virginia shall pay or reimburse when due all reasonable and documented fees 

and expenses (including travel costs and expenses) of the following (regardless of whether such 

fees and expenses were incurred before or after the Petition Date): (a) Bracewell LLP 

(“Bracewell”) as primary counsel, one local counsel, and Opportune LLP (“Opportune”) as 

financial advisor, for all Consenting RBL Lenders; and (b) Milbank, Tweed, Hadley & McCloy 

LLP (“Milbank”) as primary counsel, one local counsel, W.D. Von Gonten & Co. as engineer 

consultants, and PJT Partners LP (“PJT”) as financial advisor, for all Consenting Noteholders 

and Backstop Parties, and Heidrick & Struggles as consultant, retained by Milbank, as counsel to 

the ad hoc committee of Noteholders, and any such other advisors or consultants as may be 

reasonably determined by the Consenting Noteholders and Backstop Parties, in consultation with

Penn Virginia. Penn Virginia’s payment of fees and expenses owing to Opportune shall be in 

accordance with that certain Engagement Agreement, dated as of February 1, 2016, between 

Bracewell and Opportune (the “Opportune Engagement Agreement”). Penn Virginia’s payment 

of fees and expenses owing to Milbank shall be in accordance with that certain Letter 

Agreement, dated as of January 20, 2016, between Milbank and an ad hoc committee of certain 

Noteholders as identified therein (the “Milbank Engagement Agreement”) or pursuant to any 

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Definitive Document superseding the Milbank Engagement Agreement. Penn Virginia’s 

payment of fees and expenses owing to PJT shall be in accordance with that certain Letter 

Agreement, dated as of December 16, 2015, between PJT and Milbank (the “PJT Engagement 

Agreement”). Each of the Opportune Engagement Agreement, the Milbank Engagement 

Agreement, and the PJT Engagement Agreement shall continue to be in full force and effect 

during the pendency of the Chapter 11 Cases and following the Effective Date, unless terminated 

in accordance with its respective terms.

15. Consents and Acknowledgments.

(a) Each Party irrevocably acknowledges and agrees that this Agreement is 

not and shall not be deemed to be a solicitation for acceptances of the 

Plan. The acceptance of the Plan by each of the Restructuring Support 

Parties will not be solicited until such Restructuring Support Party has

received the Disclosure Statement and Solicitation Materials in accordance 

with applicable law, and will be subject to sections 1125, 1126, and 1127 

of the Bankruptcy Code.

(b) By executing this Agreement, each Restructuring Support Party

(including, for the avoidance of doubt, any entity that may execute this 

Agreement or a Transferee Joinder after the RSA Effective Date) consents 

to the PVA Entities’ use of its cash collateral and incurrence of

debtor-in-possession financing authorized by the DIP Orders until the 

occurrence of a Termination Date.

(c) By executing this Agreement, each Restructuring Support Party

(including, for the avoidance of doubt, any entity that may execute this 

Agreement or a Transferee Joinder after the RSA Effective Date) 

irrevocably waives any Default or Event of Default as defined under the 

RBL Credit Facility Agreement or the Indenture, as applicable, that is 

caused by the PVA Entities’ entry into this Agreement or the other 

documents related to this Agreement and the transactions contemplated in 

this Agreement.

16. Representations and Warranties.

(a) Each Restructuring Support Party hereby represents and warrants on a 

several and not joint basis for itself and not any other person or entity that 

the following statements are true, correct, and complete, to the best of its 

actual knowledge, as of the date hereof:

(i) it has the requisite organizational power and authority to enter into 

this Agreement and to carry out the transactions contemplated by, 

and perform its respective obligations under, this Agreement;

(ii) the execution and delivery of this Agreement and the performance 

of its obligations hereunder have been duly authorized by all 

necessary corporate or other organizational action on its part;

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(iii) the execution and delivery by it of this Agreement does not 

(A) violate its certificates of incorporation, or bylaws, or other 

organizational documents, or, with respect to each Consenting 

Noteholder, those of any of its affiliates in any material respect, or 

(B) result in a breach of, or constitute (with due notice or lapse of 

time or both) a default (other than, for the avoidance of doubt, a 

breach or default that would be triggered as a result of the 

Chapter 11 Cases or any PVA Entity’s undertaking to implement 

the Restructuring Transactions through the Chapter 11 Cases) 

under any material contractual obligation to which it or, with 

respect to each Consenting Noteholder, any of its affiliates is a 

party;

(iv) the execution, delivery, and performance by it of this Agreement 

does not require any registration or filing with, the consent or 

approval of, notice to, or any other action with any federal, state, or 

other governmental authority or regulatory body, except (i) any of 

the foregoing as may be necessary and/or required for disclosure 

by the Securities and Exchange Commission and applicable state 

securities or “blue sky” laws, (ii) any of the foregoing as may be 

necessary and/or required in connection with the Chapter 11 Cases, 

including the approval of the Disclosure Statement and 

confirmation of the Plan, (iii) filings of amended certificates of 

incorporation or articles of formation or other organizational 

documents with applicable state authorities, and other registrations, 

filings, consents, approvals, notices, or other actions that are 

reasonably necessary to maintain permits, licenses, qualifications, 

and governmental approvals to carry on the business of the PVA 

Entities, and (iv) any other registrations, filings, consents, 

approvals, notices, or other actions, the failure of which to make, 

obtain or take, as applicable, would not be reasonably likely, 

individually or in the aggregate, to materially delay or materially 

impair the ability of any Party hereto to consummate the 

transactions contemplated hereby;

(v) subject to the provisions of sections 1125 and 1126 of the 

Bankruptcy Code, this Agreement is its legally valid and binding 

obligation, enforceable against it in accordance with its terms, 

except as enforcement may be limited by bankruptcy, insolvency, 

reorganization, moratorium, or other similar laws relating to or 

limiting creditors’ rights generally, or by equitable principles 

relating to enforceability;

(vi) solely with respect to each Consenting Noteholder, it is an 

“accredited investor” within the meaning of Rule 501 of 

Regulation D promulgated under the Securities Act of 1933, as 

amended (the “Securities Act”), with sufficient knowledge and 

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experience to evaluate properly the terms and conditions of this 

Agreement, and has been afforded the opportunity to discuss other 

information concerning the PVA Entities with the PVA Entities’ 

representatives, and to consult with its legal and financial advisors 

with respect to its investment decision to execute this Agreement, 

and it has made its own analysis and decision to enter into this 

Agreement;

(vii) solely with respect to each Consenting Noteholder, it has been 

advised that (A) the offer and sale of the Reorganized Equity and 

any rights to acquire New Common Stock (as defined in the Plan)

has not been, and will not be, registered under the Securities Act 

and (B) the offering and issuance of the Reorganized Equity and 

any rights to acquire Reorganized Equity is intended to be exempt 

from registration under the Securities Act pursuant to Section 

4(a)(2) of the Securities Act and Regulation D thereunder or 

pursuant to section 1145 of the Bankruptcy Code; and

(viii) it (A) either (1) is the sole owner of the claims and interests 

identified below its name on its signature page hereof and in the 

amounts set forth therein, or (2) has all necessary investment or 

voting discretion with respect to the principal amount of claims 

and interests identified below its name on its signature page hereof, 

and has the power and authority to bind the owner(s) of such 

claims and interests to the terms of this Agreement; (B) is entitled 

(for its own accounts or for the accounts of such other owners) to 

all of the rights and economic benefits of such claims and interests; 

and (C) to the knowledge of the individuals working on the 

Restructuring Transactions, does not directly or indirectly own any 

RBL Claims, Note Claims, or Existing Equity Interests, other than 

as identified below its name on its signature page hereof.

(b) Each PVA Entity hereby represents and warrants on a joint and several 

basis (and not any other person or entity other than the PVA Entities) that 

the following statements are true, correct, and complete, to the best of its 

actual knowledge, as of the date hereof:

(i) it has the requisite corporate or other organizational power and 

authority to enter into this Agreement and, subject to the approval 

of the Bankruptcy Court of its assumption, to carry out the

transactions contemplated by, and perform its respective 

obligations under, this Agreement;

(ii) the execution and delivery of this Agreement and, subject to the 

approval of the Bankruptcy Court of its assumption, the 

performance of its obligations hereunder have been duly 

authorized by all necessary corporate or other organizational action 

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on its part, including approval of each of the independent 

director(s) or manager(s), as applicable, of each of the corporate 

entities that comprise the PVA Entities;

(iii) the execution and delivery by it of this Agreement does not 

(A) violate its certificates of incorporation, or bylaws, or other 

organizational documents, or those of any of its affiliates in any 

material respect, or (B) result in a breach of, or constitute (with due 

notice or lapse of time or both) a default (other than, for the 

avoidance of doubt, a breach or default that would be triggered as a 

result of the Chapter 11 Cases or any PVA Entity’s undertaking to 

implement the Restructuring Transactions through the Chapter 11 

Cases) under any material contractual obligation to which it or any 

of its affiliates is a party;

(iv) the execution and delivery by it of this Agreement does not require 

any registration or filing with, the consent or approval of, notice to, 

or any other action with any federal, state, or other governmental 

authority or regulatory body, other than, for the avoidance of 

doubt, the actions with governmental authorities or regulatory 

bodies required in connection with implementation of the 

Restructuring Transactions;

(v) (A) the offer and sale of the Reorganized Equity and any rights to 

acquire Reorganized Equity has not been, and will not be, 

registered under the Securities Act and (B) the offering and 

issuance of the Reorganized Equity and any rights to acquire 

Reorganized Equity is intended to be exempt from registration 

under the Securities Act pursuant to Section 4(a)(2) of the 

Securities Act and Regulation D thereunder or pursuant to section 

1145 of the Bankruptcy Code;

(vi) subject to the approval of the Bankruptcy Court of its assumption, 

this Agreement is its legally valid and binding obligation, 

enforceable against it in accordance with its terms, except as 

enforcement may be limited by bankruptcy, insolvency, 

reorganization, moratorium, or other similar laws relating to or 

limiting creditors’ rights generally, or by equitable principles 

relating to enforceability; and

(vii) it has sufficient knowledge and experience to evaluate properly the 

terms and conditions of the Plan and this Agreement, and has been 

afforded the opportunity to consult with its legal and financial 

advisors with respect to its decision to execute this Agreement, and 

it has made its own analysis and decision to enter into this 

Agreement and otherwise investigated this matter to its full 

satisfaction.

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17. Survival of Agreement. Each of the Parties acknowledges and agrees that this 

Agreement is being executed in connection with negotiations concerning a possible financial 

restructuring of the PVA Entities and in contemplation of possible chapter 11 filings by the PVA 

Entities and the rights granted in this Agreement are enforceable by each signatory hereto 

without approval of any court, including the Bankruptcy Court.

18. Waiver. If the transactions contemplated herein are or are not consummated, or 

following the occurrence of a Termination Date, if applicable, nothing herein shall be construed 

as a waiver by any Party of any or all of such Party’s rights, other than as provided in Section 15, 

and the Parties expressly reserve any and all of their respective rights. The Parties acknowledge 

that this Agreement, the Plan, and all negotiations relating hereto are part of a proposed 

settlement of matters that could otherwise be the subject of litigation. Pursuant to Rule 408 of 

the Federal Rules of Evidence, any applicable state rules of evidence, and any other applicable 

law, foreign or domestic, the Restructuring Term Sheet, this Agreement, the Plan, any related 

documents, and all negotiations relating thereto shall not be admissible into evidence in any 

proceeding other than a proceeding to enforce its terms.

19. Relationship Among Parties. Notwithstanding anything herein to the contrary, the 

duties and obligations of the Restructuring Support Parties under this Agreement shall be several, 

not joint. No Party shall have any responsibility by virtue of this Agreement for any trading by 

any other entity. No prior history, pattern, or practice of sharing confidences among or between 

the Parties shall in any way affect or negate this Agreement. The Parties hereto acknowledge 

that this agreement does not constitute an agreement, arrangement, or understanding with respect 

to acting together for the purpose of acquiring, holding, voting, or disposing of any equity 

securities of the PVA Entities and the Restructuring Support Parties do not constitute a “group” 

within the meaning of Rule 13d-5 under the Securities Exchange Act of 1934, as amended. No 

action taken by any Restructuring Support Party pursuant to this Agreement shall be deemed to 

constitute or to create a presumption by any of the Parties that the Restructuring Support Party 

are in any way acting in concert or as such a “group.”

20. Creditors’ Committee. All Parties agree that they shall not oppose, and nothing in 

this Agreement shall prohibit, the participation of any of the Consenting Noteholders or the 

Indenture Trustee on any official committee of unsecured creditors formed in the Chapter 11 

Cases. Notwithstanding anything herein to the contrary, if any Consenting Noteholder is 

appointed to and serves on an official committee of creditors in the Chapter 11 Cases, the terms 

of this Agreement shall not be construed so as to limit such Consenting Noteholder’s exercise of 

its fiduciary duties to any person arising from its service on such committee, and any such 

exercise of such fiduciary duties shall not be deemed to constitute a breach of the terms of this 

Agreement; provided, that, nothing in this Agreement shall be construed as requiring any 

Consenting Noteholder to serve on any official committee in any of the Chapter 11 Cases.

21. Specific Performance. It is understood and agreed by the Parties that money 

damages may be an insufficient remedy for any breach of this Agreement by any Party and each 

non-breaching Party shall be entitled to seek specific performance and injunctive or other 

equitable relief as a remedy of any such breach of this Agreement, including, without limitation, 

an order of the Bankruptcy Court or other court of competent jurisdiction requiring any Party to 

comply promptly with any of its obligations hereunder.

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22. Governing Law & Jurisdiction. 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, 

except where preempted by the Bankruptcy Code. 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.

23. Waiver of Right to Trial by Jury. Each of the Parties waives any right to have a 

jury participate in resolving any dispute, whether sounding in contract, tort or otherwise, between 

any of the Parties arising out of, connected with, relating to, or incidental to the relationship 

established between any of them in connection with this Agreement. Instead, any disputes 

resolved in court shall be resolved in a bench trial without a jury.

24. Successors and Assigns. Except as otherwise provided in this Agreement, this 

Agreement is intended to bind and inure to the benefit of each of the Parties and each of their 

respective permitted successors, assigns, heirs, executors, administrators, and representatives.

25. No Third-Party Beneficiaries. Unless expressly stated herein, this Agreement 

shall be solely for the benefit of the Parties and no other person or entity shall be a third-party 

beneficiary of this Agreement.

26. Notices. All notices (including, without limitation, any notice of termination or 

breach) and other communications from any Party hereunder shall be in writing and shall be 

deemed to have been duly given if personally delivered by courier service, messenger, email, or 

facsimile to the other Parties at the applicable addresses below, or such other addresses as may 

be furnished hereafter by notice in writing. Any notice of termination or breach shall be 

delivered to all other Parties.

(a) If to any PVA Entity:

Penn Virginia Corporation

Attn: Nancy Snyder

Four Radnor Corporate Center, Suite 200

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100 Matsonford Road

Radnor, PA 19087

Tel: (610) 687-8900

Fax: (610) 687-3688

Email: nancy.snyder@pennvirginia.com

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 Consenting RBL Lenders:

Bracewell LLP

Attn: Stephanie Song

711 Louisiana Street, Suite 2300

Houston, TX 77002

Tel: (713) 221-1542

Fax: (713) 221-2156

Email: Stephanie.Song@bracewelllaw.com

Bracewell LLP

Attn: Kurt Mayr and David Lawton

185 Asylum Street, 34th Floor

Hartford, CT 06103

Tel: (860) 256-8534

Fax: (860) 760-6528

Email: Kurt.Mayr@bracewelllaw.com

David.Lawton@bracewelllaw.com

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(c) If to the Consenting Noteholders:

To each Consenting Noteholder at the addresses or e-mail addresses set 

forth below the Consenting Noteholder’s signature page to this Agreement 

(or to the signature page to a Joinder Agreement as the case may be)

With a copy to:

Milbank, Tweed, Hadley & McCloy LLP

Attn: Samuel Khalil, Brian Kinney, and Bradley Scott 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

27. Entire Agreement. This Agreement (including the Exhibits and Schedules) 

constitutes the entire agreement of the Parties with respect to the subject matter of this 

Agreement, and supersedes all prior negotiations, agreements, and understandings, whether 

written or oral, among the Parties with respect to the subject matter of this Agreement.

28. Amendments. Except as otherwise provided herein, this Agreement (including 

the Exhibits and Schedules) may not be modified, amended, or supplemented without the prior 

written consent of the PVA Entities and the Required Consenting Creditors; provided, however, 

that any modification of, amendment or supplement to, any exhibit hereto that materially and 

adversely affects any Party shall require the prior written consent of each Party so affected; 

provided, further, that the prior written consent of all Parties shall be required to modify, amend 

or supplement (a) any of Sections 1, 7, 8, 9, or 28 hereof or (b) the definition of “Majority

Consenting RBL Lenders,” “Majority Consenting Noteholders” or “Required Consenting

Creditors” herein.

29. Reservation of Rights.

(a) Except as expressly provided in this Agreement or the Restructuring Term 

Sheet, including Section 5(a) of this Agreement, nothing herein is intended 

to, or does, in any manner waive, limit, impair, or restrict the ability of any 

Party to protect and preserve its rights, remedies and interests, including 

without limitation, its claims against any of the other Parties. 

(b) Without limiting Sub-Clause (a) of this Section 29 in any way, if the Plan 

is not consummated in the manner set forth, and on the timeline set forth, 

in this Agreement, or if this Agreement is terminated for any reason, 

nothing shall be construed herein as a waiver by any Party of any or all of 

such Party’s rights, remedies, claims, and defenses and the Parties 

expressly reserve any and all of their respective rights, remedies, claims 

and defenses, subject to Section 18 of this Agreement. This Agreement, 

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the Plan, and any related document shall in no event be construed as or be 

deemed to be evidence of an admission or concession on the part of any 

Party of any claim or fault or liability or damages whatsoever. Each of the 

Parties denies any and all wrongdoing or liability of any kind and does not 

concede any infirmity in the claims or defenses which it has asserted or 

could assert.

30. Counterparts. This Agreement may be executed in one or more counterparts, each 

of which, when so executed, shall constitute the same instrument, and the counterparts may be 

delivered by facsimile transmission or by electronic mail in portable document format (.pdf).

31. Other Support Agreements. Until a Termination Date, no PVA Entity shall enter 

into any other restructuring support agreement related to a partial or total restructuring of the 

PVA Entities’ balance sheet unless such support agreement is consistent in all respects with the 

Restructuring Term Sheet and is reasonably acceptable to the Required Consenting Creditors.

32. Public Disclosure. This Agreement, as well as its terms, its existence, and the 

existence of the negotiation of its terms are expressly subject to any existing confidentiality 

agreements executed by and among any of the Parties as of the date hereof; provided, however, 

that, after the Petition Date, the Parties may disclose the existence of, or the terms of, this 

Agreement or any other material term of the transaction contemplated herein without the express 

written consent of the other Parties; provided further, however, that no Party or its advisors shall 

disclose to any person or entity (including, for the avoidance of doubt, any other Party), other 

than advisors to the Penn Virginia, the principal amount or percentage of any notes issued under 

the Indenture held by any of the Consenting Noteholders, in each case, without such Consenting 

Noteholder’s prior written consent.

33. Headings. The section headings of this Agreement are for convenience of 

reference only and shall not, for any purpose, be deemed a part of this Agreement.

34. Interpretation. This Agreement is the product of negotiations among the Parties, 

and the enforcement or interpretation hereof, is to be interpreted in a neutral manner, and any 

presumption with regard to interpretation for or against any Party by reason of that Party having 

drafted or caused to be drafted this Agreement or any portion hereof, shall not be effective in 

regard to the interpretation hereof.

[Signatures and exhibits follow]

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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

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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 

 

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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 

 

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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 

 

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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 

 

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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 

 

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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 

 

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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 

 

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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 

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If to Franklin Advisors, Inc.: 

Franklin Advisors, Inc. 

c/o Chris Chen 

1 Franklin Parkway, San Mateo, CA 94403 

Direct: 650-312-3341 

Email: chris.chen@franklintempleton.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 

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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 

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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 

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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 

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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 

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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 

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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 

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Exhibit A to the Restructuring Support Agreement

Restructuring Term Sheet

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2 

Milestones The Restructuring will be achieved in accordance with the following milestones 

(collectively, the “Milestones”):2 

• no later than 8:00 a.m. (prevailing Eastern Time) on May 12, 2016, the PVA Entities 

shall commence the Chapter 11 Cases by filing bankruptcy petitions with the 

Bankruptcy Court (such filing date, the “Petition Date”); 

• on, or no later than 24 hours after, the Petition Date, the Debtors shall file with the 

Bankruptcy Court a motion seeking entry of the Interim DIP Order and the Final DIP 

Order; 

• no later than three days after the Petition Date, the PVA Entities shall file with the 

Bankruptcy Court (i) the Plan and related disclosure statement (the “Disclosure 

Statement”) and (ii) a motion seeking entry of an order approving the PVA Entities’ 

assumption of the RSA and the Backstop Commitment Agreement (the “Approval 

Motion”); 

• no later than three days after the Petition Date, the Bankruptcy Court shall have 

entered the Interim DIP Order; 

• no later than fifteen days after the Petition Date, the PVA Entities shall file with the 

Bankruptcy Court (i) a motion to establish a bar date for filing proofs of claim and 

(ii) the schedules of assets and liabilities and statements of financial affairs for each 

PVA Entity; 

• no later than thirty days after the Petition Date, (i) the Bankruptcy Court shall have 

entered the Final DIP Order, (ii) the Bankruptcy Court shall have entered an order 

(the “Approval Order”) granting the Approval Motion, and (iii) the PVA Entities 

shall have delivered a proposal with regard to the treatment of material contracts to 

the Majority Consenting Noteholders; 

• no later than forty-five days after the Petition Date, the Bankruptcy Court shall have 

entered an order (the “Disclosure Statement Order”) approving the adequacy of the 

Disclosure Statement and related solicitation procedures (including the Rights 

Offering Procedures); 

• no later than forty-five days after the entry of the Disclosure Statement Order, the 

Bankruptcy Court shall commence a hearing to confirm the Plan (the “Confirmation 

Hearing”); 

• no later than five days after the commencement of the Confirmation Hearing, the 

Bankruptcy Court shall enter an order (the “Confirmation Order”) confirming the 

Plan; and 

• no later than twenty-five days after entry of the Confirmation Order, the PVA Entities 

shall consummate the transactions contemplated by the Plan (the date of such 

consummation, the “Effective Date”).

Conditions Precedent to 

Emergence 

The occurrence of the Effective Date will be subject to the following conditions 

precedent: 

• the RSA shall not have been terminated and remains in full force and effect; 

• entry of the Interim DIP Order and the Final DIP Order; 

• entry of the Disclosure Statement Order; 

 

2

 For the avoidance of doubt, the computation of dates and deadlines set forth herein shall be in accordance with Rule 9006(a) 

of the Federal Rules of Bankruptcy Procedure. 

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• entry of the Confirmation Order; 

• the PVA Entities shall not be in default under the debtor-in-possession credit 

agreement (the “DIP Credit Agreement”) or the DIP Orders (or, to the extent that 

the PVA Entities have been in default or are in default on the proposed Effective 

Date, such default shall have been waived by the lenders thereunder or cured by the 

PVA Entities in a manner consistent with the DIP Credit Agreement and/or the DIP 

Orders); 

• entry into the Exit Facility (with all conditions precedent thereto having been 

satisfied or waived); 

• the Backstop Commitment Agreement shall not have been terminated and remains 

in full force and effect (with all conditions precedent thereto having been satisfied or 

waived); 

• solely to the extent not in violation or breach of the Exit Facility, establishment of a 

professional fee escrow funded in the amount of estimated (with the reasonable 

consent of the Required Consenting Creditors, which consent shall not be 

unreasonably withheld) accrued but unpaid professional fees incurred by the PVA 

Entities during the Chapter 11 Cases; and 

• all requisite governmental authorities and third parties will have approved or 

consented to the Restructuring, to the extent required. 

Status Upon Emergence The PVA Entities shall use commercially reasonable efforts to prepare to be a publicly 

listed company shortly after the Effective Date, provided, however, that any such 

decision of publicly listing the new equity in reorganized Penn Virginia Corporation 

(the “New Common Stock”) on such an exchange will be determined by the New Board 

(as defined below). In addition, the PVA Entities shall use commercially reasonable 

efforts to quote the New Common Stock on the OTC Markets Group Inc. electronic 

interdealer quotation system, including OTCQX, OTCQB and OTC Pink, or any similar 

quotation system or association promptly after the Effective Date. 

Registration Rights Customary for any Backstop Party to the extent it receives any “restricted” or “control” 

New Common Stock under the Securities Act of 1933, as amended. 

Rights Offering As set forth in the Rights Offering Procedures, the Rights Offering shall be a private 

placement conducted pursuant to section 4(a)(2) of the Securities Act of 1933, as 

amended. 

Releases The exculpation provisions, the Debtor releases, and the “Third-Party” releases to be 

included in the Plan will be as set forth on Exhibit 1 attached hereto in all material 

respects. 

The Consenting RBL Lenders, Consenting Noteholders, DIP Lenders, Backstop Parties, 

and Exit Facility Lenders, will, pursuant to the RSA, agree not to “opt out” of the 

consensual “third party” releases, including those granted to the PVA Entities’ current 

and former officers, directors, and employees. 

Employee Matters Matters with respect to management and employees in connection with the Restructuring 

will be addressed in accordance with the term sheet set forth on Exhibit 2 attached 

hereto. 

New Board Reorganized Penn Virginia’s board of directors (the “New Board”) will be chosen by the 

Majority Consenting Noteholders and identified at or prior to the Confirmation Hearing. 

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5 

General Unsecured 

Claims 

Convert into an aggregate of 100% of the New Common Stock on the Effective Date (on 

a pro rata basis with holders of Allowed General Unsecured Claims and Allowed Notes 

Claims), subject to dilution on account of the Management Incentive Plan Equity, any 

fees payable in New Common Stock under the terms of the Backstop Commitment 

Agreement (including the Commitment Premium), and the New Common Stock issued in 

the Rights Offering.

Existing Equity 

Interests 

No recovery and shall be cancelled, extinguished, and discharged. 

* * * * 

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Exhibit 1 to Term Sheet 

Release and Exculpation Provisions to be Included in the Plan 

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1 

Defined Terms 

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

2. “Avoidance Actions” means any and all avoidance, recovery, subordination, or other claims, actions, or 

remedies that may be brought by or on behalf of the Debtors or their Estates or other authorized parties in 

interest under the Bankruptcy Code or applicable non-bankruptcy law, including actions or remedies under 

sections 502, 510, 542, 544, 545, and 547 through and including 553 of the Bankruptcy Code. 

3. “Backstop Commitment Agreement” means the Backstop Commitment Agreement attached as Exhibit C to 

the Restructuring Support Agreement pursuant to which the Backstop Parties have agreed to backstop the 

Rights Offering. 

4. “Backstop Parties” means certain Noteholders that have agreed to backstop the Rights Offerings and are 

signatories to the Backstop Commitment Agreement, solely in their capacities as such. 

5. “Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§ 101–1532, as may be amended 

from time to time. 

6. “Bankruptcy Court” means the United States Bankruptcy Court for the Eastern District of Virginia 

(Richmond Division) or another court having jurisdiction over the Chapter 11 Cases. 

7. “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. 

8. “Causes of Action” means any and all claims, actions, causes of action, choses in action, suits, debts, 

damages, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, 

controversies, agreements, promises, variances, trespasses, judgments, remedies, rights of set-off, thirdparty claims, subrogation claims, contribution claims, reimbursement claims, indemnity claims, 

counterclaims, and crossclaims (including all claims and any avoidance, recovery, subordination, or other 

actions against insiders and/or any other Entities under the Bankruptcy Code) of any of the Debtors and/or 

the Debtors’ estates, whether known or unknown, liquidated or unliquidated, fixed or contingent, matured 

or unmatured, disputed or undisputed, that are or may be pending on the Effective Date or commenced by 

the Reorganized Debtors after the Effective Date against any Entity, based in law or equity, including under 

the Bankruptcy Code, whether direct, indirect, derivative, or otherwise and whether asserted or unasserted 

as of the date of entry of the Confirmation Order. 

9. “Chapter 11 Cases” means the procedurally consolidated chapter 11 cases pending for the Debtors in the 

Bankruptcy Court. 

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

11. “Class” means a category of holders of Claims or Interests under section 1122(a) of the Bankruptcy Code. 

12. “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. 

13. “Confirmation Hearing” means the hearing(s) before the Bankruptcy Court under section 1128 of the 

Bankruptcy Code at which the Debtors seek entry of the Confirmation Order. 

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

section 1129 of the Bankruptcy Code. 

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2 

15. “Consenting Noteholders” means each Noteholder that is party to the Restructuring Support Agreement, 

solely in its capacity as such. 

16. “Consenting RBL Lenders” means each RBL Lender that is party to the Restructuring Support Agreement, 

solely in its capacity as such. 

17. “Consummation” means the occurrence of the Effective Date. 

18. “Debtors” means, collectively, each of the following: Penn Virginia Corporation; Penn Virginia Holding 

Corp.; Penn Virginia MC Corporation; Penn Virginia MC Energy 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; and Penn Virginia Oil & Gas, L.P. 

19. “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. 

20. “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. 

21. “DIP Facility” means that certain $25 million debtor-in-possession financing facility provided by the DIP 

Lenders on the terms of, and subject to the conditions set forth in, the DIP Credit Agreement. 

22. “DIP Lenders” means each of the lenders and their Affiliates under the DIP Facility, solely in their capacity 

as such. 

23. “Disclosure Statement” means the Disclosure Statement for the Joint Chapter 11 Plan of Reorganization of 

Penn Virginia Corporation and its Debtor Affiliates [Docket No. ____], 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, in form and substance reasonably acceptable to 

the Required Consenting Creditors. 

24. “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. 

25. “Entity” has the meaning set forth in section 101(15) of the Bankruptcy Code. 

26. “Estate” means the estate of any Debtor created under sections 301 and 541 of the Bankruptcy Code upon 

the commencement of the applicable Debtor’s Chapter 11 Case. 

27. “Exculpated Parties” means each of the following, solely in its capacity as such: (i)(a) the Debtors; (b) the 

Reorganized Debtors, and (c) with respect to each of the foregoing parties in clauses (i)(a) and (i)(b), each 

of such Entity and its current and former Affiliates, and such Entities’ and their current and former 

Affiliates’ current and former directors, managers, officers, principals, members, employees, predecessors, 

successors, assigns, subsidiaries, agents, advisory board members, financial advisors, partners, attorneys, 

accountants, investment bankers, consultants, representatives, and other professionals; and (ii)(a) the RBL 

Lenders; (b) the Noteholders; (c) the DIP Lenders; (d) the DIP Hedge Lenders; (e) the Backstop Parties; (f) 

the Exit Facility Lenders; (g) the Indenture Trustee; (h) the RBL Agent; (i) the DIP Agent; (j) the Exit 

Facility Agent; (k) the Consenting Noteholders; (l) the Consenting RBL Lenders; and (m) with respect to 

each of the foregoing parties in clauses (ii)(a) through (ii)(l), each of such Entity’s current and former 

Affiliates, and such Entities’ and their current and former Affiliates’ current and former directors, 

managers, officers, principals, members, employees, equity holders (regardless of whether such interests 

are held directly or indirectly), predecessors, successors, assigns, subsidiaries, agents, advisory board 

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members, financial advisors, partners, attorneys, accountants, investment bankers, consultants, 

representatives, and other professionals. 

28. “Exit Facility” means the new reserve-based lending facility credit agreement to be entered into by the 

Reorganized Debtors 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. 

29. “Exit Facility Agent” means the administrative agent and collateral agent under the Exit Facility, or any 

successor thereto, solely in its capacity as such. 

30. “Exit Commitment Letters” means the commitment letter attached to the Restructuring Support Agreement 

as Exhibit E and related fee letters with respect thereto setting forth the Exit Facility Lenders’ commitment 

to provide the Exit Facility and the fees related thereto. 

31. “Exit Facility Lenders” means each of the lenders and their Affiliates under the Exit Facility, solely in their 

capacity as such. 

32. “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. 

33. “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, for the 7.250% Senior Notes due 

2019 and the 8.500% Senior Notes due 2020 among Penn Virginia, each of the guarantors party thereto, 

and the Indenture Trustee. 

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

under the Indenture. 

35. “Intercompany Interest” means, other than an Interest in Penn Virginia, an Interest in one Debtor or 

Non Debtor Subsidiary held by another Debtor. 

36. “Interest” means the common stock, preferred stock, limited liability company interests, and any other 

equity, ownership, or profits interests of any Debtor, including, without limitation, the Preferred Stock, and 

the Penn Virginia Common Stock, and options, warrants, rights, or other securities or agreements to acquire 

the common stock, preferred stock, limited liability company interests, or other equity, ownership, or 

profits interests of any Debtor (whether or not arising under or in connection with any employment 

agreement), including any Claim against the Debtors that is subject to subordination pursuant to section 

510(b) of the Bankruptcy Code arising from or related to any of the foregoing, provided, however, that the 

term “Interests” shall not include the Intercompany Interests. 

37. “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. 

38. “Noteholders” means holders of the Notes, solely in their capacity as such. 

39. “Penn Virginia” means Penn Virginia Corporation, a Virginia corporation, the ultimate parent of each of 

the Debtors and the predecessor to Reorganized Penn Virginia. 

40. “Penn Virginia Common Stock” means Penn Virginia’s authorized and issued common stock outstanding as 

of the Effective Date. 

41. “Petition Date” means the date on which each of the Debtors filed its respective petition for relief 

commencing the Chapter 11 Cases. 

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42. “Plan” means this chapter 11 plan, as it may be altered, amended, modified, or supplemented from time to 

time in accordance with the terms hereof and the Restructuring Support Agreement, including the Plan 

Supplement and all exhibits, supplements, appendices, and schedules. 

43. “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 terms hereof, 

the Bankruptcy Code, the Bankruptcy Rules, and the Restructuring Support Agreement), 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 Backstop Commitment Agreement, including all exhibits and schedules thereto; 

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 the Restructuring Support 

Agreement. 

44. “Preferred Stock” means all issuances of preferred stock issued by any of the Debtors prior to the Petition 

Date, including: (a) the Series A 6% Convertible Perpetual Preferred Stock; and (b) the Series B 6% 

Convertible Perpetual Preferred Stock. 

45. “RBL Agent” means Wells Fargo Bank, N.A., or any successor thereto, as administrative agent under the 

RBL Credit Agreement, in its capacity as such. 

46. “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, Penn Virginia, as parent, each of the guarantors 

party thereto, the RBL Agent, and the RBL Lenders. 

47. “RBL Lenders” means the lenders and their Affiliates party to the RBL Credit Agreement, in their 

capacities as such. 

48. “Released Parties” means each of the following, solely in its capacity as such: (i)(a) the Debtors; (b) the 

Reorganized Debtors, and (c) with respect to each of the foregoing parties in clauses (i)(a) and (i)(b), each 

of such Entity and its current and former Affiliates, and such Entities’ and their current and former 

Affiliates’ current and former directors, managers, officers, principals, members, employees, predecessors, 

successors, assigns, subsidiaries, agents, advisory board members, financial advisors, partners, attorneys, 

accountants, investment bankers, consultants, representatives, and other professionals; and (ii)(a) the RBL 

Lenders; (b) the Noteholders; (c) the DIP Lenders; (d) the DIP Hedge Lenders (e) the Backstop Parties; (f) 

the Exit Facility Lenders; (g) the Indenture Trustee; (h) the RBL Agent; (i) the DIP Agent; (j) the Exit 

Facility Agent; (k) the Consenting Noteholders; (k) the Consenting RBL Lenders; and (l) with respect to 

each of the foregoing parties in clauses (ii)(a) through (ii)(k), each of such Entity’s current and former 

Affiliates, and such Entities’ and their current and former Affiliates’ current and former directors, 

managers, officers, principals, members, employees, equity holders (regardless of whether such interests 

are held directly or indirectly), predecessors, successors, assigns, subsidiaries, agents, advisory board 

members, financial advisors, partners, attorneys, accountants, investment bankers, consultants, 

representatives, and other professionals; provided, however, that any holder of a Claim or Interest that opts 

out of the releases contained in, or otherwise objects to, the Plan shall not be a “Released Party.” 

49. “Releasing Parties” means collectively, and in each case solely in its capacity as such: (a) the Debtors; (b) 

the Reorganized Debtors; (c) the RBL Lenders; (d) the DIP Hedge Lenders (e) the Noteholders; (f) the DIP 

Lenders; (g) the Backstop Parties; (h) the Exit Facility Lenders; (i) the Indenture Trustee; (j) the RBL 

Agent; (k) the DIP Agent; (l) the Exit Facility Agent; (m) all holders of Claims and Interests that are 

deemed to accept the Plan; (n) all holders of Claims who vote to accept the Plan; (o) all holders of Claims 

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in voting Classes who abstain from voting on the Plan and who do not opt out of the releases provided by 

the Plan; and (p) with respect to the foregoing clauses (a) through (o), each such Entity and its current and 

former Affiliates, and such Entities’ and their current and former Affiliates’ current and former directors, 

managers, officers, principals, members, employees, equity holders (regardless of whether such interests 

are held directly or indirectly), predecessors, successors, assigns, subsidiaries, agents, advisory board 

members, financial advisors, partners, attorneys, accountants, investment bankers, consultants, 

representatives, and other professionals; provided, however, that any holder of a Claim that opts out of the 

releases contained in the Plan shall not be a “Releasing Party.” 

50. “Reorganized Debtor” means a Debtor, or any successor thereto, by merger, consolidation, or otherwise, on 

and after the Effective Date. 

51. “Reorganized Penn Virginia” means Penn Virginia, or any successors thereto, by merger, consolidation, or 

otherwise, on and after the Effective Date. 

52. “Restructuring Support Agreement” means that certain restructuring support agreement, dated May 10, 

2016, by and among the Debtors and the Restructuring Support Parties, including all exhibits thereto. 

53. “Restructuring Support Parties” means, collectively, the Consenting Noteholders, the Consenting RBL 

Lenders, the DIP Lenders, and the Backstop Parties, in each case, that are party to the Restructuring 

Support Agreement. 

54. “Restructuring Term Sheet” means the term sheet attached as Exhibit A to the Restructuring Support 

Agreement setting forth the terms and conditions of the Debtors’ comprehensive balance sheet 

restructuring. 

55. “Rights Offering” means the rights offering that is backstopped by the Backstop Parties in connection with 

the Restructuring Transactions pursuant to the Backstop Commitment Agreement and in accordance with 

the Rights Offerings Procedures (including the Subscription Agreement). 

Releases by the Debtors 

Notwithstanding anything contained in the Plan to the contrary, pursuant to section 1123(b) of the Bankruptcy Code, 

for good and valuable consideration, on and after the Effective Date, each Released Party is deemed released and 

discharged by the Debtors, the Reorganized Debtors, and their Estates from any and all Claims and Causes of 

Action, whether known or unknown, including any derivative claims, asserted on behalf of the Debtors, that the 

Debtors, the Reorganized Debtors, or their Estates would have been legally entitled to assert in their own right 

(whether individually or collectively) or on behalf of the holder of any Claim or Interest, based on or relating to, or 

in any manner arising from, in whole or in part, the Debtors (including the management, ownership or operation 

thereof), the Debtors’ in- or out-of-court restructuring efforts, any Avoidance Actions (but excluding Avoidance 

Action brought as counterclaims or defenses to Claims asserted against the Debtors), the formulation, preparation, 

dissemination, negotiation, or Filing of the Restructuring Support Agreement, or any Restructuring Transaction, 

contract, instrument, release, or other agreement or document (including providing any legal opinion requested by 

any Entity regarding any transaction, contract, instrument, document, or other agreement contemplated by the Plan 

or the reliance by any Released Party on the Plan or the Confirmation Order in lieu of such legal opinion) created or 

entered into in connection with the Restructuring Support Agreement, the Disclosure Statement, the Plan, the Plan 

Supplement, the Rights Offering, the DIP Facility, the Exit Facility, the DIP Credit Agreement, the Backstop 

Commitment Agreement, the Exit Commitment Letters, the Chapter 11 Cases, the filing of the Chapter 11 Cases, the 

pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the Plan, including 

the issuance or distribution of Securities pursuant to the Plan, or the distribution of property under the Plan, or upon 

any other act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective 

Date related or relating to the foregoing. Notwithstanding anything to the contrary in the foregoing, the releases set 

forth above do not release (a) any post-Effective Date obligations of any party or Entity under the Plan, any 

Restructuring Transaction, or any document, instrument, or agreement (including those set forth in the Plan 

Supplement) executed to implement the Plan or (b) any individual from any claim related to an act or omission that 

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is determined in a Final Order by a court competent jurisdiction to have constituted actual fraud or willful 

misconduct. 

Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval, pursuant to Bankruptcy Rule 

9019, of the Debtor Release, which includes by reference each of the related provisions and definitions contained in 

the Plan, and further, shall constitute the Bankruptcy Court’s finding that the Debtor Release is: (1) in exchange for 

the good and valuable consideration provided by the Released Parties; (2) a good faith settlement and compromise 

of the Claims released by the Debtor Release; (3) in the best interests of the Debtors and all holders of Claims and 

Interests; (4) fair, equitable, and reasonable; (5) given and made after due notice and opportunity for hearing; and (6) 

a bar to any of the Debtors, the Reorganized Debtors, or the Debtors’ Estates asserting any Claim or Cause of Action 

released pursuant to the Debtor Release. 

Releases by Holders of Claims and Interests 

Notwithstanding anything contained in the Plan to the contrary, as of the Effective Date, each Releasing Party is 

deemed to have released and discharged each Debtor, Reorganized Debtor, and Released Party from any and all 

Claims and Causes of Action, whether known or unknown, including any derivative claims, asserted on behalf of the 

Debtors, that such Entity would have been legally entitled to assert (whether individually or collectively), based on 

or relating to, or in any manner arising from, in whole or in part, the Debtors (including the management, ownership 

or operation thereof), the Debtors’ in- or out-of-court restructuring efforts, any Avoidance Actions, the formulation, 

preparation, dissemination, negotiation, or Filing of the Restructuring Support Agreement, or any Restructuring 

Transaction, contract, instrument, release, or other agreement or document (including providing any legal opinion 

requested by any Entity regarding any transaction, contract, instrument, document, or other agreement contemplated 

by the Plan or the reliance by any Released Party on the Plan or the Confirmation Order in lieu of such legal 

opinion) created or entered into in connection with the Restructuring Support Agreement, the Disclosure Statement, 

the Plan, the Plan Supplement, the Rights Offering, the DIP Facility, the Exit Facility, the DIP Commitment Letters, 

the Backstop Commitment Agreement, the Exit Commitment Letters, the Chapter 11 Cases, the filing of the Chapter 

11 Cases, the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation of the 

Plan, including the issuance or distribution of Securities pursuant to the Plan, or the distribution of property under 

the Plan, or upon any other act or omission, transaction, agreement, event, or other occurrence taking place on or 

before the Effective Date related or relating to the foregoing. Notwithstanding anything to the contrary in the 

foregoing, the releases set forth above do not release (a) any post-Effective Date obligations of any party or Entity 

under the Plan, any Restructuring Transaction, or any document, instrument, or agreement (including those set forth 

in the Plan Supplement) executed to implement the Plan or (b) any individual from any claim related to an act or 

omission that is determined in a Final Order by a court competent jurisdiction to have constituted actual fraud or 

willful misconduct. 

Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval, pursuant to Bankruptcy Rule 

9019, of the Third-Party Release, which includes by reference each of the related provisions and definitions 

contained herein, and, further, shall constitute the Bankruptcy Court’s finding that the Third Party Release is: 

(1) consensual; (2) essential to the confirmation of the Plan; (3) given in exchange for the good and valuable 

consideration provided by the Released Parties; (4) a good-faith settlement and compromise of the Claims released 

by the Third-Party Release; (5) in the best interests of the Debtors and their Estates; (6) fair, equitable, and 

reasonable; (7) given and made after due notice and opportunity for hearing; and (8) a bar to any of the Releasing 

Parties asserting any claim or Cause of Action released pursuant to the Third-Party Release.

Exculpation 

Notwithstanding anything contained herein to the contrary, no Exculpated Party shall have or incur liability for, and 

each Exculpated Party is hereby released and exculpated from, any Cause of Action for any claim related to any act 

or omission in connection with, relating to, or arising out of, the Chapter 11 Cases, the formulation, preparation, 

dissemination, negotiation, or Filing of the Restructuring Support Agreement and related prepetition transactions, 

the Disclosure Statement, the Plan, the Plan Supplement, or any Restructuring Transaction, contract, instrument, 

release or other agreement or document (including providing any legal opinion requested by any Entity regarding 

any transaction, contract, instrument, document, or other agreement contemplated by the Plan or the reliance by any 

Exculpated Party on the Plan or the Confirmation Order in lieu of such legal opinion) created or entered into in 

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connection with the Disclosure Statement, the Plan, the Plan Supplement, the Restructuring Support Agreement, the 

Rights Offering, the DIP Facility, the Exit Facility, the DIP Credit Agreement, the Backstop Commitment 

Agreement, the Exit Commitment Letters, the Filing of the Chapter 11 Cases, the pursuit of Confirmation, the 

pursuit of Consummation, the administration and implementation of the Plan, including the issuance of Securities 

pursuant to the Plan, or the distribution of property under the Plan, except for claims related to any act or omission 

that is determined in a Final Order by a court of competent jurisdiction to have constituted actual fraud or willful 

misconduct, but in all respects such Entities shall be entitled to reasonably rely upon the advice of counsel with 

respect to their duties and responsibilities pursuant to the Plan. The Exculpated Parties have, and upon completion 

of the Plan shall be deemed to have, participated in good faith and in compliance with the applicable laws with 

regard to the solicitation of, and distribution of, consideration pursuant to the Plan and, therefore, are not, and on 

account of such distributions shall not be, liable at any time for the violation of any applicable law, rule, or 

regulation governing the solicitation of acceptances or rejections of the Plan or such distributions made pursuant to 

the Plan. 

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Exhibit 2 to Term Sheet 

Term Sheet Regarding Employee Matters 

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Revised Incentives for Management through Bankruptcy Pursuant to New Agreements3

The Company will enter into new 5-month employment agreements effective as of the RSA 

effective date (the “Short-Term Agreements”) with each of John A. Brooks and Nancy M. 

Snyder. The Company will enter into a new employment agreement (together with the ShortTerm Agreements, the “Agreements”) with Steven A. Hartman. The term of Mr. Hartman’s 

Agreement will begin on the RSA effective date and end on the date that is 18 months thereafter, 

unless terminated by either Mr. Hartman or the board of directors of the reorganized entity (the 

“New Board”) in accordance with its terms. 

The Agreements will supersede the Change of Control Severance Agreements,4

 Relocation 

Agreement and all other prior agreements between the Executive and the Company in their 

entirety and be assumed as of the Company’s emergence from bankruptcy (the “Emergence”) 

pursuant to the plan of reorganization (the “Plan”). The finalized Agreements will be subject to 

review and comments by the Ad Hoc Committee and will contain other market terms, including 

customary restrictive covenants. 

Terms of Proposal: 

Base Salary: As of the RSA effective date, Mr. Hartman’s base salary will be reduced to 

$250,000 per annum. Mr. Brooks and Ms. Snyder will continue receiving their current 

annualized base salaries of $385,000 and $335,000, respectively. The Company will 

provide Mr. Hartman with market relocation assistance with respect to his move to the 

Houston metropolitan area. 

Emergence Bonus: Mr. Brooks and Ms. Snyder will each be paid an emergence bonus 

equal to $500,000, if Emergence occurs on or by 10/31/16 (a “Qualifying Emergence”) 

and either (i) he or she remains employed with the Company through the Qualifying 

Emergence or (ii) he or she was terminated by the Company without “cause” before the 

Qualifying Emergence. 

Severance: If Mr. Hartman is terminated without “cause” or for “good reason” before the 

six month anniversary of Emergence, he will be entitled to 18 months of continued base 

salary (subject to the execution of general release). If Mr. Hartman is terminated without 

cause after the six month anniversary of the date of Emergence, he will be entitled to 12 

months of continued base salary. 

MIP: The MIP pool will consist of up to [●]%5

 of the reorganized Company’s stock 

determined on a fully-diluted basis. The New Board will determine the allocation and 

other terms and conditions of MIP participation; provided that Mr. Hartman will receive 

an award of restricted stock (or economic equivalent) with a grant date value equal to 

$600,000 based on the Company value provided for in the Plan (the “Initial Equity 

Award”), so long as he is employed at the time of Emergence. The Initial Equity Award 

will vest over 3 years and be subject to such other terms and conditions as determined by 

 

3

 Note, these proposals are made only with respect to S. Hartman, J. Brooks, and N. M. Snyder (each, an “Executive”). 

4

 For the avoidance of doubt, each Executive will waive any and all claims the Executive may have to payments or 

benefits under the applicable Change of Control Severance Agreement.

5

 To be disclosed at or prior to the hearing to approve the Company’s Disclosure Statement. 

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the New Board; provided that in the event Mr. Hartman is terminated without “cause” or 

for “good reason”, the next tranche of the Initial Equity Award will vest. 

Release: The Agreements will provide for a mutual general release of claims (including 

release of Executives’ prepetition claims and any claims in respect of the SERP). 

Consulting Agreement: Upon Emergence, the reorganized Company will enter into a 

non-exclusive consulting agreement with Nancy M. Snyder (the “Consulting 

Agreement”) in lieu of extending her Short-Term Agreement. The Consulting 

Agreement will provide for a term of twelve months and payment of a monthly fee of 

$15,000 to Ms. Snyder for her services, so long as her employment has not been 

terminated for “cause” (gross negligence, willful misconduct or conviction of a felony), 

or due to death, disability or her voluntary resignation. During the term of the Consulting 

Agreement, Ms. Snyder will report to the Chief Executive Officer, or his or her designee, 

and will provide consulting services as reasonably requested by the Company. 

Treatment of Prepetition Obligations: All outstanding PBRSUs and RSUs will be 

cancelled without payment of any consideration pursuant to release. 

Severance and Revised Incentives for Rank & File Employees During Chapter 11 

The Company will establish a Key Employee Retention Plan (“KERP”) with annual payments not 

to exceed $2.0 million in the aggregate. 

 Upon a Company termination other than for “cause” on or prior to the 6 month anniversary of the 

confirmation date of the Plan, a KERP participant will receive as his or her severance the greater 

of (a) up to 13 weeks of base salary (taking into account seniority based on the Company’s 

historical practices) and (b) the balance of any unpaid KERP payments. The severance payment 

contemplated by the foregoing clause (a) will be consistent with the total amounts previously 

provided to the Ad Hoc Committee in the 4.30.16 Comp Summary. 

 As a condition to participation in the KERP or to otherwise receiving severance, participants in 

the KERP or individuals who otherwise receive severance will be required to waive all 

prepetition claims he or she may have relating to prior employment or compensation 

arrangements, including, without limitation, any applicable Change of Control Severance 

Agreement, Relocation Agreement, or other severance agreement. All outstanding long-term 

incentives will receive the treatment set forth in the Plan. 

Baird Whitehead 

 In full and final satisfaction of any and all claims that Mr. H. Baird Whitehead may have, or now 

has, against any of the PVA Entities in his former capacity as an employee of the PVA Entities 

(including as Chief Executive Officer of Penn Virginia) and in his current capacity as a director 

of Penn Virginia, and in exchange for inclusion in the debtor release, third-party release, 

exculpation, and indemnification provisions contained in the Plan as they relate to Mr. Whitehead 

in his former capacity as an employee of the PVA Entities (including as Chief Executive Officer 

of Penn Virginia) and in his current capacity as a director of Penn Virginia, Mr. Whitehead shall 

receive, on the Effective Date, a total recovery comprised of: (a) $110,000, paid in cash; and (b) 

at Mr. Whitehead’s election, (i) $110,000, paid in cash, or (ii) an allowed general unsecured claim 

in an amount that would result in Mr. Whitehead receiving a recovery under the Plan on such 

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claim that would be valued (at plan valuation) at $110,000; provided, however, that the foregoing 

release by Mr. Whitehead shall not extend to (1) any claims to indemnification or insurance 

coverage to which Mr. Whitehead may be entitled under the PVA Entities’ certificates of 

incorporation, bylaws, indemnification agreements, directors and officers insurance policies or 

applicable law with respect to the period of Mr. Whitehead's employment by the PVA Entities 

(including as Chief Executive Officer of Penn Virginia), and (2) any claims or rights that Mr. 

Whitehead cannot waive by law (e.g., any right to workers’ compensation). 

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Exhibit B to the Restructuring Support Agreement

DIP Term Sheet

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$25 MILLION SECURED SUPERPRIORITY DEBTOR IN POSSESSION 

CREDIT FACILITY 

SUMMARY OF TERMS AND CONDITIONS

This preliminary, non-binding summary of terms and conditions (this “Term Sheet”) shall be governed by 

Rule 408 of the Federal Rules of Evidence and any and all similar and applicable rules and statutory 

provisions governing the non-admissibility of settlement discussions. 

This Term Sheet outlines certain preliminary terms of the proposed DIP Facility referred to below. This 

Term Sheet was prepared for discussion purposes only and does not constitute a commitment to provide 

any financing to the Borrower. Each party referred to herein is free to terminate discussions with respect 

to the DIP Facility at any time. 

Borrower: Penn Virginia Holding Corp. (the “Borrower”), in its capacity as a 

debtor and debtor-in-possession in a case to be filed under chapter 

11 of the United States Bankruptcy Code (the “Bankruptcy Code”) 

in the United States Bankruptcy Court for the Eastern District of 

Virginia (Richmond Division) (the “Bankruptcy Court”) (the date 

of such filing, “Petition Date”). 

Guarantors: Penn Virginia Oil & Gas Corporation, Penn Virginia Oil & Gas GP 

LLC, Penn Virginia Oil & Gas LP LLC, Penn Virginia Oil & Gas, 

L.P. (TX L.P.) (by Penn Virginia Oil & Gas GP LLC, its general 

partner), Penn Virginia MC Corporation, Penn Virginia MC Energy 

L.L.C., and Penn Virginia MC Operating Company L.L.C. 

(collectively, the “Guarantors”). 

Cases: The bankruptcy cases of the Borrower, Penn Virginia Corporation 

(the “Parent”) and each of the Guarantors (collectively, the 

“Debtors”) to be filed under chapter 11 of the Bankruptcy Code 

(the “Cases”) with the Bankruptcy Court on the Petition Date. 

Agent: Wells Fargo Bank, National Association, shall act as administrative 

agent and collateral agent for the DIP Facility (in such capacity, the 

“DIP Agent”) on behalf of the Lenders (as defined below). 

Prepetition Secured Facilities: (a) 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, the “Existing Credit 

Agreement”), among the Borrower, the Parent, Wells Fargo Bank, 

National Association, as administrative agent (“Prepetition Agent”) 

and the lenders party thereto (the “Prepetition Lenders”), 

(b) Those certain Lender Party Swap Agreements (as defined in the 

Existing Credit Agreement) and 

(c) Those certain Lender Party Financial Service Products (as 

defined in the Existing Credit Agreement) 

(collectively, the facilities, agreements and products described in 

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clauses (a) - (c), the “Prepetition Secured Facilities” and each 

secured party thereunder, the “Prepetition Secured Parties”). 

Lenders: Those Prepetition Secured Parties and/or their affiliates who elect to 

participate in the DIP Facility and any of their respective successors 

and assigns in accordance herewith (the “Lenders”). The “Requisite 

Lenders” shall mean Lenders holding more than fifty percent 

(50.0%) of the outstanding aggregate principal amount of the Loans 

(as defined below). 

Noteholders and Related 

Agreements: 

Certain holders of the 7.250% Senior Notes due 2019 and the 

8.500% Senior Notes due 2020 (together, the “Notes”), in each case 

issued pursuant to that certain Senior Indenture, dated as of June 15, 

2009 (the “Indenture”) among the Parent, each of the guarantors 

party thereto, and Wells Fargo Bank, National Association as 

indenture trustee, have entered into a Restructuring Support 

Agreement with the Parent, the Borrower and the their affiliates 

dated as of May 10, 2016 (the “RSA”); and certain holders of the 

Notes (the “Backstop Parties”) have entered into the Backstop 

Commitment Agreement (as defined in the RSA) (the “BCA”) 

under which the Backstop Parties have agreed to fund a rights 

offering in the aggregate amount of $50 million pursuant to the 

terms set forth in the BCA and the RSA, including the exhibits 

thereto. 

Operative Documents: The definitive documentation for the DIP Facility (the “Operative 

Documents”) shall be based upon the Existing Credit Agreement as 

modified to reflect this Term Sheet and subject to the terms hereof 

and other adjustments customarily found in the loan agreements for 

debtor in possession financings as agreed to by the DIP Agent and 

the Borrower (as adjusted pursuant to terms herein, the 

“Documentation Principles”). The definitive credit agreement for 

the DIP Facility shall be subject to the Documentation Principles 

and shall be referred to herein as the “DIP Credit Agreement”. 

DIP Facility: 1. A non-amortizing senior secured new money facility in a 

principal amount of up to $25 million, composed of: 

(a) $10 million of new money loans, which will be made available 

to the Borrower following the entry of the Interim Order (as defined 

below) (the “Interim DIP Facility” and the term loans thereunder, 

the “Interim DIP Loan”), subject to the conditions precedent set 

forth under “Conditions Precedent to Effectiveness and Interim DIP 

Loan” below; 

(b) up to $10 million of additional new money loans, plus any 

undrawn amounts of the Interim DIP Facility, which will be made 

available to the Borrower following the entry of the Final Order (as 

defined below) (the “Final DIP Facility” and the term loans 

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thereunder, the “Final DIP Loan”), subject to the conditions 

precedent set forth under “Conditions Precedent to Final DIP Loan” 

below; and 

(c) up to $5 million of new money loans, plus any undrawn amount 

of the Interim DIP Facility and Final DIP Loan (which, for the sake 

of clarity, when combined with the Interim DIP Loan and Final DIP 

Loan, will aggregate to an amount not to exceed $25 million), 

which will be made incrementally available to the Borrower on a 

weekly basis following the entry of the Final Order (as defined 

below), subject to the conditions precedent set forth under 

“Conditions Precedent to each Conditional DIP Loan” below (the 

“Conditional DIP Facility” and each of the term loans thereunder, a 

“Conditional DIP Loan” and, together with the Interim DIP Facility 

and the Final DIP Facility, the “DIP Facility”). As of the date of 

any requested Conditional DIP Loan, the aggregate amount 

available to the Borrower to draw as part of the Conditional DIP 

Loan shall be the lesser of (a) the maximum amount subject to 

which the Borrower is in pro forma compliance with the AntiHoarding Condition (as hereinafter defined) and (b) the amount of 

the undrawn Conditional DIP Loan as of such date. 

The Interim DIP Loan, the Final DIP Loan and the Conditional DIP 

Loan shall be referred to herein collectively as the “Loans” and all 

accrued and unpaid interest, fees, expenses and other amounts 

outstanding in connection with the Loans shall become due and 

payable on the Maturity Date (as defined below). 

2. Commodity hedge transactions pursuant to Master ISDA and 

Schedules on terms to be agreed between the parties thereto and 

entered into following entry of the Hedging Order (as defined 

below) (the “DIP Hedges”). With respect to any DIP Hedge entered 

into between any Debtor and any Lender (or an affiliate of any 

Lender), such Lender (or affiliate thereof) shall be a “Hedge 

Lender.” The DIP Hedges will continue post-confirmation and, to 

the extent entered into between a Debtor and Hedge Lender, will 

share the same security in the same collateral granted in connection 

with the exit facility in accordance with the terms of the Exit 

Facility Term Sheet attached as Exhibit D to the RSA (the “Exit 

Facility”). 

Borrowing Procedure: Borrowing of each Loan shall be made upon at least three (3) 

business days’ notice to the Lenders by the Borrower or such 

shorter period as may be agreed to by the Requisite Lenders in their 

sole discretion. 

Term of DIP Facility: The period from the Closing Date (as defined below) to the earliest 

of (i) the Scheduled Maturity Date; (ii) the consummation of a sale 

of all or substantially all of the assets of the Debtors pursuant to 

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Section 363 of the Bankruptcy Code or otherwise; (iii) the effective 

date of a plan of reorganization or liquidation in the Cases; (iv) the 

date of filing or support by the Borrower of a plan of reorganization 

or liquidation that does not provide for indefeasible payment in full 

in cash of all obligations owing under the DIP Facility; (v) the entry 

of an order by the Bankruptcy Court (x) approving the appointment 

of a bankruptcy trustee or examiner with expanded powers beyond 

those set forth in section 1106(a)(3) and (4) of the Bankruptcy 

Code, (y) dismissing any of the Cases, or (z) converting any of the 

Cases to a case under Chapter 7 of the Bankruptcy Code; (vi) the 

date of termination of the Lenders’ commitments and the 

acceleration of any outstanding extensions of credit, in each case, 

under the DIP Facility in accordance with the terms of the 

Operative Documents (the earliest such date, the “Maturity Date”); 

provided, that the Maturity Date may be extended as agreed in 

writing by the Debtors and each Lender for an additional period not 

to exceed three (3) months without further approval of the 

Bankruptcy Court; provided further, if the Debtors have entered 

into an asset purchase agreement with a third party for a sale of 

substantially all of their assets pursuant to Section 363 of the 

Bankruptcy Code, and the Bankruptcy Court has entered an order 

approving bidding procedures for an auction with a stalking-horse 

bidder, prior to the Scheduled Maturity Date, the Maturity Date 

may be extended as agreed in writing by the Debtors and Lenders 

holding more than sixty-six and two-thirds percent (66-2/3%) of the 

outstanding aggregate principal amount of the Loans for an 

additional period not to exceed three (3) months without further 

approval of the Bankruptcy Court. 

“Scheduled Maturity Date” shall mean the date that is 150 days 

after the Petition Date. 

Effective Date: The date on which the Conditions Precedent to the effectiveness of 

the DIP Credit Agreement below shall have been satisfied (the 

“Effective Date”). 

Closing Date: The date on which the Conditions Precedent to the Interim DIP 

Facility below shall have been satisfied (the “Closing Date”). 

Purpose: The proceeds of the Interim DIP Loan shall be used by the 

Borrower (i) to pay certain costs, fees and expenses related to the 

Cases, including professional fees, (ii) to pay Adequate Protection 

Payments (as defined below), and (iii) to fund the working capital 

needs, capital improvements and expenditures of the Debtors during 

the Case, in each case in accordance with the Initial Budget (as 

defined below) in form and substance acceptable to the Requisite 

Lenders and the Budget (as defined below) in form and substance 

reasonably acceptable to the Requisite Lenders, in each case 

including the Budget Variances. From and after entry of the Final 

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Order, the proceeds of the Final DIP Loan shall be used by the 

Borrower (i) to pay fees, costs and expenses, including professional 

fees, (ii) to fund the working capital and capital expenditure needs 

of the Debtors during the Cases (including any Adequate Protection 

Payments), in each case in accordance with the Budget, in form and 

substance reasonably acceptable to the Requisite Lenders, including 

the Budget Variances. 

Proceeds of the DIP Facility shall not be used (i) to permit the 

Borrower, any Guarantor or any of their representatives to directly 

or indirectly challenge or otherwise contest or institute any 

proceeding to determine (x) the validity, perfection or priority of 

security interests in favor of any of the Lenders or the Prepetition 

Secured Parties, or (y) the enforceability of the obligations of the 

Borrower or any Guarantor under the DIP Facility or the Prepetition 

Secured Facilities, (ii) to investigate, commence, prosecute or 

defend any claim, motion, proceeding or cause of action against any 

of the Lenders or the Prepetition Secured Parties, each in such 

capacity, and their respective agents, attorneys, advisors or 

representatives, including, without limitation, any lender liability 

claims or subordination claims, or (iii) to fund acquisitions, capital 

expenditures, capital leases, or any other expenditure (other than 

professional fees) other than as set forth in the Budget or the CarveOut. This provision shall not restrict the use of up to $50,000 by 

any Official Committee of Unsecured Creditors appointed in the 

Cases (the “Committee”) for legal fees incurred during a challenge 

period commencing the date of the appointment of the Committee 

and expiring 60 calendar days after such appointment (the 

“Investigation Period”) solely for the purpose of investigating the 

liens and claims of the Prepetition Secured Parties pursuant to the 

Prepetition Secured Facilities and related documents (the 

“Committee Investigation”). 

Any proceeds resulting from monthly settlement payments under 

the DIP Hedges or the termination of the DIP Hedges shall be 

applied against the DIP Loans. 

Interest Rates and Fees: Loans under the DIP Facility will bear interest at a rate per annum

of the Adjusted LIBO Rate plus 6.00% per annum, accruing daily 

and payable monthly in cash in arrears. 

Interest shall be calculated on the basis of the actual number of 

days elapsed in a 360-day year (except that interest computed by 

reference to the alternate base rate shall be calculated on the basis 

of a 365/366-day year). 

The DIP Agent shall receive an administration fee of $125,000, 

which fee will be earned, due and payable on the Closing Date. 

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The Lenders shall receive a closing fee of 0.50% of the aggregate 

principal amount of Loans advanced, on a pro rata basis earned, due 

and payable on the date of each such advance (other than any 

readvance). 

The Lenders shall receive a commitment fee equal to 0.50% of the 

undrawn portion of the Loans, accruing daily and payable monthly 

in cash in arrears. 

During the continuance of an Event of Default (as defined below), 

any Loans outstanding under the DIP Facility will bear interest at 

an additional 2.0% per annum. 

Upon any extension of the Maturity Date in accordance with this 

Term Sheet, the Lenders shall receive an extension fee equal to (i) 

for any extension not exceeding three (3) months, 0.25% per 

annum of the aggregate principal amount of the Loans, (ii) for any 

extension exceeding three (3) months but not exceeding six (6) 

months, 0.50% per annum of the aggregate principal amount of the 

Loans, and (iii) for any extension exceeding six (6) months, 1.00% 

per annum of the aggregate principal amount of the Loans, in each 

case on a pro rata basis payable in cash upon the effective date of 

such extension. 

Optional Prepayments and 

Commitment Reductions: 

The Borrower may, upon at least one (1) business day’s notice, 

prepay in full or in part, without premium or penalty, the Loans; 

provided that each such partial prepayment shall be in a minimum 

aggregate amount of $1 million and multiples of $500,000 in excess 

thereof. 

Prior to the date that the Final DIP Loan is funded, the Borrower 

may reduce the commitments of the Lenders to fund the Final DIP 

Loan upon at least one (1) business day’s notice; provided that each 

such reduction shall be in an amount of $1 million and multiples of 

$500,000 in excess thereof. 

Mandatory Prepayments: Mandatory prepayments of the Loans shall be required in an 

amount equal to (i) 100% of the net cash proceeds from asset sales 

or series of related asset sales (other than ordinary course sales of 

hydrocarbons and sales of immaterial equipment no longer used or 

useful in the business and provided that the application of proceeds 

in excess of $8 million from the Granite Wash sale shall be subject 

to re-advance hereunder), (ii) 100% of insurance and condemnation 

proceeds (other than the approximate $1 million in insurance 

proceeds expected to be received on account of a casualty event that 

occurred in 2014), and (iii) 100% of net cash proceeds from the 

issuance of post-petition indebtedness or equity, in each case 

subject to customary carve-outs, exceptions and, with respect to 

clauses (i) and (ii), reinvestment rights, to be agreed upon, in each 

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case received by the Borrower or any of the Guarantors. Any 

proceeds retained in accordance with this section shall be deposited 

into a controlled account with the DIP Agent. 

Priority: All amounts owing by the Borrower under the DIP Facility and the 

DIP Hedges, and by the Guarantors in respect thereof, will at all 

times constitute allowed super-priority administrative expense 

claims in the Cases against each of the Debtors, jointly and 

severally, having priority over all administrative expenses of the 

kind specified in sections 503(b) and 507(b) or any other provisions 

of the Bankruptcy Code, subject only to the Carve-Out (as 

hereinafter defined). The “Carve-Out” shall have the meaning 

assigned to such term in the Interim Order. 

All liens authorized and granted pursuant to the Interim Order (as 

defined below) or the Final Order (as defined below) entered by the 

Bankruptcy Court approving the DIP Facility and the DIP Hedges 

shall be deemed effective and perfected as of the Petition Date, and 

no further filing, notice or act will be required to effect such 

perfection. The Lenders, or the DIP Agent on behalf of the Lenders, 

shall be permitted, but not required, to make any filings, deliver any 

notices, make recordations, perform any searches or take any other 

acts as may be desirable under state law in order to reflect the 

security, perfection or priority of the Lenders’ claims described 

herein. 

Credit Bidding: The DIP Facility shall include a provision that, in connection with 

any sale of any of the Debtors’ assets under section 363 of the 

Bankruptcy Code, a Chapter 11 plan of reorganization, or any 

equivalent thereof under any other law, that the DIP Agent, at the 

direction of the Requisite Lenders, shall have the absolute right to 

credit bid any portion, up to the full amount, of all obligations 

under the DIP Facility. 

Security: All amounts owing by the Borrower under the DIP Facility and by 

the Guarantors in respect thereof will be secured, subject to the 

Carve-out, by first priority valid, binding, continuing, enforceable, 

fully-perfected security interests in and liens (the “DIP Liens”) 

upon all assets of the Debtors (including, without limitation and 

subject to entry of the Final Order, on the proceeds of any 

avoidance actions available to the Debtors’ bankruptcy estate 

pursuant to the Bankruptcy Code and the proceeds of any litigation 

claims available to the Debtors (but not, for the avoidance of doubt, 

the avoidance actions or litigation) (the “Collateral”). 

All amounts owing by the Debtors under the DIP Hedges will be 

secured, subject to the Carve-out, by the DIP Liens upon the 

Collateral. 

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Such liens and security interests granted under the DIP Facility and 

the DIP Hedges will prime and be senior to the liens and security 

interests of the Prepetition Secured Parties in the Prepetition 

Collateral (as defined below), and shall be junior only to (i) the 

Carve-out, (ii) valid, perfected, enforceable and unavoidable liens 

in existence as of Closing, which were senior in priority to the liens 

and security interests of the Prepetition Secured Parties in the 

Prepetition Collateral as of the Closing, (iii) valid, enforceable and 

unavoidable liens in existence as of Closing that are perfected 

subsequent to Closing as permitted by section 546(b) of the 

Bankruptcy Code and (iv) other liens and encumbrances permitted 

by the Operative Documents. 

The Borrower and Guarantors shall use a cash management system 

that is the same as or substantially similar to its pre-petition cash 

management system; provided, however, that the Borrower shall 

only be allowed to withdraw or transfer from its accounts amounts 

necessary to fund expenses of the Borrower and its subsidiaries for 

the immediately following week as set forth in the Budget. Any 

material changes from such prepetition cash management system 

must be acceptable to the Requisite Lenders in their reasonable 

discretion. The Interim Order (as defined below) and the Final 

Order (as defined below) shall provide the Lenders (including the 

Hedge Lenders in such capacity) with a valid, perfected and 

enforceable first priority security interest in and lien on the cash 

held in the Borrower’s and each Guarantor’s bank accounts. 

The Lenders shall be granted in each of the Interim Order and the 

Final Order a superpriority administrative claim under section 

364(c)(1) of the Bankruptcy Code for the payment of the 

obligations under the DIP Facility with pari passu priority to the 

Hedge Admin Claim and priority above all other administrative 

claims, subject to the Carve-out (the “DIP Admin Claim”). 

The Hedge Lenders shall be granted in each of the Hedging Order, 

the Interim Order and the Final Order a superpriority administrative 

claim under section 364(c)(1) of the Bankruptcy Code for the 

payment of the obligations under the DIP Hedges with pari passu

priority to the DIP Admin Claims and priority above all other 

administrative claims, subject to the Carve-out (the “Hedge Admin 

Claim”). 

“Hedging Order” means the “Order Authorizing the Debtors to (I) 

Enter into New Lender Party Swap Agreements, (II) Pledge 

Collateral, Grant Superpriority Claims, and Honor Obligations 

Thereunder, and (III) Granting Related Relief.” 

Notwithstanding anything to the contrary herein, in the DIP Hedges 

or in the Operative Documents, the obligations under the DIP 

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Facility and the obligations under the DIP Hedges shall be treated 

pari passu in respect of priority of payment and liens in all respects. 

Subject to entry of the Final Order, no costs or expenses of 

administration shall be imposed against the Lenders’, the Hedge 

Lenders’, or the Prepetition Secured Parties’ prepetition or 

postpetition collateral under Section 506(c) of the Bankruptcy 

Code. 

Adequate Protection: The Prepetition Secured Parties shall be entitled to receive the 

following adequate protection for any diminution in value arising 

from (a) the Debtors’ use of cash collateral and the sale, lease or use 

by the Debtors (or other decline in value) of all of the existing and 

after-acquired assets with respect to which the Prepetition Agent 

and the Prepetition Secured Parties have first priority liens securing 

obligations of the Debtors owing to them under the Prepetition 

Secured Facilities (including cash collateral, the “Prepetition 

Collateral”), (b) the priming of their security interests and liens in 

the Prepetition Collateral and (c) the imposition of the automatic 

stay pursuant to Section 362 of the Bankruptcy Code (clauses (i), 

(iii) and (iv) below, the “Adequate Protection Payments”), subject, 

in each case to the Carve-Out: 

(i) a superpriority administrative expense claim as contemplated by 

Section 507(b) of the Bankruptcy Code (the “507(b) Claims”) 

immediately junior to the claims under Section 364(c)(1) of the 

Bankruptcy Code held by the DIP Agent and the Lenders; 

(ii) a lien on all collateral on which a lien in favor of the DIP 

Facility is granted, which such lien shall be junior to and 

immediately prior to the liens securing the DIP Facility (the 

“Adequate Protection Liens”); 

(iii) any interest payable under the Pre-Petition Secured Facilities, 

including any interest at the applicable default rate, which payments 

shall be made monthly in arrears at the default rate stated therein. 

The first such interest payment shall be made on May 31, 2016 and 

shall include all accrued interest to and including that date, 

including any unpaid prepetition interest; provided that the 

applicable default rate payable under the Pre-Petition Secured 

Facilities shall not apply and shall not begin to accrue until the 

Scheduled Maturity Date; and 

(iv) without duplication of amounts required to be paid pursuant to 

the DIP Facility or the DIP Hedges, upon entry of the Interim 

Order, the Debtors shall pay (a) all accrued and unpaid fees and 

disbursements (including, but not limited to, fees owed to the 

Prepetition Agent) owing to the Prepetition Secured Parties under 

the Prepetition Indebtedness Documents and incurred prior to the 

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Petition Date; and (b) current cash payments of all reasonable and 

documented out-of-pocket fees and expenses payable to the 

Prepetition Secured Parties under the Prepetition Indebtedness 

Documents, including, but not limited to, the reasonable and 

documented out-of-pocket fees and disbursements of Bracewell 

LLP, McGuireWoods LLP, Opportune, LLP, and additional 

consultants as reasonably needed and consistent with past practice, 

in consultation with the Debtors. 

Conditions Precedent to 

Effectiveness of the DIP Credit 

Agreement:

The effectiveness of the DIP Credit Agreement shall be subject to 

the conditions set forth in this section “Conditions Precedent to 

Effectiveness of the DIP Credit Agreement,” which such conditions 

shall be the sole and exclusive conditions to the effectiveness of the 

DIP Credit Agreement: 

 1. The preparation, authorization and execution of the DIP 

Credit Agreement with respect to the DIP Facility, in form and 

substance satisfactory to the Lenders and the Borrower. 

Conditions Precedent to 

Interim DIP Loan:

The availability of the Interim Facility shall be subject to the 

conditions set forth in this section “Conditions Precedent to Interim 

DIP Loan,” which such conditions shall be the sole and exclusive 

conditions to the availability of the Interim Facility: 

 1. The filing of the Cases with the Bankruptcy Court on the 

Petition Date. 

2. Entry by the Bankruptcy Court of the Interim Order. 

 3. The preparation, authorization and execution of the 

Operative Documents (other than the DIP Credit Agreement) with 

respect to the DIP Facility, in form and substance satisfactory to the 

Lenders and the Borrower. 

 4. None of the Cases shall have been dismissed or converted 

to a Chapter 7 case. 

 5. No trustee under Chapter 7 or Chapter 11 of the Bankruptcy 

Code or examiner with enlarged powers beyond those set forth in 

section 1106(a)(3) and (4) of the Bankruptcy Code shall have been 

appointed in the Case. 

 6. (i) Within three (3) business days after the Petition Date, 

the Bankruptcy Court shall have entered an interim order, 

substantially in the form attached hereto as Exhibit C(the “Interim 

Order”), which shall be in form and substance satisfactory to the 

Lenders, the Prepetition Agent and the Borrower, authorizing and 

approving the DIP Facility and the transactions contemplated 

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avoidable and fully perfected security interests and liens described 

herein; (b) solely to the extent of any diminution in value of 

collateral, the super-priority administrative expense claims under 

section 507(b) of the Bankruptcy Code described herein; (c) the 

Adequate Protection Payments; (d) the current cash payment of 

reasonable and documented out-of-pocket fees and expenses 

incurred by the Administrative Agent, the DIP Lenders and the 

Lender Swap Parties, including such amounts arising before and 

after the Petition Date and without the necessity of filing motions or 

fee applications to the extent set forth in this Term sheet; (e) 

customary stipulations from the Debtors, including that the liens 

securing the extensions of credit under the Prepetition Secured 

Facilities are valid and unavoidable and that the obligations 

thereunder are valid, binding and enforceable in accordance with 

the terms therein but subject to the limitations of the Bankruptcy 

Code; (f) subject to the Committee Investigation, if any, during the 

Investigation Period, a customary release of the Prepetition Secured 

Parties and Prepetition Agent; (g) subject to entry of the Final 

Order, the receipt by the Lenders and the Prepetition Secured 

Parties of (i) a waiver of any “equities of the case” claims under 

Section 552(b) of the Bankruptcy Code and (ii) a waiver of the 

provisions of Section 506(c) of the Bankruptcy Code with respect 

to both the Prepetition Secured Facilities and the DIP Facility; (h) a 

customary order that the Lenders and Prepetition Secured Parties 

not be subject to the equitable doctrine of “marshaling” or any 

similar doctrine with respect to the Collateral and (i) all motions 

and other documents to be filed with and submitted to the 

Bankruptcy Court in connection with the DIP Facility and the 

approval thereof shall be in form and substance reasonably 

satisfactory to the Lenders. 

 7. All material governmental and third party consents and 

approvals necessary in connection with the DIP Facilities and the 

transactions contemplated hereby shall have been obtained. 

 8. The making of the Interim DIP Loan shall not violate any 

requirement of law in any material respect and shall not be 

enjoined, temporarily, preliminarily or permanently. 

 9. All fees and expenses (including reasonable and 

documented out-of-pocket fees and expenses of counsel) required to 

be paid to the Lenders and the Prepetition Secured Parties on or 

before the Closing Date shall have been paid to the extent invoiced 

at least two (2) business days prior to the Closing Date. 

 10. The delivery of the Initial Budget (as defined below) in 

form and substance acceptable to the Lenders. 

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 11. The DIP Agent shall have received reasonably satisfactory 

opinions of independent counsel to the Borrower and the 

Guarantors, addressing such matters as the DIP Agent shall 

reasonably request, including, without limitation, due authorization, 

execution, delivery and enforceability of the Operative Documents, 

compliance with all laws and regulations and the perfection of all 

security interests purported to be granted, subject to customary 

exceptions. 

 12. At least five (5) business days prior to the Closing Date, the 

DIP Agent shall have received all documentation and other 

information with respect to the Borrower and the Guarantors 

requested by the DIP Agent in writing and required by bank 

regulatory authorities under applicable “know-your-customer” and 

anti-money laundering rules and regulations, including the U.S. 

Patriot Act. 

 13. The DIP Agent, on behalf of the Lenders, shall have a valid 

and perfected lien on and security interest in the Collateral with the 

priority described in the section above titled “Priority.” 

14. No default would or shall exist under the Operative 

Documents upon their effectiveness. 

15. The RSA and the BCA shall not have terminated and shall 

be in full force and effect. 

16. The representations and warranties of the Borrower and 

each Guarantor under the Operative Documents shall be true and 

correct in all material respects (except to the extent that such 

representations and warranties are qualified by materiality, in which 

case such representations and warranties shall be true and correct in 

all respects), immediately prior to, and after giving effect to, such 

funding. 

17. All “first day orders” entered in the Cases at the time of 

commencement of the Cases (including a cash management order) 

shall be reasonably satisfactory in form and substance to the DIP 

Agent in its sole discretion. 

Conditions Precedent to Final 

DIP Loan: 

The availability of the Final DIP Loan shall be subject to the 

conditions set forth in this section “Conditions Precedent to Final 

DIP Loan”, which conditions shall be the sole and exclusive 

conditions to the availability of the Final DIP Loan: 

1. The representations and warranties of the Borrower and each 

Guarantor under the Operative Documents shall be true and correct 

in all material respects (except to the extent that such 

representations and warranties are qualified by materiality, in which 

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case such representations and warranties shall be true and correct in 

all respects), immediately prior to, and after giving effect to, such 

funding. 

2. Entry by the Court of the Final Order. 

3. No default or event of default shall exist under any of the 

Operative Documents. 

4. The Borrower’s available cash as set forth in the Budget on a 

forecast basis, including the proceeds of any Loans (including any 

proposed draw), as of the last business day of the immediately 

following week, shall not exceed $10 million (the “Anti-Hoarding 

Condition”). 

5. Delivery of customary borrowing notice. 

6. The making of the Final DIP Loan shall not violate any 

requirement of law in any material respect and shall not be 

enjoined, temporarily, preliminarily or permanently. 

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Conditions Precedent to each 

Conditional DIP Loan: 

The availability of each Conditional DIP Loan shall be subject to 

the conditions set forth in this section “Conditions Precedent to 

each Conditional DIP Loan” as of each weekly draw date, which 

such conditions shall be the sole and exclusive conditions to the 

availability of any Conditional DIP Loan: 

1. The representations and warranties of the Borrower and each 

Guarantor under the Operative Documents shall be true and correct 

in all material respects (except to the extent that such 

representations and warranties are qualified by materiality, in which 

case such representations and warranties shall be true and correct in 

all respects), immediately prior to, and after giving effect to, such 

funding. 

2. The Final Order is in full force and effect and shall not have been 

stayed, reversed, vacated or otherwise modified. 

3. No default or event of default shall exist under any of the 

Operative Documents. 

4. The Anti-Hoarding Condition shall be satisfied. 

5. The Borrower shall have delivered a certificate to the DIP Agent 

declaring that the value of the collateral subject to a valid cash 

collateral order entered by the Bankruptcy Court, and reasonably 

acceptable to the Lenders and the Prepetition Lenders, shall not be 

less than the sum of (a) the outstanding aggregate principal amount 

of the Loans, (b) the outstanding aggregate principal amount of the 

Prepetition Secured Facilities, (c) any interest, fees or other 

amounts due in connection with the Prepetition Secured Facilities, 

or (d) any other claims of the Lenders or Prepetition Lenders 

against the Borrower or any of the Guarantors. 

6. Delivery of customary borrowing notice. 

7. The making of the Conditional DIP Loans shall not violate any 

requirement of law in any material respect and shall not be 

enjoined, temporarily, preliminarily or permanently. 

Representations and Warranties: The Operative Documents will contain representations and 

warranties customarily found in the loan agreements for similar 

debtor in possession financings, including with respect to: valid 

existence, requisite power, due authorization, no conflict with 

applicable law, enforceability of the Operative Documents, 

accuracy of financial statements, projections and all other 

information provided, taxes, compliance with law, federal reserve 

regulations, no default under the Operative Documents, 

inapplicability of Investment Company Act, use of proceeds, 

insurance, casualty, labor matters, litigation, ERISA compliance, 

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employee benefit plans and labor matters, environmental 

compliance, sanctions compliance, PATRIOT Act compliance, 

FCPA compliance, marketing of production, gas balancing 

agreements and advance payment contracts, necessary rights to 

intellectual property, ownership of properties and possession under 

leases, material agreements, subsidiaries, valid security, continued 

effectiveness of the applicable Order, and, except as would not 

reasonably be expected to have a material adverse effect, no default 

under any material contractual obligation arising after 

commencement of the Case or under any executory contract or 

unexpired lease assumed pursuant to the Bankruptcy Code, subject 

to entry of the Interim Order and Final Order, as applicable, no 

material leases for which liens are not available, and as of the 

Closing Date and as of the effective date of each Lender Swap 

Agreement (it being agreed and understood that the representation 

in this Section 3.31 shall be made as of such dates), each of the 

Borrower and the Parent is an “eligible contract participant” within 

the meaning of Section 1(a)(18) of the Commodity Exchange Act. 

The Interim Order and Final Order shall also contain provisions, 

among other things, (i) acknowledging the validity and 

enforceability of the Existing Credit Agreement and the other 

Prepetition Secured Facilities, the debt outstanding thereunder and 

the liens granted in connection therewith, and (ii) subject to entry of 

the Final Order, waiving Bankruptcy Code sections 506(c) and 552 

as such may pertain to the claims and liens of the Prepetition Agent 

and the Prepetition Secured Parties. 

Financial Reporting 

Requirements: 

The Parent shall provide to the Lenders: (i) monthly consolidated 

financial statements of the Parent and its subsidiaries, including 

balance sheet, income statement and cash flow statement, without 

footnotes, within 35 days of the end of each fiscal month, certified 

by the Parent’s chief financial officer; (ii) quarterly consolidated 

financial statements of the Parent and its subsidiaries within 60 

days of the end of each fiscal quarter, certified by the Parent’s chief 

financial officer; (iii) annual audited consolidated financial 

statements of the Parent and its subsidiaries within 120 days after 

the end of each fiscal year; (iv) promptly after they become 

available, copies of all periodic and other reports, proxy statements 

and other materials, if any, filed by the Parent or any subsidiary 

with the Securities and Exchange Commission or any national 

securities exchange or distributed to shareholders (provided, that, in 

the case of (ii), (iii) and (iv), filing such items in the form of a Form 

10-K, Form 10-Q or otherwise with the SEC shall be deemed 

delivery under the Operative Document); and (v) rolling 13-week 

cash flow projections reflecting projected expenditures on a weekly 

basis in form and substance acceptable to the Requisite Lenders by 

the fourth business day of every fourth calendar week (commencing 

with the 13-week cash flow projections acceptable to the Requisite 

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Lenders and attached hereto as Exhibit A (the “Initial Budget”)), 

and thereafter each of such subsequent projections, as effective 

upon the approval of the Requisite Lenders, the “Budget”). 

The Prepetition Agent, on behalf of itself and the Prepetition 

Secured Parties, shall be entitled to receive all financial reporting 

and other reports and notices delivered by the Parent in connection 

with the DIP Facility. 

Other Reporting Requirements: The Operative Documents will contain other reporting requirements 

contained in the Existing Credit Agreement and the RSA, subject to 

further requirements customarily found in the loan documents for 

similar debtor in possession financings as agreed by the DIP Agent 

and the Borrower. 

Budget and Variances: Subject to the Permitted Variance (as defined below), the 

expenditures authorized in the Budget shall be adhered to as 

described below. The Budget shall be tested on a cumulative basis 

for that portion of the Budget period then ended. 

The Budget will be tested weekly on a cumulative basis. The 

Debtors shall deliver to the Lenders on the fourth business day of 

each week a variance report for the then-ended Testing Period 

comparing actual disbursements (“Actual Cumulative 

Disbursements”) for such period to cumulative disbursements 

(“Budgeted Cumulative Disbursements”) in each case, other than 

professional fees, respectively, for such period as forecast in the 

Budget, which variance report shall include, inter alia, the then 

current aged accounts payable listing and the then current “AFE vs. 

Actual” report for all capital expenditure projects in excess of $1 

million. 

Debtors’ Actual Cumulative Disbursements (other than 

disbursements on account of professional fees) for such period may 

not vary as tested on May 26, 2016, and on the fourth business day 

of each week thereafter (each, a “Testing Date”) from Budgeted 

Cumulative Disbursements (other than disbursements on account of 

professional fees) as reflected in the most recently delivered Budget 

by more than 20% or by such greater amount as agreed upon by the 

Requisite Lenders (the “Permitted Variance”). 

Affirmative Covenants: The Operative Documents will contain affirmative covenants 

contained in the Existing Credit Agreement, subject to 

modifications customarily found in the loan agreements for debtor 

in possession financings, as agreed to by the DIP Agent and 

Borrower (which will be applicable to the Borrower, the Guarantors 

and their subsidiaries), including, without limitation, the following: 

existence, conduct of business, payment of obligations, taxes and 

material claims, maintenance of properties, insurance, books and 

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records, inspection rights, compliance with laws, use of proceeds, 

environmental matters, further assurances, reserve reports, title 

information, additional collateral, additional guarantors, ERISA 

compliance, business of the Borrower, permits and licenses, swap 

agreement termination, title diligence, payment of Adequate 

Protection Payments, compliance with Budget covenants consistent 

with the section titled “Budget and Variances” and compliance with 

the Milestones (as defined below), and within the earlier of (i) 30 

days of the Closing Date and (ii) entry of the Final Order (as such 

date may be extended in DIP Agent’s sole discretion), DIP Agent 

shall have received endorsements naming DIP Agent as an 

additional insured and loss payee under all insurance policies to be 

maintained with respect to the properties of the Borrower and the 

Guarantors forming part of the Collateral. 

Negative Covenants: The Operative Documents will contain negative covenants 

contained in the Existing Credit Agreement, subject to 

modifications found in the loan agreements for debtor in possession 

financings, as agreed to by the DIP Agent and Borrower (which will 

be applicable to the Borrower, the Guarantors and their 

subsidiaries), including, without limitation, the following: 

limitations on debt and guarantees, limitations on liens, limitations 

on fundamental changes, limitations on investments, limitations on 

loans and advances, limitations on hedging transactions, limitations 

on restricted payments, limitations on transactions with affiliates, 

limitations on restrictive agreements, financial covenants, 

limitations on the use of proceeds, ERISA compliance, limitations 

on the sale of properties, environmental matters, limitations on 

subsidiaries, limitations on gas imbalances, take-or-pay or other 

prepayments, limitations on changes to the fiscal year or fiscal 

quarters, limitations on the repayment or acquisition of debt and the 

amendment of debt documents, limitations on marketing activities, 

limitations on the sale or discount or receivables, limitations on 

granting additional collateral, limitations on incurring or permitting 

additional super-priority claims or the grant of adequate protection, 

limitation on maintaining any deposit, securities or commodities 

accounts, limitations on changing any Order (as defined below), 

and Requisite Lenders consent rights with respect to (i) any 

settlements with respect to the assumption, assumption and 

assignment or rejection of any executory contracts or unexpired 

leases under the Bankruptcy Code (it being agreed and understood 

that the Requisite Lenders shall have consultation rights with 

respect to any such assumption or rejection before the motion 

therefor is entered by the Bankruptcy Court, regardless of whether 

any settlement is contemplated), (ii) any motions to authorize any 

actions or transactions (including, without limitation, authorization 

to sell assets) under Section 363 of the Bankruptcy Code (except for 

asset sales that are permitted under the Operative Documents), (iii) 

motions to approve any compromise or settlement under Rule 9019, 

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and (iv) any plan of reorganization or liquidation and related 

disclosure statement. 

Events of Default: The Operative Documents will contain only the events of default 

(each an “Event of Default”) set forth below: 

1. failure to make any payment when due (including, without 

limitation, Adequate Protection Payments and any payment of 

principal, interest or fees) under the DIP Facility when due, and 

such failure continues for three (3) business days; 

2. noncompliance with negative covenants, including the Budget 

Variances, or breaches of representations and warranties; 

3. noncompliance with affirmative covenants, subject to a 10 

business day cure period and reporting covenants, subject to a 5 

business day cure period (and 1 business day cure period in the 

case of the Budget); 

4. failure to satisfy or stay execution of judgments in excess of $5 

million; 

5. the existence of certain materially adverse employee benefit or 

environmental liabilities consistent with the Existing Credit 

Agreement; 

6. any material provision of the Operative Documents fails to be 

enforceable; 

7. change in control (to be defined consistent with the Existing 

Credit Agreement); 

8. dismissal of the Cases or conversion of any of the Cases to a 

Chapter 7 case; 

9. termination of the exclusivity period for any of the Debtors to 

file a Chapter 11 plan in the Case; 

10. appointment of a Chapter 11 trustee in any of the Cases; 

11. appointment of a responsible officer or examiner with enlarged 

powers beyond those set forth in section 1106(a)(3) and (4) of 

the Bankruptcy Code relating to the operation of the business of 

the Borrower or any Guarantor; 

12. granting of relief from any stay of proceeding (including, 

without limitation, the automatic stay) so as to allow a third 

party to proceed against any assets of the Debtors in excess of 

$1,000,000 in the aggregate; 

13. entry of an order granting any super-priority claim or lien which 

is senior to or pari passu with the Lenders’ or Prepetition 

Secured Parties’ claims or liens under the DIP Facility, the 

Interim Order or the Final Order in an amount in excess of 

$1,000,000 in the aggregate; 

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14. entry of an order confirming (or the filing of any motion or 

pleading requesting confirmation of) a plan of reorganization or 

liquidation that does not require indefeasible repayment in full 

of the DIP Facility as of the effective date of the plan; 

15. entry of an order staying, reversing, vacating or otherwise 

modifying, without the prior consent of the Requisite Lenders, 

the DIP Facility, the Interim Order or the Final Order; 

16. failure to comply with the Orders in any material respect; 

17. payment of or granting adequate protection with respect to prepetition debt (other than as described herein, as otherwise 

approved by the Requisite Lenders and the Bankruptcy Court or 

as otherwise contemplated by the Operative Documents); 

provided, however, the foregoing should not restrict 

reimbursement of reasonable and documented out-of-pocket 

fees and expenses and customary indemnitees as agreed to in 

the RSA or the BCA; 

18. entry of an order denying or terminating use of cash collateral 

by the Debtors; 

19. cessation of liens or super-priority claims granted with respect 

to the DIP Facility, the Interim Order or the Final Order to be 

valid, perfected and enforceable in all respects with the priority 

described herein with respect to any material portion of the 

Collateral; 

20. the occurrence of any payment default, any event of default or 

any event, which with the giving of notice or lapse of time or 

both would constitute a default, under any of the Debtors’ or 

their respective subsidiaries’ debt instruments with a principal 

amount in excess of $5 million, other than as a result of the 

commencement of the Cases or with respect to any prepetition 

debt instruments automatically accelerated upon the 

commencement of the Cases; 

21. the commencement of any adversary proceeding, contested 

matter or other action by any Debtor asserting in writing any 

claims or defenses against any of the Prepetition Agent or the 

Prepetition Secured Parties with respect to the obligations of 

any Debtor thereunder or the liens granted to Prepetition Agent 

or Prepetition Secured Parties to secure the obligations under 

the Prepetition Secured Facility, except as permitted under the 

Interim Order or Final Order; 

22. the termination of the RSA or any agreement attached as an 

exhibit thereto, including without limitation the BCA, either in 

whole or in part, or any modification, amendment or 

supplement of the RSA, including the exhibits thereto 

(including without limitation the BCA), without the prior 

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written consent of the Requisite Lenders; 

23. any party to the RSA or the BCA fails to comply with any of its 

obligations thereunder and such non-compliance gives the 

Consenting RBL Lenders (as defined in the RSA) a right to 

terminate the RSA; 

24. any Debtor files, or supports a motion that has been filed, to 

reject the RSA; and 

25. failure to comply with any of the Milestones below. 

Remedies: Upon the occurrence and during the continuance of an Event of 

Default, (a) the Requisite Lenders or the DIP Agent acting on their 

behalf may, in their sole and absolute discretion, immediately (i) 

deliver a notice of an Event of Default to Borrower, (ii) terminate 

any commitments of each Lender and/or any pending Loans, and 

(iii) terminate the DIP Facility and (b) upon five (5) business days’ 

written notice from the Requisite Lenders, in their sole and absolute 

discretion, the automatic stay of Section 362 of the Bankruptcy 

Code shall be automatically vacated without further order of the 

Bankruptcy Court, without the need for filing any motion for relief 

from the automatic stay or any other pleading, for the limited 

purpose of permitting the Lenders to do any of the following: (i) 

enforce any and all liens and security interests created pursuant to 

any of the Operative Documents or any other document purporting 

to create a lien in favor of the Lenders (or otherwise foreclose on 

the Collateral), including, without limitation assuming control over 

the use of cash in any cash collateral accounts; (ii) enforce all of the 

guaranty rights; (iii) charge the default rate of interest on the Loans; 

(iv) declare each of the following to become due and payable 

without presentment, demand, protest or other notice of any kind, 

all of which are hereby waived by each Debtor: the unpaid principal 

of the Loans, together with accrued interest thereon and all 

outstanding fees and other obligations under the Operative 

Documents and (v) exercise any and all of its or their other rights 

and remedies (whether as a secured creditor or otherwise) under the 

Operative Documents and under applicable law (including, but not 

limited to, the Bankruptcy Code and the Uniform Commercial Code 

as in effect from time to time in any applicable jurisdiction). 

Section 362 relief from the stay in favor of the Lenders shall be 

embodied in any order approving the DIP Facility and the use of 

cash collateral. 

Milestones: The Operative Documents and any Final Order shall expressly 

authorize and require the Debtors to comply with the following 

milestones (collectively, the “Milestones”): 

1. the Petition Date shall occur no later than May 12, 

2016 at 8:00am (New York time); 

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2. no later than three days after the Petition Date, the 

Debtors shall file with the Bankruptcy Court (i) the Plan and 

related disclosure statement (the "Disclosure Statement") and (ii) 

a motion seeking entry of an order approving the Debtors' 

assumption of the RSA and the Backstop Commitment 

Agreement (the "Approval Motion"); 

3. no later than three days after the Petition Date, the 

Bankruptcy Court shall have entered the Interim DIP Order; 

4. no later than fifteen days after the Petition Date, the 

Debtors shall file with the Bankruptcy Court (i) a motion to 

establish a bar date for filing proofs of claim and (ii) the 

schedules of assets and liabilities and statements of financial 

affairs for each Debtor; 

5. no later than thirty days after the Petition Date, (i) 

the Bankruptcy Court shall have entered the Final DIP Order (the 

“Final Order” and together with the Interim Order, the 

“Orders”), (ii) the Bankruptcy Court shall have entered an order 

(the “Approval Order”) granting the Approval Motion, and (iii) 

the Debtors shall have delivered a proposal with regard to the 

treatment of material contracts to the Majority Consenting 

Noteholders; 

6. no later than forty-five days after the Petition Date, 

the Bankruptcy Court shall have entered an order (the 

“Disclosure Statement Order”) approving the adequacy of the 

Disclosure Statement and related solicitation procedures 

(including the Rights Offering Procedures); 

7. no later than forty-five days after the entry of the 

Disclosure Statement Order, the Bankruptcy Court shall 

commence a hearing to confirm the Plan (the “Confirmation 

Hearing”); 

8. no later than five days after the commencement of 

the Confirmation Hearing, the Bankruptcy Court shall enter an 

order (the "Confirmation Order") confirming the Plan; and 

9. no later than twenty-five days after entry of the 

Confirmation Order, the Debtors shall consummate the 

transactions contemplated by the Plan (the date of such 

consummation, the “Effective Date”). 

The Milestones above may be extended with the consent of the 

Requisite Lenders without further order of the Bankruptcy Court. 

Capitalized terms used in this section entitled “Milestones” but not 

otherwise defined herein shall have the meanings given to such 

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terms in the Restructuring Support Agreement Term Sheet which is 

attached to the Restructuring Support Agreement to which this 

Term Sheet is attached. 

Indemnification: The Borrower shall indemnify and hold harmless the DIP Agent, 

each Lender, each Hedge Lender, each of their respective affiliates 

and each of their respective officers, directors, employees, agents, 

advisors, attorneys and representatives (each, an “Indemnified 

Party”) from and against any and all claims, damages, losses, 

liabilities and expenses (including, without limitation, reasonable 

fees and disbursements of counsel (limited to one primary outside 

counsel and one local counsel in each necessary jurisdiction for all 

Indemnified Parties, taken as a whole, and one conflict counsel to 

the extent of any actual conflicts of interest for all similarly situated 

Indemnified Parties, taken as a whole), joint or several, that may be 

incurred by or asserted or awarded against any Indemnified Party 

(including, without limitation, in connection with or relating to any 

investigation, litigation or proceeding or the preparation of any 

defense in connection therewith), in each case arising out of or in 

connection with or by reason of the DIP Facility, the DIP Hedges, 

the Operative Documents or any of the transactions contemplated 

thereby, or any actual or proposed use of the proceeds of the DIP 

Facility, except to the extent such claim, damage, loss, liability or 

expense is found in a final non-appealable judgment by a court of 

competent jurisdiction (a) to have resulted from such Indemnified 

Party's gross negligence or willful misconduct, (b) to have resulted 

from a claim brought by the Borrower against any Indemnified 

Party of any material breach in bad faith of such Indemnified 

Party’s funding obligations under any Operative Documents, or (c) 

to be a dispute solely by or amongst Indemnified Persons (other 

than the DIP Agent in its role as such) to the extent such dispute 

does not involve and is not related to any act, omission or 

representation on the part of, or any information provided by or on 

behalf of, the Borrower, any Guarantor or affiliates thereof. In the 

case of an investigation, litigation or other proceeding to which the 

indemnity in this paragraph applies, such indemnity shall be 

effective whether or not such investigation, litigation or proceeding 

is brought by the Borrower, any of its directors, security-holders or 

creditors, an Indemnified Party or any other person, or an 

Indemnified Party is otherwise a party thereto and whether or not 

the transactions contemplated hereby are consummated. For the 

avoidance of doubt, under no circumstances shall the Borrower be 

liable for special, indirect, consequential or punitive damages 

suffered or incurred by any Indemnified Party. 

Releases: The Debtors shall provide each of the Prepetition Agent and the 

Prepetition Secured Parties a standard release of any and all claims 

and causes of action against any of them as of the Petition Date, 

without prejudice to the Committee Investigation, if any, during the 

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Investigation Period. 

Expenses: The Borrower and each Guarantor shall jointly and severally pay, 

without the need for the Administrative Agent, the DIP Lenders or 

the Hedge Lenders to file retention motions or fee applications, or 

to provide notice to any party, all reasonable and documented outof-pocket costs and expenses of the Administrative Agent, the DIP 

Lenders and the Hedge Lenders (including all reasonable fees, 

expenses and disbursements of Bracewell, LLP, McGuireWoods 

LLP, and Opportune, LLP), and such other consultants as may be 

retained or may have been retained from time to time by (a) the 

Administrative Agent, in its sole discretion, or (b) the DIP Lenders 

or the Hedge Lenders, with the prior written consent of the Debtors 

(which consent shall not be unreasonably withheld). 

Yield Protection, Taxes and 

Other Deductions: 

The Operative Documents will contain yield protection provisions 

customarily found in the loan agreements for similar debtor in 

possession financings to protect Lenders in the event of 

unavailability of funding and from funding losses, increased costs, 

reserve and capital adequacy requirements and requirements of 

Basel III and the Dodd-Frank Wall Street Reform and Consumer 

Protection Act. The Operative Documents will provide that all 

payments are to be made free and clear of any taxes subject to 

customary exceptions. 

Assignments: Assignments must be in a minimum amount of $5 million, other 

than in the case of an assignment to a Lender (or an affiliate of a 

Lender) or an assignment of a Lender’s entire interest in the DIP 

Facility; provided that, other than an assignment to a Lender or an 

affiliate of a Lender, assignments shall be subject to the prior 

written consent of the Borrower (which consent shall not be 

unreasonably withheld or delayed) so long as no Event of Default 

has occurred or is continuing; provided further, under no 

circumstance shall an assignment be made to a Company 

Competitor. In addition, under no circumstance shall an assignment 

be made to any Person unless such Person is already or 

concurrently therewith becomes a party to the RSA. 

For purposes herein. a “Company Competitor” includes the Persons 

set forth on Exhibit B and all readily identifiable affiliates thereof. 

Requisite Lenders: Lenders holding more than 50% of the outstanding commitments 

and/or Loans under the DIP Facility (the “Requisite Lenders”). 

Amendments: This Term Sheet and the Operative Documents may be amended 

with the consent of the Requisite Lenders, except that no 

amendment, waiver, supplement or modification shall (a)(i) except 

as otherwise expressly set forth herein as of the Effective Date, 

reduce the amount or extend the maturity of any Loan or any 

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installment due thereon, or reduce the rate or extend the time of 

payment of interest thereon, or reduce the amount or extend the 

time of payment of any fee, indemnity or reimbursement payable to 

any Lender hereunder or (ii) extend or increase the Commitment of 

any Lender, in each case without the written consent of each Lender 

affected thereby; (b)(i) amend, modify or waive any provision of 

this “amendments” section or reduce the percentage specified in or 

otherwise modify the definition of Requisite Lenders, or consent to 

the assignment or transfer by any Debtor of any of its rights and 

obligations under this Term Sheet and the other Commitment 

Documents or (ii) amend, modify or waive any provision of this 

Term Sheet requiring the consent or approval of all Lenders, in each 

case without the written consent of the Lenders; or (c) change any 

of the provisions of the Credit Documentation that materially, 

adversely and disproportionately affect (x) a DIP Hedge 

counterparty as compared to the other DIP Secured Parties or (y) 

the DIP Hedge counterparty as compared to the Lenders, without 

the written consent of such DIP Hedge counterparty or the DIP 

Hedge counterparties, respectively. 

Governing Law; Submission to 

Jurisdiction; Waiver of Jury 

Trial:

State of New York. Non-exclusive jurisdiction of the Bankruptcy 

Court, including with respect to the exercise of the remedies by the 

Lenders and preservation of the Collateral’s value. Each party 

expressly waives the right to trial by jury in any proceeding relating 

to or arising in any way from this Term Sheet, any other 

Commitment Document or the transactions contemplated hereby or 

thereby, to the extent permitted by applicable law. 

Counsel to Lenders: Bracewell, LLP 

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Exhibit A 

Initial Budget 

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Initial Budget

($s in millions) 1 2 3 4 5 6 7 8 9 10 11 

Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst Fcst F

w/e w/e w/e w/e w/e w/e w/e w/e w/e w/e w/e w

5/13 5/20 5/27 6/3 6/10 6/17 6/24 7/1 7/8 7/15 7/22 7

Beginning Cash Balance 26.5$ $ 26.4 36.9$ $ 21.4 15.2$ 10.0$ 10.0$ 14.3$ 10.5$ 10.0$ 10.0$ 

$ 

Receipts

Oil & Gas Receipts:

South Texas ‐      15.3        ‐      ‐      ‐      0.9 14.4         ‐      ‐      0.9 13.8    

Oklahoma ‐      0.4        ‐      ‐      ‐      0.1 0.3         ‐      ‐      0.1 0.3    

JIB Receipts ‐      0.3        ‐      ‐      ‐      1.2          ‐       1.3 ‐      ‐        

   

1.0 

Access to Hedge Proceeds ‐      ‐      ‐      ‐      ‐      ‐      ‐        ‐       ‐      ‐      ‐      

   

Total Receipts ‐      16.0        ‐      ‐      ‐      2.1 16.0         ‐      ‐      1.0 15.1    

Operating Disbursements

Payroll‐Related:

Payroll ‐             ‐      0.6        ‐      0.5        ‐        0.5         ‐      0.5        ‐      0.5    

Severance Amount 1 ‐      ‐             ‐      ‐      ‐      ‐        ‐       ‐      ‐      ‐      

   

0.6 

Healthcare Payments ‐      0.2 0.0 0.0 0.0 0.2 0.0 0.0 0.0 0.0 0.2 

Non‐Payroll Related: ‐     

CapEx ‐      0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.1 0.1 0.1 

LOE ‐      0.3 0.3 0.3 0.5 0.8 0.8 0.7 0.7 0.7 0.7 

G&A ‐      0.1 0.2 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 

Other/GPT ‐      0.2 0.2 0.5 0.3 0.5 0.5 0.5 0.7 0.4 0.4 

Royalties & Working Interest ‐      ‐             ‐      ‐      ‐      9.2          ‐       ‐      ‐      7.6        

   

7.3 

Est. Royalties & Working Interest in suspense  ‐       ‐             ‐      ‐      ‐      2.0          ‐       ‐      ‐      1.3        

   

1.3 

Severance taxes ‐      0.2 1.2        ‐      ‐      0.0          ‐       ‐      1.3 ‐      1.2    

Total Operating Disbursements ‐      1.7 13.8 1.8 1.2 2.3 11.7 2.1 1.9 2.0 11.4 

Restructuring Related Disbursements

Professional Fees ‐      ‐      ‐      ‐             ‐      ‐        2.5 2.0        ‐      ‐      

   

2.5 

Prepetition Opex, JIB's, Mkt, S&W, 503b9 claims ‐      3.8 3.8 3.8        ‐      ‐        ‐       ‐      ‐      ‐      

   

3.8 

Utility Deposit ‐             ‐      ‐      ‐      ‐      ‐        ‐       ‐      ‐      ‐      

   

0.0 

Total Restructuring‐Related Payments ‐      3.8 3.8 3.8        ‐      ‐        6.2 2.0        ‐      ‐      

   

2.5 

Net Cash Flow Prior To Financing Activities ‐      10.5 (15.5) (5.6) (7.5) (2.3) 4.3 (3.1) (4 3) (2.0) 3.7 

Financing Related Disbursements

Adequate Protection Payments ‐      ‐      ‐             ‐      ‐      ‐        0.5         ‐      ‐      ‐      

   

0.5 

DIP Fees & Interest        ‐      ‐      0.1 0.2 0.0        ‐        0.0 0.2 0.0        ‐      

   

0.0 

Total Financing Related Disbursements        ‐      ‐      0.1 0.7 0.0        ‐        0.0 0.7 0.0        ‐      

   

0.0 

DIP Loan Advances ‐      ‐      ‐      ‐      2.3        ‐        ‐       2.3 3.9        ‐      

   

2.0 

Total Net Cash Flow (0.1) 10.5 (15.5) (6.3) (5.2) (0.0) 4.3 (3.8) (0.5) (0.0) 3.7 

Ending Cash Balance $ 26.4 36.9$ $ 21.4 15.2$ 10.0$ 10.0$ 14.3$ 10.5$ 10.0$ 10.0$ 13.7$ 

$ 

Memo: DIP Balance $     ‐ ‐ $     ‐ $     ‐ $ 2.3$ 4.6$ 4.6$ 4.6$ 8.5$ 10.5$ 10.5$ 

$ 

1 Timing of this may be delayed depending upon the timing of the Final Order (I) Authorizing The Debtors To (A) Pay Prepetition Wages, Salaries, Other Compensati

And Reimbursable Expenses And (B) Continue Employee Benefit Programs.

Page 1 of 1

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Exhibit B 

Company Competitors 

1. Battle Cat Oil & Gas 

2. BHP Billiton Petroleum 

3. Canaan Resource Partners 

4. Chesapeake Energy 

5. ConocoPhillips 

6. Cypress Energy 

7. Devon Energy 

8. Earthstone Energy 

9. EOG Resources 

10. EP Energy 

11. Goodrich Petroleum 

12. Grey Rock Energy Partners 

13. Halcon Resources Corporation 

14. Hunt Oil Company 

15. Lux Energy 

16. Marathon Oil Corp. 

17. Marubini Corporation 

18. Murphy Oil Corporation 

19. NextEra Energy Resources 

20. Pioneer Natural Resources 

21. Sabine Oil & Gas Corp 

22. Sanchez Oil & Gas Corporation 

23. Sequitur Energy Resources 

24. Statoil Inc. 

25. Titanium Exploration Partners 

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Exhibit C 

Interim Order 

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Edward O. Sassower, P.C. (pro hac vice admission pending) Michael A. Condyles (VA 27807) 

Joshua A. Sussberg, P.C. Peter J. Barrett (VA 46179) 

Brian E. Schartz (pro hac vice admission pending) Jeremy S. Williams (VA 77469) 

KIRKLAND & ELLIS LLP KUTAK ROCK LLP 

KIRKLAND & ELLIS INTERNATIONAL LLP Bank of America Center 

601 Lexington Avenue 1111 East Main Street, Suite 800 

New York, New York 10022 Richmond, Virginia 23219 

Telephone: (212) 446-4800 Telephone: (804) 644-1700 

Facsimile: (212) 446-4900 Facsimile: (804) 783-6192 

 

- and - 

James H.M. Sprayregen, P.C. 

Justin R. Bernbrock (pro hac vice admission pending) 

Benjamin M. Rhode (pro hac vice admission pending) 

KIRKLAND & ELLIS LLP 

KIRKLAND & ELLIS INTERNATIONAL LLP 

300 North LaSalle 

Chicago, Illinois 60654 

Telephone: (312) 862-2000 

Facsimile: (312) 862-2200 

Proposed Co-Counsel to the Debtors 

IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE EASTERN DISTRICT OF VIRGINIA 

RICHMOND DIVISION 

 ) 

In re: ) Chapter 11 

 ) 

PENN VIRGINIA CORPORATION, et al.,

1

 ) Case No. 16-_____ (___) 

 ) 

 Debtors. ) (Joint Administration Requested) 

 ) 

INTERIM ORDER (I) AUTHORIZING 

THE DEBTORS TO (A) OBTAIN SENIOR 

SECURED SUPERPRIORITY POSTPETITION FINANCING 

AND (B) UTILIZE CASH COLLATERAL OF THE PREPETITION 

SECURED PARTIES, (II) GRANTING ADEQUATE PROTECTION TO THE 

PREPETITION SECURED PARTIES, (III) MODIFYING THE AUTOMATIC STAY, 

(IV) SCHEDULING A FINAL HEARING, AND (V) GRANTING RELATED RELIEF 

 

1

 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification 

number, include: Penn Virginia Corporation (4320); Penn Virginia Holding Corp. (7384); Penn Virginia MC 

Corporation (0458); Penn Virginia MC Energy L.L.C. (0462); Penn Virginia MC Operating Company L.L.C. 

(0466); Penn Virginia Oil & Gas Corporation (7929); Penn Virginia Oil & Gas GP LLC (3686); Penn Virginia 

Oil & Gas LP LLC (8109); Penn Virginia Oil & Gas, L.P. (9487). The location of the Debtors’ service address 

is: Four Radnor Corporate Center, Suite 200, 100 Matsonford Road, Radnor, Pennsylvania 19087. 

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Upon the motion (the “Motion”)2 of Penn Virginia Corporation (“PVA”) and its debtor 

affiliates, as debtors and debtors in possession (collectively, the “Debtors”) in the abovecaptioned chapter 11 cases (collectively, the “Cases”) for entry of an interim order (this 

“Order”), pursuant to sections 105, 361, 362, 363(c), 364, 503, and 507 of title 11 of the United 

States Code (the “Bankruptcy Code”), Rules 2002, 4001, and 9014 of the Federal Rules of 

Bankruptcy Procedure (the “Bankruptcy Rules”), and Local Rule 4001(a)-1 of the Local Rules of 

the United States Bankruptcy Court for the Eastern District of Virginia (the “Local Bankruptcy 

Rules”), seeking, among other things: 

(i) authorization for Penn Virginia Holding Corp. (“PVH” or “Borrower”) to 

obtain and be obligated in respect of postpetition financing (including requirements for the 

Debtors’ use of Cash Collateral (as defined below), the “DIP Facility”), and for all of the other 

Debtors (together with each other present and future subsidiary of the Borrower, 

the “Guarantors”) to guarantee and be jointly and severally obligated to pay the Borrower’s 

obligations in connection with the DIP Facility, up to an aggregate principal amount of 

$25,000,000 of new money funding (the actual available principal amount and available Cash 

Collateral at any time being subject to those terms and conditions set forth in this Order and the 

DIP Credit Documents (as defined below)), from certain lenders (collectively, the “DIP 

Lenders”) for which Wells Fargo Bank, National Association shall act as administrative agent (in 

such capacity, the “Administrative Agent”) pursuant to the terms of this Order and that certain 

Debtor-in-Possession Credit Agreement dated as of May 11, 2016, by and among the Borrower, 

the Guarantors, the DIP Lenders, and the Administrative Agent, attached hereto as Exhibit 1 (as 

may be amended, restated, supplemented, or otherwise modified from time to time in accordance 

 

2

 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the 

Motion or the DIP Credit Agreement, as applicable. 

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with the terms thereof and this Order and the Restructuring Support Agreement,3 the “DIP Credit 

Agreement”), and any related security agreements, fee letters, and other documents required to 

be executed or delivered by or in connection with the DIP Credit Agreement (as may be 

amended, restated, supplemented, or otherwise modified from time to time in accordance with 

the terms thereof and this Order, collectively, the “DIP Credit Documents”); 

(ii) authorization for the Debtors to execute and deliver the DIP Credit 

Documents and to perform such other and further acts as may be required in connection with the 

DIP Credit Documents; 

(iii) the granting of adequate protection of the liens and security interests 

granted in favor of Wells Fargo Bank, National Association, as collateral agent, on behalf of and 

for the benefit of itself and the Prepetition Lenders (together, the “Prepetition Secured Parties”) 

under the Security Documents (as defined below), which Prepetition Collateral (as defined 

below) is being primed by the liens securing the repayment of the DIP Facility, in accordance 

with this Order; 

(iv) authorization for the Debtors’ use of cash collateral (as such term is 

defined in section 363(a) of the Bankruptcy Code, including, without limitation, any accounts 

receivable and general intangible and any other cash or right that would be included in such 

definition of “cash collateral” within the meaning of section 363(a) of the Bankruptcy Code) 

constituting Prepetition Collateral (including, without limitation, all cash and cash equivalents 

and other amounts from time to time on deposit or maintained by the Debtors in any deposit or 

 

3

 As used herein, “Restructuring Support Agreement” shall mean that certain Restructuring Support Agreement 

entered into as of May 10, 2016, between the Borrower, the Guarantors, certain Prepetition Secured Parties and 

certain holders of notes issued pursuant to that certain Senior Indenture, dated as of June 15, 2009, for the 

7.250% Senior Notes due 2019 and the 8.500% Senior Notes due 2020 among Penn Virginia, as issuer, each of 

the guarantors party thereto, and Wilmington Savings Fund Society, FSB, as indenture trustee. 

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securities account or accounts as of the Petition Date) or any cash or cash equivalents received 

by the Debtors after the Petition Date as proceeds of the Prepetition Collateral (together, 

the “Cash Collateral”) on the terms and conditions set forth in this Order and in the DIP Credit 

Agreement and in accordance with the Approved Budget, and the granting of adequate protection 

to the Prepetition Secured Parties with respect to such use of Cash Collateral; 

(v) approval of certain stipulations by the Debtors as set forth in this Order 

and the DIP Credit Agreement with respect to the Prepetition Indebtedness Documents and the 

Prepetition Facility (each as defined below) and the liens and security interests arising therefrom; 

(vi) authorization for the Debtors to grant security interests, liens, and 

superpriority claims (including superpriority claims pursuant to section 364(c)(1) of the 

Bankruptcy Code, liens pursuant to sections 364(c)(2) and 364(c)(3) of the Bankruptcy Code, 

and priming liens pursuant to section 364(d) of the Bankruptcy Code) to the Administrative 

Agent for the benefit of (a) each of the DIP Lenders (together with the Administrative Agent, 

collectively, the “DIP Secured Parties”) and (b) certain of the DIP Lenders and their affiliates 

that are party to the Lender Party Swap Agreements (as defined in the DIP Credit Agreement) 

(the “Lender Swap Parties”),4

 in each case payable from, and having recourse to, all prepetition 

 

4

 For the avoidance of doubt, (i) the Debtors are authorized to grant security interests, liens, superpriority claims, 

automatic stay relief, and other protections afforded by this Order for the benefit of the Lender Swap Parties 

pursuant to the Order Authorizing the Debtors to (I) Enter Into New Lender Party Swap Agreements, (II) Pledge 

Collateral, Grant Superpriority Claims, and Honor Obligations Thereunder, and (III) Granting Related Relief 

(the “Swap Order”) and (ii) notwithstanding anything to the contrary herein or in the DIP Credit Documents or 

the Lender Party Swap Agreements, (x) any counterparty to one or more Debtors under a Lender Party Swap 

Agreement that is a DIP Lender or an affiliate of a DIP Lender as of the date that such counterparty enters into 

any transaction under such Lender Party Swap Agreement shall be a Lender Swap Party for purposes of this 

Order and enjoy the Superiority Claims, DIP Liens, automatic stay relief, and other protections afforded by this 

Order and the Swap Order in respect of each such transaction (without giving effect to any amendment, 

extension, increase or other modification, including, without limitation, “blending,” that occurs on or after the 

date on which such counterparty ceases to be a DIP Lender or an affiliate of a DIP Lender) until the earliest of 

(1) the termination of such transaction and the satisfaction of all obligations arising thereunder in full in cash, 

(2) such transaction enjoying the benefit of the security package contemplated by the Exit Facility referred to in 

the Lender Party Swap Agreements, and (3) other arrangements satisfactory to such Lender Swap Party having 

been made, in each case regardless of whether such counterparty ceases to be a DIP Lender or an affiliate of a 

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property, including, but not limited to, all Prepetition Collateral, and postpetition property of the 

Debtors’ estates and all proceeds thereof; except, that the DIP Liens (as defined below) are 

subject only to the Carve Out (as defined below) and the Permitted Liens (as defined in the DIP 

Credit Agreement); 

(vii) authorization for (a) the Administrative Agent, at the direction of the DIP 

Lenders, to (1) terminate the DIP Credit Agreement in accordance with its terms, (2) declare the 

DIP Facility to be immediately due and payable in full, to the extent permitted by the terms 

thereof, and (3) be granted relief from the automatic stay to foreclose on the DIP Liens; (b) the 

Lender Swap Parties to terminate the Lender Party Swap Agreements (as defined in the Swap 

Order) in accordance with their terms; (c) the Administrative Agent, at the direction of the DIP 

Lenders, be granted relief from the automatic stay to foreclose on the DIP Liens; and (d) the 

Administrative Agent, for the benefit of the Secured Parties and the Lender Swap Parties, to 

freeze, take possession of, set off against, and otherwise exercise any remedy available to a 

secured party at law or in equity with respect to all DIP Collateral (as defined below and 

including Cash Collateral) until the DIP Obligations and the obligations and the rights granted in 

this Order, including without limitation, all obligations of the Debtors pursuant to the Lender 

Party Swap Agreements (the “Lender Party Swap Obligations”) have been indefeasibly paid in 

full in cash, each upon the occurrence of an Event of Default and Termination Event (as such 

term is defined in the Lender Party Swap Agreements) on terms specified herein, in the DIP 

Credit Agreement, or in the Lender Party Swap Agreements, as applicable; 

 DIP Lender while such transaction remains outstanding; and (y) any transferee of the Lender Party Swap 

Agreements pursuant to a transfer permitted by the Lender Party Swap Agreements that becomes a DIP Lender 

at the time of transfer shall constitute a Lender Swap Party for purposes of this Order and the Swap Order and 

enjoy the Superpriority Claims, DIP Liens, automatic stay relief, and other protections afforded by this Order 

and the Swap Order. 

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(viii) subject only to, and effective upon, entry of the Final Order, authorization 

of the limitation of the Debtors’ right to assert claims to surcharge against the DIP Collateral 

pursuant to section 506(c) of the Bankruptcy Code to the extent set forth in paragraph 7 hereof; 

(ix) modification of the automatic stay imposed under section 362 of the 

Bankruptcy Code to the extent necessary to permit the Debtors, the DIP Secured Parties, and the 

Lender Swap Parties to implement and effectuate the terms and provisions of the DIP Credit 

Documents, the Lender Party Swap Agreements, and this Order, as applicable; 

(x) the scheduling of a final hearing (the “Final Hearing”) to consider entry of 

a final order (the “Final Order”), substantially in the form of this Order, granting the relief 

requested in the Motion on a final basis, authorizing the balance of the borrowings under the DIP 

Credit Documents on a final basis as set forth in the Motion and the DIP Credit Documents, and 

approving the Debtors’ notice procedures with respect thereto; and 

(xi) waiver of any applicable stay (including under Rule 6004 of the 

Bankruptcy Rules) and the provision of immediate effectiveness of this Order. 

An interim hearing having been held by this Court on May [●], 2016 (the “Interim 

Hearing”); based upon all of the pleadings filed with this Court, the evidence presented at the 

Interim Hearing, and the entire record herein; this Court having heard and resolved or overruled 

any objections to the interim relief requested in the Motion; it appearing that the relief requested 

in the Motion is in the best interests of the Debtors, their estates, and creditors; the Debtors 

having provided proper notice of the Motion and the Interim Hearing; it appearing that no other 

or further notice of the Motion or the Interim Hearing is necessary; after due deliberation and 

consideration, and sufficient cause appearing therefor; and all objections to the entry of the 

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Order, if any, having been withdrawn, resolved or overruled as provided in this Order or on the 

record of the Interim Hearing: 

IT IS HEREBY FOUND AND DETERMINED THAT:

5

A. Background. On May 12, 2016 (the “Petition Date”), PVA and each of the other 

Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code with the 

United States Bankruptcy Court of the Eastern District of Virginia (the “Court”) (docketed at 

Case No. 16-[________]). The Debtors have continued to operate their businesses as debtors 

in possession under sections 1107 and 1108 of the Bankruptcy Code. No trustee or examiner has 

been appointed in the Cases. The Cases are being jointly administered for procedural purposes 

only under Case No. 16-[_______]. [As of the date of the Interim Hearing, the Office of the 

United States Trustee for the Eastern District of Virginia (the “U.S. Trustee”) had not appointed 

an official committee of unsecured creditors in the Cases. If the U.S. Trustee appoints an official 

committee of unsecured creditors in the Cases in the future, such official committee of unsecured 

creditors shall be defined as the “Committee” hereunder.] 

B. Prepetition Lender Consent. Subject to the terms of this Order, the Prepetition 

Secured Parties have agreed (i) to permit the Debtors to use the Cash Collateral and (ii) not to 

object to the DIP Facility or the Lender Party Swap Agreements, including the DIP Liens 

contemplated in connection therewith, pursuant to the DIP Credit Agreement. 

C. Jurisdiction. This Court has jurisdiction over the Motion pursuant to 28 U.S.C. 

§§ 157 and 1334. Venue of the Cases and the Motion in this district is proper under 28 U.S.C. 

§§ 1408 and 1409, and this matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). The 

statutory predicates for the relief sought herein are sections 105, 361, 362, 363, 364, 503, and 

 

5

 Findings of fact shall be construed as conclusions of law and conclusions of law shall be construed as findings 

of fact to the fullest extent of the law. See Fed. R. Bankr. P. 7052. 

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507 of the Bankruptcy Code, Bankruptcy Rules 2002, 4001, and 9014, and Local Bankruptcy 

Rule 4001(a)-1. 

D. Notice. The Debtors have provided notice of the Motion and the Interim Hearing 

via telephone, hand delivery, electronic transmission, or overnight mail to (i) the U.S. Trustee, 

(ii) the holders of the 50 largest unsecured claims against the Debtors (on a consolidated basis); 

(iii) the Prepetition Agent; (iv) the indenture trustees for the Unsecured Notes; (v) counsel to the 

DIP Lenders; (vi) counsel to the agent under the DIP Facility; (vii) the United States Attorney’s 

Office for the Eastern District of Virginia; (viii) the Internal Revenue Service; (ix) the 

Environmental Protection Agency and similar state environmental agencies for states in which 

the Debtors conduct business; (x) the offices of the attorneys general for the states in which the 

Debtors operate; (xi) the Securities and Exchange Commission; (xii) Swap Counterparties; 

(xiii) all known parties asserting a lien against the DIP Collateral; (xv) the Lender Swap Parties; 

and (xvi) any party that has requested notice pursuant to Bankruptcy Rule 2002. Under the 

circumstances, the notice given by the Debtors of the Motion, the relief requested therein and the 

Hearing constitutes appropriate, due, and sufficient notice thereof and complies with Bankruptcy 

Rules 2002 and 4001 and the Local Bankruptcy Rules, and no further notice of any of the 

foregoing is necessary or required. 

E. Debtors’ Stipulations. Without prejudice to the rights of the Committee or any 

other party in interest (but which rights are subject to the limitations thereon contained in 

paragraphs 16 and 17 hereof), the Debtors admit, stipulate, and agree that: 

(i) Pursuant to that certain Credit Agreement dated as of September 28, 2012 

(as amended, restated, supplemented, or otherwise modified as of the date hereof, 

the “Prepetition Credit Agreement”), among PVH, PVA, the lenders party thereto 

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(the “Prepetition Lenders”), and Wells Fargo Bank, National Association, as administrative agent 

(in such capacity, the “Prepetition Agent”), agreed to extend a credit facility to the Borrower in 

an aggregate principal amount of up to the lesser of the then-applicable borrowing base and 

$600,000,000 (the “Prepetition Facility”). 

(ii) Pursuant to (a) that certain Guaranty dated as of September 28, 2012, by 

PVA and the other Guarantors party thereto, in favor of the Prepetition Agent for the benefit of 

itself and the Prepetition Lenders, and each other party signatory thereto (as amended, restated, 

supplemented, or otherwise modified as of the date hereof, the “Guaranty”), (b) that Pledge 

Agreement and Irrevocable Proxy dated as of September 28, 2012, by PVH, PVA, and each 

other Guarantor party thereto, in favor of the Prepetition Agent, for the benefit of itself and the 

Prepetition Lenders, and each other party signatory thereto (as amended, restated, supplemented, 

or otherwise modified as of the date hereof, the “Pledge Agreement”), (c) (1) the Mortgage, 

Assignment, Security Agreement, Financing Statement and Fixture Filing dated as of September 

28, 2012, from Penn Virginia MC Energy L.L.C., to the Prepetition Agent, for the benefit of 

itself and the Prepetition Lenders; (2) the Mortgage, Deed of Trust, Assignment, Security 

Agreement, Financing Statement and Fixture Filing dated as of September 28, 2012, from Penn 

Virginia Oil & Gas, L.P., to the trustee and the Prepetition Agent, for the benefit of itself and the 

Prepetition Lenders; (3) the Mortgage, Deed of Trust, Assignment, Security Agreement, 

Financing Statement and Fixture Filing dated as of June 25, 2013, from Penn Virginia Oil & 

Gas, L.P., to the trustee and the Prepetition Agent, for the benefit of itself and the Prepetition 

Lenders; (4) the Mortgage, Deed of Trust, Assignment, Security Agreement, Financing 

Statement and Fixture Filing dated as of January 8, 2016, from Penn Virginia Oil & Gas, L.P., to 

the trustee and the Prepetition Agent, for the benefit of itself and the Prepetition Lenders; (5) the 

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Mortgage, Assignment, Security Agreement, Financing Statement and Fixture Filing dated as of 

January 8, 2016, from Penn Virginia MC Energy L.L.C., to the Prepetition Agent, for the benefit 

of itself and the Prepetition Lenders (together, the mortgages and deeds of trust described in this 

clause (c), each as amended, restated, supplemented, or otherwise modified as of the date hereof, 

the “Mortgages”), and (d) all other security agreements, control agreements, or other 

instruments, agreements, or documents delivered by any Debtor to create or grant to the 

Prepetition Secured Parties any lien on any property as security for the Secured Obligations or to 

perfect, assure, or preserve any lien or any rights or remedies created thereby, including any 

other Collateral Documents (as defined in the Prepetition Credit Agreement) (clauses (a), (b), (c), 

and (d), together, the “Security Documents,” and together with the Prepetition Credit Agreement, 

the “Prepetition Indebtedness Documents”), (x) each Debtor granted to the Prepetition Secured 

Parties, to secure the Secured Obligations, a lien on and first priority security interest in all right, 

title, and interest in the shares of common stock and preferred stock of, or partnership, limited 

liability company, and other ownership interests in, certain of its subsidiaries and (y) certain of 

the Debtors granted to the Prepetition Secured Parties, to secure the Secured Obligations, a lien 

on and first priority security interest in all right, title, and interest in such Debtors’ accounts, 

deposit accounts, instruments, documents, chattel paper, goods (including inventory, equipment, 

and fixtures), payment intangibles, software, general intangibles, letter-of-credit rights, securities 

accounts, investment property, financial assets, intellectual property, easements, rights-of-way, 

leasehold interests, buildings, structures, fixtures, other improvements, machinery, equipment, 

fittings, boilers, turbines, other articles of personal property, permits, raw materials, 

hydrocarbons, as-extracted collateral, licenses, lands, interests in lands, leases, reserves, interests 

in reserves, tenements, and herediments, all other property, and all proceeds, products, 

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accessions, rents, income, royalties, and profits of or in respect of any of the foregoing, in each 

case whether now existing or thereafter acquired, in each case, to the extent provided for in the 

relevant Security Documents (collectively, the “Prepetition Collateral”). 

(iii) As of the Petition Date, the aggregate amount of the Secured Obligations 

due and payable by the Borrower and/or any Guarantor to the Prepetition Lenders under the 

Prepetition Credit Agreement, equaled approximately $112,552,819.70, consisting of: 

(a) $112,552,819.70 in respect of the outstanding principal amount of the Secured Obligations; 

(b) $0 in respect of accrued and unpaid interest on such unpaid principal amount; (c) [reserved]; 

and (d) $[_____] in respect of fees, reasonable and documented out-of-pocket costs, and 

expenses incurred or estimated to be incurred by the Prepetition Lenders, through the Petition 

Date (collectively, the “Prepetition Indebtedness”). 

(iv) The Prepetition Indebtedness constitutes the legal, valid, and binding 

obligations of the Debtors, enforceable against them in accordance with the terms of the 

Prepetition Indebtedness Documents (other than in respect of the stay of enforcement arising 

from section 362 of the Bankruptcy Code). 

(v) No portion of the Prepetition Facility, the Prepetition Indebtedness, or any 

payment on account thereof is subject to avoidance, recharacterization, recovery, reduction, 

subordination, disallowance, impairment, or any other challenges pursuant to the Bankruptcy 

Code or applicable nonbankruptcy law; and the Debtors do not have, hereby forever release, and 

are forever barred from bringing any “claims” (as such term is defined in the Bankruptcy Code), 

counterclaims, cross claims, causes of action, defenses, recoupment, or setoff rights, whether 

arising under the Bankruptcy Code or otherwise, against any of the Prepetition Secured Parties, 

solely in their capacities as the Prepetition Secured Parties, respectively, and not in any other 

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capacity or in respect to any other relationship the Prepetition Secured Parties may have, or have 

had, with or in respect to the Debtors, whether arising at law or in equity, including, without 

limitation, any recharacterization, subordination, avoidance, or other claim arising under the 

Bankruptcy Code or otherwise. 

(vi) The liens and security interests granted to, or for the benefit of, the 

Prepetition Secured Parties, including with respect to the Cash Collateral, pursuant to the 

Security Documents and in connection with the Prepetition Indebtedness constitute legal, valid, 

binding, enforceable (other than in respect of the stay of enforcement arising from section 362 of 

the Bankruptcy Code) and perfected first priority liens (subject to Permitted Liens, as defined in 

the DIP Credit Agreement) on and security interests in the Prepetition Collateral and are not 

subject to defense, counterclaim, avoidance, recharacterization, recovery, disallowance, or 

subordination pursuant to the Bankruptcy Code or applicable nonbankruptcy law or regulation by 

any person or entity, except insofar as such liens and security interests are subject to the DIP 

Liens and the Carve Out. 

F. Findings Regarding the DIP Facility and Use of Cash Collateral. 

(i) Good cause has been shown for the entry of this Order, including 

immediate and irreparable harm the estate will suffer if relief is not immediately granted. 

(ii) The Debtors need to obtain immediate access to the postpetition financing 

under the DIP Facility and to use Cash Collateral to, among other things, permit the orderly 

continuation of the operation of their businesses, maintain business relationships with vendors 

and suppliers, make capital expenditures, satisfy other working capital and operational needs, 

and fund the administration and prosecution of the Cases. The immediate access of the Debtors 

to sufficient working capital and liquidity through the use of Cash Collateral, incurrence of 

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postpetition financing under the DIP Facility, and other financial accommodations is vital to the 

preservation and maintenance of the going concern value of the Debtors’ estates and to a 

successful reorganization of the Debtors. 

(iii) The Debtors are unable to obtain sufficient financing on more favorable 

terms from sources other than the DIP Lenders under the DIP Credit Documents and are unable 

to obtain adequate unsecured credit allowable under section 503(b)(1) of the Bankruptcy Code as 

an administrative expense. The Debtors are also unable to obtain secured credit allowable under 

sections 364(c)(1), 364(c)(2), and 364(c)(3) of the Bankruptcy Code without the Debtors 

granting to the Administrative Agent, DIP Secured Parties and Lender Swap Parties, subject to 

the Carve Out as provided for herein, the DIP Liens and the Superpriority Claims (as defined 

below) under the terms and conditions set forth in this Order and in the DIP Credit Documents. 

The only available source of secured credit available to the Debtors, other than the use of Cash 

Collateral, is the DIP Facility. The Debtors require both financing under the DIP Facility and the 

continued use of Cash Collateral under the terms of this Order to satisfy their postpetition 

liquidity needs. 

(iv) The Administrative Agent and the DIP Lenders are willing to provide the 

DIP Facility, and the Prepetition Secured Parties are willing to consent to the use of their Cash 

Collateral, subject to the terms and conditions set forth in the DIP Credit Documents and the 

provisions of this Order, as applicable, and provided that the DIP Liens, the Superpriority 

Claims, the Adequate Protection Obligations (as defined below), and other protections granted 

by this Order and the DIP Credit Documents will not be affected by any subsequent reversal or 

modification of this Order or any other order, as provided in section 364(e) of the Bankruptcy 

Code, which is applicable to the DIP Facility and the use of Cash Collateral approved by this 

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Order. The Administrative Agent and the DIP Lenders have acted in good faith in agreeing to 

provide the DIP Facility approved by this Order, as further evidenced by the DIP Credit 

Documents, and the Prepetition Secured Parties have acted in good faith in consenting to the 

Debtors’ use of their Cash Collateral pursuant to the terms of this Order, and their reliance on the 

assurances referred to above is in good faith. 

(v) The DIP Credit Documents, and the DIP Facility provided for thereunder, 

and the use of Cash Collateral, each as authorized hereunder, have been negotiated in good faith 

and at arm’s length among the Debtors, the DIP Secured Parties, and the Prepetition Secured 

Parties, respectively, and the terms of the DIP Facility and the use of Cash Collateral, 

respectively, are fair and reasonable under the circumstances, reflect the Debtors’ exercise of 

prudent business judgment consistent with their fiduciary duties, and are supported by 

reasonably equivalent value and fair consideration. All of the obligations and the rights granted 

in this Order, including without limitation, all loans made to, or guaranties issued by, the Debtors 

pursuant to the DIP Credit Documents (all of the foregoing collectively, the “DIP Obligations”), 

and the Adequate Protection Obligations, are being extended or received, as applicable, by the 

DIP Secured Parties, the Prepetition Secured Parties, and their affiliates (and the successors and 

assigns of each of the foregoing) in good faith, as that term is used in section 364(e) of the 

Bankruptcy Code, and in express reliance upon the protections offered by section 364(e) of the 

Bankruptcy Code, and shall be entitled to the full protection of section 364(e) of the Bankruptcy 

Code in the event that this Order or any provision hereof is vacated, reversed, or modified, on 

appeal or otherwise. 

(vi) The Debtors have requested entry of this Order pursuant to Bankruptcy 

Rules 4001(b)(1) and 4001(c)(1). The authorization granted herein on an interim basis to use 

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Cash Collateral, to enter into the DIP Credit Documents, and to borrow an aggregate amount of 

$10,000,000 of new money is necessary to preserve the going concern value of the Debtors and 

their estates. Absent granting the relief set forth in this Order, the Debtors’ estates will be 

immediately and irreparably harmed. Consummation of the DIP Facility and the use of Cash 

Collateral in accordance with this Order and the DIP Credit Documents, as applicable, are 

therefore in the best interests of the Debtors and their estates and creditors. 

NOW, THEREFORE, on the Motion of the Debtors and the record before this Court with 

respect to the Motion, including the record made during the Interim Hearing, and good and 

sufficient cause appearing therefor, 

IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT: 

1. Approval of Motion. The Motion is granted on an interim basis in accordance 

with the terms of this Order. Any objections to the Motion with respect to the entry of this Order 

that have not been withdrawn, waived, or settled, and all reservations of rights included therein, 

are hereby denied and overruled until the Final Hearing. 

2. Authorization of the DIP Facility and the DIP Credit Documents. 

(i) Each of the Debtors is hereby authorized to execute, issue, deliver, enter 

into, and adopt, as the case may be, the DIP Credit Documents, including the DIP Credit 

Agreement, and the other DIP Credit Documents are hereby approved. 

(ii) The Borrower is hereby authorized to borrow money on an interim basis, 

and the Guarantors are hereby authorized to guarantee such borrowings, prior to the entry by the 

Court of the Final Order, on the terms and subject to the conditions, lending formulae, and sublimits set forth in this Order and the DIP Credit Documents, which borrowings may be used for 

all purposes permitted under the DIP Credit Documents, including, without limitation, to provide 

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agreed working capital for the Debtors, for other general corporate purposes, the Carve Out, to 

pay administrative expenses approved by the Court for estate professionals, to pay any fees 

required under the Restructuring Support Agreement and the Backstop Commitment Agreement 

(as defined in the Restructuring Support Agreement), and to pay such other expenses to which 

the DIP Lenders may consent in their sole discretion (subject to the limitations thereon contained 

in paragraph 17 hereof), which borrowings shall be comprised of an aggregate principal amount 

of $10,000,000, plus interest, fees, and other expenses and amounts provided for in the DIP 

Credit Documents (the “Interim DIP Loan”). 

(iii) In furtherance of the foregoing and without further approval of this Court, 

each Debtor hereby is authorized and directed to perform all acts, to make, execute, and deliver 

all instruments and documents (including, without limitation, the execution or recordation of 

security agreements, mortgages, pledges, and financing statements), and, without further 

application to the Court, to promptly pay all fees set forth in the DIP Credit Documents, that may 

be reasonably required or necessary for the Debtors’ performance of their obligations under the 

DIP Credit Documents, including, without limitation: 

(a) the execution, delivery, and performance of the DIP Credit 

Documents and any exhibits attached thereto, including, without limitation, the DIP Credit 

Agreement and all related documents contemplated thereby; 

(b) the execution, delivery, and performance of one or more 

amendments to, modifications of, or waivers relating to the DIP Credit Documents for, among 

other things, the purpose of adding additional financial institutions as DIP Lenders and 

reallocating the commitments for the DIP Facility among the DIP Lenders, in each case in such 

form as the Debtors and the DIP Secured Parties (or any portion thereof as provided in the DIP 

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Credit Documents) may agree (it being understood that no further approval of the Court shall be 

required for non-material amendments to or waivers relating to the DIP Credit Agreement (and, 

subject to and effective only upon entry of this Order, any fees paid in connection therewith) or 

modifications of the Approved Budget that do not shorten the maturity of the extensions of credit 

thereunder, increase the commitments thereunder, or otherwise do not materially change the 

terms of the DIP Credit Documents in a manner adverse to the interests of the Debtors); and 

(c) the performance of all other acts required under or in connection 

with the DIP Credit Documents. 

(vii) Upon execution and delivery of the DIP Credit Documents, the DIP Credit 

Documents shall constitute valid and binding obligations of the Debtors, enforceable against 

each Debtor party thereto in accordance with the terms of the DIP Credit Documents and this 

Order. No obligation, payment, transfer, or grant of security interest under the DIP Credit 

Documents or this Order shall be stayed, restrained, voidable, or recoverable under the 

Bankruptcy Code or any applicable law (including, without limitation, under section 502(d) of 

the Bankruptcy Code), or be subject to any defense, reduction, setoff, recoupment, or 

counterclaim. 

3. Superpriority Claims. Pursuant to section 364(c)(1) of the Bankruptcy Code, all 

of the DIP Obligations and Lender Party Swap Obligations shall constitute allowed senior 

administrative expense claims against each of the Debtors (without the need to file any proof of 

claim or request for payment of administrative expense) with priority over any and all other 

administrative expenses, adequate protection claims, diminution claims (including all Adequate 

Protection Obligations) and all other claims against the Debtors, now existing or hereafter 

arising, of any kind or nature whatsoever, including, without limitation, all administrative 

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expenses of the kind specified in sections 503(b) and 507(b) of the Bankruptcy Code, and over 

any and all other administrative expenses or other claims arising under sections 105, 326, 328, 

330, 331, 503(b), 506(c) (with any claims arising only under section 506(c) subject to the entry 

of the Final Order), 507(a), 507(b), 546, 726, 1113, or 1114 of the Bankruptcy Code 

(the “Superpriority Claims”), whether or not such expenses or claims may become secured by a 

judgment lien or other non-consensual lien, levy or attachment, which allowed claims shall for 

purposes of section 1129(a)(9)(A) of the Bankruptcy Code be considered administrative 

expenses allowed under section 503(b) of the Bankruptcy Code, and which shall be payable from 

and have recourse to all pre- and postpetition property of the Debtors and their estates and all 

proceeds thereof, excluding Avoidance Actions (as defined below) but including, without 

limitation, and subject to and effective upon entry of the Final Order, all Avoidance Proceeds (as 

defined below), subject only to the Carve Out. 

4. Carve Out. 

(i) For purposes of this Order, the “Carve Out” shall mean the sum of: (a) all 

fees required to be paid to the Clerk of the Court and all fees required to be paid to the 

U.S. Trustee under section 1930(a) of title 28 of the United States Code plus interest at the 

statutory rate (without regard to the notice set forth in (c) below); (b) all reasonable fees and 

expenses up to $50,000 incurred by a trustee under section 726(b) of the Bankruptcy Code 

(without regard to the notice set forth in (c) below); (c) to the extent allowed at any time, 

whether by interim order, final order, procedural order, or otherwise, all unpaid fees and 

expenses (the “Allowed Professional Fees”) incurred by persons or firms retained by the Debtors 

pursuant to section 327, 328, or 363 of the Bankruptcy Code (collectively, the “Debtor 

Professionals”) and a Committee pursuant to sections 328 or 1103 of the Bankruptcy Code 

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(together with the Debtor Professionals, the “Professionals”) at any time before the delivery by 

the Administrative Agent of a Carve Out Trigger Notice,6 whether allowed by the Court prior to 

or after delivery of a Carve Out Trigger Notice; and (d) the Allowed Professional Fees of the 

Professionals in an aggregate amount not to exceed $1,000,000 incurred beginning the first 

business day following delivery by the Administrative Agent of the Carve Out Trigger Notice, to 

the extent allowed at any time, whether by interim order, final order, procedural order, or 

otherwise (the amounts set forth in this clause (iv) being the “Post-Carve Out Trigger Notice 

Cap”). 

(ii) On the day on which a Carve Out Trigger Notice is given by the 

Administrative Agent to the Debtors (the “Termination Declaration Date”), the Carve Out 

Trigger Notice shall (a) be deemed a draw request and notice of borrowing by the Debtors under 

the DIP Credit Agreement in an amount equal to the then unpaid amounts of the Allowed 

Professional Fees and (b) constitute a demand to the Debtors to utilize all cash on hand as of the 

date of such notice and any available cash thereafter held by any Debtor to fund a reserve in an 

amount equal to the then-unpaid amounts of the Allowed Professional Fees. The Debtors shall 

deposit and hold such amounts in a segregated account in trust to pay any then-unpaid Allowed 

Professional Fees (the “Pre-Carve Out Trigger Notice Reserve”) prior to any and all other 

claims, subject to the provisions of paragraph 4(iv) of this Order. 

(iii) On the Termination Declaration Date, the Carve Out Trigger Notice shall 

also be deemed a draw request and notice of borrowing by the Debtors under the DIP Credit 

 

6

 “Carve Out Trigger Notice” shall mean a written notice delivered by electronic mail (or other electronic means) 

by the Administrative Agent to the Debtors, their lead restructuring counsel, the U.S. Trustee, and lead counsel 

to the Committee, which notice may be delivered following the occurrence and during the continuation of an 

Event of Default and acceleration of the DIP Obligations under the DIP Facility, stating that the Post-Carve Out 

Trigger Notice Cap has been invoked. 

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Agreement in an amount equal to the Post-Carve Out Trigger Notice Cap. The Debtors shall 

deposit and hold such amounts in a segregated account in trust to pay such Allowed Professional 

Fees benefiting from the Post-Carve Out Trigger Notice Cap (the “Post-Carve Out Trigger 

Notice Reserve” and, together with the Pre-Carve Out Trigger Notice Reserve, the “Carve Out 

Reserves”) prior to any and all other claims, subject to the provisions of the immediately 

following paragraph. The Administrative Agent shall immediately send the Carve Out Trigger 

Notice to the DIP Lenders. On the first business day after the Administrative Agent sends a 

Carve Out Trigger Notice to the DIP Lenders, notwithstanding anything to the contrary in the 

DIP Credit Agreement, including with respect to the existence of a Default (as defined in the DIP 

Credit Agreement) or Event of Default, the failure of the Debtors to satisfy any or all of the 

conditions precedent for the loans under the DIP Facility, any termination of the commitments 

under the DIP Facility following an Event of Default, or the occurrence of the Maturity Date (as 

defined in the DIP Credit Agreement), each DIP Lender (on a pro rata basis based on the thenoutstanding commitments under the DIP Facility) shall make available to the Administrative 

Agent such DIP Lender’s pro rata share with respect to such borrowing in accordance with the 

DIP Facility. 

(iv) No fees shall be paid pursuant to the Final Order from the Carve Out 

Reserves to any professional retained in these cases pursuant to section 327, section 328, or 

section 1103 of the Bankruptcy Code (a “Retained Professional”) absent (i) compliance with any 

order entered by the Court regarding interim compensation procedures governing payment of 

such Retained Professional and, if applicable, (ii) a Court order approving payment of the such 

fees upon the filing, on notice, of a fee application of such Retained Professional. For the 

avoidance of doubt, the foregoing shall not apply to those professionals that are subject to any 

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order entered by the Court concerning ordinary course professionals (an “OCP Order”), with 

respect to which no fees shall be paid to such ordinary course professionals except in compliance 

with the procedures set forth in such OCP Order. 

(v) All funds in the Pre-Carve Out Trigger Notice Reserve shall be used first 

to pay the obligations set forth in clauses (a) through (c) of the definition of Carve Out set forth 

above (the “Pre-Carve Out Amounts”), but not, for the avoidance of doubt, the Post-Carve Out 

Trigger Notice Cap, until paid in full, and then, to the extent the Pre-Carve Out Trigger Notice 

Reserve has not been reduced to zero, to pay the Administrative Agent for the benefit of the DIP 

Lenders and the Lender Swap Parties until the DIP Obligations and Lender Party Swap 

Obligations have been paid in full, in which case any such excess shall be paid to any prepetition 

claimants in accordance with their rights and priorities under applicable law. 

(vi) All funds in the Post-Carve Out Trigger Notice Reserve shall be used first 

to pay any remaining obligations set forth in clause (a) of the definition of Carve Out set forth 

above, and then to pay the obligations set forth in clause (d) of the definition of Carve Out set 

forth above (the “Post-Carve Out Amounts”), and then, to the extent the Post-Carve Out Trigger 

Notice Reserve has not been reduced to zero, to pay the Administrative Agent for the benefit of 

the DIP Lenders and the Lender Swap Parties until the DIP Obligations and Lender Party Swap 

Obligations have been paid in full, in which case any such excess shall be paid to any prepetition 

claimants in accordance with their rights and priorities as of the Petition Date. 

(vii) Notwithstanding anything to the contrary in the DIP Credit Documents, 

Lender Party Swap Agreements, this Interim Order, or the Final Order, if either of the Carve Out 

Reserves is not funded in full in the amounts set forth under this paragraph 4 entitled “Carve 

Out”, then any excess funds in one of the Carve Out Reserves following the payment of the PreCase 16-32395-KLP Doc 21 Filed 05/12/16 Entered 05/12/16 05:45:32 Desc Main

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Carve Out Amounts and Post-Carve Out Amounts, respectively, shall be used to fund the other 

Carve Out Reserve, up to the applicable amount set forth in this paragraph 4 entitled “Carve 

Out”, prior to making any payments to the Administrative Agent, the DIP Lenders, the Lender 

Swap Parties, or any prepetition claimants. 

(viii) Notwithstanding anything to the contrary in the DIP Credit Documents, 

Lender Party Swap Agreements, this Interim Order, or the Final Order, following delivery of a 

Carve Out Trigger Notice, none of the Administrative Agent, DIP Lenders, Lender Swap Parties, 

Prepetition Agent, or Prepetition Lenders shall, nor shall they direct any entity to, sweep or 

foreclose on cash (including cash received as a result of the sale or other disposition of any 

assets) of the Debtors until the Carve Out Reserves have been fully funded, but shall have a 

security interest in any residual interest in the Carve Out Reserves, with any excess paid to the 

Administrative Agent for application in accordance with the DIP Credit Documents and Lender 

Party Swap Agreements. Further, notwithstanding anything to the contrary in the DIP Credit 

Documents, the Lender Party Swap Agreements, this Interim Order, or the Final Order: 

(i) disbursements by the Debtors from the Carve Out Reserves shall not constitute loans or 

increase or reduce the DIP Obligations or Lender Party Swap Obligations; (ii) the failure of the 

Carve Out Reserves to satisfy in full the Allowed Professional Fees shall not affect the priority of 

the Carve Out; and (iii) in no way shall the Initial Budget, 13-Week Budget, Approved Budget,7

any Permitted Variances, Carve Out, Post-Carve Out Trigger Notice Cap, Carve Out Reserves, 

or any of the foregoing be construed as a cap or limitation on the amount of the Allowed 

Professional Fees due and payable by the Debtors nor shall the Debtor Professionals be subject 

to any budget. For the avoidance of doubt and notwithstanding anything to the contrary 

 

7

 A copy of the initial 13-Week Budget, which has been approved by the Prepetition Lenders, is attached hereto 

as Exhibit 2. 

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contained in this Order or any prepetition secured debt, the Carve Out shall be senior to all liens 

and claims securing the DIP Facility and Lender Party Swap Agreements, the Adequate 

Protection Liens, the Superpriority Claims, and any and all other forms of adequate protection, 

liens, or claims securing the obligations under the DIP Facility, the Lender Party Swap 

Agreements, or the Prepetition Indebtedness. Any payment or reimbursement made prior to the 

occurrence of the Carve Out Trigger Notice in respect of any Allowed Professional Fees shall 

not reduce the Carve Out. 

5. DIP Liens. As security for the DIP Obligations and Lender Party Swap 

Obligations, effective and perfected as of the Petition Date and without the necessity of the 

execution by the Debtors (or recordation or other filing) of mortgages, security agreements, 

control agreements, pledge agreements, financing statements, or other similar documents, or the 

possession or control by any DIP Secured Party or Lender Swap Party of, or over, any DIP 

Collateral, the following security interests and liens, hereby are granted by the Debtors to each of 

the DIP Secured Parties and Lender Swap Parties (all property of the Debtors identified in 

clauses (i), (ii), and (iii) below being collectively referred to as the “DIP Collateral”), subject 

only to the Carve Out (all such liens on and security interests in the DIP Collateral granted to the 

DIP Secured Parties and Lender Swap Parties, pursuant to this Order, the DIP Credit Documents, 

and the Lender Party Swap Agreements, the “DIP Liens”): 

(i) First Lien on Any Unencumbered Property. Pursuant to section 364(c)(2) 

of the Bankruptcy Code, a valid, binding, continuing, enforceable, fully-perfected, first priority 

senior security interest in and lien upon all pre-petition and postpetition property of the Debtors, 

whether existing on the Petition Date or thereafter acquired, that, on or as of the Petition Date or 

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avoidable liens, if any (collectively, “Unencumbered Property”), (a) including, without 

limitation, any unencumbered cash of the Debtors (wherever maintained) and any investment of 

such cash, inventory, accounts receivable, other rights to payment whether arising before or after 

the Petition Date, contracts, properties, plants, equipment, general intangibles, documents, 

instruments, interests in leaseholds, real properties, patents, copyrights, trademarks, trade names, 

other intellectual property, equity interests, and any claims and causes of the Debtors; 

(b) excluding any claims and causes of action against any directors or officers of the Debtors, but 

including, subject only to entry of the Final Order, any proceeds of, or property recovered in 

connection with, any successful claims and causes of action against any directors or officers of 

the Debtors; and (c) excluding any claims and causes of action of the Debtors under 

sections 544, 545, 547, 548, 549 and 550 of the Bankruptcy Code, or any other avoidance actions 

under the Bankruptcy Code or other applicable law (collectively, the “Avoidance Actions”), but 

including, subject only to entry of the Final Order, any proceeds of, or property recovered in 

connection with, any successful Avoidance Action (whether by judgment, settlement or 

otherwise, and unencumbered or not, the “Avoidance Proceeds”). Notwithstanding anything to 

the contrary herein or in the DIP Credit Documents or the Lender Party Swap Agreements, in no 

event shall any enclosed structure (having two walls and a roof) or manufactured mobile home 

be included as DIP Collateral. 

(ii) Liens Senior to Prepetition Secured Parties’ Liens. Pursuant to 

section 364(d)(1) of the Bankruptcy Code, a valid, binding, continuing, enforceable, fullyperfected, first priority (subject to any Permitted Liens, as defined in the DIP Credit Agreement) 

senior priming security interest in and lien upon all pre- and postpetition property of the Debtors 

(including, without limitation, Cash Collateral), whether now existing or hereafter acquired, of 

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the same nature, scope, and type as the Prepetition Collateral. Such security interests and liens 

shall be senior in all respects to the interests in such property of the Prepetition Secured Parties 

arising from current and future liens of the Prepetition Secured Parties (including, without 

limitation, the Adequate Protection Liens granted hereunder). 

(iii) Liens Junior to Certain Other Liens. Pursuant to section 364(c)(3) of the 

Bankruptcy Code, a valid, binding, continuing, enforceable, fully-perfected security interest in 

and lien upon all pre- and postpetition property of the Debtors (other than the property described 

in clauses (i) or (ii) of this paragraph 5, as to which the liens and security interests in favor of the 

Administrative Agent for the benefit of the DIP Secured Parties and Lender Swap Parties, will be 

as described in such clauses), whether now existing or hereafter acquired, that is (a) subject to 

valid, perfected, and unavoidable liens in existence immediately prior to the Petition Date or 

(b) subject to valid and unavoidable liens in existence immediately prior to the Petition Date that 

are perfected subsequent to the Petition Date as permitted by section 546(b) of the Bankruptcy 

Code, which security interests and liens in favor of the DIP Secured Parties and Lender Swap 

Parties, are junior to such valid, perfected, and unavoidable liens. 

(iv) Liens Senior to Certain Other Liens. The DIP Liens shall not be subject or 

subordinate to (a) any lien or security interest that is avoided and preserved for the benefit of the 

Debtors and their estates under section 551 of the Bankruptcy Code or (b) any liens arising after 

the Petition Date including, without limitation, any liens or security interests granted in favor of 

any federal, state, municipal, or other governmental unit, commission, board, or court for any 

liability of the Debtors. 

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6. Protection of the DIP Secured Parties’ and Lender Swap Parties’ Rights. 

(i) So long as any DIP Obligations or Lender Party Swap Obligations are 

outstanding or the DIP Lenders or Lender Swap Parties have any outstanding Commitments 

under the DIP Credit Agreement, the Prepetition Secured Parties shall (a) have no right to and 

shall take no action to foreclose upon or recover in connection with the liens granted thereto 

pursuant to the Prepetition Indebtedness Documents or this Order, or otherwise exercise or seek 

to exercise any enforcement rights or remedies against any DIP Collateral without the prior 

written consent of the DIP Lenders and Lender Swap Parties, except as authorized by a further 

order of this Court entered after the date hereof and (b) be deemed to have consented to any 

release of DIP Collateral authorized under the DIP Credit Documents or Lender Party Swap 

Agreements. 

(ii) The automatic stay provisions of section 362 of the Bankruptcy Code are 

vacated and modified to the extent necessary to permit the DIP Secured Parties to exercise 

(a) immediately upon the occurrence and during the continuance of an Event of Default, all 

rights and remedies under, and in accordance with, the DIP Credit Documents other than those 

rights and remedies against the DIP Collateral, as provided in the following clause (b); and 

(b) upon the occurrence and during the continuance of such an Event of Default and after the 

giving of five (5) Business Days’ prior written notice (the “Default Notice Period”) to the 

U.S. Trustee, the Debtors, and any Committee through their respective counsel, all rights and 

remedies against the DIP Collateral provided for in the DIP Credit Documents and this Order. In 

any hearing regarding any exercise of rights or remedies (which hearing must take place within 

the Default Notice Period), the only issue that may be raised by any party in opposition thereto 

shall be whether, in fact, an Event of Default has occurred and is continuing, and the Debtors, 

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any Committee, and all other parties in interest shall not be entitled to seek relief, including, 

without limitation, under section 105 of the Bankruptcy Code, to the extent such relief would in 

any way impair or restrict the rights and remedies of the Administrative Agent or the DIP 

Lenders set forth in this Order, the Final Order, or the DIP Credit Documents, as applicable. In 

no event shall any of the DIP Secured Parties, Lender Swap Parties, or the Prepetition Secured 

Parties be subject to the equitable doctrine of “marshaling” or any similar doctrine with respect 

to their respective liens and security interests upon and in the DIP Collateral or the Prepetition 

Collateral, as applicable. Any DIP Secured Party’s delay or failure to exercise rights and 

remedies under the DIP Credit Documents or this Order shall not constitute a waiver of any DIP 

Secured Party’s rights hereunder, thereunder, or otherwise, unless any such waiver is pursuant to 

a written instrument executed in accordance with the terms of the DIP Credit Agreement. 

Further, subject only to and effective upon entry of the Final Order, in no event shall the 

“equities of the case” exception of section 552(b) of the Bankruptcy Code apply to the secured 

claims of the Prepetition Secured Parties. 

(iii) Subject to the Carve Out, on or after a Termination Declaration Date and 

immediately after funding the Carve-Out Reserves, the Debtors shall pay-down the DIP 

Obligations in an amount equal to the difference between the Debtors’ Available Cash (as such 

term is defined in the DIP Credit Agreement, but excluding, for the avoidance of doubt, amounts 

held in the Carve-Out Reserves) minus $7,000,000 (to the extent greater than zero) (the “Paydown Amount”). The failure by the Debtors to pay the Pay-down Amount shall be an immediate 

Event of Default and the Administrative Agent shall immediately be authorized to exercise 

remedies against the Debtors’ cash in the amount of the Pay-down Amount without prior written 

notice and without further order of the Court and the automatic stay provisions of section 362 of 

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the Bankruptcy Code are vacated and modified to the extent necessary to permit the DIP Secured 

Parties to exercise such remedy. 

(iv) No rights, protections, or remedies of the DIP Secured Parties or Lender 

Swap Parties granted by the provisions of this Order or the DIP Credit Documents or Lender 

Party Swap Agreements shall be limited, modified, or impaired in any way by (a) any actual or 

purported withdrawal of the consent of any party to the Debtors’ use of Cash Collateral, (b) any 

actual or purported termination of the Debtors’ authority to use Cash Collateral, or (c) the terms 

of any other order or stipulation related to the Debtors’ use of Cash Collateral or any other 

matter, or the provision of adequate protection to any party. 

7. Limitation on Charging Expenses Against Collateral. Subject only to and 

effective upon entry of the Final Order, except to the extent of the Carve Out, no claim may be 

asserted against any of the DIP Secured Parties, the Lender Swap Parties, or the Prepetition 

Secured Parties, each in their capacity as such, to (i) charge any expenses of administration of the 

Cases or any future proceeding that may result therefrom, including liquidation in bankruptcy or 

other proceedings under the Bankruptcy Code, against the DIP Collateral or the Prepetition 

Collateral or (ii) recover such expenses from the DIP Collateral or the Prepetition Collateral 

pursuant to section 506(c) of the Bankruptcy Code or any similar principle of law, in each case 

without the prior written consent of the DIP Secured Parties, the Lender Swap Parties, and the 

Prepetition Secured Parties, and no such consent shall be implied from any other action, inaction, 

or acquiescence by any of the DIP Secured Parties, the Lender Swap Parties, or the Prepetition 

Secured Parties. 

8. Use of Cash Collateral. The Debtors are hereby authorized, subject to the terms 

and conditions of the DIP Credit Documents and this Order, to use all Cash Collateral, including, 

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without limitation, any Cash Collateral on which the DIP Secured Parties and the Prepetition 

Secured Parties hold a lien to fund (i) working capital, (ii) general corporate purposes, 

(iii) restructuring expenses, (iv) professional fees, and (v) any fees required under the 

Restructuring Support Agreement and the Backstop Commitment Agreement, in each case with 

respect to clauses (i) through (iii), pursuant to the Approved Budget, subject to Permitted 

Variances; provided, however, that no Cash Collateral shall be used in a manner that would 

violate paragraph 17 hereof. The Debtors’ right to use any such Cash Collateral shall be in 

accordance with the DIP Credit Agreement and the Approved Budget, subject to Permitted 

Variances, and such right shall terminate automatically upon the earliest of (x) the Maturity Date 

and (y) five (5) Business Days’ written notice provided by the Administrative Agent to the 

U.S. Trustee, the Debtors, and the Committee through their respective counsel, or provided by 

the Debtors to the DIP Secured Parties and the Prepetition Secured Parties, through each of their 

respective counsel, of the occurrence and continuance of any Event of Default under the DIP 

Credit Documents. 

9. Failure to Provide Notice of an Event of Default. Notwithstanding the 

foregoing, the Debtors’ right to use Cash Collateral shall immediately terminate (without notice 

from the DIP Secured Parties or the Prepetition Secured Parties) at the time that any Debtor has 

actual knowledge of an Event of Default if the Debtors fail to promptly notify the Secured 

Parties, the Prepetition Secured Parties, and their respective counsel of such Event of Default. 

10. Optional and Mandatory Prepayments. The Borrower may voluntarily prepay 

the principal of the Loans, in whole or in part, in accordance with the DIP Credit Agreement. 

Pursuant to the terms and conditions set forth in the DIP Credit Agreement, the Borrower shall 

make mandatory prepayments of the principal amount of the Loans. 

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11. Adequate Protection. The Prepetition Secured Parties are entitled, pursuant to 

sections 361, 363(e), and 364(d)(1) of the Bankruptcy Code, to adequate protection of their 

interests in the Prepetition Collateral, including the Cash Collateral, for and to the extent of any 

diminution in the value of the Prepetition Secured Parties’ interests in the Prepetition Collateral 

during the Cases, including, without limitation, any such diminution during the Cases resulting 

from the sale, lease, or use by the Debtors (or other decline in value) of Cash Collateral and any 

other Prepetition Collateral, the priming of the Prepetition Secured Parties’ security interests and 

liens in the Prepetition Collateral by the DIP Secured Parties and Lender Swap Parties, pursuant 

to the DIP Credit Documents, the Lender Party Swap Agreements, this Order, and the imposition 

of the automatic stay pursuant to section 362 of the Bankruptcy Code (any such diminution in 

value, “Diminution in Value”). As adequate protection, the Prepetition Secured Parties are 

hereby granted the following adequate protection to the extent of any Diminution in Value 

(collectively, the “Adequate Protection Obligations”): 

(i) Adequate Protection Liens. Effective and perfected as of the Petition Date 

and without the necessity of the execution by the Debtors of mortgages, security agreements, 

pledge agreements, financing statements, or other agreements, a replacement security interest in 

and lien upon all of the DIP Collateral to the extent of any Diminution in Value, subject and 

subordinate only to the DIP Liens, the Carve Out, and Permitted Liens (as defined in the DIP 

Credit Agreement) (the “Adequate Protection Liens”). 

(ii) Adequate Protection Superpriority Claims. Allowed superpriority claims 

against each of the Debtors (the “Adequate Protection Superpriority Claims”) with priority over 

any and all other administrative expenses, and other claims against the Debtors, now existing or 

hereafter arising, of any kind whatsoever, including, without limitation, all other administrative 

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expenses of the kind specified in sections 503(b) and 507(b) of the Bankruptcy Code, and over 

any and all other administrative expenses or other claims arising under sections 105, 326, 328, 

330, 331, 503(b), subject to entry of the Final Order 506(c), 507(a), 507(b), 546, 726, 1113, or 

1114 of the Bankruptcy Code, whether or not such expenses or claims may become secured by a 

judgment lien or other non-consensual lien, levy, or attachment, which allowed claims shall for 

purposes of section 1129(a)(9)(A) of the Bankruptcy Code be considered administrative 

expenses allowed under section 503(b) of the Bankruptcy Code, and which shall be payable from 

and have recourse to all prepetition and postpetition property of the Debtors and all proceeds 

thereof; provided, however, that the Adequate Protection Superpriority Claims shall be 

subordinate only to (a) the Superpriority Claims and (b) the Carve Out. 

(iii) [RESERVED] 

(iv) Prepetition Secured Party Fees and Expenses. The Debtors shall pay, in 

accordance with paragraph 26 of this Order, (a) all accrued and unpaid fees and disbursements 

(including, but not limited to, fees owed to the Prepetition Agent) owing to the Prepetition 

Secured Parties under the Prepetition Indebtedness Documents and incurred prior to the Petition 

Date; and (b) current cash payments of all reasonable fees and out-of-pocket disbursements of 

(v) Bracewell LLP, (w) McGuireWoods LLP, (x) Opportune LLP, (y) such other consultants as 

may be retained or may have been retained from time to time by the Prepetition Agent, in its sole 

discretion, and (z) such other consultants as may be retained or may have been retained from 

time to time by the Prepetition Lenders with the prior written consent of the Debtors (which 

consent shall not be unreasonably withheld). 

(v) Payment of Interest. Payments of interest payable under the Prepetition 

Credit Agreement, including (a) any prepetition interest and postpetition interest at the applicable 

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non-default rate for interest accruing prior to the Scheduled Maturity Date (as defined in the DIP 

Credit Agreement) and (b) any interest at the applicable default rate for interest accruing after 

such Scheduled Maturity Date, which payments shall be made monthly in arrears on the last day 

of each calendar month. The first such interest payment shall be made on May 31, 2016, and 

shall include all accrued interest to and including that date, including any unpaid prepetition 

interest. 

(vi) Reporting. Receipt of financial and all other reporting, including the 

periodic provision of budgets and forecasts, as described in the DIP Credit Documents. 

12. Reservation of Rights of Prepetition Secured Parties. Under the circumstances, 

the Court finds that the adequate protection provided in this Order is reasonable and sufficient to 

protect the interests of the Prepetition Secured Parties. However, the Prepetition Secured Parties 

may request further or different adequate protection, and the Debtors or any other party may 

contest any such request; provided that any such further or different adequate protection shall at 

all times be subordinate and junior to the claims and liens of the DIP Secured Parties and the 

Lender Swap Parties granted under this Order, the DIP Credit Documents, the Lender Party 

Swap Agreements, and the Carve Out. Except as expressly provided herein, nothing contained 

in this Order (including, without limitation, the authorization of the use of any Cash Collateral) 

shall impair or modify any rights, claims, or defenses available in law or equity to the Prepetition 

Secured Parties, the DIP Secured Parties, or the Lender Swap Parties. Notwithstanding anything 

to the contrary in this Order, nothing herein shall impair the rights or the ability to exercise any 

rights that any Prepetition Secured Party may have under any swap or other hedging agreement 

with any Debtor, including any right of set-off. 

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13. Perfection of DIP Liens and Adequate Protection Liens. 

(i) The DIP Secured Parties and the Lender Swap Parties are hereby 

authorized, but not required, to file or record financing statements, intellectual property filings, 

mortgages, notices of lien, or similar instruments in any jurisdiction, take possession of or 

control over, or take any other action, in each case, to validate and perfect the liens and security 

interests granted to them hereunder. Whether or not the DIP Secured Parties or the Lender Swap 

Parties choose to file such financing statements, intellectual property filings, mortgages, notices 

of lien, or similar instruments, take possession of or control over, or otherwise confirm 

perfection of the liens and security interests granted to it under this Order, such liens and security 

interests shall be deemed valid, perfected, allowed, enforceable, non-avoidable, and not subject 

to challenge, dispute, or subordination, as of the Petition Date. The Prepetition Secured Parties, 

without any further consent of any party, are authorized to take, execute, deliver, and file such 

instruments (in each case without representation or warranty of any kind) to enable the DIP 

Secured Parties and the Lender Swap Parties to further validate, perfect, preserve, and enforce 

the DIP Liens and for the Prepetition Secured Parties to further validate, perfect, preserve, and 

enforce the Adequate Protection Liens. The Debtors shall execute and deliver to the DIP 

Secured Parties, the Lender Swap Parties and/or the Prepetition Secured Parties all such 

agreements, financing statements, instruments, and other documents as the DIP Secured Parties, 

the Lender Swap Parties, and/or the Prepetition Secured Parties may reasonably request to more 

fully evidence, confirm, validate, perfect, preserve, and enforce the DIP Liens and the Adequate 

Protection Liens. All such documents will be deemed to have been recorded and filed as of the 

Petition Date. 

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(ii) A certified copy of the Order may, in the discretion of the DIP Secured 

Parties, the Lender Swap Parties, or the Prepetition Secured Parties, be filed with or recorded in 

filing or recording offices in addition to or in lieu of such financing statements, mortgages, 

notices of lien or similar instruments, and all filing offices are hereby authorized and directed to 

accept such certified copy of the Order for filing and recording. For the avoidance of doubt, the 

automatic stay of section 362(a) of the Bankruptcy Code shall be, and hereby is, modified to the 

extent necessary to permit the DIP Secured Parties, the Lender Swap Parties, and the Prepetition 

Secured Parties to take all actions, as applicable, referenced in this subparagraph (ii) and in the 

immediately preceding subparagraph (i). 

(iii) Subject to and effective only upon entry of this Order, any provision of 

any lease or other license, contract or other agreement that requires (a) the consent or approval of 

one or more landlords or other parties or (b) the payment of any fees or obligations to any 

governmental entity, in order for any Debtor to pledge, grant, sell, assign, or otherwise transfer 

any such leasehold interest, or the proceeds thereof, or other postpetition collateral related 

thereto, is hereby deemed to be inconsistent with the applicable provisions of the Bankruptcy 

Code. Any such provision shall have no force and effect with respect to the transactions granting 

postpetition liens on (x) such leasehold interest or (y) the proceeds of any assignment and/or sale 

thereof by any Debtor in favor of any DIP Secured Party, the Lender Swap Parties, or the 

Prepetition Secured Parties in accordance with the terms of the DIP Credit Documents or this 

Order. 

14. Setoff of Lender Party Swap Obligations. Notwithstanding anything to the 

contrary herein or in the Bankruptcy Code, any proceeds due any of the Debtors resulting from 

the termination of a Lender Party Swap shall be deposited with the Administrative Agent and 

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applied in the following order: first, to repay the DIP Obligations; and, second, after the DIP 

Obligations have been repaid in full in cash, to be deposited with the Debtors and distributed 

pursuant to a plan of reorganization. 

15. Preservation of Rights Granted Under the Order. 

(i) Except as expressly provided herein and subject to the Carve Out and 

Permitted Liens (as defined in the DIP Credit Agreement), (a) no claim or lien having a priority 

superior to or pari passu with those granted by this Order to the DIP Secured Parties, the Lender 

Swap Parties, or the Prepetition Secured Parties, respectively, shall be granted or allowed while 

any portion of the DIP Facility or the commitments thereunder or the DIP Obligations, Lender 

Party Swap Obligations, or the Adequate Protection Obligations remain outstanding, and (b) the 

DIP Liens and the Adequate Protection Liens shall not be (1) subject or junior to any lien or 

security interest that is avoided and preserved for the benefit of the Debtors’ estates under 

section 551 of the Bankruptcy Code or (2) subordinate to or made pari passu with any other lien 

or security interest, whether under section 364 of the Bankruptcy Code or otherwise. 

(ii) Each Guarantor’s guarantee of the Borrower’s obligations in connection 

with the DIP Facility (the “DIP Guarantees”), and any liens granted thereunder by each 

Guarantor to secure the obligations and liabilities arising pursuant to the DIP Guarantees, shall 

not constitute a fraudulent conveyance or fraudulent transfer under section 548 of the 

Bankruptcy Code or a fraudulent conveyance or fraudulent transfer under the provisions of any 

applicable fraudulent conveyance or fraudulent transfer law or similar law of any state, nation, or 

other governmental unit, as in effect from time to time. 

(iii) Unless all DIP Obligations shall have been indefeasibly paid in full in cash 

in accordance with the DIP Credit Agreement and the Adequate Protection Obligations shall 

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have been paid in full, no Debtor shall assert, file or seek, or consent to the filing or the assertion 

of or joinder in, and it shall constitute an Event of Default under the DIP Credit Agreement and 

terminate the right of the Debtors to use any and all Cash Collateral if any of the Debtors asserts, 

files or seeks, or consents to the filing or the assertion of or joinder in, or if there is entered, 

without the prior written consent of each of the DIP Secured Parties and the Prepetition Secured 

Parties (a) any reversal, modification, amendment, stay, or vacatur of this Order; (b) an order 

dismissing any of the Cases under sections 105, 305, or 1112 of the Bankruptcy Code or 

otherwise; (c) an order converting any of the Cases to cases under chapter 7 of the Bankruptcy 

Code; (d) an order appointing a chapter 11 trustee in any of the Cases; (e) an order appointing an 

examiner with enlarged powers beyond those set forth in sections 1104(d) and 1106(a)(3) and (4) 

of the Bankruptcy Code in any of the Cases; or (f) an order granting a change of venue with 

respect to any Case. If an order dismissing any of the Cases under section 1112 of the 

Bankruptcy Code or otherwise is at any time entered, such order shall provide (in accordance 

with sections 105 and 349 of the Bankruptcy Code) that (x) the Superpriority Claims, Adequate 

Protection Superpriority Claims, and other administrative claims granted under this Order, the 

DIP Liens, and the Adequate Protection Liens granted to the DIP Secured Parties, the Lender 

Swap Parties, and, as applicable, the Prepetition Secured Parties, pursuant to this Order shall 

continue in full force and effect and shall maintain their priorities as provided in this Order until 

all of the DIP Obligations, the Lender Party Swap Obligations, and the Adequate Protection 

Obligations shall have been paid and satisfied in full (and that such Superpriority Claims, 

Adequate Protection Superpriority Claims, the other administrative claims granted under this 

Order, the DIP Liens, and the Adequate Protection Liens shall, notwithstanding such dismissal, 

remain binding on all parties in interest) and (y) the Court shall retain jurisdiction 

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notwithstanding such dismissal, for the purposes of enforcing the claims, liens, and security 

interests referred to in clause (x) above. 

(iv) If any or all of the provisions of this Order are hereafter reversed, 

modified, vacated, or stayed, such reversal, stay, modification, or vacatur shall not affect (a) the 

validity, priority, or enforceability of any DIP Obligations, Lender Party Swap Obligations, or 

the Adequate Protection Obligations incurred prior to the actual receipt of written notice by the 

Administrative Agent, the DIP Lenders, the Lender Swap Parties, or the Prepetition Secured 

Parties, as applicable, of the effective date of such reversal, stay, modification, or vacatur or 

(b) the validity, the priority, or enforceability of any lien or priority authorized or created hereby 

or pursuant to the DIP Credit Agreement with respect to any DIP Obligations, Lender Party 

Swap Obligations, or Adequate Protection Obligations. Notwithstanding any such reversal, stay, 

modification, or vacatur, any use of Cash Collateral, any DIP Obligations, Lender Party Swap 

Obligations, or any Adequate Protection Obligations incurred by the Debtors to any of the DIP 

Secured Parties, the Lender Swap Parties, and/or the Prepetition Secured Parties, as the case may 

be, prior to the actual receipt of written notice by the DIP Secured Parties, the Lender Swap 

Parties, and/or the Prepetition Secured Parties, as the case may be, of the effective date of such 

reversal, stay, modification, or vacatur shall be governed in all respects by the original provisions 

of this Order, and the DIP Secured Parties, the Lender Swap Parties, and the Prepetition Secured 

Parties shall be entitled to all of the rights, remedies, privileges, and benefits granted in 

section 364(e) of the Bankruptcy Code, this Order, and pursuant to the DIP Credit Documents 

with respect to all such uses of Cash Collateral and proceeds of the DIP Facility, all DIP 

Obligations, Lender Party Swap Obligations, and all Adequate Protection Obligations. 

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(v) Except as expressly provided in this Order or in the DIP Credit Documents 

or Lender Party Swap Agreements, the DIP Liens, the Superpriority Claims, the Adequate 

Protection Liens, the Adequate Protection Obligations, and all other rights and remedies of the 

DIP Secured Parties, the Lender Swap Parties, and the Prepetition Secured Parties granted by the 

provisions of this Order, the Lender Party Swap Agreements, and the DIP Credit Documents 

shall survive, and shall not be modified, impaired, or discharged by (a) the entry of an order 

converting any of the Cases to a case under chapter 7 of the Bankruptcy Code, dismissing any of 

the Cases, terminating the joint administration of the Cases, or by any other act or omission, 

(b) the entry of an order approving the sale of any DIP Collateral pursuant to section 363(b) of 

the Bankruptcy Code (except to the extent permitted by the DIP Credit Documents), or (c) except 

as may otherwise be provided in a plan of reorganization with respect to any allowed claims for 

diminution, the entry of an order confirming a plan of reorganization in any of the Cases, and, 

pursuant to section 1141(d)(4) of the Bankruptcy Code, the Debtors have waived any discharge 

as to any remaining DIP Obligations, Lender Party Swap Obligations, and Adequate Protection 

Obligations. The terms and provisions of this Order, the Lender Party Swap Agreements, and 

the DIP Credit Documents shall continue in the Cases, in any successor cases thereto 

(the “Successor Cases”) if the Cases cease to be jointly administered, or in any superseding 

chapter 7 cases under the Bankruptcy Code, and the DIP Liens, the Adequate Protection Liens, 

the Superpriority Claims and all other administrative claims granted pursuant to this Order, the 

Adequate Protection Obligations, and all other rights and remedies of the DIP Secured Parties, 

the Lender Swap Parties, and the Prepetition Secured Parties granted by the provisions of this 

Order, the Lender Party Swap Agreements, and the DIP Credit Documents shall continue in full 

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force and effect until the DIP Obligations, Lender Party Swap Obligations, and the Adequate 

Protection Obligations are indefeasibly paid in full in cash. 

16. Effect of Stipulations on Third Parties. The stipulations and admissions 

contained in this Order, including, without limitation, in paragraph E hereof, shall be binding in 

all circumstances upon the Debtors and any successor thereto (including, without limitation, any 

chapter 7 or chapter 11 trustee appointed or elected for any of the Debtors), the Debtors’ estates, 

and all parties in interest, including, without limitation, any committee (including the 

Committee) or any other person or entity acting on behalf of the Debtors, unless and solely to the 

extent that (i) a properly authorized adversary proceeding or contested matter (subject to the 

limitations contained herein, including, inter alia, in paragraph 17) has been commenced by the 

Committee or any other party in interest with requisite standing other than the Debtors (or if the 

Cases are converted to cases under chapter 7 prior to the expiration of the Challenge Period (as 

defined below), the chapter 7 trustee in such successor case) (a) challenging the validity, 

enforceability, priority, or extent of the Prepetition Indebtedness, the Prepetition Indebtedness 

Documents, or the Prepetition Secured Parties’ liens on the Prepetition Collateral or 

(b) otherwise asserting or prosecuting any action for preferences, fraudulent conveyances, other 

avoidance power claims, subordination, recharacterization, or any other claims, counterclaims, or 

causes of action, objections, contests, or defenses (collectively, “Claims and Defenses”) against 

any of the Prepetition Secured Parties or any of their affiliates, representatives, attorneys, or 

advisors in connection with matters related to the Prepetition Indebtedness, the Prepetition 

Indebtedness Documents, the Prepetition Collateral, or the Prepetition Secured Parties’ liens on 

the Prepetition Collateral, as applicable (such adversary proceeding or Claims and Defenses, 

a “Challenge”), by the earlier of (1) in the case of the Committee, by no later than the date that is 

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sixty (60) days after the date that notice of the formation of a Committee appointed under 

section 1102 of the Bankruptcy Code in the Cases is filed on the docket of such Cases and 

(2) with respect to other parties in interest with requisite standing other than the Debtors or the 

Committee, by no later than the date that is ninety (90) days after the date of entry of this Order 

(such time period established by the earlier of clauses (1) and (2) above, or such later date as has 

been agreed to, in writing, by the Prepetition Secured Parties in their sole discretion, 

the “Challenge Period”); and (ii) there is a final order in favor of the plaintiff sustaining any such 

Challenge in any such properly authorized and timely filed adversary proceeding; provided that, 

as to the Debtors, all such Claims and Defenses are hereby irrevocably waived and relinquished 

as of the Petition Date. If no such properly authorized adversary proceeding or contested matter 

is timely filed, then (x) to the extent not theretofore indefeasibly repaid, the Prepetition 

Indebtedness and all related obligations of the Debtors shall constitute allowed claims not subject 

to counterclaim, setoff, recoupment, subordination, recharacterization, defense, or avoidance, for 

all purposes, in the Cases and any subsequent chapter 7 cases, (y) the Prepetition Secured 

Parties’ liens on the Prepetition Collateral shall be deemed to have been, as of the Petition Date, 

and to be legal, valid, binding, and perfected liens not subject to defense, counterclaim, 

recharacterization, subordination, or avoidance, and (z) the Prepetition Indebtedness, the 

Prepetition Indebtedness Documents, and the liens of the Prepetition Secured Parties on the 

Prepetition Collateral shall not be subject to any other or further challenge by the Debtors, any 

committee, or any party in interest, each of whom shall be enjoined from seeking to exercise the 

rights of the Debtors’ estates, including, without limitation, any successor thereto (including, 

without limitation, any estate representative or a chapter 7 or 11 trustee appointed or elected for 

any of the Debtors with respect thereto). If any such properly authorized adversary proceeding 

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or contested matter is timely filed, the stipulations and admissions contained in paragraph E 

hereof shall nonetheless remain binding and preclusive (as provided in the third sentence of this 

paragraph) on any committee, whether official, ad hoc, or other (including the Committee), and 

any other person or entity, except to the extent that any such findings and admissions were 

expressly and successfully challenged in such properly authorized and timely filed adversary 

proceeding. Nothing in this Order vests or confers on any Person (as defined in the Bankruptcy 

Code), including any committee (including the Committee), standing or authority to pursue any 

cause of action belonging to the Debtors or their estates, including, without limitation, Claims 

and Defenses with respect to the Prepetition Facility, the Prepetition Indebtedness, the 

Prepetition Indebtedness Documents, or the Prepetition Secured Parties’ liens on the Prepetition 

Collateral. Except as expressly provided in this Order, the rights and remedies of the Prepetition 

Secured Parties granted by the provisions of this Order shall (x) survive and shall not be 

modified or affected by the entry of an order converting any of the Cases to a case under 

chapter 7, dismissing any of the Cases, terminating the joint administration of the Cases or by 

any other act or omission, and (y) continue in the Cases or in any Successor Cases in full force 

and effect. 

17. Limitation on Use of Financing Proceeds and Collateral. Notwithstanding 

anything to the contrary herein or in any other order by this Court, none of the proceeds of the 

Loans and none of the DIP Obligations, the Cash Collateral, the DIP Collateral, or the Carve Out 

may be used for the following purposes, including any fees or expenses incurred by any 

professional in connection therewith: (i) an assertion or joinder in (but excluding any 

investigation into) any claim, counter-claim, action, proceeding, application, motion, defense, or 

other contested matter seeking any order, judgment, determination or similar relief 

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(a) challenging the legality, validity, priority, perfection, or enforceability of any amount due 

under the DIP Credit Documents, the Prepetition Facility, or the Prepetition Indebtedness 

Documents or the liens, security interests, or claims granted under this Order, the DIP Credit 

Documents, or the Prepetition Indebtedness Documents; (b) invalidating, setting aside, 

recharacterizing, avoiding, or subordinating in whole or in part any amount due under the DIP 

Credit Documents, the Prepetition Facility, or the Prepetition Indebtedness Documents or the 

liens, security interests, or claims granted under this Order, the DIP Credit Documents, or the 

Prepetition Indebtedness Documents; (c) challenging or objecting to payment of any amount due 

under the DIP Credit Documents, the Prepetition Facility, or the Prepetition Indebtedness 

Documents pursuant to the chapter 11 plan of reorganization in any of the Cases; (d) preventing, 

hindering, or delaying the assertion or enforcement by any of the DIP Secured Parties, the 

Lender Swap Parties or the Prepetition Secured Parties of any of their respective liens, claims, 

rights, or security interests or realization upon the Prepetition Collateral, the DIP Collateral, the 

DIP Liens, the Secured Obligations, or the DIP Obligations; or (e) seeking to modify any of the 

rights granted to any of the DIP Secured Parties, the Lender Swap Parties, or the Prepetition 

Secured Parties hereunder or under the DIP Credit Documents, the Lender Party Swap 

Agreements, the Swap Order, or the Prepetition Indebtedness Documents, in each of the 

foregoing cases without such parties’ prior written consent; (ii) the commencement or 

prosecution of any action or proceeding of any claims, causes or action, or defenses against any 

of the DIP Secured Parties, the Lender Swap Parties, or the Prepetition Secured Parties or any of 

their respective officers, directors, employees, agents, attorneys, affiliates, assigns, or successors, 

including, without limitation, any attempt to recover or avoid any claim or interest from any of 

the DIP Secured Parties, the Lender Swap Parties, or the Prepetition Secured Parties under 

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Chapter 5 of the Bankruptcy Code; or (iii) selling or otherwise disposing of any DIP Collateral, 

using or seeking to use any insurance proceeds, or incurring any indebtedness, in each case to the 

extent not permitted under the DIP Credit Documents or without the Administrative Agent’s 

express prior written consent; provided that notwithstanding the foregoing, an aggregate amount 

not to exceed $50,000 of the DIP Facility, DIP Collateral, Cash Collateral, and Carve Out may 

be used by the Committee (if any) to investigate the Prepetition Indebtedness and liens on the 

Prepetition Collateral within the Challenge Period. Nothing herein shall be construed as consent 

to the allowance of any Debtor or Committee Professional Fees or shall affect the right of any of 

the DIP Secured Parties, the Lender Swap Parties, or the Prepetition Secured Parties to object to 

the allowance of such fees and expenses. 

18. Sales of Collateral, Right to Credit Bid. Upon entry of this Order, the DIP 

Lenders and the Prepetition Secured Parties, with respect to the Prepetition Indebtedness, 

respectively, shall have the right to credit bid up to the full amount of the DIP Obligations or the 

Prepetition Indebtedness (subject to any Challenge), as applicable, in connection with any sale of 

the DIP Collateral conducted (i) pursuant to a plan of reorganization subject to confirmation 

under section 1129(b)(2)(A)(ii)-(iii) of the Bankruptcy Code or (ii) pursuant to section 363 of the 

Bankruptcy Code. No sale of any DIP Collateral shall constitute a waiver by any DIP Lender or 

the Prepetition Secured Parties of any deficiency claim under any applicable law, regardless of 

whether the Administrative Agent, any DIP Lender, or any Prepetition Secured Party consents to 

or opposes such sale and regardless of whether the DIP Obligations are credit bid in connection 

with such sale. For the avoidance of doubt, as part of the Adequate Protection Obligations, the 

Prepetition Secured Parties shall be allowed to credit bid the full amount of the Prepetition 

Indebtedness (subject to any Challenge) with respect to any sale of the Prepetition Collateral not 

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in the ordinary course of business pursuant to a plan of reorganization or section 363 of the 

Bankruptcy Code. 

19. Insurance. Wells Fargo Bank, National Association, as the Administrative Agent 

for the benefit of the Prepetition Secured Parties, shall be deemed to be the loss payee or 

additional insured under the Debtors’ applicable insurance policies, shall act in such capacities, 

and, subject to the terms of the DIP Credit Documents, distribute any proceeds recovered or 

received in respect of any such insurance policies, first, to the payment in full of the DIP 

Obligations, second, to the payment of the Adequate Protection Obligations, and, third, to the 

payment of the Prepetition Indebtedness. 

20. Recharacterization. In the event that it is determined by a final order that the 

Prepetition Secured Parties are not entitled to the payment of some or all interest payments 

required by paragraph 11(v) of this Order as adequate protection for the Diminution in Value of 

their interests in the Prepetition Collateral and the Prepetition Secured Parties are determined to 

be undersecured, then such interest payments shall either be applied as a payment made to the 

allowed amount of such Prepetition Secured Parties’ unsecured deficiency claims or be applied 

to the principal balance of such Prepetition Secured Parties’ secured claims. 

21. Proofs of Claim. The Prepetition Secured Parties, DIP Secured Parties, and 

Lender Swap Parties will not be required to file proofs of claim in any of the Cases or Successor 

Cases in respect of any claims arising under or related to Prepetition Indebtedness, the 

Prepetition Indebtedness Documents, DIP Obligations, DIP Credit Documents, Lender Party 

Swap Obligations, or Lender Party Swap Agreements. The Debtors’ stipulations and admissions 

contained in this Order shall be deemed to constitute a timely proof of claim for the Prepetition 

Secured Parties upon approval of this Order, and the Prepetition Secured Parties shall be treated 

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under section 502(a) of the Bankruptcy Code as if the Prepetition Secured Parties have filed a 

proof of claim and shall have an allowed claim (subject to any Challenge) with respect to the 

Prepetition Indebtedness for the purposes of credit bidding. Nothing in this paragraph shall 

waive, alter, or modify the Prepetition Secured Parties’ right to file, amend, and/or supplement, 

in its sole discretion, a proof of claim(s) in each of the Cases or Successor Cases for any claim 

allowed herein. 

22. Modifications of DIP Credit Documents. Without further Order of the Court, the 

Debtors and the DIP Secured Parties are hereby authorized to implement, in accordance with the 

terms of the respective DIP Credit Documents, any modifications to the Approved Budget, any 

extension of the maturity subject to the conditions set forth in the DIP Credit Documents, nonmaterial modifications of the DIP Credit Documents (that do not shorten the maturity of the 

extensions of credit thereunder, increase the commitments thereunder, or otherwise do not 

materially change the terms of the DIP Credit Documents in a manner adverse to the interests of 

the Debtors) or waivers with respect to the DIP Credit Documents; provided, however, any 

material modification or amendment to the respective DIP Credit Documents not expressly 

authorized hereby or pursuant to the DIP Credit Documents shall be subject to court approval 

after notice and a hearing. 

23. Order Governs. The DIP Credit Documents and this Order shall govern the 

financial and credit accommodations to be provided to the Debtors by the DIP Secured Parties; 

provided that in the event of any inconsistency between the provisions of the DIP Credit 

Documents and this Order, the provisions of this Order shall govern. 

24. Binding Effect; Successors and Assigns. The DIP Credit Documents and the 

provisions of this Order, including all findings herein, shall be binding upon all parties in interest 

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in the Cases, including, without limitation, each of the DIP Secured Parties and the Prepetition 

Secured Parties, any committee (including the Committee) appointed in the Cases, and the 

Debtors and their respective successors and assigns (including any chapter 7 or chapter 11 trustee 

hereinafter appointed or elected for the estate of any of the Debtors) and shall inure to the benefit 

of the DIP Secured Parties, the Lender Swap Parties, and the Prepetition Secured Parties, any 

committee (including the Committee) appointed in the Cases, and the Debtors and their 

respective successors and assigns; provided, however, that none of the DIP Secured Parties or 

Lender Swap Parties shall have any obligation to extend any financing to any chapter 7 trustee or 

similar responsible person appointed for the estates of the Debtors. In determining to make any 

loan or other financial accommodation under the DIP Credit Agreement or in exercising any 

rights or remedies as and when permitted pursuant to this Order or the DIP Credit Documents, 

none of the DIP Secured Parties or Lender Swap Parties, individually or collectively, shall be 

deemed to be in control of the operations of the Debtors or to be acting as a “responsible person” 

or “owner or operator” with respect to the operation or management of the Debtors (as such 

terms, or any similar terms, are used in the United States Comprehensive Environmental 

Response, Compensation and Liability Act, 42 U.S.C. §§ 9601 et seq., as amended, or any 

similar federal or state statute). 

25. DIP Fees and Expenses. The Debtors shall pay, without the need for the 

Administrative Agent, the DIP Lenders, or the Lender Swap Parties to file retention motions or 

fee applications, or to provide notice to any party, all (i) reasonable and documented out-ofpocket expenses incurred by the Administrative Agent, the DIP Lenders, and the Lender Swap 

Parties, including the reasonable and documented out-of-pocket fees, charges, and expenses of 

counsel and other outside consultants for the Administrative Agent, the DIP Lenders, and the 

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Lender Swap Parties (limited to the reasonable and documented fees, expenses, and 

disbursements of (a) Bracewell LLP, (b) McGuireWoods LLP, (c) Opportune LLP, (d) such 

other consultants as may be retained or may have been retained from time to time by the 

Administrative Agent, in its sole discretion, and (e) such other consultants as may be retained or 

may have been retained from time to time by the DIP Lenders or Lender Swap Parties, with the 

prior written consent of the Debtors (which consent shall not be unreasonably withheld), 

including the reasonable travel, photocopy, mailing, courier, telephone, and other similar 

expenses in connection with the syndication of the credit facilities provided for herein, the 

preparation, negotiation, execution, delivery, and administration (both before and after the 

execution hereof and including advice of counsel to the Administrative Agent and any DIP 

Lender with respect thereto) of the DIP Credit Agreement and the other DIP Credit Documents 

and any amendments, modifications or waivers of, or consents related to the provisions thereof 

(whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all 

costs and expenses incurred by the Administrative Agent in connection with any filing, 

registration, recording, or perfection of any security interest contemplated or permitted by the 

DIP Credit Agreement or any other DIP Credit Document, and (iii) the reasonable and 

documented out-of-pocket expenses incurred by the Administrative Agent and the DIP Lenders, 

including the fees, charges, and disbursements of any counsel for the Administrative Agent and 

the DIP Lenders as limited above and subject to the procedural requirements set forth in 

paragraph 26 hereof, in connection with the administration of, amendment or waiver of any 

provisions of, interpretation of, or enforcement or protection of its or their rights in connection 

with the DIP Credit Documents or Lender Party Swap Agreements, or in connection with the 

DIP Loans or hedges entered into pursuant to the Lender Party Swap Agreements, including, 

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without limitation, all such out-of-pocket expenses incurred in connection with the discussion, 

negotiation, preparation, execution, and delivery of any documents related to any proposed 

financing of the Debtors, including the DIP Credit Documents and the Lender Party Swap 

Agreements, and the funding of all DIP Loans, such costs and expenses including, without 

limitation, due diligence, syndication (including printing, distribution, and bank meeting), 

transportation, duplication, messenger, audit, insurance, appraisal, and consultant costs and 

expenses. 

26. Professional Fee Procedural Requirements. A copy of each invoice shall be 

submitted to the Debtors for professional fees, expenses, and disbursements (to the extent 

incurred by such professionals after the Effective Date (as defined in the DIP Credit 

Agreement)), the payment of which is authorized by paragraphs 11(iv) and 25 of this Order (such 

fees and expenses, the “Lender Professional Fees”). The invoices for such Lender Professional 

Fees shall include the number of hours billed and a reasonably detailed description of the 

services provided and the expenses incurred by the applicable professional; provided, however, 

that any such invoice (i) may be redacted to protect privileged, confidential, or proprietary 

information and (ii) shall not be required to contain individual time detail. None of the Lender 

Professional Fees shall be subject to Court approval or required to be maintained in accordance 

with the U.S. Trustee Guidelines and no recipient of any payment on account thereof shall be 

required to file with respect thereto any interim or final fee application with the Court. Payment 

of Lender Professional Fees shall not be delayed based on any objections thereto, and the 

relevant professional shall only be required to disgorge amounts objected to upon being “so 

ordered” pursuant to a final non-appealable order of the Court. 

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27. The Debtors are authorized and empowered to jointly and severally indemnify 

and hold harmless the Administrative Agent (solely in its capacity as an administrative agent), 

each DIP Lender (solely in its capacity as a DIP Lender), and each other Indemnified Party (as 

defined in the DIP Credit Agreement) solely to the extent provided in the DIP Credit Agreement. 

28. Effectiveness. This Order shall constitute findings of fact and conclusions of law 

and shall take effect and be fully enforceable nunc pro tunc to the Petition Date immediately 

upon entry hereof. Notwithstanding Bankruptcy Rules 4001(a)(3), 6004(h), 6006(d), 7062, or 

9024 or any other Bankruptcy Rule, or Rule 62(a) of the Federal Rules of Civil Procedure, this 

Order shall be immediately effective and enforceable upon its entry and there shall be no stay of 

execution or effectiveness of this Order. 

29. Retention of Jurisdiction. The Court retains jurisdiction with respect to all 

matters arising from or related to the implementation of this Order. 

30. Final Hearing. The Final Hearing on the Motion shall be held on _________, 

2016, at__:__ _.m., prevailing Eastern Time. Any objections or responses to entry of a final 

order on the Motion shall be filed on or before 4:00 p.m., prevailing Eastern Time, on 

_________, 2016, and shall be served on: (i) the Debtors, Penn Virginia Corporation, Four 

Radnor Corporate Center, Suite 200, 100 Matsonford Road, Radnor Pennsylvania 19087, 

Attn: General Counsel; (ii) proposed counsel to the Debtors, Kirkland & Ellis LLP, 601 

Lexington Avenue, New York, New York 10022, Attn: Edward O. Sassower, P.C. and Brian E. 

Schartz, and Kirkland & Ellis LLP, 300 North LaSalle, Chicago, Illinois 60654, Attn: Justin R. 

Bernbrock and Benjamin M. Rhode; (iii) proposed co-counsel to the Debtors, Kutak Rock LLP, 

Bank of America Center, 1111 East Main Street, Suite 800, Richmond, Virginia 23219, 

Attn: Michael A. Condyles, Peter J. Barrett, and Jeremy S. Williams; (iv) the Administrative 

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Agent, [___]; (v) the indenture trustees for the Unsecured Notes, [___] and [___]; (vi) counsel to 

the Ad Hoc Committee of Noteholders, Milbank Tweed Hadley & McCloy, 28 Liberty Street, 

New York, New York 10005, Samuel Khalil, Brian Kinney, and Bradley Friedman; (vii) counsel 

to the Administrative Agent, Bracewell LLP, 711 Louisiana Street, Suite 2300, Houston, Texas 

77002, Attn: Stephanie Song and Kurt Mayr; (viii) co-counsel to the Administrative Agent, 

McGuireWoods LLP, 800 East Canal Street, Richmond, Virginia 23219, Attn: Dion W. Hayes 

and Sarah B. Boehm; (ixi) counsel to any statutory committee appointed in these cases; and 

(x) the Office of The United States Trustee, 701 East Broad Street, Suite 4304, Richmond, 

Virginia 23219, Attn: Robert Van Arsdale, Esq., and 210 First Street, Suite 505, Roanoke, 

Virginia 24011, Attn: Webb King, Esq. In the event no objections to entry of a final order on 

the Motion are timely received, this Court may enter such final order without need for the Final 

Hearing. 

 

Richmond, Virginia UNITED STATES BANKRUPTCY JUDGE 

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WE ASK FOR THIS: 

/s/ Michael A. Condyles 

Michael A. Condyles (VA 27807) 

Peter J. Barrett (VA 46179) 

Jeremy S. Williams (VA 77469) 

KUTAK ROCK LLP 

Bank of America Center 

1111 East Main Street, Suite 800 

Richmond, Virginia 23219 

Telephone: (804) 644-1700 

Facsimile: (804) 783-6192 

- and - 

Edward O. Sassower, P.C. (pro hac vice admission pending) 

Joshua A. Sussberg, P.C. 

Brian E. Schartz (pro hac vice admission pending) 

KIRKLAND & ELLIS LLP 

KIRKLAND & ELLIS INTERNATIONAL LLP 

601 Lexington Avenue

New York, New York 10022 

Telephone: (212) 446-4800 

Facsimile: (212) 446-4900 

- and - 

James H.M. Sprayregen, P.C. 

Justin R. Bernbrock (pro hac vice admission pending) 

Benjamin M. Rhode (pro hac vice admission pending) 

KIRKLAND & ELLIS LLP 

KIRKLAND & ELLIS INTERNATIONAL LLP 

300 North LaSalle 

Chicago, Illinois 60654 

Telephone: (312) 862-2000 

Facsimile: (312) 862-2200 

Proposed Co-Counsel to the Debtors 

CERTIFICATION OF ENDORSEMENT 

UNDER LOCAL BANKRUPTCY RULE 9022-1(C) 

Pursuant to Local Bankruptcy Rule 9022-1(C), I hereby certify that the foregoing proposed order 

has been endorsed by or served upon all necessary parties. 

 /s/ Michael A. Condyles 

 

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Exhibit C to the Restructuring Support Agreement

Backstop Commitment Agreement

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Execution Version 

#4823-7500-2415 

KE 40665698 

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 

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ARTICLE I DEFINITIONS ........................................................................................................ 2

Section 1.1 Definitions................................................................................................... 2

Section 1.2 Construction .............................................................................................. 16

ARTICLE II BACKSTOP COMMITMENT .......................................................................... 16

Section 2.1 The Rights Offering; Subscription Rights ................................................ 16

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 ................................................................. 22

Section 4.2 Corporate Power and Authority ................................................................ 23

Section 4.3 Execution and Delivery; Enforceability .................................................... 23

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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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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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................................ 36

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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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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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 ................................................................................ 57

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-inpossession 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 

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distributed in accordance with the Bankruptcy Code, the Bankruptcy Rules, and any other 

applicable law. 

“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. 

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 

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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 nonDefaulting 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 

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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. 

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, 

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nothing in this Agreement shall limit or restrict in any way the ability of any Commitment Party 

(or any permitted transferee thereof) to Transfer any of the shares of 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. 

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 

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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 nonassessable, 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 

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made, not misleading. The Disclosure Statement as approved by the Bankruptcy Court will 

conform in all material respects with section 1125 of the Bankruptcy Code. 

Section 4.11 Absence of Certain Changes. Since 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 15d15(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 

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(corporate or otherwise) required for the due authorization, execution, delivery and performance 

by it of this Agreement and the other Transaction Agreements. 

Section 5.3 Execution and Delivery. This Agreement and each other 

Transaction Agreement to which such Commitment Party is a party (a) has been, or prior to its 

execution and delivery will be, duly and validly executed and delivered by such Commitment 

Party and (b) upon entry of the 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 

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the Note Claims set forth opposite such Commitment Party’s name under the column titled “Note 

Claims” on Schedule 2 attached hereto. 

(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’slength 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. 

Section 6.2 Confirmation Order; Plan and Disclosure Statement. The 

Debtors shall use their commercially reasonable efforts to obtain entry of the Confirmation 

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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 

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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. 

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 

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Agreement shall be filed with the Bankruptcy Court as part of the Plan Supplement or an 

amendment thereto. 

(b) The Plan will provide that on the Effective Date the 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 

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STATEMENT UNDER THE ACT OR AN AVAILABLE EXEMPTION FROM 

REGISTRATION THEREUNDER.” 

In the event that any such shares are uncertificated, such shares shall be subject to a restrictive 

notation substantially similar to the Legend in the stock ledger or other appropriate records 

maintained by 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 0 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 the relative benefits received by the 

Indemnifying Party, on the one hand, and such Indemnified Person, on the other hand, but also 

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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 Section 7.1(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 Section 7.1(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 

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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; 

(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 

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the Termination Fee, in cash, on or prior to the second (2nd) Business Day 

following such termination; 

(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. 

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 

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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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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 

 

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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 

 

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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 

 

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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 

 

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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 

 

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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 

 

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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 

 

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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 

 

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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 

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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 

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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 

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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 

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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 

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GMO CREDIT OPPORTUNITIES ^UND, L.P.

By:

Name: Tim Lang

Title: Authorized Trader

Grantham, Mayo, Van Otterloo & Co. LLC,

investment manager of

GMO Credit Opportunities Fund, L.P.

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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 

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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 

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Privileged & Confidential 

Schedule 3 

Consents 

• None 

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Exhibit A 

PENN VIRGINIA CORPORATION 

RIGHTS OFFERING PROCEDURES 

Each Rights Offering Share is being distributed and issued by the Debtors without 

registration under the Securities Act of 1933, as amended (the “Securities Act”), in 

reliance upon the exemption provided by Section 4(a)(2) thereof and/or Regulation D 

promulgated thereunder. 

None of the Subscription Rights or Rights Offering Shares issuable upon exercise of 

such rights distributed pursuant to these Rights Offering Procedures have been or will 

be registered under the Securities Act, nor any state or local law requiring registration 

for offer and sale of a security. No Subscription Rights may be sold, transferred, 

assigned, pledged, hypothecated, participated, donated or otherwise encumbered or 

disposed of, directly or indirectly (including through derivatives, options, swaps, 

forward sales or other transactions in which any person receives the right to own or 

acquire any current or future interest in the Subscription Rights, the Rights Offering 

Shares, the Notes and any related claims) (each of the above, a “Transfer”). 

None of the Rights Offering Shares have been registered under the Securities Act, nor 

any State or local law requiring registration for offer or sale of a security, and no 

Rights Offering Shares may be sold or transferred except pursuant to an exemption 

from registration under the Securities Act. 

Each Rights Offering Share issued upon exercise of a Subscription Right, and each 

certificate issued in exchange for or upon the transfer, sale or assignment of any such 

Rights Offering Share, shall be stamped or otherwise imprinted with a legend in 

substantially the following form: 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE 

ORIGINALLY ISSUED ON [ISSUANCE DATE], HAVE NOT BEEN REGISTERED 

UNDER THE 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.” 

The Rights Offering is being conducted in good faith and in compliance with the 

Bankruptcy Code. In accordance with Section 1125(e) of the Bankruptcy Code, a 

debtor or any of its agents that participate, in good faith and in compliance with the 

applicable provisions of the Bankruptcy Code, in the offer, issuance, sale, or purchase 

of a security offered or sold under the plan of the debtor, of an affiliate participating in 

a joint plan with the debtor, or of a newly organized successor to the debtor under the 

plan, is not liable, on account of such participation, for violation of any applicable law, 

rule, or regulation governing the offer, issuance, sale or purchase of securities. 

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Eligible Holders (as defined below) should note the following times relating to the Rights 

Offering: 

Date Calendar Date Event 

Record Date............................ [•], 2016 The date and time fixed by the 

Company for 

the determination of the 

holders entitled to 

participate in the Rights 

Offering. 

 

Subscription Commencement Date .. [•], 2016 Commencement of the Rights 

Offering. 

 

Subscription Expiration Deadline ... 5:00 p.m. New 

York City time on 

[•], 2016 

The deadline for Eligible 

Holders to subscribe for 

Rights Offering Shares. The 

Eligible Holder’s Beneficial 

Holder Subscription Form 

(with accompanying IRS 

Form W-9 or appropriate IRS 

Form W-8, as applicable) and 

Subscription Agreement must 

be received by the Eligible 

Holder’s Nominee (as defined 

below) in sufficient time to 

allow such Nominee to 

deliver the Master 

Subscription Form to the 

Subscription Agent by the 

Subscription Expiration 

Deadline. 

Eligible Holders who are not 

Backstop Parties must deliver 

the aggregate Purchase 

Payment by the Subscription 

Expiration Deadline. 

Eligible Holders who are 

Backstop Parties must deliver 

the aggregate Purchase 

Payment within the second 

(2nd) Business Day following 

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receipt of a Funding Notice 

(as defined below) in 

accordance with the terms of 

the Backstop Commitment 

Agreement. 

 

Terms used and not defined herein shall have the meaning assigned to them in the Plan (as 

defined below).

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To Eligible Holders and Nominees of Eligible Holders: 

On May 12, 2016, the Debtors filed their Chapter 11 Plan of Reorganization with the 

United States Bankruptcy Court for the Eastern District of Virginia, Richmond Division (as 

such plan of reorganization may be amended or modified from time to time in accordance with 

its terms, the “Plan”), and the disclosure statement with respect to the Plan (as such disclosure 

statement may be amended from time to time in accordance with its terms, the “Disclosure 

Statement”). Pursuant to the Plan, each holder of an Allowed Note Claim as of the Record Date 

that is an Accredited Investor and that has timely and validly completed and returned the letter 

confirming it is an Accredited Investor, pursuant to the cover letter dated May [•], 2016 of the 

Company attached to the Beneficial Holder Subscription Form (the “Accredited Investor Cover 

Letter”) (each such holder, an “Eligible Holder”) has the right to participate in the Rights 

Offering in accordance with the terms and conditions of the Subscription Agreement and these 

Rights Offering Procedures. Only Eligible Holders that complete the Accredited Investor 

Questionnaire included as Exhibit B to the Beneficial Holder Subscription Form may 

participate in the Rights Offering of the Rights Offering Shares. 

Pursuant to the Plan, each Eligible Holder will receive Subscription Rights to subscribe 

for its pro rata Rights Offering Shares, provided that it timely and properly executes and 

delivers its Beneficial Holder Subscription Form (with accompanying IRS Form W-9 or 

appropriate IRS Form W-8, as applicable) to the Subscription Agent or its Nominee, as 

applicable, in advance of the Subscription Expiration Deadline. Each Nominee will receive a 

Master Subscription Form which it shall use to summarize the Subscription Rights exercised by 

each Eligible Holder that timely returns a properly filled out Beneficial Holder Subscription 

Form to such Nominee. Please note that all Beneficial Holder Subscription Forms (with 

accompanying IRS Form W-9 or appropriate IRS Form W-8, as applicable) must be returned to 

the applicable Nominee in sufficient time to allow such Nominee to process and deliver the 

Master Subscription Form and copies of all Beneficial Holder Subscription Forms and 

accompanying IRS Forms) prior to the Subscription Expiration Deadline. 

No Eligible Holder shall be entitled to participate in the Rights Offering unless the 

aggregate Purchase Price (as defined below) for the Rights Offering Shares it subscribes for is 

received by the Subscription Agent (i) in the case of an Eligible Holder that is not a Backstop 

Party, by the Subscription Expiration Deadline, and (ii) in the case of an Eligible Holder that is 

a Backstop Party, on the second (2nd) Business Day following receipt of a written notice (a 

“Funding Notice”) delivered by the Debtors to the Backstop Parties in accordance with Section 

2.4 of the Backstop Commitment Agreement (the “Backstop Funding Deadline”). No interest is 

payable on any advanced funding of the Purchase Price. If the Rights Offering is terminated for 

any reason, your Purchase Price will be returned to you promptly. No interest will be paid on 

any returned Purchase Price. Any Eligible Holder submitting payment via its Nominee must 

coordinate such payment with its Nominee in sufficient time to allow the Nominee to forward 

such payment to the Subscription Agent by the Subscription Expiration Deadline or the 

Backstop Funding Deadline, as applicable. 

In order to participate in the Rights Offering, you must complete all the steps 

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outlined below. If all of the steps outlined below are not completed by the Subscription 

Expiration Deadline, or the Backstop Funding Deadline, as applicable. If you fail to do so, 

you shall be deemed to have forever and irrevocably relinquished and waived your right to 

participate in the Rights Offering.

1. Rights Offering

Eligible Holders have the right, but not the obligation, to participate in the Rights 

Offering. Only holders of an Allowed Note Claim as of the Record Date that validly and timely 

completed the Accredited Investor Cover Letter and that are Accredited Investors may 

participate in the Rights Offering. 

Subject to the terms and conditions set forth in the Plan, these Rights Offering 

Procedures and the Subscription Agreement, each Eligible Holder is entitled to subscribe 

for up to [•] Rights Offering Shares per $1,000 of Principal Amount of the Notes, at a 

purchase price of $[•] per share (the “Purchase Price”). 

SUBJECT TO THE TERMS AND CONDITIONS OF THE SUBSCRIPTION 

AGREEMENT AND THE BACKSTOP AGREEMENT IN THE CASE OF ANY 

BACKSTOP PARTY, ALL SUBSCRIPTIONS SET FORTH IN THE SUBSCRIPTION 

AGREEMENT ARE IRREVOCABLE.

2. Subscription Period

The Rights Offering will commence on the Subscription Commencement Date and will 

expire at the Subscription Expiration Deadline. Each Eligible Holder intending to purchase 

Rights Offering Shares in the Rights Offering must affirmatively elect to exercise its 

Subscription Rights in the manner set forth in the Beneficial Holder Subscription Form by the 

Subscription Expiration Deadline. 

Any exercise of Subscription Rights after the Subscription Expiration Deadline will not 

be allowed and any purported exercise received by the Subscription Agent after the Subscription 

Expiration Deadline, regardless of when the documents or payment relating to such exercise 

were sent, will not be honored. 

The Subscription Expiration Deadline may be extended with the consent of the Requisite 

Commitment Parties (as defined in the Backstop Commitment Agreement), or as required by 

law. 

3. Delivery of Subscription Agreement

Each Eligible Holder may exercise all or any portion of such Eligible Holder’s 

Subscription Rights, but subject to the terms and conditions of the Subscription Agreement. In 

order to facilitate the exercise of the Subscription Rights, beginning on the Subscription 

Commencement Date, the Subscription Agent will send a Subscription Agreement to each 

Eligible Holder or its Nominee, as applicable, together with appropriate instructions for the 

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proper completion, due execution and timely delivery of the executed Subscription Agreement 

and the payment of the applicable Purchase Price for its Rights Offering Shares. 

4. Exercise of Subscription Rights

(a) In order to validly exercise its Subscription Rights, each Eligible Holder that is 

not a Backstop Party must: 

i. return a duly executed Subscription Agreement along with a duly completed and 

executed Beneficial Holder Subscription Form (with accompanying IRS Form W-9 or 

appropriate IRS Form W-8, as applicable) to the Subscription Agent or its Nominee, 

as applicable, so that such documents are actually received by the Subscription Agent 

by the Subscription Expiration Deadline; and 

ii. at the same time it returns its Subscription Agreement and Beneficial Holder 

Subscription Form to the Subscription Agent or its Nominee, as applicable, but in no 

event later than the Subscription Expiration Deadline, pay, or arrange for the payment 

by its Nominee of, the applicable Purchase Price to the Subscription Agent by wire 

transfer ONLY of immediately available funds in accordance with the instructions 

included in Item 4 of the Beneficial Holder Subscription Form. 

(b) In order to validly exercise its Subscription Rights, each Eligible Holder that is a 

Backstop Party must: 

i. return a duly executed Subscription Agreement along with a duly completed and 

executed Beneficial Holder Subscription Form (with accompanying IRS Form W-9 

or appropriate IRS Form W-8, as applicable) to the Subscription Agent or its 

Nominee, as applicable, so that such documents are actually received by the 

Subscription Agent by the Subscription Expiration Deadline; and 

ii. no later than the Backstop Funding Deadline, pay the applicable Purchase Price to 

the Subscription Agent by wire transfer ONLY of immediately available funds in 

accordance with the instructions included in Item 4 of the Beneficial Holder 

Subscription Form. 

ALL BACKSTOP PARTIES MUST PAY THEIR APPLICABLE PURCHASE PRICE 

DIRECTLY TO THE SUBSCRIPTION AGENT AND SHOULD NOT PAY THEIR 

NOMINEES, IF ANY. 

With respect to (a) and (b) above, for those Eligible Holders that hold Allowed Note 

Claims through a Nominee, you must duly complete, execute and return your Beneficial Holder 

Subscription Form in accordance with the instructions herein to your Nominee in sufficient time 

to allow your Nominee to process your instructions and deliver to the Subscription Agent the 

Master Subscription Form, your completed Beneficial Holder Subscription Form (with 

accompanying IRS Form W-9 or appropriate IRS Form W-8, as applicable), Subscription 

Agreement and, solely with respect to the Eligible Holders that are not Backstop Parties, 

payment of the applicable Purchase Price, payable for the Rights Offering Shares elected to be 

purchased by such Eligible Holder, by the Subscription Expiration Deadline. 

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Any Eligible Holder that does not hold an Allowed Note Claim through a Nominee must 

deliver their completed Beneficial Holder Subscription Form (with accompanying IRS Form W9 or appropriate IRS Form W-8, as applicable), Subscription Agreement and payment of the 

applicable Purchase Price payable for the Rights Offering Shares elected to be purchased by such 

Eligible Holder (with respect to the Eligible Holders that are not Backstop Parties) directly to the 

Subscription Agent on or before the Subscription Expiration Deadline. In all cases, Eligible 

Holders that are Backstop Parties must deliver their payment of the applicable Purchase Price 

payable for the Rights Offering Shares elected to be purchased by such Eligible Holder directly 

to the Subscription Agent no later than the Backstop Funding Deadline. 

In the event that the funds received by the Subscription Agent from any Eligible Holder 

do not correspond to the Purchase Price payable for the Rights Offering Shares elected to be 

purchased by such Eligible Holder, the number of the Rights Offering Shares deemed to be 

purchased by such Eligible Holder will be the lesser of (i) the number of the Rights Offering 

Shares elected to be purchased by such Eligible Holder and (ii) a number of the Rights Offering 

Shares determined by dividing the amount of the funds received by the Purchase Price. 

The cash paid to the Subscription Agent in accordance with these Rights Offering 

Procedures will be deposited and held by the Subscription Agent in a segregated escrow account 

designed in escrow agreements mutually satisfactory to each of the Eligible Holders and the 

Debtors until administered in connection with the settlement of the Rights Offering on the 

Effective Date. The Subscription Agent may not use such cash for any other purpose prior to the 

Effective Date and may not encumber or permit such cash to be encumbered with any lien or 

similar encumbrance. The cash held by the Subscription Agent hereunder shall not be deemed 

part of the Debtors’ bankruptcy estates. 

5. Transfer Restriction; Revocation

The Subscription Rights are not detachable from the Allowed Note Claims. If any 

Subscription Rights are Transferred by an Eligible Holder, the Subscription Rights will be 

cancelled, and neither such Eligible Holder nor the purported transferee will receive any Rights 

Offering Shares otherwise purchasable on account of such transferred Subscription Rights. 

Once an Eligible Holder has properly exercised its Subscription Rights, subject to the 

terms and conditions of the Subscription Agreement and the Backstop Commitment Agreement 

in the case of any Backstop Party, such exercise will be irrevocable. 

6. Return of Payment

If the Rights Offering is not consummated, any cash paid to the Subscription Agent will 

be returned, without interest, to the applicable Eligible Holder as soon as reasonably practicable, 

but in any event within six (6) Business Days, after the date on which the Rights Offering is 

terminated. 

7. Settlement of the Rights Offering and Distribution of the Rights Offering 

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Shares

The Debtors intend that the Rights Offering Shares will be issued to the Eligible Holders, 

and/or to any Affiliates (as defined in the Subscription Agreement) or Related Funds (as defined 

in the Subscription Agreement) that the Eligible Holders so designate in the Beneficial Holder 

Subscription Form, in book-entry form, and that DTC, or its nominee, will be the holder of 

record of such Rights Offering Shares. 

8. Fractional Shares

No fractional rights or Rights Offering Shares will be issued in the Rights Offering. All 

share allocations (including each Eligible Holder’s Rights Offering Shares) will be calculated 

and rounded down to the nearest whole share. 

9. Validity of Exercise of Subscription Rights

All questions concerning the timeliness, viability, form and eligibility of any exercise of 

Subscription Rights will be determined in good faith by the Debtors and, if necessary, subject to 

a final and binding determination by the Bankruptcy Court. The Debtors may waive any defect 

or irregularity in, or permit such defect or irregularity to be corrected within such time as they 

may determine in good faith, or reject, the purported exercise of any Subscription Rights. 

Subscription Agreements will be deemed not to have been received or accepted until all 

irregularities have been waived or cured within such time as the Debtors determine in good faith. 

Before exercising any Subscription Rights, Eligible Holders should read the Disclosure 

Statement and the Plan for information relating to the Debtors and the risk factors to be 

considered.

10. Modification of Procedures

With the prior written consent of the Requisite Commitment Parties, the Debtors reserve 

the right to modify or adopt additional procedures consistent with these Rights Offering 

Procedures to effectuate the Rights Offering and to issue the Rights Offering Shares, provided, 

however, that the Debtors shall provide prompt written notice to each Eligible Holder of any 

material modification to these Rights Offering Procedures made after the Subscription 

Commencement Date. In so doing, and subject to the consent of the Requisite Commitment 

Parties, the Debtors may execute and enter into agreements and take further action that the 

Debtors determine in good faith are necessary and appropriate to effectuate and implement the 

Rights Offering and the issuance of the Rights Offering Shares. Nothing in this paragraph shall 

be construed so as to permit the Debtors to modify the terms of any executed and delivered 

Subscription Agreement without the consent of the Eligible Holder party thereto. 

The Debtors shall undertake reasonable procedures to confirm that each participant in the 

Rights Offering is in fact an Eligible Holder, including but not limited to, requiring such 

participant to validly and timely complete an Accredited Investor Cover Letter, requiring 

additional certifications by such participant to that effect and other diligence measures as the 

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Debtors deem reasonably necessary. 

11. Inquiries And Transmittal of Documents; Subscription Agent 

The Rights Offering Instructions attached hereto should be carefully read and strictly 

followed by the Eligible Holders. 

Questions relating to the Rights Offering should be directed to the Subscription Agent at 

the following phone number: [•]. 

The risk of non-delivery of all documents and payments to the Subscription Agent and 

any Nominee is on the Eligible Holder electing to exercise its Subscription Rights and not the 

Debtors or the Subscription Agent. 

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PENN VIRGINIA CORPORATION 

RIGHTS OFFERING INSTRUCTIONS FOR ELIGIBLE HOLDERS

Terms used and not defined herein or in the Subscription Agreement shall have the 

meaning assigned to them in the Plan.

To elect to participate in the Rights Offering, you must follow the instructions set out 

below:

1. Insert the principal amount of the Allowed Note Claims that you held as of the Record 

Date in Items 1a, 1b and 1c of your Beneficial Holder Subscription Form (if your 

Nominee holds your Allowed Note Claims on your behalf and you do not know such 

amount, please contact your Nominee immediately). 

2. Confirm whether you a Backstop Party pursuant to the representation in Item 3 of your 

Beneficial Holder Subscription Form. 

3. Complete the calculation in Item 2a of your Beneficial Holder Subscription Form, which 

calculates the maximum number of Rights Offering Shares available for you to purchase. 

Such amount must be rounded down to the nearest whole share. 

4. Complete the calculation in Item 2b of your Beneficial Holder Subscription Form, which 

calculates the Purchase Price for the Rights Offering Shares that you elect to purchase. 

5. Read and complete the certification in Item 2c of your Beneficial Holder Subscription 

Form certifying that you are an Accredited Investor. 

6. Read, complete and sign the certification in Item 5 of your Beneficial Holder 

Subscription Form. 

7. Read and countersign the Subscription Agreement. Such execution shall indicate your 

acceptance and approval of the terms and conditions set forth therein. 

8. Read, complete and sign an IRS Form W-9 if you are a U.S. person. If you are a nonU.S. person, read, complete and sign an appropriate IRS Form W-8. These forms may be 

obtained from the IRS at its website: www.irs.gov. 

9. Return your signed Subscription Agreement and Beneficial Holder Subscription Form 

(with accompanying IRS Form W-9 or appropriate IRS Form W-8, as applicable) to the 

Subscription Agent prior to the Subscription Expiration Deadline or to your Nominee in 

sufficient time to allow your Nominee to process your instructions and prepare and 

deliver the Master Subscription Form to the Subscription Agent by the Subscription 

Expiration Deadline. A registered holder of Allowed Note Claims should follow the 

delivery instructions as provided in the Master Subscription Form. 

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10. Arrange for full payment of the aggregate Purchase Price by wire transfer of 

immediately available funds, calculated in accordance with Item 2b of your Beneficial 

Holder Subscription Form. For Eligible Holders that are not Backstop Parties that hold 

Allowed Note Claims via a Nominee, please instruct your Nominee to coordinate 

payment of the Purchase Price and transmit and deliver such payment to the Subscription 

Agent by the Subscription Expiration Deadline. A registered holder of Allowed Note 

Claims that is not a Backstop Party should follow the payment instructions as provided in 

the Master Subscription Form. A registered holder of Allowed Note Claims that is a 

Backstop Party should follow the payment instructions in the Funding Notice. 

The Subscription Expiration Deadline is 5:00 p.m. New York City Time on [•], 2016.

Please note that the Beneficial Holder Subscription Form (with accompanying IRS Form 

W-9 or appropriate IRS Form W-8, as applicable) and the Subscription Agreement must 

be received by your broker, bank, commercial bank, transfer agent, trust company, dealer, 

or other agent or nominee (as applicable, the “Nominee”) in sufficient time to allow such 

Nominee to process and deliver the Master Subscription Form to the Subscription Agent 

by the Subscription Expiration Deadline, along with the appropriate funding (with respect 

to Eligible Holders that are not Backstop Parties) or the subscription represented by your 

Beneficial Holder Subscription Form will not be counted and you will be deemed forever to 

have relinquished and waived your right to participate in the Rights Offering. Registered 

holders of Allowed Note Claims that are not Backstop Parties should follow the delivery 

and payment instructions provided in the Master Subscription Form. Registered holders of 

Allowed Note Claims that are Backstop Parties should follow the payment instructions in 

the Funding Notice. 

Eligible Holders that are Backstop Parties must deliver the appropriate funding directly to 

the Subscription Agent no later than the Backstop Funding Deadline. 

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Execution Version

______________________________________________________________________

SCHEDULES TO THE 

BACKSTOP COMMITMENT AGREEMENT 

by and among 

PENN VIRGINIA CORPORATION 

and 

THE COMMITMENT PARTIES THERETO 

These schedules have been arranged for purposes of convenience in separately titled sections 

corresponding to sections of the Backstop Commitment Agreement, dated May 10, 2016, by and among 

Penn Virginia Corporation and the Commitment Parties thereto (the “Agreement”); provided, however, 

information disclosed in any section of the schedules shall be deemed to modify any information 

disclosed in any other section of the Agreement (whether or not such section calls for a schedule) to 

which the applicability of such information is reasonably apparent on its face. Capitalized terms used in 

the schedules and not otherwise defined therein have the meanings given to them in the Agreement. The 

information contained in the Agreement and in the Schedules and Exhibits thereto is disclosed solely for 

purposes of the Agreement, and no information contained herein or therein shall be deemed to be an 

admission by any party hereto to any third party of any matter whatsoever (including, without limitation, 

any violation of law or breach of contract).

 

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Schedules 

Schedule 1.1 Material Contracts 

Schedule 4.4 Authorized and Issued Capital Stock 

Schedule 4.11 Absence of Certain Changes 

Schedule 4.12 No Violation; Compliance with Laws 

Schedule 4.13 Legal Proceedings 

Schedule 4.14 Labor Relations 

Schedule 4.16 Title to Real Property 

Schedule 4.21 Employee Benefit Plans 

Schedule 4.24 Material Contracts 

Schedule 4.28 No Broker’s Fees 

 

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Schedule 1.1 – Material Contracts 

1. Patterson-UTI Drilling Company LLC 

a. Drilling Bid Proposal and Daywork Drilling Contract - U.S., dated December 7, 2015, by 

and between Patterson-UTI Drilling Company LLC and Penn Virginia Oil & Gas, L.P. 

2. Dominion Transmission, Inc. 

a. Service Agreement Applicable to Transportation of Natural Gas Under Rate Schedule FT 

(Contract No. 200597), dated May 31, 2011, by and between Dominion Transmission, 

Inc. and Penn Virginia Oil & Gas Corporation, together with the Negotiated Rate 

Agreement, undated, by and between Dominion Transmission, Inc. and Penn Virginia Oil 

& Gas Corporation, and the Revised Negotiated Rate Agreement, dated July 17, 2012, by 

and between Dominion Transmission, Inc. and Penn Virginia Oil & Gas Corporation. 

b. Precedent Agreement for Firm Transportation Services – Appalachian Gateway Project, 

dated September 4, 2008, as amended on March 13, 2009, by and between Dominion 

Transmission, Inc. and Penn Virginia Oil & Gas Corporation. 

c. Service Agreement Applicable to Transportation of Natural Gas Under Rate Schedule FT 

(Contract No. 200627), dated March 28, 2013, by and between Dominion Transmission, 

Inc. and Penn Virginia Oil & Gas Corporation. 

d. Precedent Agreement for Firm Transportation Services Tioga Area Expansion Project, 

dated February 25, 2011, by and between Dominion Transmission, Inc. and Penn 

Virginia Oil & Gas Corporation. 

3. Republic Midstream, LLC 

a. Transportation Agreement, dated July 30, 2014, by and between Republic Midstream, 

LLC and Penn Virginia Oil & Gas, L.P. 

b. Crude Oil Marketing Agreement, dated July 30, 2014, by and between Republic 

Midstream Marketing, LLC and Penn Virginia Oil & Gas, L.P., as amended by that 

certain First Amendment to Crude Oil Marketing Agreement, dated September 24, 2015. 

c. Amended and Restated Construction and Field Gathering Agreement, dated September 

24, 2015, by and between Republic Midstream, LLC and Penn Virginia Oil & Gas, L.P. 

d. Letter Agreement re Buy-Sell Marketing Arrangements, dated May 22, 2015, by and 

among Republic Midstream, LLC, Republic Midstream Marketing, LLC and Penn 

Virginia Oil & Gas, L.P. 

4. CEP Holdings, Ltd. 

a. Farmout Agreement – Blackjack South Prospect (Block 1), dated August 28, 2014, by 

and between CEP Holdings, Ltd. and Penn Virginia Oil & Gas, L.P., as amended by that 

certain Amendment to Farmout Agreement, dated November 6, 2014. 

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b. Farmout Agreement – Shiner East Prospect, dated August 28, 2014, by and between CEP 

Holdings, Ltd. and Penn Virginia Oil & Gas, L.P. 

5. American Midstream (Lavaca), LLC 

a. Construction and Field Gathering Agreement, dated January 31, 2014, by and between 

American Midstream (Lavaca), LLC (f/k/a HPIP Lavaca, LLC) and Penn Virginia Oil & 

Gas, L.P., as amended by that certain First Amendment to Construction and Field 

Gathering Agreement, dated May 7, 2015. 

b. Letter Agreement, dated June 29, 2015, by and between American Midstream (Lavaca), 

LLC and Penn Virginia Oil & Gas, L.P. 

c. Letter Agreement, dated August 21, 2015, by and between American Midstream 

(Lavaca), LLC and Penn Virginia Oil & Gas, L.P. 

d. Letter Agreement, dated September 18, 2015, by and between American Midstream 

(Lavaca), LLC and Penn Virginia Oil & Gas, L.P. 

e. Letter Agreement, dated September 28, 2015, by and between American Midstream 

(Lavaca), LLC and Penn Virginia Oil & Gas, L.P. 

6. ETC Texas Pipeline, Ltd.

a. Gas Processing Agreement, dated January 1, 2011, by and between ETC Texas Pipeline, 

Ltd. and Penn Virginia Oil & Gas, L.P., as amended by that certain Amendment to Gas 

Processing Agreement, dated July 1, 2013, as amended by that certain Second 

Amendment to Gas Processing Agreement, dated October 1, 2014. 

b. Gathering and Natural Gas Services Agreement, dated January 1, 2011, by and between 

ETC Texas Pipeline, Ltd. and Penn Virginia Oil & Gas, L.P., and all Individual 

Transaction Confirmations related thereto. 

i. Letter Agreement, dated April 19, 2013, by and between ETC Texas Pipeline, 

Ltd. and Penn Virginia Oil & Gas, L.P. 

ii. Letter Agreement, dated January 9, 2015, by and between ETC Texas Pipeline, 

Ltd. and Penn Virginia Oil & Gas, L.P. 

 

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Schedule 4.4 - Authorized and Issued Capital Stock 

(c) 

1. Capital stock or other equity securities or voting interests reserved for issuance under the new 

management incentive plan described in the Plan. 

(d) 

1. The new management incentive plan described in the Plan. 

 

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Schedule 4.11 - Absence of Certain Changes 

1. The Company’s financial condition has weakened as a result of the continued depressed 

commodity prices and other events leading to the pendency of the Chapter 11 Cases. 

 

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Schedule 4.12 - No Violation; Compliance with Laws 

1. Following an audit of the Company’s Bureau of Indian Affairs leases (the “Indian Affairs 

Leases”) for the period of 2007-2008, the Office of Natural Resources Revenue (“ONRR”) had 

verbally notified the Company that it intended to assess a civil penalty against the Company in 

the amount of $3.5 million for late payment of royalties due under the Indian Affairs Leases (the 

“ONRR Matter”). Following discussions with ONRR, the Company has reason to believe that the 

amount of the penalty will be reduced to approximately $2.5 million and will not involve 

litigation; however, the discussions with ONRR are ongoing. 

2. The Company has failed to make certain payments required under the Penn Virginia Corporation 

Supplemental Employee Retirement Plan (the “SERP”). 

 

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Schedule 4.13 - Legal Proceedings 

The following current litigation involves the Company and/or its Subsidiaries. 

PENN VIRGINIA OIL & GAS CORPORATION (“PVOG”) LITIGATION 

1. Excalibur Rentals, Inc. and Elite Toilet Rentals, Inc. v. Penn Virginia Oil and Gas Corporation 

Background: Plaintiffs brought suit against PVOG for non-payment of amounts that plaintiffs claim are 

owed as a result of their providing equipment and services to PVOG. 

Status: Discovery is underway. Plaintiffs are claiming damages of approximately $1.4 million in the 

aggregate. PVOG believes it owes plaintiffs only a small portion of the amount claimed as much of the 

amounts claimed by plaintiffs are not supported by invoices and an audit of the services provided resulted 

in a credit to PVOG of nearly $400,000. 

PENN VIRGINIA OIL & GAS, L.P. (“PVOG LP”) LITIGATION 

2. Freddy Howard Driver v. Penn Virginia Oil & Gas, L.P. 

Background: Mr. Driver claims he was injured in June 2014 while picking up a load of produced salt 

water at PVOG LP’s Targac #1H well. Mr. Driver was an employee of Key Energy Services, Inc. 

(“Key”) at the time of his injury. 

Status: Discovery is ongoing. Trial has been set for September 19, 2016. Key’s insurer is providing the 

defense and indemnifying PVOG LP. 

3. EOG Resources, Inc. v. Penn Virginia Oil & Gas, L.P. et al 

Background: EOG, a nonconsenting cotenant in certain Munson Ranch wells operated by PVOG LP, 

brought suit against PVOG LP alleging that (i) PVOG LP overcharged EOG for EOG’s interest in the 

wells, including by charging EOG an impermissible marketing fee in its payout calculations, as set forth 

in an audit conducted on behalf of EOG covering the period from 2011 to April 2013, (ii) PVOG LP was 

required to but failed to make payment on drip condensate on the wells and (iii) PVOG LP failed to pay 

EOG revenue from the Munson Ranch #6H well from November 2013 through January 2015. 

Status: PVOG LP responded to each audit exception and adjusted the relevant payout dates, resulting in a 

$190,000 payment to EOG for agreed exceptions. PVOG LP paid EOG the approximately $300,000 

in revenue it owed for production on the Munson Ranch #6H well (see (iii) above) in August 

2015. After giving effect to such payments, EOG’s outstanding demand amounts to approximately 

$200,000. 

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4. Hornacky et al. v. American Midstream (Lavaca), LLC et al 

Background: Plaintiffs filed suit in February 2016 against numerous parties, including American 

Midstream (Lavaca), LLC (“AMID”) and PVOG LP. Plaintiffs are homeowners of property adjacent to 

Republic Midstream, LLC’s midstream operations in Lavaca County. The lawsuit alleges, among other 

things, (i) that AMID’s midstream operations constitute a private nuisance and (ii) civil conspiracy to 

deceive the plaintiffs with respect to the intended use of its property.

Status: PVOG LP filed its answer in March 2016. Republic Midstream, LLC is controlling the defense 

and indemnifying PVOG LP. 

PENN VIRGINIA MC CORPORATION (“PVMCE”) LITIGATION 

5. Petroleum Development Corporation (“PDC”) v. Penn Virginia MC Energy L.L.C. 

Background: PDC filed this action on April 5, 2013, alleging that PDC and PVMCE had entered into a 

letter agreement in April 2007 whereby PDC assigned PVMCE several hundred mineral acres in 

properties in Washita County, Oklahoma. PDC further alleges that the letter agreement provided if 

another party made an offer to purchase the acreage within 12 months, then PDC would have an option to 

meet that offer. PDC asserts that PVMCE sold a portion of the acreage within the 12-month period 

without offering PDC the option. 

Status: In March 2014, the court denied both plaintiff’s and PVMCE’s motions for summary judgment. 

A new judge was assigned to the case in May 2015 and PVMCE has filed a new motion for summary 

judgment on statute of limitations which was denied. In January 2016, PDC proposed a settlement 

whereby PVMCE would pay approximately $5 million and make an assignment of certain leasehold 

interests. PVMCE rejected the offer. 

PENN VIRGINIA CORPORATION (THE “COMPANY”) LITIGATION 

6. Shelton v. Penn Virginia Corp. 

Background: Shelton is a former contractor who claims he was terminated for retaliation under 

Sarbanes-Oxley after he reported to the Company that certain service companies were paying kickbacks.

Status: Penn Virginia Corp.’s answer was filed in April 2016. It is expected that Penn Virginia Corp. 

will prevail in the lawsuit. In his complaint, Shelton requested past and future earnings, punitive damages 

and fees, to be determined by a jury. 

7. Potential litigation regarding the ONRR Matter. 

8. Hunt Oil Company. 

Background: In 2014, Hunt Oil Company (“Hunt”) demanded payment of $8.7 million in damages 

from Magnum Hunter Resources Corporation (“MHR”) in connection with a seismic program and as a 

result of certain audits relating to contractual arrangements between Hunt and Eagle Ford Hunter, Inc. 

(“EFH”), which was a subsidiary of MHR during the period subject to the penalty assessment. In 2014, 

the Company acquired EFH from MHR and MHR agreed to provide customary indemnification for preexisting liabilities. MHR has failed to make the $8.7 million payment and is now bankrupt. 

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Status: Hunt sent a demand letter, dated November 17, 2015, to the Company demanding that the 

Company make the $8.7 million payment in full by November 30, 2015. The Company’s response, dated 

November 24, 2015, disavows liability for substantially all amounts demanded by Hunt and affirms that 

MHR is responsible for payment of such amounts. Hunt sent a settlement offer by letter, dated December 

10, 2015, which was rejected by the Company by letter, dated December 15, 2015. 

 

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Schedule 4.14 - Labor Relations 

1. Reference is made to item 2 of Schedule 4.13 as if fully set forth herein. 

2. Reference is made to item 6 of Schedule 4.13 as if fully set forth herein. 

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Schedule 4.16 - Title to Real and Personal Property 

(a) 

1. Hunt Oil Company maintains a Lien on all of the Company’s equipment, fixtures, oil and gas 

when extracted and other personal property described in that certain Memorandum and Notice of 

Operating Agreement, Statement of Liens, Security Agreement and Financing Statement affecting 

the Bongo North Unit. 

2. The following involuntary liens have been filed against certain of the Company’s Real Properties 

located in Gonzales County, Texas. 

1. Lien Affidavit 

1221/526 DR 

3/16/2016 

Cactus Wellhead, LLC 

To The Public 

Washington Wells - # 2H; API – 42-177-33669 $123,335.33 

2. Lien Affidavit 

1221/559 DR 

3/16/2016 

Cactus Wellhead, LLC 

To The Public 

Washington Wells - # 3H; API – 42-177-33670 $123,335.33 

3. Lien Affidavit 

1221/592 DR 

3/16/2016 

Cactus Wellhead, LLC 

To The Public 

L & J Unit Wells - # 4H; API – 42-177-33666 $70,702.55 

4. Lien Affidavit 

1221/617 DR 

3/16/2016 

Cactus Wellhead, LLC 

To The Public 

L & J Unit Wells - # 5H; API – 42-177-33625 $70,259.35 

5. Lien Affidavit 

1221/642 DR 

3/16/2016 

Cactus Wellhead, LLC 

To The Public 

L & J Unit Wells - # 6H; API – 42-177-33626 $70,956.12 

6. Lien Affidavit 

1221/802 DR 

3/16/2016 

Bedrock Petroleum Consultants, LLC 

To The Public 

Axis Unit 

Wells - # 1H, 2H, 3H; 

API – 42-177-33695, 42-177-33696, 42-177-33697 

$13,589.75 

7. Lien Affidavit 

1221/814 DR 

3/16/2016 

Bedrock Petroleum Consultants, LLC 

To The Public 

Washington Unit Wells - # 2H, 3H; API – 42-177-33669, 42-

177-33670 $4,968.75 

8. Affidavit Claiming 

Oil and Gas Lien 

1222/151 DR 

3/10/2016 

3/21/2016 

Patterson-UTI Drilling Company LLC 

To The Public 

Washington 2H & 3H 

$23,800.00 

3. The following involuntary liens have been filed against certain of the Company’s Real Properties 

located in Lavaca County, Texas. 

1. Lien Affidavit 

To Secure Lien Against 

Mineral Property 

712/851 DR 

Acock Engineering & Associates, L.P. 

To The Public 

Property Owner 

Penn Virginia Oil & Gas, LP, 

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3/1/2016 Ted Collings, Jr. 

Plein Sud Holdings, LLC 

Marubeni Eagle Ford, LP 

Hawg Hunter Unit 

$15,595.00 

2. Lien Affidavit 

To Secure Lien Against 

Mineral Property 

712/866 DR 

3/1/2016 

Acock Engineering & Associates, L.P. 

To The Public 

Property Owner 

Penn Virginia Oil & Gas, LP, 

ZaZa Energy, LLC Hess Corporation Sable Hunter Unit 

$8,050.00 

3. Lien Affidavit 

713/808 DR 

3/14/2016 

Cactus Wellhead, LLC 

To The Public 

Hawg Hunter Wells - # 3H; API – 42-285-33975 $144,817.10

4. Lien Affidavit 

713/867 DR 

3/14/2016 

Cactus Wellhead, LLC 

To The Public 

Hawg Hunter Wells - # 4H; API – 42-285-33972 $164,322.27

5. Lien Affidavit 

714/12 DR 

3/14/2016 

Cactus Wellhead, LLC 

To The Public 

Hawg Hunter Wells - # 5H; API – 42-285-33973 $140,582.64

6. Lien Affidavit 

714/51 DR 

3/14/2016 

Cactus Wellhead, LLC 

To The Public 

RBK Unit Wells - # 3H; 

API – 42-285-33873 

$2,424.80 

7. Lien Affidavit 

714/57 DR 

3/14/2016 

Cactus Wellhead, LLC 

To The Public 

Sable Hunter Wells - # 4H; API – 42-285-33979 $60,365.07 

8. Lien Affidavit 

714/120 DR 

3/14/2016 

Cactus Wellhead, LLC 

To The Public 

Sable Hunter Wells - # 5H; API – 42-285-33980 $57,638.51 

9. Lien Affidavit 

714/144 DR 

3/14/2016 

Cactus Wellhead, LLC 

To The Public 

Sable Hunter Wells - # 6H; API – 42-285-33981 $31,971.61 

10. Lien Affidavit 

714/570 DR 

3/16/2016 

Bedrock Petroleum Consultants, LLC 

To The Public 

Hawg Hunter Unit 

Wells - # 3H, 4H, 5H; 

API – 42-285-33975, 42-285-33972, 42-285-33973 

$20,239.75 

11. Lien Affidavit 

714/584 DR 

3/16/2016 

Bedrock Petroleum Consultants, LLC 

To The Public 

Sable Hunter Unit 

Wells - # 4H, 5H, 6H; 

API – 42-285-33979, 42-285-33980, 42-285-33981 

$26,272.50 

13. Lien Affidavit 

714/616 DR 

3/16/2016 

Bedrock Petroleum Consultants, LLC 

To The Public 

Kelly Deep Water 

Wells - # 2, 

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API – 42-285-33730 

$11,957.00 

14. Affidavit Claiming Oil and 

Gas Lien 

715/40 DR 

3/10/2016 

3/21/2016 

Patterson – UTI Drilling Company LLC 

To The Public 

Hawg Hunter 3H, 4H & 5H 

$436,902.40 

15. Affidavit Claiming Oil and 

Gas Lien 

715/63 DR 

3/10/2016 

3/21/2016 

Patterson – UTI Drilling Company LLC 

To The Public 

Sable Hunter 4H, 5H & 6H $636,861.30 

(b) 

1. The Company is in default under that certain Lease Agreement, dated December 14, 2001, by 

and between Memorial City Towers, Ltd. and Penn Virginia Oil & Gas, L.P., as amended, 

and the related Lease Commencement Agreement, dated September 4, 2002, with respect to 

its leased facilities at Three Memorial City Plaza, Suite 700, 840 Gessner, Houston, Texas 

77024. 

2. The Company is in default under that certain Lease, dated June 8, 1995, by and between 

Radnor Center Associates and Penn Virginia Corporation, as amended, with respect to its 

leased facilities at Four Radnor Corporate Center, 100 Matsonford Road, Radnor, 

Pennsylvania 19087. 

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Schedule 4.21 - Employee Benefit Plans 

(a) 

1. The Company has failed to make certain payments required under the SERP. 

(e) 

1. The Company has failed to make certain payments required (i) under the Penn Virginia 

Corporation 2013 Amended and Restated Long-Term Incentive Plan, (ii) under the Penn Virginia 

Corporation Supplemental Employee Retirement Plan, (iii) with respect to performance-based 

restricted stock units and (iv) due to adjustments to its severance program. 

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Schedule 4.24 - Material Contracts 

1. As a result of the Company’s insolvency, the Company is in default under the terms of certain 

Material Contracts and, as a result of the anticipated filing of the Chapter 11 Cases, will be in 

default under the terms of certain Material Contracts and the enforceability thereof may be 

limited by bankruptcy, insolvency, reorganization or other similar laws limiting creditors’ rights 

generally or by equitable principles relating to enforceability. 

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Schedule 4.28 - No Broker’s Fees 

1. Jefferies LLC is entitled to certain fees and expenses from the Company or its Subsidiaries, 

subject to confirmation of the Plan. 

2. Alvarez & Marsal North America LLC is entitled to certain fees and expenses from the Company 

or its Subsidiaries, subject to confirmation of the Plan. 

3. PJT Partners Inc. is entitled to certain fees and expenses from the Company or its Subsidiaries, 

subject to confirmation of the Plan. 

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Exhibit D to the Restructuring Support Agreement

Exit Facility Term Sheet

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Exhibit A 

1 

#4834-9214-0593v2 

#4834-9214-0593v3

CONFIDENTIAL 

Penn Virginia Holding Corp.

Senior Secured Revolving Credit Facility 

Indicative Summary of Terms and Conditions 

May 10, 2016 

I. Parties 

Borrower: Penn Virginia Holding Corp. 

Guarantors: Penn Virginia Corporation (the “Parent”) and all 

subsidiaries of the Parent that will exist as of the 

Closing Date, or that are formed or acquired during 

the tenor of the Facility. 

Sole Lead Arranger and 

Sole Bookrunner: 

Wells Fargo Securities, LLC (“Wells Fargo 

Securities” and, in such capacity, the “Arranger”). 

Administrative Agent: Wells Fargo Bank, National Association (“Wells 

Fargo Bank” and, in such capacity, the 

“Administrative Agent”). 

Other Agents: To be mutually agreed upon by the Arranger and the 

Borrower. 

Lenders: A syndicate of banks, financial institutions and other 

entities, including Wells Fargo Bank (collectively, the 

“Lenders”), arranged by the Arranger and mutually 

agreed by the Borrower. 

Majority Lenders: Lenders holding more than 50.0% of the aggregate 

amount of the Loans and participations in Letters of 

Credit and unused commitments under the Facility 

(the “Majority Lenders”). 

Required Lenders: Lenders holding not less than 66.67% of the 

aggregate amount of the Loans and participations in 

Letters of Credit and unused commitments under the 

Facility. 

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Exhibit A 

2 

#4834-9214-0593v2 

#4834-9214-0593v3

Lender Swap Counterparties: Lenders or affiliates of a Lender that are party to 

Lender Swap Agreements (to be defined as set forth 

in the Debtor-in-Possession Credit Agreement dated 

on or about May 11, 2016 (the “DIP Credit 

Agreement”)), with the Borrower or any Guarantor 

(collectively, the “Lender Swap Agreements”). 

Secured Parties: Administrative Agent, Lenders, Issuing Bank, Lender 

Swap Counterparties and providers of cash 

management products provided to the Borrower or 

any Guarantor by a Lender or an affiliate of a Lender 

(collectively, the “Cash Management Products”) (as 

defined below) (the “Secured Parties”). Any Lender 

Swap Counterparty that is a Lender or an Affiliate of 

a Lender as of the date such Lender Swap 

Counterparty enters into any transaction under a 

Lender Swap Agreement shall be a Secured Party 

with respect to such transaction (without giving effect 

to any extension, increases or modifications 

(including blending) thereof which are made after 

such Lender Swap Counterparty ceases to be a 

Lender or an Affiliate of a Lender) until the payment 

in full in cash by Borrower and any Guarantor of all 

of their obligations under such transaction regardless 

of whether such Lender Swap Counterparty ceases to 

be a Lender or an Affiliate of a Lender while such 

transaction remains outstanding or arrangements 

satisfactory to such Lender Swap Counterparty has 

been made with respect to such transaction. 

II. Facility 

Type and Amount of Facility: A senior secured revolving credit facility (the 

“Facility”) in an amount up to $200 million (the 

“Aggregate Maximum Credit Amount”) (the loans 

thereunder, the “Loans”). 

Scheduled Termination Date: The fourth anniversary of the Closing Date (the 

“Termination Date”). 

Commitment Termination Date under 

Commitment Letter: 

120 days after the Petition Date as may be extended 

in accordance with Section 11(b) of the Commitment 

Letter. 

Availability: Subject to the Borrowing Base then in effect, the 

Facility shall be available on a revolving basis during 

the period commencing on the Closing Date and 

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Exhibit A 

3 

#4834-9214-0593v2 

#4834-9214-0593v3

ending on the Termination Date in accordance with 

the terms hereof and subject to satisfaction of 

applicable conditions precedent, including, without 

limitation, pro forma compliance with financial 

covenants to the extent set forth below. 

Availability under the Facility shall be equal to the 

lesser of (a) the Aggregate Maximum Credit Amount 

and (b) the then effective Borrowing Base (such 

lesser amount being the “Commitments”). 

Letters of Credit: A portion of the Facility not in excess of $5 million 

shall be available for the issuance of letters of credit 

(the “Letters of Credit”) by Wells Fargo Bank (in 

such capacity, the “Issuing Bank”). No Letter of 

Credit shall have an expiration date after the earlier of 

(a) twelve (12) months after the date of issuance and 

(b) five (5) business days prior to the Termination 

Date, provided that any Letter of Credit may provide 

for the renewal thereof (which shall in no event 

extend beyond the date referred to in clause (b) 

above). 

Drawings under any Letter of Credit shall be 

reimbursed by the Borrower (whether with its own 

funds or with the proceeds of Loans) on the business 

day the Borrower receives notice of such drawing 

from the Issuing Bank if such notice is received by 

the Borrower prior to 12:00 p.m. New York time or, 

if such notice is received after 12:00 p.m. New York 

time, then on the business day following such notice. 

To the extent that the Borrower does not so reimburse 

the Issuing Bank, the Lenders shall be irrevocably 

and unconditionally obligated to reimburse the 

Issuing Bank on a pro rata basis. 

Purpose: The proceeds of the Loans shall be used by the 

Borrower for (a) financing certain fees, costs and 

expenses in connection with the Borrower’s and 

Guarantor’s exit from chapter 11 and refinancing 

certain debt in connection therewith, (b) financing 

capital expenditures and acquisitions, and (c) working 

capital and general corporate purposes of the 

Borrower and its subsidiaries, provided that neither 

the Borrower nor its subsidiaries nor any other 

Guarantor will use any proceeds for the purpose of 

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Exhibit A 

4 

#4834-9214-0593v2 

#4834-9214-0593v3

purchasing or carrying directly or indirectly any 

margin stock or for any other purpose which would 

constitute this transaction a “purpose credit” within 

the meaning of Regulation U. 

Security/Guarantee: The Facility, the Lender Swap Agreements and the 

Cash Management Products (obligations and 

liabilities arising thereunder, the “Secured 

Obligations”) shall be ratably secured on a pari passu 

basis (as provided in the Application of Proceeds 

section below) by: 

• First priority, perfected liens and security 

interests on substantially all personal and real 

property assets of the Borrower and the 

Guarantors, including a first priority, perfected 

lien on: 

(a) all oil and gas properties of the Borrower 

and the Guarantors, including (i) not less than 

95% of the total value of the oil and gas 

properties evaluated in the most recent reserve 

report delivered to the Administrative Agent 

(“Proven Reserves”) and (ii) not less than 95% of 

all other oil and gas properties (but in any event, 

100% of oil and gas properties covered by the 

mortgages filed in connection with the existing 

credit facility (which such mortgages will be 

delivered (A) with each Scheduled Borrowing 

Base Redetermination or any other 

redetermination which results in an increase in 

the Borrowing Base, (B) with each acquisition 

(whether completed in one transaction or a series 

of related transactions) of oil and gas properties 

with a purchase price in excess of $5 million, and 

(C) to comply with the title covenant. 

(b) all present and future capital stock or other 

membership or partnership equity ownership or 

profit interests (collectively, “Equity Interests”) 

owned or held of record or beneficially by the 

Borrower or any Guarantor; 

(c) all tangible and intangible personal property 

and assets of the Borrower and the Guarantors 

(including, without limitation, all equipment, 

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Exhibit A 

5 

#4834-9214-0593v2 

#4834-9214-0593v3

inventory and other goods, accounts, licenses, 

contracts, intellectual property and other general 

intangibles, deposit accounts, securities accounts 

and other investment property and cash); and 

(d) all products, profits, and proceeds of the 

foregoing, 

subject to customary exclusions to be mutually 

agreed, including without limitation, exclusions 

for (i) contracts/leases/permits which expressly 

prohibit the granting of a security interest, (ii) 

intent-to-use trademark applications, (iii) 

commercial tort claims where the amount of 

damages expected to be claimed is less than 

$250,000, (iv) letter of credit rights where the 

amount thereof is less than $250,000, (v) 

perfecting liens on vehicles and other assets 

subject to certificate of title statutes and (vi) 

perfecting liens on other assets where the cost or 

burden of perfection outweighs the benefit to the 

Administrative Agent and the Lenders thereof as 

determined by the Administrative Agent in its 

reasonable discretion. 

For the avoidance of doubt, all deposit accounts and 

securities accounts (excluding (x) (A) accounts 

designated solely for payroll or employee benefits, 

(B) cash collateral accounts under the Facility and 

cash collateral accounts permitted under the Facility, 

(C) trust accounts held exclusively for the payment of 

taxes of the Borrower or any Guarantor, and (D) 

suspense or trust accounts held exclusively for 

royalty and working interest payments owing to third 

parties (the funds in such clauses (A) through (D), 

“Excluded Funds”), and (y) petty cash accounts 

holding no more than $250,000 in the aggregate) of 

the Borrower and Guarantors shall be subject to 

control agreements in form and substance reasonably 

satisfactory to the Administrative Agent. 

• Negative pledge on substantially all nonmortgaged assets of the Parent, the Borrower and 

its subsidiaries. 

 The Facility, the Cash Management Products and the 

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Exhibit A 

6 

#4834-9214-0593v2 

#4834-9214-0593v3

Lender Swap Agreements shall be ratably guaranteed 

on a pari passu basis (as provided in the Application 

of Proceeds section below) by an unconditional joint 

and several guarantee of payment from the Borrower 

(of the Cash Management Products of, and Lender 

Swap Agreements entered into by, Guarantors) and 

from the Guarantors. Security and Guarantees of 

obligations under the Lender Swap Agreements shall 

be subject to customary exceptions for non-qualified 

ECP counterparties. 

Lender Swap Agreements shall constitute Secured 

Obligations and Guaranteed Obligations until all 

obligations of Borrower and any Guarantor 

thereunder are paid in full, irrespective of whether the 

Lender Swap Counterparty is a Lender under the 

Facility. 

Borrowing Base: The Borrowing Base shall be the loan value to be 

assigned to the proved reserves attributable to the 

Borrower’s and the Guarantors’ oil and gas properties 

located in the United States (the “Borrowing Base 

Properties”). The Borrowing Base will be 

redetermined on a semi-annual basis (the “Scheduled 

Borrowing Base Redetermination”), with the parties 

having the right to interim unscheduled 

redeterminations as described below. 

Scheduled Borrowing Base Redeterminations will be 

on a semi-annual basis each April 1st and October 1st, 

commencing with April 1, 2017 (the “First Scheduled 

Borrowing Base Redetermination”) and will be based 

upon a Reserve Report prepared as of the 

immediately preceding January 1st and July 1st, 

respectively, and delivered to the Administrative 

Agent on or before March 1st and September 1st, 

respectively. The January 1st Reserve Report will be 

prepared by (a) Netherland, Sewell & Associates, 

Inc., (b) Ryder Scott Company, L.P., (c) DeGolyer 

and MacNaughton or (d) any other independent 

petroleum engineering firm reasonably acceptable to 

the Majority Lenders (collectively, the “Approved 

Engineers”), and the July 1st Reserve Report will be 

prepared internally by the Borrower in a form 

reasonably acceptable to the Administrative Agent. 

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Exhibit A 

7 

#4834-9214-0593v2 

#4834-9214-0593v3

The Borrowing Base will also be subject to interim 

reductions in connection with (a) any asset 

dispositions of oil and gas properties (including, but 

not limited to, disposition of Equity Interests in 

Guarantors holding oil and gas properties and, for the 

avoidance of doubt, casualty/condemnation events), 

(b) hedge unwinds or terminations, and (c) title 

defects, if the aggregate value attributed thereto 

(when aggregated with all such dispositions, hedge 

events or title defects) in the Borrowing Base (as 

determined by the Administrative Agent) is in excess 

of 5.0% of then current Borrowing Base in between 

Scheduled Borrowing Base Redeterminations. With 

respect to interim redeterminations on account of title 

defects, the Borrower shall have a period of 60 days 

to cure or correct such title defects before a 

redetermination on account of such title defects is 

made effective. 

Decisions regarding the amount of the Borrowing 

Base will be made at the sole discretion of the 

Lenders in accordance with their normal and 

customary oil and gas lending criteria as it exists at 

the particular time and as specified in the Credit 

Documentation. Increases in the amount of the 

Borrowing Base will require approval of all Lenders, 

and decreases or maintenance of the amount of the 

Borrowing Base will require approval of the Required 

Lenders. 

Initial Borrowing Base: The Borrowing Base will be set initially at an amount 

equal to $118 million until the next scheduled 

redetermination or such amount is otherwise adjusted 

as described herein, and subject to the following 

paragraph. 

If the Borrower has entered into commodity hedging 

agreements hedging proved, developed producing oil 

and gas reserves of the Borrower and the Guarantors 

in the minimal notional volumes and at the prices and 

for the periods described on Schedule A attached 

hereto (the “Minimum Hedges”) and such Minimum 

Hedges are in effect on the Closing Date, then the 

initial Borrowing Base amount set forth above shall 

be increased by $10 million on the Closing Date so 

long as such Minimum Hedges are otherwise on 

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Exhibit A 

8 

#4834-9214-0593v2 

#4834-9214-0593v3

terms permitted under the Facility and no other 

commodity hedging agreements are in effect which 

would negatively impact the benefits of such 

Minimum Hedges. If the Borrower and the 

Guarantors enter into commodity hedging agreements 

hedging proved, developed producing oil and gas 

reserves of the Borrower and the Guarantors for the 

periods described on Schedule A but with lesser 

notional volumes or lower prices than those set forth 

on Schedule A (the “Other Lower Hedges”) and such 

Other Lower Hedges are in effect on the Closing 

Date, then the Lenders and the Administrative Agent 

will, in good faith, consider (but is not obligated to 

agree to) a lesser increase in the initial Borrowing 

Base to be in effect on the Closing Date taking into 

account such Other Lower Hedges and other factors 

as the Lenders customarily deem appropriate 

(including, but not limited to, proven increases to cost 

savings and increases to proven reserves as reflected 

in an Approved Engineer’s reserve report) and 

determined in accordance with the Administrative 

Agent’s and the Lenders’ then in effect internal 

standards and practices for valuing and redetermining 

the value of Oil and Gas Properties in connection 

with reserve based oil and gas loan transactions. If 

the Borrower and the Guarantors enter into 

commodity hedging agreements hedging proved, 

developed producing oil and gas reserves of the 

Borrower and the Guarantors for the periods and 

minimal volumes described on Schedule A but with 

higher prices than those set forth on Schedule A (the 

“Other Higher Hedges”) and such Other Higher 

Hedges are in effect on the Closing Date, then the 

Lenders and the Administrative Agent will, in good 

faith, consider (but is not obligated to agree to) an 

increase in the initial Borrowing Base to be in effect 

on the Closing Date taking into account such Other 

Higher Hedges and other factors as the Lenders 

customarily deem appropriate and determined in 

accordance with the Administrative Agent’s and the 

Lenders’ then in effect internal standards and 

practices for valuing and redetermining the value of 

Oil and Gas Properties in connection with reserve 

based oil and gas loan transactions. 

The foregoing conditions and parameters around 

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Exhibit A 

9 

#4834-9214-0593v2 

#4834-9214-0593v3

setting the initial Borrowing Base to be in effect on 

the Closing Date takes into account various factors 

and circumstances, including but not limited to those 

expressly discussed above, and are being provided 

herein with the express understanding and agreement 

that the foregoing should not be construed as an 

indication or precedent for any future redetermination 

of the Borrowing Base and that no course of dealing 

shall be established hereby. 

The Administrative Agent, at the request of the 

Required Lenders, and the Borrower, each may 

request one additional unscheduled Borrowing Base 

redetermination during each period between 

scheduled Borrowing Base redeterminations (each, a 

“Wild Card Redetermination”). The Wild Card 

Redetermination requested by the Required Lenders 

may not be exercised prior to the First Scheduled 

Borrowing Base Redetermination. 

The Borrower may request additional unscheduled 

Borrowing Base redeterminations in connection with 

any acquisition of oil and gas properties having a 

purchase price, either individually or in the aggregate, 

in excess of 5.0% of the then current Borrowing 

Base. 

III. Certain Payment Provisions 

Fees and Interest Rates: As set forth on Annex I. 

Principal Payments: On the Termination Date. 

Voluntary Prepayments: Voluntary prepayments of Loans are permitted 

without premium or penalty (but subject to payment 

of applicable breakage costs, if any, except in the 

event of a payment made on account of the AntiHoarding Prepayment Provision) in minimum 

amounts and with prior notices to be agreed, except in 

the event of a payment made on account of the AntiHoarding Prepayment Provision. 

Mandatory Prepayments: If as a result of (a) a Scheduled Borrowing Base 

Redetermination, (b) a Wild Card Redetermination, 

or (c) an adjustment for title defects, the sum of 

outstanding Loans and Letters of Credit exceeds the 

Commitments (a “Borrowing Base Deficiency”), a 

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Exhibit A 

10 

#4834-9214-0593v2 

#4834-9214-0593v3

Borrowing Base Deficiency shall exist, then the 

Borrower will be required to prepay/cash collateralize 

such Borrowing Base Deficiency within 90 days 

(such period of time, a “Deficiency Period”) in three 

consecutive monthly installments. If a Scheduled 

Borrowing Base Redetermination, a Wild Card 

Redetermination or an adjustment on account of title 

defects (“Additional Trigger”) occurs during a 

Deficiency Period when a prepayment/cash 

collateralization schedule is in effect, then the 

Borrower shall continue to make such 

prepayments/cash collateralization when due and any 

additional amount of Borrowing Base Deficiency 

occurring as a result of the Additional Trigger shall 

be prepaid/cash collateralized within its own 

Deficiency Period of 90 days in three consecutive 

monthly installments. During any Deficiency Period, 

the Applicable Margin will increase by 2.00%. 

If as a result of an adjustment for an asset disposition 

or an adjustment resulting from the unwind or 

termination of a hedging agreement, a Borrowing 

Base Deficiency exists, then the Borrower will be 

required to prepay such Borrowing Base Deficiency 

on the first business day after such net cash proceeds 

from such asset disposition is paid, or on the day net 

cash proceeds are received in the case of an unwind 

or termination of a hedging agreement. 

If an asset disposition or a hedge unwind or 

termination occurs during the period when a 

Borrowing Base Deficiency already exists, then in 

addition to the requirement to prepay any Borrowing 

Base Deficiency occurring as a result thereof (as 

provided above), the Borrower shall apply any 

remaining proceeds resulting from such asset 

disposition or hedge unwind or termination on the 

date thereof as a pro rata prepayment of monthly 

installments due in such Deficiency Period. 

If, at any time Loans or Letters of Credit are 

outstanding, the Consolidated Cash Balance (as 

defined below) exceeds the Consolidated Cash 

Balance Limit (as defined below) as of the end of the 

last business day of any week, then the Borrower 

shall, within one business day, prepay the Loans in an 

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Exhibit A 

11 

#4834-9214-0593v2 

#4834-9214-0593v3

aggregate principal amount equal to such excess, and 

if any excess remains after prepaying all of the Loans 

as a result of an LC Exposure, pay to the 

Administrative Agent on behalf of the Lenders an 

amount equal to such excess to be held as cash 

collateral (the “Anti-Hoarding Prepayment 

Provision”). 

As used herein, the following terms have the 

meanings indicated below: 

“Consolidated Cash Balance” means, at any time, the 

aggregate amount of cash and cash equivalents, 

marketable securities, treasury bonds and bills, 

certificates of deposit, investments in money market 

funds and commercial paper, in each case, held or 

owned by (whether directly or indirectly), credited to 

the account of, or otherwise reflected as an asset on 

the balance sheet of, the Parent and its consolidated 

subsidiaries less Excluded Funds. 

“Consolidated Cash Balance Limit” means $10 

million. 

Optional Commitment Reductions: Commitments may be reduced by the Borrower in 

minimum amounts to be agreed upon or terminated in 

whole without penalty (other than breakage costs, if 

any). Optional reductions in Commitments which 

result in credit exposure exceeding the Commitments, 

as so reduced, shall be accompanied by concurrent 

payments sufficient to eliminate such excess. 

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Exhibit A 

12 

#4834-9214-0593v2 

#4834-9214-0593v3

IV. Certain Conditions 

Initial Conditions: 

 

Below is an exclusive list of conditions to the initial 

availability of the Facility: 

The initial availability of the Facility shall be 

conditioned upon satisfaction of the following 

conditions precedent (the date upon which all such 

conditions precedent shall be satisfied or waived, the 

“Closing Date”): 

(a) The Borrower and each Guarantor shall have 

executed and delivered satisfactory definitive 

financing documentation with respect to the Facility 

(the “Credit Documentation”), including mortgages, 

security agreements, pledge agreements, control 

agreements, transfer order letters executed in blank, 

other documentation reasonably satisfactory for the 

creation and perfection of the liens and security 

interests contemplated hereby (provided, however, if 

the Borrower has not received the initial draft forms 

of any such collateral documentation on or prior to 15 

days prior to the Closing Date, then the terms of the 

Credit Documentation will not impair availability of 

the Facility on the Closing Date if a perfected 

security interest in any such collateral (the security 

interest in respect of which cannot be perfected by 

means of the filing of a UCC financing statement, the 

making of a federal intellectual property filing or 

delivery of possession of capital stock or other 

certificated security of domestic entities) is not able 

to be provided on the Closing Date after Borrower’s 

use of commercially reasonable efforts to do so, the 

perfection of such security interest in such collateral 

will not constitute a condition precedent to the 

availability of the Facility on the Closing Date, but a 

security interest in such collateral will be required to 

be perfected (or delivery of documentation necessary 

to establish such perfection will be required) no later 

than 15 days after the Closing Date pursuant to 

arrangements to be mutually agreed between 

Borrower and the Administrative Agent (or by such 

later date as the Administrative Agent may agree to in 

its sole discretion). 

 (b) The Lenders, the Administrative Agent and 

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Exhibit A 

13 

#4834-9214-0593v2 

#4834-9214-0593v3

the Arranger shall have received all fees required to 

be paid, and all expenses for which invoices have 

been presented at least two (2) business days prior to 

the Closing Date (it being agreed and understood that 

this condition (b) may be satisfied concurrent with the 

initial funding under the Facility). 

 (c) All material governmental and third party 

approvals necessary (as determined in the reasonable 

discretion of the Administrative Agent) in connection 

with the financing and transactions contemplated 

hereby and the continuing operations of the Parent, 

the Borrower and its subsidiaries shall have been 

obtained and be in full force and effect. 

 (d) The Lenders shall have received (i) unaudited 

consolidated financial statements of the Borrower for 

each fiscal quarter of the current fiscal year ended at 

least 45 days prior to the Closing Date, and (ii) a 

satisfactory reserve report for the oil and gas 

properties of the Parent, Borrower and its subsidiaries 

prepared by an Approved Engineer. The reserve 

report dated as of December 31, 2015 and delivered 

to the Administrative Agent prior to the date of the 

Commitment Letter satisfies this clause (d)(ii). 

 (e) The Lenders shall have received a satisfactory 

opening balance sheet of the Borrower giving pro 

forma effect to the debt (if any) to be incurred on the 

Closing Date (it being agreed and understood that the 

opening balance sheet attached to the approved 

Disclosure Statement shall be deemed satisfactory to 

the Lenders). 

(f) Since the date of the Commitment Letter the 

Administrative Agent shall not become aware (i) of 

any material title defects arising since the date of the 

Commitment Letter or (ii) that any title diligence 

materials reviewed by the Administrative Agent (or 

counsels thereto) prior to the date of the Commitment 

Letter were inaccurate in any material respect, in the 

case of clauses (i) and (ii), to the extent the 

Borrowing Base value attributable to such affected 

properties exceeds 5% of the initial Borrowing Base 

in the aggregate; provided however, any defects or 

inaccuracies remedied upon effectiveness of and 

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Exhibit A 

14 

#4834-9214-0593v2 

#4834-9214-0593v3

pursuant to, the Plan of Reorganization shall not 

count towards such 5%. 

(g) No “Material Adverse Effect” as defined in 

BCA shall have occurred since the date of the 

Commitment Letter. 

(h) The Administrative Agent shall have received 

customary evidence of authorization, customary 

officer’s certificates, good standing certificates in the 

Borrower’s and each Guarantor’s jurisdiction of 

incorporation or formation, customary UCC searches, 

customary funds flow memorandum, insurance 

certificates and a solvency certificate from the 

Parent’s chief financial officer or treasurer (certifying 

that, after giving pro forma effect to the Transactions 

and after giving effect to each debtors’ exit from the 

Chapter 11 Cases in accordance with the Plan of 

Reorganization, that the Borrower and the 

Guarantors, on a consolidated basis, are solvent) in 

the form of Schedule B hereto. 

 (i) There shall be no adversary proceeding 

pending in the Bankruptcy Court, or litigation 

commenced outside of the Chapter 11 Cases that is 

not stayed pursuant to section 362 of the Bankruptcy 

Code, seeking to enjoin or prevent the financing or 

the transactions contemplated hereby. 

 (j) The Administrative Agent shall be reasonably 

satisfied that after the making of the Loans, the 

application of the proceeds thereof and after giving 

effect to the other transactions contemplated hereby, 

the aggregate amount of credit extensions under the 

Facility outstanding on the Closing Date shall not 

exceed the lesser of (A) $125 million and (B) the 

initial Borrowing Base in effect on the Closing Date. 

(k) The Administrative Agent shall have received 

evidence reasonably satisfactory to the 

Administrative Agent that the Borrower has received 

common equity proceeds in an aggregate amount not 

less than $50 million (it being understood that this 

clause (k) may be satisfied concurrently with the 

initial funding under the Facility). 

(l) The Lenders shall have received such legal 

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Exhibit A 

15 

#4834-9214-0593v2 

#4834-9214-0593v3

opinions, including opinions of local counsel, 

documents and other instruments as are customary for 

transactions of this type. 

 (m) If the initial Borrowing Base is adjusted as a 

result of Other Lower Hedges or Other Higher 

Hedges, then the Administrative Agent shall have 

received evidence reasonably satisfactory to the 

Administrative Agent that the Borrower has entered 

into such Other Lower Hedges or Other Higher 

Hedges, as applicable. This condition may be 

satisfied concurrent with the initial funding on the 

Closing Date. 

 (n) The Administrative Agent shall have received 

a certificate of insurance coverage of the Parent, the 

Borrower and its subsidiaries evidencing that the 

Parent, the Borrower and its subsidiaries are carrying 

insurance in accordance with the Credit 

Documentation. 

(o) The Borrower’s capital structure and financing 

plan shall be satisfactory to the Administrative Agent 

(it being agreed and understood that the capital 

structure and financing plan as set forth in the RSA as 

in effect on the “RSA Effective Date” as defined in 

the RSA, and as amended by any amendments 

consented to in writing by the Administrative Agent, 

is deemed satisfactory to the Administrative Agent). 

(p) The Administrative Agent shall have received 

from the Borrower a written policy regarding its and 

its subsidiaries’ marketing activities for oil and gas 

production to be in effect on the Closing Date. 

(q) The Administrative Agent shall have received a 

certificate of a responsible officer of the Borrower 

certifying as to compliance with the provision titled 

“Ongoing Conditions” below. 

(r) The Administrative Agent and the Lenders 

shall have received (at least five (5) business days 

prior to Closing Date to the extent requested at least 

ten business (10) days prior to the Closing Date 

unless the facts related thereto were not disclosed to 

the Administrative Agent prior to such 10th business 

day), and be reasonably satisfied in form and 

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Exhibit A 

16 

#4834-9214-0593v2 

#4834-9214-0593v3

substance with, all documentation and other 

information required by bank regulatory authorities 

under applicable “know-your-customer” and antimoney laundering rules and regulations, including but 

not restricted to the USA Patriot Act. 

(s) The Bankruptcy Court shall have entered an 

Order in form and substance reasonably acceptable to 

the Administrative Agent and the Majority Lenders 

approving the Commitment Letter and the Fee Letter 

and such Order shall be a Final Order. 

(t) The Bankruptcy Court shall have entered an 

Order confirming the Plan of Reorganization in form 

and substance reasonably acceptable to the 

Administrative Agent and the Majority Lenders, and 

such Order shall be a Final Order. Such Plan of 

Reorganization shall authorize and approve the 

extensions of credit under the Facility and the 

performance of the Borrower and the Guarantors’ 

obligations thereunder and otherwise be in form and 

substance reasonably acceptable to the 

Administrative Agent and the Majority Lenders (it 

being agreed and understood that any Plan of 

Reorganization that is substantially consistent with 

that certain Restructuring Term Sheet dated as of the 

date hereof attached hereto as Schedule C (the “Form 

Plan”) is deemed to be in form and substance 

reasonably acceptable to the Administrative Agent 

and the Majority Lenders). 

The Plan of Reorganization shall be deemed to be 

substantially consistent with the Form Plan as long as 

the Plan of Reorganization contains no departures, 

amendments, changes or modifications from the 

Form Plan that that could be reasonably expected to 

affect any Lender’s rights, claims, recoveries, and/or 

obligations. 

“Final Order” means, as applicable, an order or 

judgment 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 

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Exhibit A 

17 

#4834-9214-0593v2 

#4834-9214-0593v3

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 or 

judgment 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. 

“Order” means any judgment, order, award, 

injunction, writ, permit, license or decree of any 

Governmental Entity or arbitrator of applicable 

jurisdiction. 

“Governmental Entity” has the meaning set forth in 

section 101(27) of the Bankruptcy Code. 

(t) All authorizations, consents, and regulatory 

approvals required, if any, in connection with the 

Consummation (as defined in the Plan of 

Reorganization) of the Plan of Reorganization shall 

have been obtained. 

(u) All other actions, documents, and agreements 

necessary to implement the Plan of Reorganization 

shall have been effected or executed, including the 

final forms of the documents contained in the Plan of 

Reorganization, shall have been effected or executed 

and delivered, as the case may be, to the required 

parties and, to the extent required, filed with the 

applicable governmental units in accordance with 

applicable laws. 

(v) All documents and agreements referred to in 

clause (u) above shall be reasonably acceptable to the 

Administrative Agent and the Majority Lenders, 

solely as to provisions that could be reasonably 

expected to affect the Lenders’ rights, claims, 

recoveries, and/or obligations. 

(w) Each of the conditions listed in the Plan of 

Reorganization shall have been satisfied and in full 

force and effect or waived in accordance with the 

provisions thereof. 

(x) No event of default under the DIP facility 

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Exhibit A 

18 

#4834-9214-0593v2 

#4834-9214-0593v3

shall have occurred and be continuing. 

(y) The Administrative Agent shall have received 

a customary notice of borrowing in accordance with 

the Credit Documentation. 

(z) (i) All obligations owing to the Lender Swap 

Counterparties shall constitute Secured Obligations 

pursuant to Lender Swap Agreements under the 

Facility or (ii) to the extent such obligations owing to 

the Lender Swap Counterparties are not rolled over to 

the Facility, such obligations shall have been paid in 

full. 

(aa) No event of default shall have occurred and be 

continuing under the Lender Swap Agreements (as 

defined in the DIP Credit Agreement) with respect to 

the Borrower or the Guarantors as the defaulting or 

sole affected parties. 

On-Going Conditions: The making of each extension of credit, including the 

initial funding on the Closing Date, shall be 

conditioned upon (a) the accuracy of all 

representations and warranties in all material respects 

(unless already qualified by materiality or material 

adverse change in the Credit Documentation, in 

which case, such representations and warranties shall 

be true and correct in all respects) in the Credit 

Documentation (including, without limitation, the 

material adverse change since the Closing Date and 

litigation representations), (b) there being no default 

or Event of Default in existence at the time of, and 

after giving effect to the making of, such extension of 

credit, (c) in the good faith reasonable expectation of 

the certifying officer and as certified to such in the 

request for extension of credit (i) the Borrower 

intends to apply the proceeds of such extension of 

credit and (ii) after giving effect to the making of 

such extension of credit and the application thereof, 

the pro forma Consolidated Cash Balance as of the 

end of the last business day of the week in which 

such extension of credit is to be made will not exceed 

the Consolidated Cash Balance Limit, and (d) other 

than as to the initial funding on the Closing Date and 

any funding prior to the delivery of financial 

statements with respect to the fiscal quarter ending 

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Exhibit A 

19 

#4834-9214-0593v2 

#4834-9214-0593v3

December 31, 2016, after giving effect to the making 

of such extension of credit, the Borrower would be in 

pro forma compliance with the financial covenants 

based on EBITDAX as of the immediately preceding 

fiscal quarter end for which financial statements are 

available. 

As used herein and the Credit Documentation, a 

“material adverse effect” shall mean any material 

adverse effect on (a) the business, property, 

operations, or condition (financial or otherwise) of 

the Borrower and the Guarantors taken as a whole, 

(b) the ability of the Borrower and Guarantors, taken 

as a whole, to perform any of their obligations under 

the Credit Documentation to which any of them is a 

party, (c) the validity or enforceability of any of the 

Credit Documentation or (d) the rights or remedies of 

or benefits available to the Administrative Agent, any 

other agent, the Issuing Bank or the Lenders under 

the Credit Documentation. 

V. Certain Documentation Matters

 The Credit Documentation shall contain 

representations, warranties, covenants and Events of 

Default customary for financings of this type and 

other terms to be mutually agreed, without limitation: 

Representations and Warranties: Limited to the following representations and 

warranties to be made by the Borrower and the 

Guarantors, subject to customary exceptions, baskets 

and materiality qualifiers: Organization; Powers; 

Authority; Enforceability; Approvals; No Conflicts; 

Financial Condition; No Material Adverse Effect 

since the Closing Date; Litigation; Environmental 

Matters; Compliance with Laws and Agreements; No 

Defaults; Investment Company Act; Taxes; ERISA; 

Disclosure of Written Information (with customary 

exceptions for forward-looking statements, 

projections or information of a general industry or 

economic nature); No Material Misstatements; 

Insurance; Restriction on Liens; Subsidiaries; 

Location of Business and Offices; Properties; Titles; 

Maintenance of Properties; Gas Imbalances, 

Prepayments; Marketing of Production; Swap 

Agreements; Intellectual Property; Material Personal 

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Exhibit A 

20 

#4834-9214-0593v2 

#4834-9214-0593v3

Property; Use of Loans and Letters of Credit; 

Solvency of Borrower and Guarantors on a 

consolidated basis; Line of Business and International 

Operations; Anti-Corruption Laws, Sanctions, 

PATRIOT Act; Deposit Accounts and Securities 

Accounts; Licenses, Permits, etc.; Fiscal Year; Senior 

Debt Status. 

Affirmative Covenants: Limited to the following affirmative covenants 

applicable to the Borrower, the Guarantors and their 

respective subsidiaries, subject to customary 

exceptions, baskets and materiality qualifiers: 

Financial Statements; Other Information (including 

Consolidated Cash Balance Information on a weekly 

basis); Notices of Default; Notices of other Material 

Events; Existence; Conduct of Business; Payment of 

Taxes (other than taxes that are being contested in 

good faith by appropriate proceedings diligently 

conducted and for which adequate reserves have been 

made in accordance with GAAP); Performance of 

Obligations under Loan Documents; Operation and 

Maintenance of Properties; Intercompany 

Indebtedness; Information Regarding Borrower and 

Guarantors; Insurance; Books and Records; 

Inspection Rights (which such rights (a) may be 

exercised by the Administrative Agent and the 

Lenders, acting together, at reasonable times and with 

reasonable prior notice, (b) shall be reimbursed only 

once per year by the Borrower absent an Event of 

Default, and (c) shall be subject to customary limiters 

for confidentiality, privilege, attorney work product 

and non-financial trade secrets and proprietary 

information; provided that the Borrower shall not be 

obligated to reimburse the expenses of any Lender 

that is not the Administrative Agent absent an Event 

of Default); Compliance with Laws (including, but 

not limited to, Anti-Corruption Laws and Sanctions); 

Environmental Matters; Further Assurances; Reserve 

Reports; Title Information; Additional Collateral 

(maintenance of liens on not less than 95% of the 

total value of the oil and gas properties of the 

Borrower and the Guarantors at any time and, in any 

event, 100% of the oil and gas properties of the 

Borrower and the Guarantors covered by the 

mortgages filed in connection with the existing credit 

facility); Additional Guarantors; ERISA Compliance; 

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Exhibit A 

21 

#4834-9214-0593v2 

#4834-9214-0593v3

Permits, Licenses, etc.; and, within 30 days of the 

Closing Date, the Borrower shall have entered into 

commodity hedging agreements hedging proved 

developed producing oil and gas reserves of the 

Borrower and its subsidiaries covering minimal 

notional volumes of 75% of projected oil and gas 

production from such proved developed producing oil 

and gas reserves and at the prices reasonably 

acceptable to the Administrative Agent and for a 

period of no less than 36 consecutive months (which 

covenant may be satisfied on the Closing Date to the 

extent hedges in effect at the Closing Date complies 

with such requirements). 

Financial Covenants: Limited to the following financial covenants: 

Total Debt to EBITDAX: The Borrower will not 

permit, at any time, the ratio of total debt (not 

including (a) surety performance and other similar 

bonds and (b) hedging obligations) as of such time to 

consolidated EBITDAX for the four fiscal quarters 

ending on the last day of the fiscal quarter 

immediately preceding the date of determination 

(beginning with the first full fiscal quarter postClosing Date) for which financial statements are 

available (or if such ratio is being tested as of the last 

day of any fiscal quarter, EBITDAX for the four 

fiscal quarters ending on such day) to be greater than 

4.00 to 1.00 as of each fiscal quarter end through and 

including September 30, 2017, 3.75 to 1.00 as of the 

fiscal quarter ending December 31, 2017 and 3.50 to 

1.00 as of each fiscal quarter thereafter. 

The definition of EBITDAX will (a) add-back all 

non-cash charges (except to the extent that such noncash charges are reserved for cash charges to be taken 

in the future) and extraordinary losses (excluding 

extraordinary losses from discontinued operations) 

(b) deduct non-cash gains or other non-cash items 

increasing income and extraordinary gains, and (c) be 

measured on an annualized basis for the first three 

fiscal quarters of testing (e.g., for purposes of 

calculating EBITDAX for the four fiscal quarters 

ending (i) at the end of the first full fiscal quarter 

post-Closing Date, such EBITDAX shall be 

EBITDAX for such fiscal quarter then ended times 

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Exhibit A 

22 

#4834-9214-0593v2 

#4834-9214-0593v3

four, (b) at the end of the second full fiscal quarter 

post-Closing Date, such EBITDAX shall be 

EBITDAX for such two fiscal quarters then ended 

times two and (c) at the end of the third full fiscal 

quarter post-Closing Date, such EBITDAX shall be 

EBITDAX for such three fiscal quarters then ended 

times four-thirds). 

Interest Coverage Ratio: The Borrower will not 

permit, as of the last day of any fiscal quarter, the 

ratio of consolidated EBITDAX for the four fiscal 

quarters then ending to consolidated cash interest 

expense for such period to be less than 3.00 to 1.00. 

For the avoidance of doubt, cash interest expense for 

the first three fiscal quarters shall be measured on an 

annualized basis (e.g., for purposes of calculating 

cash interest expense for the four fiscal quarters 

ending (i) at the end of the first full fiscal quarter 

post-Closing Date, such cash interest expense shall be 

cash interest expense for such fiscal quarter then 

ended times four, (b) at the end of the second full 

fiscal quarter post-Closing Date, such cash interest 

expense shall be cash interest expense for such two 

fiscal quarters then ended times two and (c) at the end 

of the third full fiscal quarter post-Closing Date, such 

cash interest expense shall be cash interest expense 

for such three fiscal quarters then ended times fourthirds). 

Current Ratio: The Borrower will not permit, as of 

the last day of any fiscal quarter, its ratio of (i) 

consolidated current assets (including the unused 

amount of the Commitments unless a Default exists, 

but excluding non-cash assets under FASB 

Accounting Standards Codification 815) to (ii) 

consolidated current liabilities (excluding non-cash 

obligations under FASB Accounting Standards 

Codification 815, current maturities under the Facility 

and non-cash liabilities recorded in connection with 

stock-based or similar incentive based compensation 

awards or arrangements) to be less than 1.0 to 1.0. 

Negative Covenants: Limited to the following negative covenants to be 

applicable to the Borrower, the Guarantors and their 

subsidiaries, subject to customary exceptions, baskets 

and materiality qualifiers: Limitations on: Debt (but 

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Exhibit A 

23 

#4834-9214-0593v2 

#4834-9214-0593v3

permitting $10 million for capital leases or purchase 

money debt for equipment and $10 million for 

unsecured debt); Liens (but permitting (i) $1 million 

lien basket encumbering oil and gas properties and 

(ii) $2 million lien basket encumbering non-oil and 

gas properties, in any case, for non-debt obligations 

except that hedges may not be secured other than the 

obligations under the Lender Swap Agreements 

secured through the Facility); Restricted Payments 

(Dividends, Distributions and Redemptions) (but 

permitting permitted tax distributions so long as no 

payment, bankruptcy, or fundamental change Event 

of Default has occurred and is continuing); 

Investments, Loans and Advances (but permitting 

acquisitions of a person, or substantially all the assets 

of a person, or a line of business, division or 

enterprise on terms to be mutually agreed including, 

without limitation, (a) no dollar limit on acquisitions 

to the extent funded with common equity issuance 

proceeds, (b) after giving effect thereto (including, 

any increases in the Borrowing Base resulting 

therefrom), availability under the Facility is no less 

than 15% of the then effective Borrowing Base, (c) a 

requirement that all such acquired assets (including 

assets of any acquired subsidiary) become Collateral 

and (d) customary exceptions for customary oil and 

gas investments made in the ordinary course of 

business); Nature of Business; No Foreign 

Subsidiaries or International Operations; Leases; 

Proceeds of Loans; Anti-Corruption Laws and 

Sanctions; ERISA Compliance; Sale or Discount of 

Receivables; Mergers, Etc.; Sale of Properties, 

including Sale-Leasebacks; Environmental Matters; 

Transactions with Affiliates; Subsidiaries; Restrictive 

Agreements; Gas Imbalances, Take-or-Pay or Other 

Prepayments; Swap Agreements (with limitations on 

maximum hedging volumes to be consistent with 

those set forth in the DIP Credit Agreement); 

Required Hedges; Deposit Accounts and Securities 

Accounts; Fiscal Year and Quarter; Repayment of 

Debt; Marketing Activities; Passive Holding 

Company. 

For the avoidance of doubt, the Credit Documentation 

will permit the professional fee escrow (including 

payments therefrom) as contemplated under the Form 

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Exhibit A 

24 

#4834-9214-0593v2 

#4834-9214-0593v3

Plan. 

Events of Default: Limited to the following events of default to be 

applicable to the Borrower, the Guarantors and their 

subsidiaries, subject to customary exceptions, baskets 

and materiality qualifiers: Nonpayment of principal 

of any loan or any reimbursement obligation in 

respect of a letter of credit disbursement when due; 

nonpayment of interest, fees or other amounts after a 

grace period of three (3) business days, in each case, 

under the Facility; inaccuracy of representations and 

warranties in any material respects (unless already 

qualified by materiality or material adverse effect in 

the Credit Documentation, in which case, in any 

respect); violation of covenants (subject, in the case 

of certain customary affirmative covenants, to a grace 

period of 30 days); cross-default to debt, including 

hedges ($10 million); bankruptcy events; ERISA 

events ($10 million); material judgments ($5 million); 

Change of Control (as defined below); any of the 

Credit Documentation or any material provision 

therein ceases to be in full force and effect and valid, 

binding and enforceable. 

As used herein “Change of Control” shall mean (a) 

any “person” or “group” (as such terms are used in 

Sections 13(d) and 14(d) of the Exchange Act, but 

excluding any employee benefit plan of such person 

or its subsidiaries, and any person or entity acting in 

its capacity as trustee, agent or other fiduciary or 

administrator of any such plan) (other than the equity 

holders at the Closing Date) becomes the “beneficial 

owner” (as defined in Rules 13d-3 and 13d-5 under 

the Exchange Act, except that a “person” or “group” 

shall be deemed to have “beneficial ownership” of all 

equity interests that such “person” or “group” has the 

right to acquire, whether such right is exercisable 

immediately or only after the passage of time (such 

right, an “option right”)), directly or indirectly, of 

more than 35% of the Equity Interests of the Parent 

entitled to vote in the election of members of the 

board of directors (or equivalent governing body) of 

the Parent, (b) a majority of the members of the board 

of directors (or other equivalent governing body) of 

Parent shall not constitute Continuing Directors, (c) 

there shall have occurred under any indenture or other 

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Exhibit A 

25 

#4834-9214-0593v2 

#4834-9214-0593v3

instrument evidencing any debt or equity interests in 

excess of $5 million any “change in control” or 

similar provision (as set forth in the indenture, 

agreement or other evidence of such debt) obligating 

the Parent or any of its subsidiaries to repurchase, 

redeem or repay all or any part of the debt or equity 

interests provided for therein, or (d) the Parent 

ceasing to own directly or indirectly 100% of the 

Borrower.1

“Continuing Directors” means the directors (or 

equivalent governing body) of the Parent on the 

Closing Date and each other director (or equivalent) 

of Parent, if, in each case, such other Person’s 

nomination for election to the board of directors (or 

equivalent governing body) of Parent is approved by 

at least 51% of the then Continuing Directors. 

Remedies: Usual and customary with the Administrative Agent, 

acting on behalf of the Secured Parties and at the 

direction of the Majority Lenders. 

Voting: Amendments and waivers with respect to the Credit 

Documentation shall require the approval of the 

Majority Lenders, except that (a) the consent of each 

Lender directly affected thereby shall be required 

with respect to (i) extensions of the scheduled date of 

the Termination Date, (ii) reductions in the rate of 

interest or any fee or extensions of any due date 

thereof, (iii) increases in the amount or extensions of 

the expiry date of any Lender’s commitment and (iv) 

other customary exceptions (including, but not 

limited to, (x) changes to application of proceeds, and 

(y) releases of all or substantially all guarantors or 

collateral), (b) the consent of all the Lenders or the 

Required Lenders, as applicable, shall be required 

with respect to modifications of the Borrowing Base, 

(c) the consent of all the Lenders shall be required 

with respect to modifications of any of the voting 

percentages and (d) the consent of each Lender Swap 

Counterparty directly affected thereby shall be 

required with respect to any amendments or waivers 

 

1 Assumes reorganized entity is a public entity. A reorganized entity that is private may have a 

different Change of Control. 

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Exhibit A 

26 

#4834-9214-0593v2 

#4834-9214-0593v3

to the Credit Documentation that materially, 

adversely and disproportionately affects (i) such 

Lender Swap Counterparty as compared to the other 

Secured Parties or (ii) the Lender Swap 

Counterparties as compared to the Lenders. 

Application of Proceeds: Usual and customary, including, without limitation, 

obligations under the Lender Swap Agreements and 

the Cash Management Products being provided pari 

passu and pro rata treatment with payments of 

principal owing under the Facility. 

Release of Collateral and Guarantors: Usual and customary, including, without limitation, 

no release of all or substantially all guarantors or all 

or substantially all of the collateral until all Secured 

Obligations have been paid (other than contingent 

indemnification obligations as to which no claim has 

been made and other Secured Obligations as to which 

arrangements satisfactory to the holders of such 

obligations have been made) and commitments 

terminated. 

Assignments and Participations: The Lenders shall be permitted to assign all or a 

portion of their Loans and commitments with the 

consent, not to be unreasonably withheld, of (a) the 

Borrower, unless (i) the assignee is a Lender, an 

affiliate of a Lender or an approved fund (provided 

that, the Borrower shall be deemed to have consented 

to an assignment unless it shall have objected thereto 

by written notice to the Administrative Agent within 

five (5) business days after having received notice 

thereof) or (ii) an Event of Default has occurred and 

is continuing, (b) the Administrative Agent and (c) 

the Issuing Bank. In the case of partial assignments 

(other than to another Lender, to an affiliate of a 

Lender or an approved fund), the minimum 

assignment amount shall be $5,000,000, in each case 

unless otherwise agreed by the Borrower and the 

Administrative Agent. The Lenders shall also be 

permitted to sell participations in their Loans. 

Participants shall have the same benefits as the 

Lenders with respect to yield protection and increased 

cost provisions. Voting rights of participants shall be 

limited to those matters with respect to which the 

affirmative vote of the Lender from which it 

purchased its participation would be required as 

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Exhibit A 

27 

#4834-9214-0593v2 

#4834-9214-0593v3

described under “Voting” above. Pledges of Loans in 

accordance with applicable law shall be permitted 

without restriction. Promissory notes shall be issued 

under the Facility only upon request. No assignments 

or participations shall be permitted to be made to the 

Borrower or any of its affiliates or to natural persons. 

Yield Protection; Etc: The Credit Documentation shall contain customary 

provisions (a) protecting the Lenders against 

increased costs or loss of yield resulting from changes 

in reserve, tax, capital adequacy or other 

requirements of law, and from the imposition of or 

changes in withholding or other taxes (including 

reflecting that both (x) the Dodd-Frank Wall Street 

Reform and Consumer Protection Act and all 

requests, rules, guidelines, requirements and 

directives thereunder, issued in connection therewith 

or in implementation thereof and (y) all requests, 

rules, guidelines, requirements and directives 

promulgated by the Bank for International 

Settlements, the Basel Committee on Banking 

Supervision (or any successor or similar authority) or 

the United States or foreign regulatory authorities, in 

each case pursuant to Basel III shall, in the case of 

each of the foregoing clause (x) and clause (y), be 

deemed to be a change in law after the Closing Date 

regardless of the date enacted, adopted or issued), (b) 

indemnifying the Lenders for “breakage costs” 

incurred in connection with, among other things, any 

prepayment of a Eurodollar Loan on a day other than 

the last day of an interest period with respect thereto 

(other than any such repayment on account of the 

Anti-Hoarding Prepayment Provision), and (c) 

concerning defaulting lenders. 

Expenses and Indemnification: The Borrower shall pay (a) all reasonable and 

documented out-of-pocket expenses of the 

Administrative Agent, the Arranger and the Lender 

Swap Counterparties associated with the syndication 

of the Facility and the preparation, execution, 

delivery and administration of the Credit 

Documentation and the Lender Swap Agreements and 

any amendment or waiver with respect thereto 

(including the reasonable fees, disbursements and 

other charges of counsel) and (b) all documented outof-pocket expenses of the Administrative Agent, the 

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Exhibit A 

28 

#4834-9214-0593v2 

#4834-9214-0593v3

Lenders and the Lender Swap Counterparties 

(including the fees, disbursements and other charges 

of counsel) in connection with the enforcement of the 

Credit Documentation and the Lender Swap 

Agreements.. 

 The Administrative Agent, the Arranger, the Lenders 

and the Lender Swap Counterparties (and their 

affiliates and their respective sub-agents, partners, 

directors, officers, employees, agents, trustees, 

administrators, managers, advisors and 

representatives of such Person and of such Person’s 

affiliates) (each of the foregoing being called an 

“Indemnitee”) will have no liability to the Parent, the 

Borrower, any subsidiary or affiliate thereof, and will 

be indemnified and hold harmless each Indemnitee 

against, and hold each Indemnitee harmless from, and 

shall pay or reimburse any such Indemnitee for, any 

and all losses, claims (including, without limitation, 

any environmental claims), penalties, damages, 

liabilities and related expenses (including the fees, 

charges and disbursements of any counsel and any 

consultant for any Indemnitee) incurred by any 

Indemnitee or asserted against any Indemnitee by any 

Person (including the Parent, the Borrower, any 

subsidiary or any affiliate thereof), arising out of, in 

connection with, or as a result of (i) the execution or 

delivery of the Credit Documentation or the Lender 

Swap Agreements, or any agreement or instrument 

contemplated thereby, the performance by the parties 

hereto of their respective obligations hereunder or 

thereunder or the consummation of the transactions 

contemplated hereby or thereby, (ii) any Loan or 

Letter of Credit or the use or proposed use of the 

proceeds therefrom (including any refusal by any 

Issuing Bank to honor a demand for payment under a 

Letter of Credit if the documents presented in 

connection with such demand do not strictly comply 

with the terms of such Letter of Credit), (iii) any 

actual or alleged presence or release of hazardous 

materials on or from any property owned or operated 

by the Parent, the Borrower or any subsidiary or 

affiliate thereof, or any environmental claim related 

in any way to the Parent, the Borrower or any 

subsidiary or affiliate thereof, (iv) any actual or 

prospective claim, litigation, investigation or 

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Exhibit A 

29 

#4834-9214-0593v2 

#4834-9214-0593v3

proceeding relating to any of the foregoing, whether 

based on contract, tort or any other theory, whether 

brought by a third party or by the Parent, the 

Borrower or any subsidiary or affiliate thereof, and 

regardless of whether any Indemnitee is a party 

thereto, or (v) any claim (including, without 

limitation, any environmental claims), investigation, 

litigation or other proceeding (whether or not the 

Administrative Agent, any Lender or any Lender 

Swap Counterparty is a party thereto) and the 

prosecution and defense thereof, arising out of or in 

any way connected with the Loans, the Credit 

Documentation, the Lender Swap Agreements or any 

documents contemplated by or referred to therein or 

the transactions contemplated thereby (and in all 

cases, whether or not caused by or arising, in whole 

or in part, out of the comparative, contributory or sole 

negligence of such Indemnitee); provided that such 

indemnity shall not, as to any Indemnitee, be 

available to the extent that such losses, claims, 

damages, liabilities or related expenses are 

determined by a court of competent jurisdiction by 

final and non-appealable judgment (a) to have 

resulted from the gross negligence or willful 

misconduct of such Indemnitee, (b) to have resulted 

from a claim brought by the Borrower against any 

Indemnitee of any material breach in bad faith of 

such Indemnitee’s funding obligations under the 

Credit Agreement or with respect to the Lender Swap 

Agreements, or (c) are on account of a dispute arising 

solely among Indemnitees (other than the 

Administrative Agent in its role as such) to the extent 

such dispute does not involve and is not related to any 

act, omission or representation on the part of, or any 

information provided by or on behalf of, the 

Borrower, any Guarantor or affiliates thereof. This 

indemnity shall not apply with respect to Taxes other 

than any Taxes that represent losses, claims, 

damages, etc. arising from any non-Tax claim. 

Waiver of Consequential Damages; 

Confidentiality: 

To the fullest extent permitted by applicable law the 

parties to the Credit Documentation shall not assert, 

and will waive, any claim against any other party, on 

any theory of liability, for special, indirect, 

consequential or punitive damages (as opposed to 

direct or actual damages) arising out of, in connection 

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Exhibit A 

30 

#4834-9214-0593v2 

#4834-9214-0593v3

with, or as a result of, any Credit Documentation or 

any agreement or instrument contemplated hereby, 

the transactions contemplated hereby or thereby, any 

Loan or Letter of Credit or the use of the proceeds 

thereof; provided that, this waiver and agreement 

shall not limit the Borrower or any Guarantor’s 

indemnification obligations to the extent set forth in 

Credit Documentation to the extent such special, 

indirect, consequential or punitive damages are 

included in any third party claim in connection with 

which such indemnified person is otherwise entitled 

to indemnification hereunder. No Indemnitee shall 

be liable for any damages arising from the use by 

unintended recipients of any information or other 

materials distributed by it through 

telecommunications, electronic or other information 

transmission systems in connection with the Credit 

Documentation or the transactions contemplated 

hereby or thereby. The Credit Documentation shall 

include customary confidentiality provisions. 

Set-Off Rights: Usual and customary, including, but not limited to, a 

Lender Swap Counterparty’s ability, during such time 

as an Event of Default has occurred and is continuing, 

to set-off any amounts owed by such Lender Swap 

Counterparty to the Borrower or any Guarantor 

pursuant to a Lender Swap Agreement against 

obligations owed by the Borrower or any Guarantor 

to such Lender Swap Counterparty. 

Defaulting Lender; Yank-a-Bank; BailIn Language: Customary defaulting lender provisions, yank-a-bank 

and Bail-In provisions. 

Governing Law and Forum: State of New York 

Counsel to the Arranger and the 

Administrative Agent: 

Bracewell LLP 

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Annex I - 1 

#4834-9214-0593v2 

#4834-9214-0593v3

Annex I 

Interest and Certain Fees 

Interest Rate Options: The Borrower may elect that the Loans 

comprising each borrowing bear interest at a 

rate per annum equal to: 

• the ABR plus the Applicable 

Margin; or 

• the Adjusted LIBO Rate plus the 

Applicable Margin. 

 As used herein: 

 “ABR” means, for any day, the highest of (a) 

the rate of interest publicly announced by 

Wells Fargo Bank as its prime rate in effect on 

such day (the “Prime Rate”), (b) the Federal 

Funds Effective Rate in effect on such day plus 

1⁄2 of 1%, and (c) the Adjusted LIBO Rate plus 

1%. In no event shall the Federal Funds Rate 

be less than 0%. 

“Applicable Margin” means a percentage 

determined in accordance with the pricing grid 

attached hereto as Annex I-A. 

“Commitment Fee Rate” means a percentage 

determined in accordance with the pricing grid 

attached hereto as Annex I-A. 

“Interest Period” means a period of one, three 

or six months (as selected by the Borrower). 

 “LIBO Rate” means (a) for purposes of 

determining Adjusted LIBO Rate for ABR, the 

rate per annum for Dollar deposits quoted by 

the Administrative Agent for the purpose of 

calculating effective rates of interest for loans 

making reference to the “Daily Three-Month 

LIBOR” or the “LIBOR Market Index Rate” or 

other words of similar import, as the inter-bank 

offered rate in effect from time to time for 

delivery of funds for three (3) months in 

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Annex I - 2 

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amounts approximately equal to the principal 

amount of the applicable Advances; provided 

that, the Administrative Agent may base its 

quotation of the inter-bank offered rate upon 

such offers or other market indicators of the 

inter-bank market as the Administrative Agent 

in its reasonable discretion deems appropriate 

including the rate determined under the 

following clause (b), and (b) with respect to 

any borrowing comprised of Eurodollar Loans 

for any Interest Period, the rate (rounded 

upwards, if necessary, to the next 1/100 of 1%) 

appearing on Reuters Screen LIBOR01 Page at 

approximately 11:00 a.m., London time, two 

business days prior to the commencement of 

such Interest Period, as the rate for dollar 

deposits with a maturity comparable to such 

Interest Period; provided that, if such quotation 

is not available for any reason, then for 

purposes of this clause (b), LIBO Rate shall 

then be the rate determined by the 

Administrative Agent to be the rate at which 

deposits in Dollars for delivery on the first day 

of such Interest Period in immediately 

available funds in the approximate amount of 

the Loans being made, continued or converted 

by the Lenders and with a term equivalent to 

such Interest Period would be offered by the 

Administrative Agent’s London Branch (or 

other branch or Affiliate of the Administrative 

Agent, or in the event that the Administrative 

Agent does not have a London branch, the 

London branch of a Lender chosen by the 

Administrative Agent) to major banks in the 

London or other offshore inter-bank market for 

Dollars at their request at approximately 11:00 

a.m. (London time) two Business Days prior to 

the commencement of such Interest Period; 

provided further that, if the rate determined 

under the preceding clause (a) or clause (b) is 

less than zero, then “LIBO Rate” shall be 

deemed to be zero for such determination. 

 “Adjusted LIBO Rate” means the LIBO Rate, 

as adjusted for statutory reserve requirements 

for eurocurrency liabilities. 

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Interest Payment Dates: In the case of Loans bearing interest based 

upon the ABR (“ABR Loans”), quarterly in 

arrears. 

In the case of Loans bearing interest based 

upon the Adjusted LIBO Rate (“Eurodollar 

Loans”), on the last day of each relevant 

Interest Period and, in the case of any Interest 

Period longer than three months, on each 

successive date three months after the first day 

of such Interest Period. 

Commitment Fees: The Borrower shall pay to the Administrative 

Agent for the account of each Lender a 

commitment fee, which shall accrue at the 

applicable Commitment Fee Rate on the 

average daily amount of the unused amount of 

the Commitment of such Lender. Accrued 

commitment fees shall be payable quarterly in 

arrears and on the date that is the earlier of the 

Termination Date and the date of termination 

of the Commitments. 

Letter of Credit Fees: The Borrower shall pay a participation fee on 

all outstanding Letters of Credit at a per annum 

rate equal to the Applicable Margin then in 

effect with respect to Eurodollar Loans on the 

face amount of each such Letter of Credit. 

Such participation fee shall be shared ratably 

among the Lenders and shall be payable 

quarterly in arrears. 

 A fronting fee equal to the greater of (i) $700 

or (ii) 1/4 of 1% per annum on the face amount 

of each Letter of Credit, shall be payable 

quarterly in arrears to the Issuing Bank for its 

own account. In addition, customary 

administrative, issuance, amendment, payment 

and negotiation charges shall be payable to the 

Issuing Bank for its own account. 

During the continuation of an Event of Default, 

Letter of Credit fees shall increase by 2.00% 

per annum over the then applicable rate; 

provided that, such increase shall be automatic 

in the event of a payment default, a bankruptcy 

related default and failure to provide default 

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notice default, and only at the election of the 

Majority Lenders in the case of all other 

defaults. 

Default Rate: During the continuation of an Event of Default, 

all Loans shall bear interest at 2.00% above the 

then applicable rate; provided that, such 

increase shall be automatic in the event of a 

payment default, a bankruptcy related default 

and failure to provide default notice default, 

and only at the election of the Majority 

Lenders in the case of all other defaults. 

Rate and Fee Basis: All commitment fees and all per annum rates 

shall be calculated on the basis of a year of 360 

days (or 365/366 days, in the case of ABR 

Loans the interest rate payable on which is then 

based on the Prime Rate) for actual days 

elapsed. 

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Annex I - A 

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Annex I – A 

Applicable Margin and Commitment Fee Rate: 

The Applicable Margin and the Commitment Fee Rate will be determined based upon the 

“Utilization Percentage”, which shall equal, as of any date, (a) the sum of all outstanding Loans 

and issued and outstanding Letters of Credit, divided by (b) the Commitments then in effect, as 

follows (expressed as a percentage): 

Utilization 

Percentage 

≤25% >25%, but 

≤50% 

>50%, but 

≤75% 

>75%, but 

≤90% 

>90% 

ABR Loans 2.00% 2.25% 2.50% 2.75% 3.00% 

Eurodollar 

Loans 

3.00% 3.25% 3.50% 3.75% 4.00% 

Commitment 

Fee Rate 

0.50% 0.50% 0.50% 0.50% 0.50% 

 

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Schedule A 

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#4834-9214-0593v3

Schedule A 

Minimum Hedges 

 MMBL Swap Strike Period Covered 

2016 1,093 $40.63 Balance of July – Dec, 2016 

2017 1,609 $42.11 Calendar year 2017 

2018 1,269 $43.63 Calendar year 2018 

2019 1,064 $44.95 Calendar year 2019 

 

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Schedule B - 1 

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Schedule B 

FORM OF SOLVENCY CERTIFICATE 

[_____], 2016 

This Solvency Certificate is being executed and delivered pursuant to Section [__] of that 

certain Credit Agreement, dated as of [_____], 2016 (the “Credit Agreement”; the terms defined 

therein being used herein as therein defined), among Penn Virginia Holding Corp. (the 

“Borrower”), Penn Virginia Corporation (the “Parent”), the other guarantors party thereto, the 

lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent and 

collateral agent. 

I, [_____], the [Chief Financial Officer] / [Treasurer] of the Parent, solely in such 

capacity and not in an individual capacity, hereby certify as follows: 

1. I am generally familiar with the businesses and assets of the Parent, the Borrower and its 

subsidiaries, on a consolidated basis, and am duly authorized to execute this Solvency 

Certificate on behalf of the Parent pursuant to the Credit Agreement. 

2. As of the date hereof and after giving effect to the Transactions and after giving effect to 

each of the Parent, the Borrower and its subsidiaries’ exit from the Chapter 11 Cases in 

accordance with the Plan of Reorganization and the incurrence of the indebtedness and 

obligations being incurred in connection with the Credit Agreement and the Transactions, 

(a) the fair value of the properties of the Parent, the Borrower and its subsidiaries, on a 

consolidated basis, is greater than the total amount of liabilities, including contingent 

liabilities, of the Parent, the Borrower and its subsidiaries, on a consolidated basis, (b) the 

present fair salable value of the assets of the Parent, the Borrower and its subsidiaries, on 

a consolidated basis, is not less than the amount that will be required to pay the probable 

liability of the Parent, the Borrower and its subsidiaries, on a consolidated basis, on its 

respective debts as they become absolute and matured, (c) neither Parent, the Borrower 

nor any of their respective subsidiaries intends to, and does not believe that it will, incur 

debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they 

mature, (d) neither Parent, the Borrower nor any of their respective subsidiaries is 

engaged in business or a transaction, and is not about to engage in business or a 

transaction, for which such Person’s property would constitute an unreasonably small 

capital, and (e) each of the Parent, the Borrower and its subsidiaries is able to pay its 

debts and liabilities, contingent obligations and other commitments as they mature in the 

ordinary course of business. For the purposes hereof, the amount of contingent liabilities 

at any time shall be computed as the amount that, in the light of all the facts and 

circumstances existing at such time, represents the amount that can reasonably be 

expected to become an actual or matured liability 

 [Remainder of page intentionally left blank] 

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Schedule B - 2 

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IN WITNESS WHEREOF, I have executed this Solvency Certificate on the date first 

written above. 

By: 

Name: 

Title: 

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Schedule C 

Schedule C 

RESTRUCTURING TERM SHEET 

[See attached.] 

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Exhibit E to the Restructuring Support Agreement

Exit Commitment Letters

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EXECUTION VERSION 

Wells Fargo Bank, National Association 

1000 Louisiana, 9th Floor 

MAC T0002-090 

Houston, Texas 77002 

CONFIDENTIAL 

May 10, 2016

Penn Virginia Corporation 

Penn Virginia Holding Corp. 

1011 Centre Road, Suite 322 

Wilmington, Delaware 19805 

Attention: Steven A. Hartman 

Re: Exit Facility Commitment Letter 

$200 Million Senior Secured Credit Facility 

Ladies and Gentlemen: 

Penn Virginia Corporation (the “Parent”) and Penn Virginia Holding Corp. (the “Borrower”, and 

together with the Parent, the “Obligors”, individually and collectively, “you”) have advised Wells Fargo 

Bank, National Association (“Wells Fargo Bank”) and each financial institution signatory hereto (together 

with Wells Fargo Bank, the “Initial Lenders” and individually, an “Initial Lender”, “we” or “us”) that the 

Borrower seeks financing to (a) refinance certain existing indebtedness of the Parent and its subsidiaries 

(such refinancings, collectively, the “Refinancing”), (b) pay fees, commissions and expenses in connection 

with the Transactions (as defined below) and (c) finance ongoing working capital requirements and other 

general corporate purposes, all as more fully described in the Indicative Summary of Terms and Conditions 

attached hereto as Exhibit A (the “Term Sheet”). This Commitment Letter (as defined below) describes 

the general terms and conditions for senior secured credit facility with aggregate note amount of $200

million to be provided to the Borrower consisting of a revolving credit facility subject to an initial 

borrowing base limit of up to $128 million, all as more fully described in the Term Sheet (the “Senior 

Credit Facility”). 

 As used herein, the term “Transactions” means, collectively, the Refinancing, the initial 

borrowings and other extensions of credit under the Senior Credit Facility on the Closing Date (as defined 

below) and the payment of fees, commissions and expenses in connection with each of the foregoing. 

This letter, including the Term Sheet, is hereinafter referred to as the “Commitment Letter”. The date on 

which the Senior Credit Facility is closed is referred to as the “Closing Date”. 

1. Commitment. Upon the terms and subject to the conditions set forth in this Commitment 

Letter, the fee letter dated the date hereof from the Commitment Parties to you (the “Lender Fee Letter”) 

and the fee letter dated the date hereof from Wells Fargo Bank to you (the “Agent Fee Letter”; together 

with the Lender Fee Letter, the “Fee Letters”), each Initial Lender hereby advises you of its several, but 

not joint, commitment to provide to the Borrower such percentage of the Senior Credit Facility that is set 

forth next to such Initial Lender’s name on Annex A attached hereto (each a “Commitment”, and 

collectively, the “Commitments”; and each such Initial Lender’s percentage, the “Commitment 

Percentage”). Notwithstanding anything in this Commitment Letter or in Financing Documentation (as 

defined below) to the contrary, in no event shall the principal amount of any Initial Lender’s Commitment 

#5185021.5 

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PAGE 2 

exceed such Initial Lender’s Commitment Percentage of $128,000,000 without each Initial Lender’s 

written consent. 

2. Titles and Roles. Wells Fargo Bank, acting alone or through or with affiliates selected by 

it, will act as the sole bookrunner and sole lead arranger (in such capacities, the “Lead Arranger”; together 

with the Initial Lenders, the “Commitment Parties”) in arranging and syndicating the Senior Credit 

Facility. Wells Fargo Bank will act as the sole administrative agent (in such capacity, the “Administrative 

Agent”) for the Senior Credit Facility. No additional agents, co-agents, arrangers or bookrunners will be 

appointed, no other titles will be awarded and no other compensation will be paid (other than 

compensation expressly contemplated by this Commitment Letter and the Fee Letters) unless you and 

Wells Fargo Bank shall agree in writing; provided that the Lead Arranger shall have the right, in 

consultation with you, to award titles to other co-agents, arrangers or bookrunners who are Initial Lenders 

(it being further agreed that (i) no other agent, co-agent, arranger or bookrunner (other than the Lead 

Arranger) will have rights in respect of the management of the syndication of the Senior Credit Facility 

and (ii) Wells Fargo Bank will have the “left” and “highest” placement in any and all marketing materials 

or other documentation used in connection with the Senior Credit Facility and shall hold the leading role 

and responsibilities conventionally associated with such placement, including maintaining sole physical 

books for the Senior Credit Facility). 

3. Conditions to Commitment. The Commitments and undertakings of the Commitment 

Parties hereunder are subject solely to the satisfaction of the conditions precedent set forth in the Term 

Sheet under the heading “IV. Certain Conditions”. 

4. Syndication. 

(a) The Lead Arranger reserves the right, both prior to and after the Closing Date, to secure 

additional commitments for the Senior Credit Facility from a syndicate of banks, financial institutions and 

other entities (such banks, financial institutions and other entities committing to the Senior Credit 

Facility, including the Initial Lenders, the “Lenders”), such Lenders to be mutually agreed upon by the 

Borrower and the Lead Arranger, upon the terms and subject to the conditions set forth in this 

Commitment Letter. The Commitments of the Initial Lenders will be reduced on a dollar-for-dollar basis 

by the amount of any corresponding commitment received through syndication from such other Lenders, 

subject to Section 4(c) below. To assist us in our syndication efforts, each Obligor agrees that it will, and 

will cause its representatives and advisors to, and will use commercially reasonable efforts to cause 

appropriate members of management and its representatives and advisors to, (i) provide promptly to the 

Commitment Parties and the other Lenders upon request all information reasonably deemed necessary by 

the Lead Arranger to assist the Lead Arranger and each Lender in their evaluation of the Transactions and to 

complete the syndication, (ii) make its senior management and (to the extent reasonable and practical) 

appropriate members of management available to prospective Lenders on reasonable prior notice and at 

reasonable times and places, (iii) host, with the Lead Arranger, one or more meetings and/or calls with 

prospective Lenders at mutually agreed times and locations, and (iv) assist, and cause its affiliates and 

advisors to assist, the Lead Arranger in the preparation of one or more confidential information 

memoranda and other marketing materials in form and substance reasonably satisfactory to the Lead 

Arranger to be used in connection with the syndication. 

(b) The Lead Arranger and/or one or more of its affiliates will exclusively manage all aspects 

of the syndication of the Senior Credit Facility, including decisions as to the selection and number of 

potential other Lenders to be approached, when they will be approached, whose commitments will be 

accepted, how the Commitments of the Initial Lenders may be reduced, any titles offered to the Lenders 

and the final allocations of the commitments and any related fees among the Lenders (it being agreed and 

understood that you shall not be required to pay any fees other than those specifically agreed to in the Fee 

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Letters), and the Lead Arranger will exclusively perform all functions and exercise all authority as is 

customarily performed and exercised in such capacities; provided that any Lender (other than an Initial 

Lender) from which commitments have been accepted shall be reasonably acceptable to you. 

(c) Notwithstanding the Lead Arranger’s right to syndicate the Senior Credit Facility and 

receive commitments with respect thereto, unless otherwise agreed to by you, (i) each Initial Lender shall 

not be relieved or released from its obligations hereunder (including its obligation to fund the Senior 

Credit Facility on the Closing Date) in connection with any syndication, assignment or participation in the 

Senior Credit Facility, including its respective Commitment, until the initial funding under the Senior 

Credit Facility has occurred on the Closing Date, (ii) no assignment by any Initial Lender shall become 

effective with respect to all or any portion of such Initial Lender’s Commitment until the initial funding of 

the Senior Credit Facility and (iii) unless you, the Lead Arranger and the applicable Initial Lender agree 

to in writing, each Initial Lender will retain exclusive control over all rights and obligations with respect 

to its respective Commitment in respect of the Senior Credit Facility, including all rights with respect to 

consents, modifications, supplements, waivers and amendments, until the Closing Date has occurred. 

5. Information. 

(a) Each Obligor represents, warrants and covenants that (i) all written information 

and written data (other than the Projections, as defined below, other forward-looking information and 

information of a general economic or general industry nature) concerning the Parent, the Borrower and 

your respective subsidiaries and the Transactions that has been or will be made available to the 

Commitment Parties or the Lenders by any Obligor, or any of your respective representatives, subsidiaries 

or affiliates (or on your or their behalf) (the “Information”), when taken as a whole, (x) is, and in the case 

of Information made available after the date hereof, will be, complete and correct in all material respects 

and (y) does not, and in the case of Information made available after the date hereof, will not, contain any 

untrue statement of a material fact or omit to state a material fact necessary in order to make the 

statements contained therein, in light of the circumstances under which they were made, not misleading 

and (ii) all financial projections concerning the Parent, the Borrower and your respective subsidiaries, 

taking into account the consummation of the Transactions, that have been or will be made available to the 

Commitment Parties or the Lenders by any Obligor or any of your respective representatives, subsidiaries 

or affiliates (or on your or their behalf) (the “Projections”) have been and will be prepared in good faith 

based upon assumptions believed by you to be reasonable at the time made available to the Commitment 

Parties or the Lenders, it being understood that such Projections are not to be viewed as facts and that 

actual results may vary materially from the Projections. You agree that if, at any time prior to the Closing 

Date, you become aware that any of the representations and warranties contained in the preceding sentence 

would be incorrect in any material respect if the Information and Projections were being furnished, and such 

representations were being made, at such time, then you will promptly supplement the Information and the 

Projections so that such representations are correct in all material respects under those circumstances. We 

will be entitled to use and rely upon, without responsibility to verify independently, the Information and the 

Projections. You acknowledge that we may share with any of our affiliates (it being understood that such 

affiliates will be subject to the confidentiality agreements between you and us), and such affiliates may 

share with the Commitment Parties, any information related to you or any of your subsidiaries or affiliates 

(including, without limitation, in each case, information relating to creditworthiness) and the transactions 

contemplated hereby. 

(b) You acknowledge that (i) the Commitment Parties will make available, on your 

behalf, the Information, Projections and other marketing materials and presentations, including the 

confidential information memoranda (collectively, the “Informational Materials”), to the potential 

Lenders by posting the Informational Materials on SyndTrak Online or by other similar electronic means 

(collectively, the “Electronic Means”) and (ii) certain prospective Lenders may be “public side” (i.e., 

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lenders that have personnel that do not wish to receive material non-public information (within the 

meaning of the United States federal securities laws, “MNPI”) with respect to the Obligors or their 

respective subsidiaries or affiliates or any of their respective securities, and who may be engaged in 

investment and other market-related activities with respect to such entities’ securities (such Lenders, 

“Public Lenders”)). At the reasonable request of the Lead Arranger, (A) you will assist, and cause your 

affiliates, advisors to assist, the Lead Arranger in the preparation of Informational Materials to be used in 

connection with the syndication of the Senior Credit Facility to Public Lenders, which will not contain 

MNPI (the “Public Informational Materials” and all other Informational Materials other than Public 

Informational Materials, the “Private Informational Materials”)), (B) you will identify and conspicuously 

mark any Public Informational Materials “PUBLIC”, and (C) you will identify and conspicuously mark 

any Informational Materials that include any MNPI as “PRIVATE AND CONFIDENTIAL” (it being 

agreed and understood that any Informational Materials that do not contain a conspicuous mark of 

“PUBLIC” or “PRIVATE AND CONFIDENTIAL” shall be deemed to be Private Informational Materials 

for all purposes hereunder). Notwithstanding the foregoing, you agree that the Commitment Parties may 

distribute the following documents to all prospective Lenders (including the Public Lenders) on your 

behalf, unless you advise the Commitment Parties in writing (including by email) within a reasonable 

time prior to their intended distributions that such material should not be distributed to Public Lenders: 

(w) administrative materials for prospective Lenders such as lender meeting invitations and funding and 

closing memoranda, (x) notifications of changes in the terms of the Senior Credit Facility, (y) financial 

information regarding the Borrower and its subsidiaries (other than the Projections) and (z) other 

materials intended for prospective Lenders after the initial distribution of the Informational Materials, 

including drafts and final versions of the Term Sheet and the definitive documentation for the Senior 

Credit Facility (the “Financing Documentation”). If you advise us in writing (including by email) that 

any of the foregoing items (other than the Financing Documentation) should not be distributed to Public 

Lenders, then the Commitment Parties will not distribute such materials to Public Lenders without further 

discussions with you. Before distribution of any Informational Materials to prospective Lenders, you 

shall provide us with a customary letter authorizing the dissemination of the Informational Materials and 

confirming the accuracy and completeness in all material respects of the information contained therein 

and, in the case of Public Informational Materials, confirming the absence of MNPI therefrom. 

6. Indemnification. You agree to indemnify and hold harmless the Commitment Parties and 

each of their respective affiliates, directors, officers, employees, partners, representatives, advisors and 

agents and each of their respective heirs, successors and assigns (each, an “Indemnified Party”) from and 

against any and all actions, suits, losses, claims, damages, penalties, liabilities and expenses of any kind 

or nature (including legal expenses), joint or several, to which such Indemnified Party may become 

subject or that may be incurred or asserted or awarded against such Indemnified Party, in each case 

arising out of or in connection with or by reason of (including, without limitation, in connection with any 

investigation, litigation or proceeding or preparation of a defense in connection therewith) (a) any matters 

contemplated by this Commitment Letter, the Fee Letters, the Transactions or any related transaction 

(including, without limitation, the execution and delivery of this Commitment Letter and the Financing 

Documentation and the closing of the Transactions) or (b) the use or the contemplated use of the proceeds 

of the Senior Credit Facility, and will reimburse each Indemnified Party for all reasonable and 

documented out-of-pocket expenses (including reasonable and documented out-of-pocket attorneys’ fees, 

expenses and charges) on demand as they are incurred in connection with any of the foregoing; provided 

that no Indemnified Party will have any right to indemnification for any of the foregoing to the extent 

resulting from (i) such Indemnified Party’s own gross negligence or willful misconduct as determined by 

a court of competent jurisdiction in a final non-appealable judgment, (ii) a material breach in bad faith of 

the funding obligations of such Indemnified Party under this Commitment Letter as determined by a court 

of competent jurisdiction in a final non-appealable judgment or (iii) any dispute solely among 

Indemnified Parties, other than any claims against any Commitment Party in its respective capacity or in 

fulfilling its role as an administrative agent or arranger or any similar role hereunder or under the Senior 

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Credit Facility, and other than any claims arising out of any act, omission, or representation on the part of, 

or any information provided by or on behalf of, the Parent, the Borrower, or any subsidiary or affiliate 

thereof. In the case of an investigation, litigation or proceeding to which the indemnity in this paragraph 

applies, such indemnity shall be effective whether or not such investigation, litigation or proceeding is 

brought by you, your equity holders or creditors or an Indemnified Party, whether or not an Indemnified 

Party is otherwise a party thereto and whether or not the transactions contemplated hereby are 

consummated. You also agree that no affiliate, equityholder or creditor of yours is intended to be, and 

none of such persons or entities shall be, third party beneficiaries of this Commitment Letter, and 

therefore no Indemnified Party will have any liability (whether direct or indirect, in contract or tort, or 

otherwise) to your affiliates or to your or their respective equityholders or creditors arising out of, related 

to or in connection with any aspect of the transactions contemplated hereby. You also agree that no 

Indemnified Party will have any liability (whether direct or indirect, in contract or tort, or otherwise) to 

you arising out of, related to or in connection with any aspect of the Transactions, except to the extent 

such liability to you is determined in a final, nonappealable judgment by a court of competent jurisdiction 

to have resulted from one or more Indemnified Party’s gross negligence or willful misconduct or a 

material breach in bad faith of the funding obligations of such Indemnified Party under this Commitment 

Letter. Each Initial Lender shall be liable solely in respect of its own commitment (if any) to the Senior 

Credit Facility on a several, and not joint, basis with any other Lender. No Indemnified Party or any other 

party hereto will be liable for any indirect, consequential, special or punitive damages in connection with 

this Commitment Letter, the Fee Letters, the Financing Documentation or any other element of the 

Transactions. For the avoidance of doubt, the parties hereto acknowledge and agree that a claim for 

indemnity under the preceding provisions of this Section 6, to the extent covered thereby, is a claim of 

direct or actual damages and nothing contained in the foregoing sentence shall limit your indemnification 

obligations to the extent such special, indirect, consequential or punitive damages are included in any 

third party claim in connection with which such Indemnified Party is otherwise entitled to indemnification 

hereunder. No Indemnified Party will be liable to you, your affiliates or any other person for any 

damages arising from the use by others of Informational Materials or other materials obtained by 

Electronic Means. You shall not, without the prior written consent of each Indemnified Party affected 

thereby, settle any threatened or pending claim or action that would give rise to the right of any 

Indemnified Party to claim indemnification hereunder unless such settlement (x) includes a full and 

unconditional release of all liabilities arising out of such claim or action against such Indemnified Party, 

(y) does not include any statement as to or an admission of fault, culpability or failure to act by or on 

behalf of such Indemnified Party and (z) requires no action on the part of the Indemnified Party other than 

its consent. 

7. Expenses. You agree to reimburse each of the Commitment Parties, from time to time on 

demand, for all reasonable and documented out-of-pocket costs and expenses of the Commitment Parties, 

including, without limitation, reasonable and documented out-of-pocket legal fees and expenses, due 

diligence expenses and all printing, reproduction, document delivery, travel, CUSIP, SyndTrak and 

communication costs, incurred in connection with the syndication and execution of the Senior Credit 

Facility and the preparation, review, negotiation, execution, delivery and enforcement of this 

Commitment Letter, the Fee Letters, the Financing Documentation and any security arrangements in 

connection therewith regardless of whether the Closing Date occurs. 

8. Fees. As consideration for the commitments and agreements of the Commitment Parties 

hereunder, you agree to cause to be paid the nonrefundable fees described in the Fee Letters on the terms 

and subject to the conditions set forth therein. 

9. Confidentiality. 

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(a) This Commitment Letter and the Fee Letters (collectively, the “Commitment 

Documents”) and the existence and contents hereof and thereof shall be confidential and may not be 

disclosed, directly or indirectly, by you in whole or in part to any person without the prior written consent 

of the respective Commitment Parties that are party hereto or thereto, except for disclosure (i) hereof or 

thereof on a confidential basis to your affiliates and your and your affiliates’ directors, officers, 

employees, accountants, attorneys and other professional advisors who have been advised of their 

obligation to maintain the confidentiality of the Commitment Documents for the purpose of evaluating, 

negotiating or entering into the Transactions, (ii) in any legal, judicial or administrative proceeding (other 

than pursuant to your or your subsidiaries’ bankruptcy cases which are addressed in clauses (iii) and (iv) 

below), or as otherwise required by law or regulation or as requested by any governmental authority (in 

which case, you agree, to the extent not prohibited by law, to inform us promptly in advance thereof) 

(provided that any information relating to pricing, fees and expenses has been redacted in a manner 

reasonably acceptable to Wells Fargo Bank), (iii) pursuant to your or your subsidiaries’ bankruptcy cases 

(in which case, you agree, to the extent not prohibited by law, to inform the Lead Arranger promptly 

thereof and to file the Fee Letters under seal), (iv) to the office of the U.S. Trustee, any statutory 

committee appointed in your or your subsidiaries’ bankruptcy cases and their respective advisors and 

professionals, in each case, on a confidential and “need to know” basis, and (v) this Commitment Letter, 

but not the Fee Letters, in any required filings with the Securities and Exchange Commission and other 

applicable regulatory authorities and stock exchanges. Notwithstanding the foregoing, it is agreed and 

understood that you and your subsidiaries shall be permitted to disclose this Commitment Letter and the 

Fee Letters and the contents thereof to the bankruptcy court (in the case of the Fee Letters, under seal) to 

the extent disclosure thereof is necessary or advisable to consummate the transactions contemplated 

herein. In connection with any disclosure by you to any third party as set forth above (except as set forth 

in clause (ii) above), you shall notify such third party of the confidential nature of the Commitment 

Documents and agree to be responsible for any failure by any third party to whom you disclosed the 

Commitment Documents or any portion thereof to maintain the confidentiality of the Commitment 

Documents or any portion thereof. 

(b) Each Commitment Party agrees to maintain in confidence any and all of your 

non-public Information and Projections and not disclose such information; provided that nothing herein 

shall prevent any Commitment Party from disclosing any such information (i) to any Lenders or 

participants or prospective Lenders or participants, (ii) in any legal, judicial, administrative proceeding or 

other compulsory process or otherwise as required by applicable law or regulations (in which case, we 

agree, to the extent permitted by law and to the extent practicable, to inform you promptly in advance 

thereof), (iii) upon the request or demand of any regulatory authority having jurisdiction over any 

Commitment Party or any affiliate thereof, (iv) to the employees, legal counsel, independent auditors, 

professionals and other experts or agents of any Commitment Party or any affiliate thereof who are 

informed of the confidential nature of such information and are or have been advised of their obligation to 

keep information of this type confidential, (v) to the extent any such information becomes publicly 

available other than by reason of disclosure by such Commitment Party or any employee, legal counsel, 

independent auditor, professional, expert or agent thereof or of any affiliate thereof in breach of this 

Commitment Letter, (vi) to the extent that such information is received by a Commitment Party from a 

third party that is not to such Commitment Party’s knowledge subject to confidentiality obligations to 

you, (vii) to the extent that such information is independently developed by a Commitment Party or any 

of its affiliates, (viii) for purposes of establishing a “due diligence” defense, and (ix) with your prior 

written consent; provided that the disclosure of any such information to any Lenders or prospective 

Lenders or participants or prospective participants referred to above shall be made subject to the 

acknowledgment and acceptance by such Lender or prospective Lender or participant or prospective 

participant that such information is being disseminated on a confidential basis in accordance with the 

standard syndication processes of Wells Fargo Bank or customary market standards for dissemination of 

such type of information. The provisions of this paragraph with respect to the Commitment Parties shall 

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automatically terminate on the earlier of (i) two years following the date of this Commitment Letter and 

(ii) the Closing Date. 

(c) The Commitment Parties shall be permitted to use information related to the 

syndication and arrangement of the Senior Credit Facility (including your name and company logo) in 

connection with obtaining a CUSIP number, marketing, press releases or other transactional 

announcements or updates provided to investor or trade publications, subject to confidentiality obligations 

or disclosure restrictions reasonably requested by you. Prior to the Closing Date, the Commitment Parties 

shall have the right to review and approve any public announcement or public filing made by you or your 

representatives relating to the Senior Credit Facility or to any of the Commitment Parties in connection 

therewith, before any such announcement or filing is made (such approval not to be unreasonably 

withheld or delayed). 

(d) The Commitment Parties hereby notify you that pursuant to the requirements of 

the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “PATRIOT 

Act”), each of them is required to obtain, verify and record information that identifies you and any 

additional borrowers or guarantors under the Senior Credit Facility, which information includes your and 

their respective names, addresses, tax identification numbers and other information that will allow the 

Commitment Parties and the other Lenders to identify you and such other parties in accordance with the 

PATRIOT Act. This notice is given in accordance with the requirements of the PATRIOT Act and is 

effective for each of us and the Lenders. 

10. Other Services. 

(a) Nothing contained herein shall limit or preclude the Commitment Parties or any 

of their affiliates from carrying on any business with, providing banking or other financial services to, or 

from participating in any capacity, including as an equity investor, in any party whatsoever, including, 

without limitation, any competitor, supplier or customer of you or any of your affiliates, or any other 

party that may have interests different than or adverse to such parties. 

(b) You acknowledge that the Commitment Parties and their respective affiliates (i) 

may be providing debt financing, equity capital or other services (including financial advisory services) to 

other entities and persons with which you or your affiliates may have conflicting interests regarding the 

Transactions and otherwise, (ii) may act, without violation of its contractual obligations to you, as it 

deems appropriate with respect to such other entities or persons, and (iii) have no obligation in connection 

with the Transactions to use, or to furnish to you or your affiliates or subsidiaries, confidential 

information obtained from other entities or persons. 

(c) In connection with all aspects of the Transactions, you acknowledge and agree 

that: (i) the Senior Credit Facility and any related arranging or other services contemplated in this 

Commitment Letter constitute an arm’s-length commercial transaction between you and your affiliates, 

on the one hand, and the Commitment Parties and their respective affiliates, on the other hand, and you 

are capable of evaluating and understanding and understand and accept the terms, risks and conditions of 

the Transactions, (ii) in connection with the process leading to the Transactions, each of Commitment 

Parties and their respective affiliates is and has been acting solely as a principal and not as a financial 

advisor, agent or fiduciary, for you or any of your management, affiliates, equity holders, directors, 

officers, employees, creditors or any other party, (iii) no Commitment Party and no affiliate thereof has 

assumed or will assume an advisory, agency or fiduciary responsibility in your or your affiliates’ favor 

with respect to any of the Transactions or the process leading thereto (irrespective of whether any 

Commitment Party or any of its affiliates has advised or is currently advising you or your affiliates on 

other matters) and no Commitment Party and no any affiliate thereof has any obligation to you or your 

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affiliates with respect to the Transactions except those obligations expressly set forth in the Commitment 

Documents, (iv) the Commitment Parties and their respective affiliates may be engaged in a broad range 

of transactions that involve interests that differ from yours and those of your affiliates and no 

Commitment Party shall have any obligation to disclose any of such interests, and (v) no Commitment 

Party and no affiliate thereof has provided any legal, accounting, regulatory or tax advice with respect to 

any of the Transactions and you have consulted your own legal, accounting, regulatory and tax advisors to 

the extent you have deemed appropriate. You hereby waive and release, to the fullest extent permitted by 

law, any claims that you may have against any Commitment Party or any of their respective affiliates with 

respect to any breach or alleged breach of agency, fiduciary duty or conflict of interest. 

11. Acceptance/Expiration of Commitments. 

(a) This Commitment Letter and the Commitment of each Initial Lender and the 

undertakings of each Commitment Party set forth herein shall automatically terminate at 5:00 p.m. (New 

York City Time) on May 11, 2016 (the “Acceptance Deadline”), without further action or notice unless 

signed counterparts of this Commitment Letter and the Fee Letters shall have been delivered to the Lead 

Arranger by such time to the attention of Bryan M. McDavid, Director (electronic mail: 

Bryan.M.McDavid@wellsfargo.com). 

(b) In the event this Commitment Letter is accepted by you as provided above, the 

Commitments and agreements of the Initial Lenders and the undertakings of each Commitment Party set 

forth herein will automatically terminate without further action or notice at the earlier of the following 

(such date being the “Commitment Termination Date”): (i) 5:00 p.m. (New York City Time) on the date 

the BCA (as defined below) is terminated in accordance with the terms thereof if the Closing Date shall not 

have occurred by such time, and (ii) 5:00 p.m. (New York City Time) on the date that is 120 days after May 

12, 2016 (the “Scheduled Termination Date”) if the Closing Date shall not have occurred by such time; 

provided however, the Scheduled Termination Date shall be extended to the extent the Outside Date (as 

defined in the BCA in effect on the date hereof) is extended and the Commitment Parties holding at least 

50.1% of the Commitments consents to such extension of the Commitment Termination Date; provided 

further that, in no event shall the Scheduled Termination Date be later than 5:00 p.m. (New York City 

Time) on the date that is 150 days after May 12, 2016 without the prior written consent of all of the 

Commitment Parties. For purposes of this Commitment Letter and the Fee Letters, the “BCA” means that 

certain Backstop Commitment Agreement dated as of the date hereof, by and among the Parent and the 

other parties thereto, as amended from time to time in accordance with the terms thereof unless as otherwise 

noted herein or in the Fee Letters. 

12. Survival. The sections of this Commitment Letter and the Fee Letters relating to 

Indemnification, Expenses, Confidentiality, Other Services, Survival and Governing Law shall survive 

any termination or expiration of this Commitment Letter, the Commitment of each Initial Lender or the 

undertakings of each Commitment Party set forth herein (regardless of whether the Financing 

Documentation is executed and delivered), and the sections relating to Syndication and Information shall 

survive until the Closing Date; provided that your obligations under this Commitment Letter (other than 

your obligations with respect to the sections of this Commitment Letter relating to Syndication, 

Information, Confidentiality, Other Services, Survival and Governing Law) shall be superseded by the 

provisions of the Financing Documentation upon the initial funding thereunder. 

13. Governing Law. THIS COMMITMENT LETTER AND THE FEE LETTERS, AND 

ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED THERETO 

(INCLUDING, WITHOUT LIMITATION, ANY CLAIMS SOUNDING IN CONTRACT LAW OR 

TORT LAW ARISING OUT OF THE SUBJECT MATTER HEREOF OR THEREOF), SHALL 

BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE 

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STATE OF NEW YORK (INCLUDING SECTION 5-1401 AND SECTION 5-1402 OF THE 

GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REFERENCE 

TO ANY OTHER CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF. THE 

PARTIES HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY 

CLAIM OR ACTION ARISING OUT OF THIS COMMITMENT LETTER OR THE FEE 

LETTERS. With respect to any suit, action or proceeding arising in respect of this Commitment Letter 

or the Fee Letters or any of the matters contemplated hereby or thereby, the parties hereto hereby 

irrevocably and unconditionally submit to the exclusive jurisdiction of any state or federal court located in 

the Borough of Manhattan, and irrevocably and unconditionally waive any objection to the laying of 

venue of such suit, action or proceeding brought in such court and any claim that such suit, action or 

proceeding has been brought in an inconvenient forum. The parties hereto hereby agree that service of 

any process, summons, notice or document by registered mail addressed to you or each of the 

Commitment Parties will be effective service of process against such party for any action or proceeding 

relating to any such dispute. A final judgment in any such action or proceeding may be enforced in any 

other courts with jurisdiction over you or each of the Commitment Parties. 

14. Miscellaneous. This Commitment Letter and the Fee Letters embody the entire agreement 

among the Commitment Parties and you and your affiliates with respect to the specific matters set forth 

above and supersede all prior agreements and understandings relating to the subject matter hereof. No 

person has been authorized by any of the Commitment Parties to make any oral or written statements 

inconsistent with this Commitment Letter or the Fee Letters. This Commitment Letter shall not be 

assignable by you without the prior written consent of the Commitment Parties, and any purported 

assignment without such consent shall be void. This Commitment Letter and the Fee Letters are not 

intended to benefit or create any rights in favor of any person other than the parties hereto, the Lenders 

and, with respect to indemnification, each Indemnified Party. This Commitment Letter and the Fee 

Letters may be executed in separate counterparts and delivery of an executed signature page of this 

Commitment Letter and the Fee Letters by facsimile or electronic mail shall be effective as delivery of 

manually executed counterpart hereof; provided that, upon the request of any party hereto, such facsimile 

transmission or electronic mail transmission shall be promptly followed by the original thereof. This 

Commitment Letter and the Lender Fee Letter may only be amended, modified or superseded by an 

agreement in writing signed by each of you and the Commitment Parties. The Agent Fee Letter may only 

be amended, modified or superseded by an agreement in writing signed by each of you and Wells Fargo 

Bank. 

[Signature Pages Follow] 

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Annex A to Commitment Letter (Penn Virginia Holding Corp.)

Annex A 

Commitments 

Initial Lender 

Commitment 

Percentage 

Commitment 

Amount if Initial 

Borrowing Base is 

$128,000,000 

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Exhibit A to Commitment Letter (Penn Virginia Holding Corp.)

Exhibit A 

Term Sheet 

[See attached.] 

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Exhibit F to the Restructuring Support Agreement

Form of Transferee Joinder

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Form of Transferee Joinder

This joinder (this “Joinder”) to the Restructuring Support Agreement (the “Agreement”), 

dated as of [_______], 2016, by and among: (i) Penn Virginia Corporation (“Penn Virginia”); 

Penn Virginia Holding Corp.; 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.; Penn Virginia Resource Holdings Corp. (such 

subsidiaries and Penn Virginia, each a “PVA Entity” and, collectively with Penn Virginia, the 

“PVA Entities”); (ii) the Consenting RBL Lenders; and (iii) the Consenting Noteholders, is 

executed and delivered by [________________] (the “Joining Party”) as of 

[________________]. Each capitalized term used herein but not otherwise defined shall have 

the meaning ascribed to it in the Agreement.

1. Agreement to be Bound. The Joining Party hereby agrees to be bound by all of 

the terms of the Agreement, a copy of which is attached to this Joinder as Annex 1 (as the same 

has been or may be hereafter amended, restated, or otherwise modified from time to time in 

accordance with the provisions thereof). The Joining Party shall hereafter be deemed to be a 

Party for all purposes under the Agreement and one or more of the entities comprising the 

Restructuring Support Parties.

2. Representations and Warranties. The Joining Party hereby represents and 

warrants to each other Party to the Agreement that, as of the date hereof, such Joining Party (a) is 

the legal or beneficial holder of, and has all necessary authority (including authority to bind any 

other legal or beneficial holder) with respect to, the RBL Claims and/or Note Claims identified 

below its name on the signature page hereof, and (b) makes, as of the date hereof, the 

representations and warranties set forth in Section 16 of the Agreement to each other Party.

3. Governing Law. This Joinder shall be governed by and construed in accordance 

with the internal laws of the State of New York without regard to any conflicts of law provisions 

which would require the application of the law of any other jurisdiction.

4. Notice. All notices and other communications given or made pursuant to the 

Agreement shall be sent to:

To the Joining Party at:

[JOINING PARTY]

[ADDRESS]

Attn:

Facsimile: [FAX]

EMAIL:

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

the date first written above.

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[JOINING PARTY]

By:

Name:

Title:

Holdings: $__________________ of Debt 

 Under the RBL Credit Facility

Holdings: $__________________ of Debt

 Under the Indenture

Holdings: __________________

 Shares of Common Stock

Holdings: __________________

Shares 6.0% Convertible Preferred Stock

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33

Annex 1 to the Form of Transferee Joinder

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EXHIBIT B

Bullock Declaration

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KE 41527322

Edward O. Sassower, P.C. (pro hac vice admission pending) Michael A. Condyles (VA 27807)

Joshua A. Sussberg, P.C. Peter J. Barrett (VA 46179)

Brian E. Schartz (pro hac vice admission pending) Jeremy S. Williams (VA 77469)

KIRKLAND & ELLIS LLP KUTAK ROCK LLP

KIRKLAND & ELLIS INTERNATIONAL LLP Bank of America Center

601 Lexington Avenue 1111 East Main Street, Suite 800

New York, New York 10022 Richmond, Virginia 23219

Telephone: (212) 446-4800 Telephone: (804) 644-1700

Facsimile: (212) 446-4900 Facsimile: (804) 783-6192

- and -

James H.M. Sprayregen, P.C. 

Justin R. Bernbrock (pro hac vice admission pending)

Benjamin M. Rhode (pro hac vice admission pending)

KIRKLAND & ELLIS LLP

KIRKLAND & ELLIS INTERNATIONAL LLP

300 North LaSalle

Chicago, Illinois 60654

Telephone: (312) 862-2000

Facsimile: (312) 862-2200

Proposed Co-Counsel to the Debtors 

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

RICHMOND DIVISION

)

In re: ) Chapter 11

)

PENN VIRGINIA CORPORATION, et al.,

1 ) Case No. 16-32395 (___)

)

Debtors. ) (Joint Administration Requested)

)

DECLARATION OF R. SETH BULLOCK, 

CHIEF RESTRUCTURING OFFICER OF 

PENN VIRGINIA CORPORATION, IN SUPPORT OF 

THE DEBTORS’ MOTION FOR ENTRY OF AN ORDER 

(I) AUTHORIZING THE DEBTORS TO ASSUME (A) THE 

RESTRUCTURING SUPPORT AGREEMENT, (B) THE BACKSTOP 

COMMITMENT AGREEMENT, AND (C) THE EXIT COMMITMENT 

LETTERS, (II) AUTHORIZING THE DEBTORS TO PAY CERTAIN FEES 

IN CONNECTION THEREWITH, AND (III) GRANTING RELATED RELIEF

 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification 

number, include: Penn Virginia Corporation (4320); Penn Virginia Holding Corp. (7384); Penn Virginia MC 

Corporation (0458); Penn Virginia MC Energy L.L.C. (0462); Penn Virginia MC Operating Company L.L.C. 

(0466); Penn Virginia Oil & Gas Corporation (7929); Penn Virginia Oil & Gas GP LLC (3686); Penn Virginia 

Oil & Gas LP LLC (8109); Penn Virginia Oil & Gas, L.P. (9487). The location of the Debtors’ service address 

is: Four Radnor Corporate Center, Suite 200, 100 Matsonford Road, Radnor, Pennsylvania 19087.

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2

I, R. Seth Bullock, Chief Restructuring Officer of Penn Virginia Corporation (“Penn 

Virginia”), hereby declare under penalty of perjury:

1. I am a Managing Director at Alvarez & Marsal North America, LLC (“A&M”) 

and have served as the Chief Restructuring Officer of Penn Virginia, a corporation organized 

under the laws of the Commonwealth of Virginia, and a debtor and debtor in possession in the 

above-captioned chapter 11 cases of Penn Virginia and its affiliates as debtors and debtors in 

possession (collectively, the “Debtors”) since March 2016, and served as financial advisor to the 

Debtors starting in January 2016. I have over fifteen years of experience in corporate 

restructuring and distressed investing, including extensive experience in the energy sector and, 

specifically, the upstream sector of the oil and gas industry.

2. I am generally familiar with the Debtors’ day-to-day operations, business and 

financial affairs, and books and records. I am also familiar with the circumstances leading to 

these chapter 11 cases and was involved in the negotiation of the terms of the Restructuring 

Support Agreement and ancillary documentation. I submit this declaration in support of

Debtors’ Motion for Entry of an Order (I) Authorizing the Debtors to Assume (A) the 

Restructuring Support Agreement, (B) the Backstop Commitment Agreement, and (C) the Exit 

Commitment Letters, (II) Authorizing the Debtors to Pay Certain Fees in Connection Therewith, 

and (III) Granting Related Relief (the “Motion”).

2

3. Except as otherwise indicated, all facts set forth in this declaration are based upon 

my personal knowledge, my discussions with the Debtors’ management team and advisors, 

including the A&M team working under my supervision, my review of relevant documents and 

information concerning the Debtors’ operations, financial affairs, and restructuring initiatives, or 

 2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Motion

or the Restructuring Support Agreement, as applicable.

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my opinions based upon my experience and knowledge. I am over the age of 18 and authorized 

to submit this declaration on behalf of the Debtors. If called upon to testify, I could and would 

testify competently to the facts set forth in this declaration.

Restructuring Support Agreement

4. The Debtors have commenced these chapter 11 cases with a consensual 

restructuring framework in place that will swiftly resolve the Debtors’ highly leveraged balance 

sheet and provide substantial new sources of post-emergence liquidity. The Restructuring 

Support Agreement, along with the DIP Financing, Rights Offering, and Exit Facility, 

collectively provide the Debtors with the resources and flexibility both during these chapter 11 

cases and post-emergence to pursue and implement a value-maximizing restructuring 

transaction. In simple terms, the Restructuring Support Agreement contemplates a valuemaximizing transaction under which the RBL Lenders will be paid in full and the Noteholders 

and general unsecured claim holders will, subject to dilution by the Rights Offering, 

Commitment Premium, and Management Incentive Plan, receive 100 percent of the equity in 

reorganized Penn Virginia. Further, certain settlements in the Restructuring Support Agreement

enable the Debtors to avoid protracted, value-destructive litigation that would delay their 

emergence from chapter 11.

5. The Restructuring Support Agreement is the product of good-faith, arms’-length 

negotiations among the Debtors and the Restructuring Support Parties, each of whom had 

separate, sophisticated legal counsel and financial advisors and whom, collectively, represent the 

overwhelming majority of the holders of the Debtors’ prepetition funded-debt obligations.

6. To capture the full benefit of the Restructuring Support Agreement, the Debtors 

must move efficiently through chapter 11. The Restructuring Support Parties’ various 

commitments are contingent upon the Debtors’ executing their restructuring in accordance with 

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the Milestones. In light of the tumultuous market backdrop, the Restructuring Support Parties’ 

various concessions, and their commitments to fund post-emergence sources of liquidity—which 

would almost certainly be unavailable to the Debtors from any other source—I believe that the 

Milestones are reasonable and the Debtors are prepared to execute their restructuring in 

accordance therewith. In light of the Debtors’ progress to date, I am confident that they can 

consummate their restructuring in accordance with the Milestones.

7. Additionally, pursuant to the Restructuring Support Agreement, the Debtors have 

agreed to pay the Professional Fees. By securing the support and cooperation of the 

Restructuring Support Parties, the Debtors have significantly reduced the potential cost and 

duration of their chapter 11 cases. Payment of the Professional Fees pursuant to the 

Restructuring Support Agreement was a negotiated component of the agreements and a material 

inducement for the Restructuring Support Parties’ various concessions and commitments 

thereunder. Additionally, based on my conversations with the Debtors’ advisors, and my 

experience as a restructuring professional, I understand that payment of the Professional Fees 

under the Restructuring Support Agreement is a market-based term that courts frequently 

approve in similar circumstances. Accordingly, I believe that payment of the Professional Fees 

is reasonable and appropriate under the circumstances.

The Backstop Fees and Exit Commitment Fees are Appropriate.

8. The Rights Offering and Exit Facility are of great benefit to the Debtors by

solidifying their post-emergence liquidity position. Locking in the Backstop Parties’ and Exit 

Facility Lenders’ commitments through the assumption of the Restructuring Support Agreement 

will further benefit the Debtors by minimizing the risk associated with these chapter 11 cases. 

Even under normal operating conditions, the Debtors would expect to pay certain fees in 

connection with such transactions. In light of market conditions, and the lack of traditional 

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sources of capital for E&P companies, the Debtors are satisfied that the Backstop Fees and Exit 

Commitment Fees represent the market rate. 

9. Further, Jefferies examined and compared both the Backstop Fees and the Exit 

Commitment Fees to fees paid to new capital providers in both in- and out-of-court transactions 

similar to the Rights Offering and Exit Facility and determined that such fees are within market 

levels. Based on my conversations with Jefferies, the Debtors’ other advisors, and my more than 

fifteen years of experience in corporate restructuring and distressed investing, I believe that the 

Backstop Fees and Exit Commitment Fees are reasonable, appropriate under the circumstances, 

and in line with the market for similar transactions.

Marketing Process

10. In addition to weighing the costs and benefits of attempting to fund a 

non-consensual chapter 11 proceeding with proceeds from their Swap Contracts, the Debtors 

engaged in a third-party marketing process, at least in part, to test the market for the highest and 

otherwise best restructuring alternative. Starting in mid-2015 through late 2015, Jefferies began 

exploring various strategic alternatives on the Debtors’ behalf, including exploring alternative 

sources of financing and the sale of some or all of the Debtors’ assets. In connection with this 

process a number of third parties conducted substantial diligence regarding the Debtors and their 

assets.

11. In January 2016, the Debtors announced the engagement of Jefferies, K&E, and 

A&M to assist the Debtors with exploring more comprehensive restructuring alternatives. The 

Debtors and their advisors continued to explore various third-party restructuring alternatives in 

the months preceding the Petition Date. Due to its efforts on the Debtors’ behalf over the second 

half of 2015, Jefferies had a well-defined population of potential interested investors, both 

strategic and financial, that were familiar with the Debtors’ assets and liquidity constraints. With 

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the assistance of Jefferies, the Debtors contacted 16 potential third-party investors, including 

both strategic and financial investors, specifically requesting restructuring proposals. A number 

of these parties conducted further due diligence in connection with their analysis of whether to 

submit such a proposal. Because of the 2015 process, the Debtors were well-positioned to 

provide any information third-party investors may have requested. The Debtors ultimately 

received four Third-Party Proposals. Additionally, while the Debtors brokered the joint 

resolution among the RBL Lenders and Noteholders embodied in the Restructuring Support 

Agreement, over the course of their prepetition marketing process, the Debtors received and 

considered separate proposals from the RBL Agent and the Ad Hoc Committee. 

12. The Third-Party Proposals generally contemplated outside investments in the 

form of junior debtor-in-possession financing and post-emergence equity rights offerings (or 

similar equity investments) in return for the majority of the reorganized Penn Virginia’s equity. 

Noteholders were generally left with significantly less than half of reorganized Penn Virginia’s 

equity. The Debtors, their management team and advisors, and the Board closely considered the 

Third-Party Proposals and, as set forth below, ultimately determined that the Restructuring 

Support Agreement embodies the best alternative to maximize value for all of the Debtors’ 

estates. Further, the Debtors presented the Third-Party Proposals to both the RBL Lenders and 

the Ad Hoc Committee and the overwhelming majority—holding approximately 87 percent in 

principal of the Debtors’ aggregate prepetition funded-debt obligations—elected to support the 

RSA.

Board Consideration

13. As the Debtors’ Chief Restructuring Officer, I participated in all board-led 

discussions regarding the restructuring negotiations, including the third-party marketing process. 

The Board was actively engaged in the above-described negotiations and third-party marketing 

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process. Over the course of the first four months of 2016, the Board met regularly and 

consistently to receive updates and authorize various actions, including, for example, entry into 

the RBL Amendments. Prior to entry into the Restructuring Support Agreement, the Board met 

to receive a comprehensive presentation from the Debtors’ advisors regarding the final terms of 

the Restructuring Support Agreement, the relative benefits of the transactions contemplated 

thereby, the legal and financial ramifications of entry therein, and the chapter 11 process 

generally. Ultimately, on May 9, 2016, the Board unanimously authorized the Debtors’ entry 

into the Restructuring Support Agreement and commencement of these chapter 11 cases, subject 

to the resolution of certain remaining open issues that were subsequently resolved.

Debtors’ Business Judgment

14. Without the benefits and protections provided by the Restructuring Support 

Agreement, the Debtors could potentially face a prolonged stay in bankruptcy. In light of the 

Debtors’ prepetition defaults under the RBL Facility, and based on all of the Debtors’ prepetition 

restructuring negotiations, I believe they likely could not have navigated a soft landing in chapter 

11 absent the RBL Lenders’ support. The RBL Lenders’ support was, in turn, ultimately 

contingent upon the participation of the Noteholders—the RBL Lenders specifically stated that 

they would not fund a restructuring process that the Noteholders did not support. The swift, 

consensual process contemplated by the Restructuring Support Agreement presents far less 

execution risk than any available alternative, accomplishes a critical deleveraging, and better 

preserves estate assets for the benefit of the Debtors’ stakeholders. 

15. The Third-Party Proposals were non-binding and had higher execution risk and 

associated costs to the Debtors. First, it is not clear that the Debtors would have had the support 

of the RBL Lenders under any of the Third-Party Proposals. Even with the RBL Lenders’ 

support, if the Debtors had proceeded with one of the Third-Party Proposals, they almost 

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certainly would have faced postpetition litigation with the Noteholders. Ultimately, I do not 

believe that the all-in economics of the Third-Party Proposals were as favorable as those of the 

Restructuring Support Agreement, especially in light of the additional cost and uncertainty 

attendant to the non-consensual process contemplated by the Third-Party Proposals. Further, the 

Debtors negotiated a full fiduciary-out provision as part of the Restructuring Support Agreement 

in the event that proceeding with the transactions contemplated thereby would be inconsistent 

with the Debtors’ fiduciary duties to maximize value for their stakeholders.

16. Finally, as stated above, the Debtors shared the Third-Party Proposals with both

the RBL Lenders, 100 percent of which signed the Restructuring Support Agreement, and Ad 

Hoc Committee, which represents holders of approximately 86 percent in principal amount of the 

Notes and the Debtors’ largest unsecured creditor constituency. The RBL Lenders and the Ad 

Hoc Committee chose to support the Restructuring Support Agreement and its more consensual 

path. In light of this fact, current market uncertainty, and the other considerations outlined 

above, I believe at this time that pursuing any alternative transaction without the support of the 

RBL Lenders and Noteholders would not be reasonable. The Debtors engaged in a thorough

analysis of the Restructuring Support Agreement vis-à-vis the Third-Party Proposals and 

determined that the Restructuring Support Agreement represents the value-maximizing 

transaction. Accordingly, I believe that assumption of the Restructuring Support Agreement, 

including the Backstop Commitment Agreement and Exit Commitment Letters, and payment of 

all fees contemplated thereunder is a reasonable exercise of the Debtors’ business judgment.

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Pursuant to 28 U.S.C. § 1746,1 declare under penalty of perjury that the foregoing is true 

and correct to the best of my knowledge and belief. 

Dated: May ,2016 Respectfully submitted, 

rltir; 

R. Seth Bullock 

Chief Restructuring Officer 

Penn Virginia Corporation 

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