Document:

atax-ex101_6.htm

 

Exhibit 10.1

 

 

FIRST AMENDMENT TO BOND EXCHANGE, 

REIMBURSEMENT, PLEDGE AND SECURITY AGREEMENT

 

 

between

 

 

FEDERAL HOME LOAN MORTGAGE CORPORATION

 

 

 

and

 

 

 

ATAX TEBS II, LLC,

as Sponsor

 

 

 

Relating to

 

 

 

Freddie Mac

Multifamily M Certificates

Series M031

 

 

 

 

 

Dated as of July 1, 2019

 

 

 

 

 

THIS FIRST AMENDMENT TO REIMBURSEMENT AND SECURITY AGREEMENT (this “First Amendment”) is made and entered into as of the 1st day of July, 2019, by and between the FEDERAL HOME LOAN MORTGAGE CORPORATION (“Freddie Mac”), a shareholder-owned government-sponsored enterprise organized and existing under the laws of the United States, and ATAX TEBS II, LLC (the “Sponsor”), a limited liability company duly organized and existing under the laws of the State of Delaware, and amends and supplements the Bond Exchange, Reimbursement, Pledge and Security Agreement dated as of July 1, 2014 (the “Original Agreement” and together with this First Amendment, the “Agreement”) by and between Freddie Mac and the Sponsor.  

RECITALS:

WHEREAS, the Initial Freddie Mac Liquidity Pricing Term expires on July 15, 2019; and 

WHEREAS, pursuant to Section 3.20 of the Original Agreement, the Sponsor has timely requested that Freddie Mac provide a quote for the Base Rate that would be effective for an ensuing five-year Freddie Mac Liquidity Pricing Term; and  

WHEREAS, Freddie Mac has provided, in response to the Sponsor’s Base Rate Quote Request, Freddie Mac’s Base Rate quote for an ensuing Freddie Mac Liquidity Pricing Term; and

WHEREAS, the Sponsor has timely submitted to Freddie Mac a Liquidity Election Notice notifying Freddie Mac of its election to accept the new Base Rate to be effective for an ensuing Freddie Mac Liquidity Pricing Term; and

WHEREAS, in accordance with Section 3.20(b) of the Original Agreement, the Original Agreement is being amended to reflect the same.  

NOW, THEREFORE, the parties hereto hereby agree to amend the Original Agreement as follows:

	
Section 1.
	
The recitals hereto are incorporated herein and made a part hereof.

	
Section 2.
	
All initially capitalized terms included herein and not otherwise specifically defined in this First Amendment shall have the same meanings, respectively, as the defined terms in the Original Agreement.  

	
Section 3.
	
The definition of “Base Rate” in Section 1.1 of the Original Agreement is hereby amended and restated to read as follows (added language is underlined and deleted language is struck-through):

“Base Rate” means, with respect to the calculation of the Freddie Mac Liquidity Facility Fee, (a) 0.30% (thirty basis points) during the Initial Freddie Mac Liquidity Pricing Term, (b) 0.30% (thirty basis points) for the subsequent Freddie Mac Liquidity Pricing Term, beginning on July 15, 2019 and ending on July 15, 2024 (or such lesser 

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term ending on the Liquidity Commitment Termination Date), and (c) thereafter, upon any subsequent Freddie Mac Liquidity Pricing Reset accepted to which Freddie Mac has consented in its sole discretion following receipt of a written request by the Sponsor in accordance with Section 3.20 hereof, the percentage per annum established by Freddie Mac and accepted by the Sponsor in accordance with Section 3.20 hereof and set forth in an amendment to this Agreement.

	
Section 4. 
	
The Sponsor agrees to pay all costs and expenses of Freddie Mac incident to the preparation of this First Amendment and the consummation of the transactions specified herein, including without limitation, fees and expenses of legal counsel to Freddie Mac.  

	
Section 5.
	
The Sponsor acknowledges that any further requests by the Sponsor for an additional five-year Freddie Mac Liquidity Pricing Term and related Freddie Mac Liquidity Pricing Reset shall be in the sole discretion of Freddie Mac.  The Sponsor represents and warrants that (a) the execution and delivery of this First Amendment does not contravene, result in a breach of, or constitute a default under, any deed of trust, loan agreement, indenture or other contract or agreement to which the Sponsor is a party or by which the Sponsor or any of its properties may be bound (nor would such execution and delivery constitute such a default with the passage of time or the giving of notice or both); (b) this First Amendment constitutes the legal, valid and binding obligation of the Sponsor, enforceable in accordance with its terms; (c) the execution and delivery of, and performance under, this First Amendment are within the Sponsor’s power and authority without the joinder or consent of any other party, have been duly authorized by all requisite action and are not in contravention of any law, or of the Sponsor’s operating agreement or other corporate organizational documents or of any indenture, agreement or undertaking to which the Sponsor is a party or by which it is bound; (d) there exists no default under any of the Sponsor Documents, after giving effect to this First Amendment; and (e) there are no offsets or defenses against any of the Sponsor’s obligations under the Sponsor Documents.

	
Section 6. 
	
Except as expressly modified as stated above, all provisions of the Original Agreement shall remain unaffected and in full force and effect.

	
Section 7.
	
This First Amendment may be executed in several counterparts, each of which shall be an original and all of which shall constitute one and the same instrument.

	
Section 8.
	
If any provisions of this First Amendment shall be held or deemed to be or shall, in fact, be illegal, inoperative or unenforceable, the same shall not affect any other provision or provisions herein contained or render the same invalid, inoperative or unenforceable to any extent.

	
Section 9.
	
The amendments set forth in this First Amendment shall be effective as of the date first written above. 

[Signatures Appear on Following Page]

 

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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Bond Exchange, Reimbursement, Pledge and Security Agreement to be duly executed by their duly authorized officers or representatives effective as of the date first above written.

 

FEDERAL HOME LOAN MORTGAGE

CORPORATION

 

 

By:  /s/ Curtis Melvin__________________ 

Curtis Melvin

Multifamily, Production Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Freddie Mac Signature Page to the First Amendment to 
ATAX TEBS M031 Reimbursement Agreement]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Bond Exchange, Reimbursement, Pledge and Security Agreement to be duly executed by their duly authorized officers or representatives effective as of the date first above written. 

ATAX TEBS II, LLC, a Delaware limited liability company

 

		
	
By:
	
AMERICA FIRST MULTIFAMILY INVESTORS, L.P., a Delaware limited partnership (f/k/a America First Tax Exempt Investors, L.P.), its Sole Member

 

		
	
 
	
 

	
By:
	
AMERICA FIRST CAPITAL ASSOCIATES LIMITED PARTNERSHIP TWO, a Delaware limited partnership

	
Its:
	
General Partner

 

			
	
 
	
 

	
By:
	
 
	
THE BURLINGTON CAPITAL GROUP LLC, a Delaware limited liability company

	
Its:
	
 
	
General Partner

	
 
	
 

 

		
	
 
	
 

	
By:
	
/s/ Craig S. Allen

	
 
	
Craig S. Allen

	
 
	
CFO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Sponsor Signature Page to the First Amendment to 
ATAX TEBS M031 Reimbursement Agreement]Exhibit 10.1

 

RESTRUCTURING SUPPORT AGREEMENT

 

This RESTRUCTURING SUPPORT AGREEMENT (together with all exhibits, schedules, and attachments hereto, as each may be amended, supplemented, or otherwise modified from time to time in accordance with the terms hereof, this “Agreement”), dated as of August 2, 2019, is entered into by and among:

 

(a)                                 Halcón Resources Corporation (“Parent”), Halcón Resources Operating, Inc., Halcón Holdings, Inc., Halcón Energy Properties, Inc., Halcón Permian, LLC, Halcón Field Services, LLC, and Halcón Operating Co., Inc., each such entity a subsidiary of Parent (collectively with Parent, the “Company” or the “Debtors”); and

 

(b)                                 the undersigned beneficial holders, or investment advisors or managers for the account of beneficial holders (the “Senior Noteholders”), of the 6.75% Senior Notes due 2025 (the “Senior Notes”) issued under that certain indenture, dated as of February 16, 2017 (as amended, modified, or otherwise supplemented from time to time, the “Senior Notes Indenture”), by and among Parent, as issuer, each of the guarantors named therein, and U.S. Bank National Association, as indenture trustee, together with their respective successors and permitted assigns and any subsequent Senior Noteholder that becomes party hereto in accordance with the terms hereof (collectively, the “Consenting Creditors”).

 

The Company, each Consenting Creditor, and any subsequent Person that becomes a party hereto in accordance with the terms hereof are referred to herein collectively as the “Parties” and each individually as a “Party.”  Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Restructuring Term Sheet (as defined below).

 

RECITALS

 

WHEREAS, the Parties have engaged in arm’s-length, good faith discussions regarding a restructuring of certain of the Company’s indebtedness and other obligations, including the Company’s indebtedness and obligations under the Revolving Credit Agreement and Senior Notes Indenture;

 

WHEREAS, the Parties have agreed to a restructuring of the Company’s capital structure (the “Restructuring”), which is anticipated to be implemented through the Plan (as defined below), a solicitation of votes thereon (the “Solicitation”), the Equity Rights Offerings (as defined below), and the commencement by the Company of voluntary cases (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”);

 

WHEREAS, as of the date hereof, the Consenting Creditors, in the aggregate, hold approximately 67.3% of the aggregate outstanding principal amount of the Senior Notes;

 

WHEREAS, as of the date hereof, the Consenting Creditors, in the aggregate, hold or control, directly or indirectly, approximately 26.2% of the issued and outstanding common equity of Parent (the “Existing Equity Interests”);

 

 

WHEREAS, in connection with the Restructuring, (i) the Senior Noteholders will be offered the right to purchase New Common Shares (as defined below) for an aggregate purchase price of $150,150,000 (the “Senior Noteholder Rights Offering”), and (ii) certain of the Consenting Creditors (in such capacity, the “Backstop Parties”) will backstop the Senior Noteholder Rights Offering, in each case, in accordance with the terms and conditions described in the Restructuring Term Sheet and the backstop commitment agreement dated as of the date hereof, attached hereto as Exhibit B (the “Senior Noteholder Backstop Agreement”);

 

WHEREAS, in connection with the Restructuring, subject to the Existing Equity Cash Out, the holders of common stock of Parent will be offered the right to purchase New Common Shares for an aggregate purchase price of $14,850,000 (the “Existing Equity Interests Rights Offering”) in accordance with the terms and conditions described in the Restructuring Term Sheet;

 

WHEREAS, the Restructuring will include the grant of a new post-restructuring management incentive plan (the “Management Incentive Plan”) in accordance with the terms and conditions described in the Restructuring Term Sheet;

 

WHEREAS, the Parties desire to express to each other their mutual support and commitment specifically as set forth in the Restructuring Term Sheet and this Agreement.

 

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

 

1.                                      Certain Definitions.  The following terms used in this Agreement shall have the following definitions:

 

(a)                                 “Ad Hoc Noteholder Group” means those certain holders of Senior Notes represented by the Consenting Creditor Advisors.

 

(b)                                 “Alternative Restructuring” means any new money investment, restructuring, reorganization, merger, amalgamation, acquisition, consolidation, dissolution, winding up, assignment for the benefit of creditors, transaction, debt investment, equity investment, joint venture, partnership, sale, plan proposal, liquidation, tender offer, recapitalization, plan of reorganization, share exchange, business combination, or similar transaction involving any one or more of the Debtors or the debt, equity, or other interests in any one or more of the Debtors that is an alternative to the Restructuring and the Plan, including the Equity Rights Offerings, the Exit Facility and the other transactions contemplated by the Plan.

 

(c)                                  “Backstop Assumption Motion” means the motion and proposed form of order to be filed by the Debtors with the Bankruptcy Court seeking the assumption of the Senior Noteholder Backstop Agreement pursuant to section 365 of the Bankruptcy Code, authorizing the payment of certain expenses and other amounts thereunder (including the Backstop Commitment Premium and the Expense Reimbursement (each as defined in the Senior

 

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Noteholder Backstop Agreement) and the indemnification provisions set forth therein, and granting any other related relief.

 

(d)                                 “Backstop Order” means an order of the Bankruptcy Court approving the Backstop Assumption Motion, which shall include, among other things, provisions expressly approving (i) the payment of the Backstop Commitment Premium and Expense Reimbursement, and (ii) the indemnification provisions set forth in the Senior Noteholder Backstop Agreement.

 

(e)                                  “Consenting Creditor Advisors” means, together, the Consenting Creditor Counsel and Ducera Partners, LLC, as financial advisor to the Ad Hoc Group of Noteholders.

 

(f)                                   “Consenting Creditor Counsel” means, collectively, (i) Paul, Weiss, Rifkind, Wharton & Garrison LLP, as counsel and (ii) Porter Hedges LLP, as local counsel, to the Ad Hoc Noteholder Group.

 

(g)                                  “Definitive Documents” shall have the meaning ascribed to such term in Section 3 of this Agreement.

 

(h)                                 “Equity Rights Offerings” means, collectively, the Senior Noteholder Rights Offering and the Existing Equity Interests Rights Offering.

 

(i)                                     “Plan” means the prepackaged chapter 11 plan of reorganization of the Company implementing the Restructuring, attached hereto as Exhibit C, including all appendices, exhibits, schedules, and supplements thereto, as may be modified from time to time.

 

(j)                                    “Qualified Marketmaker” means an entity that (i) holds itself out to the public or the applicable private markets as standing ready in the ordinary course of business to purchase from customers and sell to customers Claims against or Interests in the Company (or enter with customers into long and short positions in Claims against or Interests in the Company), in its capacity as a dealer or marketmaker in Claims against or Interests in the Company and (ii) is, in fact, regularly in the business of making a market in claims against or interests in issuers or borrowers (including debt securities or other debt).

 

(k)                                 “Requisite Creditors” means, as of the date of determination, Consenting Creditors holding at least two-thirds of the outstanding Senior Notes held by the Consenting Creditors as of such date.

 

(l)                                     “Restructuring Term Sheet” means the term sheet (including any schedules and exhibits attached thereto), attached hereto as Exhibit A, which contains the material terms and provisions of the Restructuring agreed upon by the Parties that are to be incorporated into the Plan and the Definitive Documents.

 

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

 

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(n)                                 “Voting Deadline” means the deadline to submits votes to accept or reject the Plan.

 

2.                                      Support 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 “Support Effective Date”) that:

 

(a)                                 this Agreement has been executed by (i) each Debtor and (ii) Consenting Creditors holding, in aggregate, at least 66 2/3% in principal amount of the Senior Notes; and

 

(b)                                 the reasonable and documented fees and expenses incurred by the Consenting Creditor Advisors pursuant to the terms of their fee letters as of the Support Effective Date have been paid in full in Cash.

 

3.                                      Exhibits; Definitive Documents; Bankruptcy Process.

 

(a)                                 Each of the exhibits attached hereto, including the Restructuring Term Sheet, and any schedules or exhibits to such exhibits (collectively, the “Exhibits and Schedules”) are 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 the terms of this Agreement (excluding the Exhibits and Schedules) and the Exhibits and Schedules, the Exhibits and Schedules shall govern.  In the event of any inconsistency between the terms of this Agreement (including the Exhibits and Schedules) and the Definitive Documents, as applicable, the terms of the Definitive Documents shall govern.

 

(b)                                 The definitive documents and agreements governing the Restructuring (collectively, the “Definitive Documents”) shall include:

 

i.                              the Plan;

 

ii.                           the Confirmation Order and any motion or other pleadings related to the Plan or to confirmation of the Plan;

 

iii.                        the Solicitation Materials and the motion seeking approval of the Solicitation Materials;

 

iv.                       (A) the interim order authorizing use of cash collateral and approving the DIP Financing (if any) (the “Interim DIP Order”) and (B) the final order authorizing use of cash collateral and approving the DIP Financing (if any) (the “Final DIP Order” and, together with the Interim DIP Order, the “DIP Orders”);

 

v.                          the DIP Documents;

 

vi.                       the Equity Rights Offering Documents;

 

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vii.                    the Backstop Assumption Motion and Backstop Order;

 

viii.                 the Exit Facility, if any, and any material document related to the Exit Facility;

 

ix.                       the Amended Organizational Documents;

 

x.                          the Management Incentive Plan;

 

xi.                       the Warrant Agreement; and

 

xii.                    if applicable, the Governance Term Sheet (as defined in the Plan).

 

(c)                                  Except as set forth or provided for herein, the Definitive Documents (and any modifications, restatements, supplements, or amendments to any of the Definitive Documents) shall, after the Support Effective Date, remain subject to negotiation and shall, upon completion, contain terms, conditions, representations, warranties, and covenants consistent in all respects with the terms of this Agreement and otherwise be in form and substance reasonably  satisfactory to the Debtors and the Requisite Creditors.

 

(d)                                 Commencement of the Chapter 11 Cases.  Provided that the Support Effective Date has occurred, the Company hereby agrees that, as soon as reasonably practicable, but in no event later than August 7, 2019 (the “Outside Petition Date”) (the date on which such filing occurs, the “Petition Date”), the Company shall file with the Bankruptcy Court voluntary petitions for relief under chapter 11 of the Bankruptcy Code and any and all other documents necessary to commence the Chapter 11 Cases.

 

4.                                      Agreements of the Consenting Creditors.

 

(a)                                 Voting; Support.  Each Consenting Creditor (severally and not jointly) agrees that, for the duration of the Support Period applicable to such Consenting Creditor, such Consenting Creditor shall:

 

i.                              timely vote or cause to be voted its Claims or Interests, if applicable, to accept the Plan by delivering or causing to be delivered its duly authorized, executed, and completed ballot or ballots, and consent to and, if applicable, not opt out of, the releases set forth in the Plan against each Released Party on a timely basis, and, in any event, within four (4) Business Days following commencement of the Solicitation;

 

ii.                           not change or withdraw (or cause or direct to be changed or withdrawn) any such vote or release described in clause (i) above; provided, however, that notwithstanding anything in this Agreement to the contrary, a Consenting Creditor’s vote and release may, upon prior written notice to the Company and the other Parties, be revoked (and, upon such revocation, deemed void ab initio) by any Consenting Creditor at any time following (and solely in

 

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the event of) the termination of this Agreement pursuant to Section 6 with respect to such Consenting Creditor;

 

iii.                        timely vote (or cause to be voted) its Claims or Interests against any Alternative Restructuring;

 

iv.                       negotiate in good faith with the Company the form of the Definitive Documents and (as applicable) execute the Definitive Documents;

 

v.                          not directly or indirectly, through any Person (including any indenture trustee), seek, solicit, propose, support, assist, engage in negotiations in connection with or participate in the formulation, preparation, filing, or prosecution of any Alternative Restructuring;

 

vi.                       not object to, or take any other action that is inconsistent with or that would reasonably be expected to prevent, interfere with, delay, or impede, the Solicitation, the Equity Rights Offerings, the Exit Facility, the approval of and entry of the DIP Orders, approval of the Disclosure Statement, or the confirmation and consummation of the Plan and the Restructuring;

 

vii.                    not direct the Senior Notes Trustee to take any action inconsistent with such Consenting Creditor’s obligations under this Agreement or the Restructuring Term Sheet, and, if the Senior Notes Trustee takes any action inconsistent with such Consenting Creditor’s obligations under this Agreement or the Restructuring Term Sheet, such Consenting Creditor shall use its commercially reasonable efforts to cause and direct (if reasonably requested by the Company) the Senior Notes Trustee to cease, withdraw, and refrain from taking any such action;

 

viii.                 to the extent any legal or structural impediment arises that would prevent, hinder, or delay the consummation of the Restructuring, negotiate in good faith appropriate additional, or alternative provisions to address any such impediment; provided, however, that no such additional or alternative provisions shall modify any Consenting Creditor’s economic treatment set forth in the Restructuring Term Sheet without such Consenting Creditor’s written consent.

 

(b)                                 Transfers.  Each Consenting Creditor agrees that, for the duration of the Support Period, such Consenting Creditor shall not sell, transfer, loan, issue, pledge, hypothecate, assign, or otherwise dispose of (each, a “Transfer”), directly or indirectly, in whole or in part, any of its Claims or Interests or any option thereon or any right or interest therein or any other claims against or interests in the Company (including grant any proxies, deposit any Claims against or Interests into a voting trust, or entry into a voting agreement with respect to any such Claims or Interests), unless the transferee thereof either (i) is a Consenting Creditor or (ii) prior to such Transfer, agrees in writing for the benefit of the Parties to become a Consenting Creditor and to be bound by all of the terms of this Agreement applicable to Consenting Creditors (including with respect to any and all Claims, Interests, or other claims or interests it

 

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already may hold against or in the Company prior to such Transfer) by executing a joinder agreement, a form of which is attached hereto as Exhibit D (the “Joinder Agreement”), and delivering an executed copy thereof within two (2) Business Days following such execution, to Weil, Gotshal & Manges LLP (“Weil”), as counsel to the Company, and the Consenting Creditor Counsel, in which event (A) the transferee (including the Consenting Creditor transferee, if applicable) shall be deemed to be a Consenting Creditor hereunder to the extent of such transferred rights and obligations and (B) the transferor shall be deemed to relinquish its rights (and be released from its obligations) under this Agreement to the extent of such transferred rights and obligations.  Each Consenting Creditor agrees that any Transfer of any Claims or Interests that does not comply with the terms and procedures set forth herein shall be deemed void ab initio, and the Company and each other Consenting Creditor shall have the right to enforce the voiding of such Transfer.  Notwithstanding anything to the contrary herein, a Consenting Creditor may Transfer its Claims or Interests to an entity that is acting in its capacity as a Qualified Marketmaker without the requirement that the Qualified Marketmaker become a Party; provided, however, that (x) such Qualified Marketmaker must Transfer such right, title, or interest by the earlier of five (5) Business Days following its receipt thereof and, if received prior to the Voting Deadline, five (5) Business Days prior to the Voting Deadline, (y) any subsequent Transfer by such Qualified Marketmaker of the right, title, or interest in such Claims or Interests is to a transferee that is or becomes a Consenting Creditor at the time of such transfer, and (z) such Consenting Creditor shall be solely responsible for the Qualified Marketmaker’s failure to comply with the requirements of this Section 4. Without limitation of the foregoing, if the Qualified Marketmaker fails to comply with this Section 4(b), such Qualified Marketmaker shall comply with the obligations of a Consenting Creditor under Section 4(a) of this Agreement.

 

(c)                                  Additional Claims and Interests.  To the extent any Consenting Creditor (i) acquires additional Claims or Interests, (ii) holds or acquires any other claims or interests against the Company entitled to vote on the Plan, or (iii) Transfers any Claims or Interests, then, in each case, such Consenting Creditor shall promptly notify Weil and the Consenting Creditor Counsel (in no event less than three (3) Business Days following such transaction).  Each such Consenting Creditor agrees that such additional Claims, Interests, or other claims and interests shall be subject to this Agreement and that, for the duration of the Support Period applicable to such Consenting Creditor, it shall vote (or cause to be voted) any such additional Claims, Interests, or other claims or interests entitled to vote on the Plan (to the extent still held by it or on its behalf at the time of such vote), in a manner consistent with Section 4(a) hereof.

 

(d)                                 Additional Parties.  Any Senior Noteholder may, at any time after the Support Effective Date, become a party to this Agreement as a Consenting Creditor (an “Additional Consenting Creditor”), by delivering an executed copy of a Joinder Agreement to Weil and the Consenting Creditor Counsel, pursuant to which such Additional Consenting Creditor shall be bound by the terms of this Agreement as a Consenting Creditor hereunder and shall be deemed a Consenting Creditor for all purposes hereunder.

 

(e)                                  The foregoing provisions of this Section 4 will not (i) limit any Consenting Creditor’s rights to enforce any rights under this Agreement or (ii) be construed to prohibit or limit any Consenting Creditor from appearing as a party-in-interest in any matter to

 

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be adjudicated in a court of competent jurisdiction or the Chapter 11 Cases (as applicable), so long as, from the Support Effective Date and continuing for the Support Period, such appearance and the positions advocated in connection therewith are not inconsistent with this Agreement, are not in violation of this Agreement, and are not for the purpose of hindering, delaying, or preventing the consummation of the Restructuring.

 

5.                                      Agreements of the Company.

 

(a)                                 Covenants.  The Company agrees that, for the duration of the Support Period, the Company shall:

 

i.                              use commercially reasonable efforts to (A) support the Restructuring, as contemplated under this Agreement and the Restructuring Term Sheet, (B) implement and consummate the Restructuring in a timely manner, and take any and all actions in furtherance of the Restructuring, as contemplated under this Agreement and the Restructuring Term Sheet, (C) negotiate in good faith with the Consenting Creditors the form of the Definitive Documents and (as applicable) execute the Definitive Documents, and (D) obtain, file, submit, or register any and all required governmental, regulatory, and third-party approvals that are necessary for the Restructuring;

 

ii.                           subject to Section 29 hereof, not directly or indirectly (A) seek, solicit, support, propose, assist, encourage, vote for, consent to, enter, or participate in any discussion regarding the negotiation or formulation of an Alternative Restructuring, (B) publicly announce its intention not to pursue the Restructuring, or (C) object to, impede, delay, or take any other action that is inconsistent with, or that would reasonably be expected to prevent, interfere with, or materially impede or delay, the confirmation or consummation of the Restructuring;

 

iii.                        operate its business in the ordinary course in a manner consistent with past practice in all material respects (other than any changes in operations (A) resulting from or relating to this Agreement or the filing or prosecution of the Chapter 11 Cases or (B) imposed by the Bankruptcy Court);

 

iv.                       as reasonably requested, confer with the Consenting Creditors and their respective representatives that have entered into and are subject to a confidentiality agreement with the Company to report on operational matters and the general status of ongoing operations; provided, however, that (A) such requests shall be directed solely to David S. Elkouri in accordance with Section 23 hereof and (B) any information provided in response to such requests shall be deemed “Confidential Information” in accordance with the applicable confidentiality agreements between the Company and the receiving Consenting Creditors;

 

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v.                          maintain good standing and legal existence under the laws of the state or other jurisdiction in which such entity is incorporated, organized, or formed;

 

vi.                       not sell, or file any motion or application seeking to sell, any assets in excess of $5 million other than in the ordinary course of business, except (A) as otherwise provided in this Agreement or (B) with the prior written consent of the Requisite Creditors;

 

vii.                    promptly provide written notice to the Consenting Creditors and the Consenting Creditor Advisors of (A) the occurrence, or failure to occur, of any event of which the Company has actual knowledge which occurrence or failure would be likely to cause any condition precedent contained in this Agreement not to occur or become impossible to satisfy, (B) the receipt of any written notice from any governmental authority or third party alleging that the consent of such party is or may be required in connection with the transactions contemplated by the Restructuring, or (C) receipt of any written notice of any proceeding commenced or, to the actual knowledge of the Company, threatened against the Company relating to or involving or otherwise affecting in any material respect the transactions contemplated by this Agreement or the Restructuring, or (D) a failure of the Company to comply in any material respect with or satisfy a covenant, condition, or agreement to be complied with or satisfied by it hereunder;

 

viii.                 promptly notify the Consenting Creditors and the Consenting Creditor Advisors in writing following the receipt of notice of any material governmental or third-party complaints, litigations, investigations, or hearings (or communications indicating that the same may be contemplated or threatened);

 

ix.                       not adopt any new executive compensation or retention plans, approve any executive bonuses, or retention payments, or terminate any employees that would give rise to contractual severance obligations, without the prior written consent of the Requisite Creditors;

 

x.                          subject to Section 29 hereof, not take any action that is inconsistent with, or is intended to interfere with, consummation of the Restructuring;

 

xi.                       provide draft copies of all material motions or applications related to the Restructuring (including all “first day” and “second day” motions and orders, the Plan, the Disclosure Statement, ballots, and other Solicitation Materials in respect of the Plan and any proposed amended version of the Plan or the Disclosure Statement, and a proposed Confirmation Order) the Company intends to file with the Bankruptcy Court to the Consenting Creditors Counsel, if reasonably practicable, at least two (2) Business Days prior to the date when the Company intends to file any such pleading or other document (provided that if delivery of such motions, orders, or materials at least two (2) Business Days in

 

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advance is not reasonably practicable prior to filing, such motion, order, or material shall be delivered as soon as reasonably practicable prior to filing), and shall consult in good faith with the Consenting Creditor Advisors regarding the form and substance of any such proposed filing with the Bankruptcy Court;

 

xii.                    to the extent any legal or structural impediment arises that would prevent, hinder, or delay the consummation of the Restructuring, negotiate in good faith appropriate additional, or alternative provisions to address any such impediment;

 

xiii.                 subject to professional responsibilities, timely file with the Bankruptcy Court a written objection to any motion filed with the Bankruptcy Court by a third party seeking the entry of an order (A) directing the appointment of an examiner with expanded powers or a trustee, (B) converting any of the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code, (C) dismissing any of the Chapter 11 Cases, or (D) modifying or terminating the Company’s exclusive right to file and/or solicit acceptances of a plan of reorganization; and

 

xiv.                pay in cash (A) immediately prior to the Petition Date, all reasonable and documented fees and expenses accrued prior to the Petition Date for which invoices or receipts are furnished by the Consenting Creditor Advisors at least one Business Day prior thereto, (B) after the Petition Date, subject to any applicable orders of the Bankruptcy Court but without the need to file fee or retention applications, all reasonable and documented fees and expenses incurred by the Consenting Creditor Advisors from time to time prior to (to the extent not previously paid), on, and after the Petition Date, and (C) on the Effective Date, all reasonable and documented fees and expenses of the Consenting Creditor Advisors incurred and outstanding in connection with the Restructuring (including any estimated fees and expenses estimated to be incurred through the Effective Date).

 

6.                                      Termination of Agreement.

 

(a)                                 This Agreement shall terminate three (3) Business Days following the delivery of written notice (in accordance with Section 23 hereof) from: (i) the Requisite Creditors to Parent at any time after the occurrence and during the continuance of any Creditor Termination Event (as defined below) or (ii) Parent to the Consenting Creditors at any time after the occurrence and during the continuance of any Company Termination Event (as defined below).  Notwithstanding any provision to the contrary in this Section 6, no Party may exercise any of its respective termination rights as set forth herein if such Party has failed to perform or comply in all material respects with the terms and conditions of this Agreement (unless such failure to perform or comply arises as a result of another Party’s actions or inactions), with such failure to perform or comply causing, or resulting in, the occurrence of a Creditor Termination Event or Company Termination Event specified herein.  This Agreement shall terminate automatically, without any further action required by any Party, upon the occurrence of the

 

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Effective Date.  This Agreement shall terminate automatically as to any Consenting Creditor that sells or transfers all Claims against and Interests in the Company that it holds in accordance with Section 4(b).

 

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

 

i.                              the breach by the Company of any of the undertakings, representations, warranties, or covenants of the Company set forth herein in any material respect that remains uncured (if susceptible to cure) for a period of five (5)

 

Business Days after the receipt of written notice of such breach pursuant to this Section 6 and in accordance with Section 23 (as applicable);

 

ii.                           the issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of any ruling, judgment, or order enjoining the consummation of or prohibiting the Debtors from implementing the Plan or the Restructuring, and such ruling, judgment, or order has not been stayed, reversed, or vacated within fifteen (15) days after such issuance;

 

iii.                        the Company enters into a definitive agreement with respect to an Alternative Restructuring or publicly announces its intention to pursue an Alternative Restructuring;

 

iv.                       if, as of 11:59 p.m. prevailing Eastern Time on August 5, 2019, the Company has not commenced the Solicitation in accordance with section 1126(b) of the Bankruptcy Code;

 

v.                          if, as of 11:59 p.m. prevailing Eastern Time on the Outside Petition Date, the Chapter 11 Cases have not been filed;

 

vi.                       on the Petition Date, the Company has not filed (A) the Plan, (B) the Disclosure Statement, (C) motions seeking (x) interim and final approval of the DIP Orders and DIP Credit Agreement, if applicable and (y) a combined hearing for approval of the Disclosure Statement and confirmation of the Plan, and (D) the Backstop Assumption Motion;

 

vii.                    if, as of 11:59 p.m. prevailing Eastern Time on the date that is three (3) Business Days after the Petition Date, the Bankruptcy Court has not entered the Interim DIP Order;

 

viii.                 if, as of 11:59 p.m. prevailing Eastern Time on the date that is thirty (30) days after the Petition Date, the Bankruptcy Court has not entered the Final DIP Order;

 

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ix.                       if, as of 11:59 p.m. prevailing Eastern Time on the date that is thirty (30) days after the commencement of Solicitation, the Voting Deadline has not occurred;

 

x.                          if, as of 11:59 p.m. prevailing Eastern Time on the date that is seventy (70) days after the Petition Date, the Bankruptcy Court has not entered the Confirmation Order and the Backstop Order;

 

xi.                       if, as of 11:59 p.m. prevailing Eastern Time on the date that is eighty-five (85) days after the Petition Date, the Effective Date has not occurred (the “Outside Date”);

 

xii.                    the Bankruptcy Court (A) enters an order denying confirmation of the Plan or (B) after entry of the Confirmation Order, enters an order vacating the Plan or Confirmation Order, or modifying or otherwise amending the Plan or Confirmation Order in a manner materially inconsistent with this Agreement, the Restructuring, the Plan, or any other Definitive Documents then in effect;

 

xiii.                 the Bankruptcy Court enters an order terminating the Company’s exclusive right to file or solicit acceptances of a chapter 11 plan;

 

xiv.                the Company withdraws the Plan or publicly announces its intention to withdraw the Plan;

 

xv.                   the Bankruptcy Court enters an order (A) directing the appointment of a trustee in the Chapter 11 Cases, (B) converting any of the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code, or (C) dismissing any of the Chapter 11 Cases;

 

xvi.                the Bankruptcy Court enters any order authorizing the use of cash collateral or post-petition financing that is inconsistent in any material respect with this Agreement or the applicable DIP Order, or otherwise not consented to by the Requisite Creditors;

 

xvii.             if any of the DIP Orders are reversed, stayed, dismissed, vacated, reconsidered, modified, or amended in any material respect without the consent of the Requisite Creditors;

 

xviii.          if applicable, the occurrence of the Maturity Date (as defined in the DIP Credit Agreement) without the Plan having been substantially consummated;

 

xix.                the termination of the Senior Noteholder Backstop Agreement, other than as a result of consummation of the Equity Rights Offerings;

 

xx.                   if the Company shall not have obtained a firm commitment for DIP Financing and the consensual use of cash collateral in form and substance satisfactory to the Requisite Creditors prior to the Petition Date;

 

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xxi.                if the Company shall not have obtained a firm commitment for the Exit Facility in form and substance reasonably satisfactory to the Requisite Creditors prior to the Effective Date;

 

xxii.             if any court of competent jurisdiction has entered a final, non-appealable judgement or order declaring this Agreement to be unenforceable;

 

xxiii.          the Bankruptcy Court enters an order granting relief from the automatic stay imposed by section 362 of the Bankruptcy Code authorizing any party to proceed against any material asset of the Company or that would materially and adversely affect the Company’s ability to operate the Company’s businesses in the ordinary course; or

 

xxiv.         either (A) the Company files a motion, application, or adversary proceeding (or the Company supports any such motion, application, or adversary proceeding filed or commenced by any third party) challenging the validity, enforceability, or priority of, or seeking avoidance or subordination of, any portion of the Claims arising under the Senior Notes and Senior Notes Indenture asserting any other cause of action against the Consenting Creditors or with respect or relating to the Claims arising under the Senior Notes and Senior Notes Indenture; or (B) the Bankruptcy Court (or any court with jurisdiction over the Chapter 11 Cases) enters an order that is inconsistent with this Agreement or the Plan in any material respect.

 

(c)                                  A “Company Termination Event” shall mean any of the following:

 

i.                              the breach by one or more of the Consenting Creditors of any of the undertakings, representations, warranties, or covenants of the Consenting Creditors set forth herein in any material respect that remains uncured for a period of five (5) Business Days after the receipt of written notice of such breach pursuant to this Section 6 and in accordance with Section 23 hereof (as applicable), but only if the non-breaching Consenting Creditors hold less than 66 2/3% of the aggregate principal amount of Senior Notes;

 

ii.                           if, pursuant to Section 29 hereof, the board of directors, managers, members, or partners, as applicable, of any Company entity party hereto reasonably determines in good faith based upon the advice of legal counsel that continued performance under this Agreement would be inconsistent with the exercise of its fiduciary duties under applicable law; provided, however, that such Company entity provides notice of any such determination to the Consenting Creditors within one (1) day of board approval of any Alternative Restructuring;

 

iii.                        if, as of 11:59 p.m. prevailing Eastern Time on August 5, 2019, the Support Effective Date has not occurred;

 

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iv.                       the issuance by any governmental authority, including any regulatory authority or court of competent jurisdiction, of any ruling, judgment, or order enjoining the consummation of or prohibiting the Debtors from implementing the Plan or the Restructuring, and such ruling, judgment, or order has not been stayed, reversed, or vacated within fifteen (15) days after such issuance;

 

v.                          if the Company shall not have obtained a firm commitment for DIP Financing and the consensual use of cash collateral in form and substance satisfactory to the Company prior to the Petition Date;

 

vi.                       if the Company shall not have obtained a firm commitment for the Exit Facility in form and substance satisfactory to the Company prior to the Effective Date;

 

vii.                    the Bankruptcy Court enters an order (A) directing the appointment of a trustee in the Chapter 11 Cases, (B) converting any of the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code, or (C) dismissing any of the Chapter 11 Cases;

 

viii.                 the Bankruptcy Court (A) enters an order denying confirmation of the Plan or (B) after entry of the Confirmation Order, enters an order vacating the Plan or Confirmation Order, or modifying or otherwise amending the Plan or Confirmation Order in a manner materially inconsistent with this Agreement, the Restructuring, the Plan, or any other Definitive Documents then in effect;

 

ix.                       the Bankruptcy Court enters an order terminating the Company’s exclusive right to file or solicit acceptances of a chapter 11 plan;

 

x.                          the termination of the Senior Noteholder Backstop Agreement, other than as a result of consummation of the Equity Rights Offerings; or

 

xi.                       the occurrence of the Outside Date if the Effective Date has not occurred.

 

Notwithstanding the foregoing, any of the dates or deadlines set forth in Sections 6(b) and 6(c)  may be extended by agreement of the Company and the Requisite Creditors (which may be provided by the Consenting Creditors Advisors on behalf of the Requisite Creditors).

 

(d)                                 Mutual Termination.  This Agreement may be terminated at any time by the mutual written agreement of the Company and the Requisite Creditors.

 

(e)                                  Effect of Termination.

 

i.                              The date on which termination of this Agreement is effective as to a Party in accordance with this Section 6 shall be referred to as the “Termination

 

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Date” and, the provisions of this Agreement shall terminate on the Termination Date, except as otherwise provided in Section 15 hereof.

 

ii.                           Subject to the provisions contained in Section 6(a) and Section 15 hereof, upon the Termination Date, this Agreement shall forthwith become null and void and of no further force or effect and each Party shall, except as provided otherwise in this Agreement, be immediately released from its liabilities, obligations, commitments, undertakings, and agreements under or related to this Agreement and shall have all the rights and remedies that it would have had and shall be entitled to take all actions, whether with respect to the Restructuring or otherwise, that it would have been entitled to take had it not entered into this Agreement, including all rights and remedies available to it under applicable law;

 

provided, however, that in no event shall any such termination relieve a Party from liability for its breach or non-performance of its obligations hereunder prior to the date of such termination.

 

(f)                                   Limited Waiver of Automatic Stay.  The Company acknowledges and agrees and shall not dispute that after the commencement of the Chapter 11 Cases, the giving of notice of termination of this Agreement by any Party solely in accordance with the terms of this Agreement shall not be a violation of the automatic stay of section 362 of the Bankruptcy Code (and the Company hereby waives, to the fullest extent permitted by law, the applicability of the automatic stay to the giving of such notice, and if this Agreement is terminated in accordance with Section 6, each Consenting Creditor’s vote or release described in Section 4(a)i of this Agreement may be revoked (and, upon such revocation, deemed void ab initio) notwithstanding the Automatic Stay or passage of the Voting Deadline); provided, however, that nothing herein shall prejudice any Party’s rights to argue that the giving of notice of default or termination was not proper under the terms of this Agreement.

 

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

 

Each Party hereby covenants and agrees to cooperate with each other in good faith in connection with, and shall exercise commercially reasonable efforts with respect to the pursuit, approval, negotiation, execution, delivery, implementation, and consummation of the Plan and the Restructuring, as well as the negotiation, drafting, execution and delivery of the Definitive Documents, which shall be subject to the applicable consent rights of the Requisite Creditors in Section 3.  Furthermore, subject to the terms hereof, each of the Parties shall (i) take such action as may be reasonably necessary or reasonably requested by the other Parties to carry out the purposes and intent of this Agreement, including making and filing any required regulatory filings, and (ii) refrain from taking any action that would frustrate the purpose and intent of this Agreement.

 

8.                                      Representations and Warranties.

 

(a)                                 Each Party, severally (and not jointly), represents and warrants to the other Parties that the following statements are true, correct, and complete as of the Support Effective

 

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Date (or as of the date a Consenting Creditor becomes a Party to this Agreement by executing and delivering a Joinder Agreement):

 

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

 

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

 

iii.                        the execution, delivery, and performance by such Party of this Agreement does not and will not require any material registration or filing with, consent or approval of, or notice to, or other action, with or by, any federal, state or governmental authority or regulatory body, except such filings as may be necessary and/or required by the U.S. Securities and Exchange Commission or other securities regulatory authorities under applicable securities laws; and

 

iv.                       this Agreement is the legally valid and binding obligation of such Party, 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 or a ruling of the Bankruptcy Court.

 

(b)                                 Representations and Warranties of the Consenting Creditors. Each Consenting Creditor severally (and not jointly) represents and warrants to the other Parties that, as of the Support Effective Date (or such later date on which a Consenting Creditor becomes a Party to this Agreement by executing and delivering a Joinder Agreement), such Consenting Creditor (i) is the owner of the aggregate principal amount of Senior Notes and the number of shares of Existing Equity Interests set forth below its name on the signature page hereto (or below its name on the signature page of a Joinder Agreement for any Consenting Creditor that becomes a party hereto after the date hereof), free and clear of any restrictions on transfer, liens or options, warrants, purchase rights, contracts, commitments, claims, demands, and other encumbrances and does not own any other Senior Notes or Existing Equity Interests or (ii) has, with respect to the beneficial owners of such Senior Notes and Existing Equity Interests, (A) sole investment or voting discretion with respect thereto, (B) full power and authority to vote on and

 

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consent to matters concerning such Senior Notes and Existing Equity Interests or to exchange, assign, and transfer such Senior Notes and Existing Equity Interests and (C) full power and authority to bind or act on the behalf of, such beneficial owners.

 

(c)                                  Representations and Warranties of the Company.  The Company represents and warrants, on a joint and several basis, to the other Parties as of the Support Effective Date:

 

i.                              there is no pending or undisclosed agreement, understanding, negotiation, or discussion (in each case, whether oral or written) with respect to any Alternative Restructuring;

 

ii.                           except as would not reasonably be expected to have a Material Adverse Effect (as defined in the Senior Noteholder Backstop Agreement), when furnished, none of the material and information regarding the Company that was provided to the Consenting Creditors in the virtual data room maintained by or on behalf of the Company or provided by or on behalf of the Company to the Consenting Creditor Advisors on an advisors’ eyes only basis, in each case, in connection with the Restructuring, when read or considered together, contains any untrue statement of a material fact or omits to state a material fact necessary in order to prevent the statements made therein from being materially misleading; provided, however, that the foregoing shall not apply to any projections or other forward looking material or information provided by or on behalf of the Company and, with respect to any such projections or other forward looking material or information, the Company represents, warrants, and covenants, on a joint and several basis, that such material and information was prepared in good faith by the Company based on assumptions that the Company determined were reasonable at the time of the preparation thereof; provided, further, however, that the foregoing representation shall not survive confirmation of the Plan; and

 

iii.                        the aggregate principal amount of outstanding indebtedness (excluding any fees, costs, expenses and indemnities that may be owed by the applicable obligors) on account of the Senior Notes is at least $625 million.

 

9.                                      Disclosure; Publicity.  The Company shall submit drafts to Consenting Creditor Counsel of any press releases, and any and all filings with the Securities and Exchange Commission that constitute disclosure of the existence or terms of this Agreement or any amendment to the terms of this Agreement at least two (2) Business Days prior to making any such disclosure.  Except as required by applicable law, and notwithstanding any provision of any other agreement between the Company and such Consenting Creditor to the contrary, no Party or its advisors shall disclose to any Person (including, for the avoidance of doubt, any other Consenting Creditor), other than advisors to the Company and the Consenting Creditor Advisors, the principal amount or percentage of any Senior Notes or other Claims against, or Interests in, the Debtors held by any Consenting Creditor without such Consenting Creditor’s prior written consent; provided, however, that (i) if such disclosure is required by law, subpoena, or other legal process or regulation, the disclosing Party shall, to the extent permitted by law, afford the

 

17

 

relevant Consenting Creditor a reasonable opportunity to review and comment in advance of such disclosure and shall take commercially reasonable measures to limit such disclosure (the expense of which, if any, shall be borne by the relevant Consenting Creditor) and (ii) the foregoing shall not prohibit the disclosure of the aggregate percentage or aggregate principal amount of Senior Notes collectively held by the Consenting Creditors.  Notwithstanding the provisions in this Section 9, any Party may disclose, to the extent consented to in writing by a Consenting Creditor, such Consenting Creditor’s individual holdings.

 

10.                               Amendments and Waivers.

 

(a)                                 Other than as set forth in Section 10(b), this Agreement, including the Exhibits and Schedules, may not be waived, modified, amended, or supplemented except with the written consent of the Company and the Requisite Creditors.

 

(b)                                 Notwithstanding Section 10(a):

 

i.                              any waiver, modification, amendment, or supplement to this Section 10 shall require the written consent of all of the Parties;

 

ii.                           any modification, amendment, or change to the definition of “Requisite Creditors” shall require the written consent of each Consenting Creditor and the Company;

 

iii.                        any waiver, modification, amendment, or supplement to the Securities Issuance Requirements shall require the written consent of all Parties; and

 

iv.                       any change, modification, or amendment to this Agreement, the Restructuring Term Sheet, or the Plan that treats or affects any Consenting Creditor’s Claims arising under the Senior Notes and Senior Notes Indenture in a manner that is materially and adversely disproportionate, on an economic or non-economic basis, to the manner in which any of the other Consenting Creditors are treated shall require the written consent of such materially adversely and disproportionately affected Consenting Creditor.

 

(c)                                  In the event that a materially adversely and disproportionately affected Consenting Creditor (“Non-Consenting Creditor”) does not consent to a waiver, change, modification, or amendment to this Agreement requiring the consent of each Consenting Creditor, but such waiver, change, modification, or amendment receives the consent of Consenting Creditors (i) owning at least 66 2/3% of the outstanding Senior Notes and (ii) representing at least a majority in number of claimants asserting Claims arising under the Senior Notes, this Agreement shall be deemed to have been terminated only as to such Non-Consenting Creditor, but this Agreement shall continue in full force and effect with respect to all other Consenting Creditors from time to time without the consent of any Consenting Creditors who have so consented.

 

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(d)                                 Notwithstanding anything in this Agreement to the contrary, no amendment or waiver of the Outside Date shall be effective as to any Supporting Party without such Supporting Party’s prior written consent.  In the event that the Parties properly amend or waive the Outside Date, this Agreement shall terminate on the Outside Date that existed under this Agreement immediately prior to such amendment or waiver with respect to each Party that did not expressly consent in writing to such amendment or waiver.

 

11.                               Effectiveness.  This Agreement shall become effective and binding upon each Party on the Support Effective Date; provided, however, that signature pages executed by Consenting Creditors shall be delivered to (i) other Consenting Creditors in a redacted form that removes such Consenting Creditors’ holdings of the Senior Notes and (ii) the Company, Weil, and Consenting Creditor Counsel in an unredacted form (to be held by Weil and Consenting Creditor Counsel on a professionals’ eyes only-basis).

 

12.                               Fee and Expenses.  In accordance with and subject to Section 2(b) and Section 5(a)xiv hereof and the terms of the applicable fee letters, the Company shall pay or reimburse when due all reasonable and documented fees and expenses of the Ad Hoc Noteholder Group and the Consenting Creditor Advisors (regardless of whether such fees and expenses were incurred before or after the Petition Date) incurred through and including the Termination Date.

 

13.                               GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL.

 

(a)                                 This Agreement and the rights and obligations of the Parties hereunder shall be construed and enforced in accordance with, and the rights of the Parties shall be governed by, the law of the State of New York, without giving effect to any conflict of laws principles that would require the application of the law of any other jurisdiction.

 

(b)                                 Each of the Parties irrevocably agrees that any legal action, suit, or proceeding arising out of or relating to this Agreement brought by any Party shall be brought and determined in any federal or state court in the Borough of Manhattan in the City of New York (“NY Courts”) and each of the Parties hereby irrevocably submits to the exclusive jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such proceeding arising out of or relating to this Agreement or the Restructuring.  Each of the Parties agrees not to commence any proceeding relating to this Agreement or the Restructuring except in the NY Courts, other than proceedings in any court of competent jurisdiction to enforce any judgment, decree, or award rendered by any NY Courts.  Each of the Parties further agrees that notice as provided in Section 23 shall constitute sufficient service of process and the Parties further waive any argument that such service is insufficient.  Each of the Parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any proceeding arising out of or relating to this Agreement or the Restructuring, (i) any claim that it is not personally subject to the jurisdiction of the NY Courts for any reason, (ii) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment, or otherwise) and (iii) that (A) the proceeding in any such court is brought in an inconvenient forum, (B) the venue of such proceeding is improper, or (C)

 

19

 

this Agreement, or the subject matter hereof, may not be enforced in or by such courts.  Notwithstanding the foregoing, during the pendency of the Chapter 11 Cases, all proceedings contemplated by this Section 13(b) shall be brought in the Bankruptcy Court.

 

(c)                                  EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY).  EACH PARTY (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

14.                               Specific Performance/Remedies.  It is understood and agreed by the Parties that money damages would not be a sufficient remedy for any breach of this Agreement by any Party and each non-breaching Party shall be entitled to specific performance and injunctive or other equitable relief as a remedy of any such breach of this Agreement, without the necessity of proving the inadequacy of money damages as a remedy, including an order of the Bankruptcy Court or other court of competent jurisdiction requiring any Party to comply promptly with any of its obligations hereunder.  Each Party also agrees that it will not seek, and will waive any requirement for, the securing or posting of a bond in connection with any Party seeking or obtaining such relief.

 

15.                               Survival.  Notwithstanding the termination of this Agreement pursuant to Section 6 hereof, the acknowledgements, agreements and obligations of the Parties in this Section 15 and Sections 6, 12 (for purposes of enforcement of obligations accrued through the Termination Date), 13, 14, 16, 17, 18, 19, 20, 22, 24, 25, 26, 27 and 28 hereof (and any defined terms used in any such Sections) shall survive such termination and shall continue in full force and effect in accordance with the terms hereof; provided, however, that any liability of a Party for failure to comply with the terms of this Agreement shall survive such termination.

 

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

 

17.                               Successors and Assigns; Severability; Several Obligations.  This Agreement is intended to bind and inure to the benefit of the Parties and their respective successors, permitted assigns, heirs, executors, administrators and representatives; provided, however, that nothing contained in this Section 17 shall be deemed to permit Transfers of the Claims arising under the Senior Notes and Senior Notes Indenture or the Existing Equity Interests other than in accordance with the express terms of this Agreement.  If any provision of this Agreement, or the application of any such provision to any Person or circumstance, shall be

 

20

 

held invalid or unenforceable in whole or in part, such invalidity or unenforceability shall attach only to such provision or part thereof and the remaining part of such provision hereof and this Agreement shall continue in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party.  Upon any such determination of invalidity, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a reasonably acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible.  Except as expressly provided for herein, the agreements, representations, warranties, and obligations of the Parties are, in all respects, ratable and several and neither joint nor joint and several.

 

18.                               No Third-Party Beneficiaries.  The terms and provisions of this Agreement are intended solely for the benefit of the Parties hereto and their respective successors and permitted assigns, and no other Person shall be a third-party beneficiary hereof.

 

19.                               Prior Negotiations; Entire Agreement.  This Agreement, including the Exhibits and Schedules, constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all other prior agreements (oral or written), negotiations, and documents between and among the Parties (and their respective advisors) with respect to the subject matter hereof, except that the Parties acknowledge that any confidentiality agreements (if any) heretofore executed between the Company and each Consenting Creditor shall continue in full force and effect.

 

20.                               Relationship Among Parties.  Notwithstanding anything herein to the contrary, (i) the duties and obligations of the Consenting Creditors under this Agreement shall be several, not joint and several, (ii) no Party shall have any responsibility by virtue of this Agreement for any trading by any other Person, and (iii) no prior history, pattern, or practice of sharing confidences among or between the Parties shall in any way affect or negate this Agreement.

 

21.                               Relationship Among Consenting Creditors. Notwithstanding anything herein to the contrary, each Consenting Creditor hereby agrees and acknowledges that (i) 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 Company and the Consenting Creditors do not constitute a “group” within the meaning of Rule 13d-5 under the Exchange Act, (ii) none of the Consenting Creditors shall have any fiduciary duty, any duty of trust or confidence in any form, or other duties or responsibilities in any kind or form to each other, the Company or any of the Company’s other lenders, Senior Noteholders, or stakeholders, including as a result of this Agreement or the transactions contemplated herein, and (iii) no action taken by any Consenting Creditor pursuant to this Agreement shall be deemed to constitute or to create a presumption by any of the Consenting Creditors that the Consenting Creditors are in any way acting in concert or as a “group.”

 

22.                               Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all of which together shall be deemed to be one and the same agreement.  Execution copies of this Agreement and executed counterpart 

 

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signature pages hereto may be delivered by electronic mail (in “.pdf” or “.tif” format), facsimile, or other electronic imaging means, which shall be deemed to be an original for the purposes of this Agreement.

 

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

 

	
(1)                                 If to the Company,   to:
    
	
 
    
	
1000   Louisiana Street, Suite 1500 
    
	
Houston,   Texas 77002 
    
	
Attention:
    	
David   S. Elkouri, Executive Vice President and Chief Legal Officer 
    
	
 
    	
(delkouri@halconresources.com)
    
	
 
    	
 
    
	
With   a copy to:
    
	
 
    
	
Weil,   Gotshal & Manges LLP
    
	
767   Fifth Avenue
    
	
New   York, NY 10153
    
	
Attention:
    	
Gary Holtzer, Esq. 
    
	
 
    	
(Gary.Holtzer@weil.com) 
    
	
 
    	
Alfredo R. Pérez, Esq. 
    
	
 
    	
(Alfredo.Perez@weil.com) 
    
	
 
    	
Lauren Tauro, Esq. 
    
	
 
    	
(Lauren.Tauro@weil.com)
    
	
 
    	
 
    
	
(2)                                 If to a Consenting   Creditor, or a transferee thereof, to the addresses set forth below the   Consenting Creditor’s signature (or as directed by any transferee thereof),   as the case may be, with copies to:   
    
	
 
    	
 
    
	
Paul,   Weiss, Rifkind, Wharton & Garrison LLP
    
	
1285   Avenue of the Americas
    
	
New   York, NY 10019
    
	
Attention:
    	
Andrew Rosenberg, Esq. 
    
	
 
    	
(arosenberg@paulweiss.com) 
    
	
 
    	
Robert Britton, Esq. 
    
	
 
    	
(rbritton@paulweiss.com) 
    
	
 
    	
Samuel Lovett, Esq. 
    
	
 
    	
(slovett@paulweiss.com)
    

 

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

 

22

 

24.                               No Solicitation; Representation by Counsel; Adequate Information.

 

(a)                                 This Agreement is not and shall not be deemed to be a solicitation for votes in favor of the Plan in the Chapter 11 Cases or solicitation of an offer to buy securities, including with respect to the Equity Rights Offerings.  The acceptances of the Consenting Creditors with respect to the Plan will not be solicited until such Consenting Creditor has received the Disclosure Statement and, as applicable, related ballots and Solicitation Materials. In addition, this Agreement does not constitute an offer to issue or sell securities to any Person or the solicitation of an offer to acquire or buy securities in any jurisdiction where such offer or solicitation would be unlawful.

 

(b)                                 Each Party acknowledges that it has had an opportunity to receive information from the Company and that it has been represented by counsel in connection with this Agreement and the transactions contemplated hereby.  Accordingly, any rule of law or any legal decision that would provide any Party with a defense to the enforcement of the terms of this Agreement against such Party based upon lack of legal counsel shall have no application and is expressly waived.

 

(c)                                  Each Consenting Creditor acknowledges, agrees, and represents to the other Parties that it (i) is an “accredited investor” as such term is defined in Rule 501 of Regulation D of the Securities Act and a “qualified institutional buyer” as such term is defined in Rule 144A of the Securities Act, (ii) understands that if it is to acquire any securities, as defined in the Securities Act, pursuant to the Restructuring, such securities have not been registered under the Securities Act and that such securities are, to the extent not offered, solicited, or acquired pursuant to section 1145 of the Bankruptcy Code, being offered and sold pursuant to an exemption from registration contained in the Securities Act, based in part upon such Consenting Creditor’s representations contained in this Agreement and cannot be sold unless subsequently registered under the Securities Act or an exemption from registration is available, and (iii) has such knowledge and experience in financial and business matters to evaluate properly the terms and conditions of this Agreement and the Restructuring and is capable of evaluating the merits and risks of the securities to be acquired by it (if any) pursuant to the Restructuring and understands and is able to bear any economic risks with such investment.

 

23

 

25.                               Time.  In computing any period of time prescribed or allowed by the Plan, unless otherwise set forth in the Plan or determined by the Bankruptcy Court, the provisions of Bankruptcy Rule 9006 shall apply.

 

26.                               No Waiver of Participation and Preservation of Rights.  Except as provided in this Agreement, nothing herein is intended to, does, or shall be deemed in any manner to waive, limit, impair, or restrict the ability of each of the Parties to protect and preserve its rights, remedies, and interests, including its claims and any liens or security interests it may have in any assets of the Company.  Without limiting the foregoing sentence in any way, if this Agreement is terminated in accordance with its terms for any reason (other than consummation of the Restructuring), the Parties each fully and expressly reserve any and all of their respective rights, remedies, claims, defenses, and interests, in the case of any claim for breach of this Agreement arising prior to termination.

 

27.                               Settlement Discussions.  This Agreement is part of a proposed settlement of matters that could otherwise be the subject of litigation among the Parties.  Nothing herein (including Exhibits and Schedules) shall be construed as or be deemed to be evidence of an admission or concession of any kind on the part of any Party of any claim, fault, 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.  Pursuant to Federal Rule of Evidence 408, any applicable state rules of evidence and any other applicable law, foreign, or domestic, this Agreement and all negotiations relating hereto shall not be admissible into evidence in any proceeding other than to prove the existence of this Agreement or in a proceeding to enforce the terms of this Agreement.

 

28.                               Miscellaneous.  This Agreement is the product of negotiations among the Parties, and the enforcement or interpretation of this Agreement is to be interpreted in a neutral manner.  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 of this Agreement, shall not be effective in regard to the interpretation of this Agreement.  When a reference is made in this Agreement to a Section, Exhibit, or Schedule, such reference shall be to a Section, Exhibit, or Schedule, respectively, of or attached to this Agreement unless otherwise indicated.  Unless the context of this Agreement otherwise requires, (i) words using the singular or plural number also include the plural or singular number, respectively, (ii) the terms “hereof,” “herein,” “hereby,” and derivative or similar words refer to this entire Agreement, (iii) the words “include,” “includes,” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation,” (iv) the word “or” shall not be exclusive and shall be read to mean “and/or,” and (v) any reference in this Agreement to “dollars” or “$” shall mean U.S. dollars.  The Parties agree that they have been represented by legal counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding, or rule of construction providing that ambiguities in an agreement or other document shall be construed against the party drafting such agreement or document.

 

29.                               Fiduciary Duty.  Nothing in this Agreement shall require the Company or any directors, officers, or members of any Company party hereto, each in their capacity as such, to take any action, or to refrain from taking any action, to the extent that doing so would be 

 

24

 

inconsistent with its fiduciary obligations under applicable law (as reasonably determined by it in good faith after consultation with outside legal counsel), provided, however, that within one (1) day of board approval of the entry into a definitive agreement with respect to any Alternative Restructuring, the Company shall provide written notice to the Consenting Creditor Advisors on behalf of the Ad Hoc Noteholder Group (which may be provided by email) of the taking of such action.

 

[Signature Pages Follow]

 

25

 

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

 

	
 
    	
HALCÓN RESOURCES CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Richard Little
    
	
 
    	
 
    	
Name: 
    	
Richard Little
    
	
 
    	
 
    	
Title:
    	
Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
HALCÓN RESOURCES OPERATING, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Richard Little
    
	
 
    	
 
    	
Name: 
    	
Richard Little
    
	
 
    	
 
    	
Title:
    	
Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
HALCÓN HOLDINGS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Richard Little
    
	
 
    	
 
    	
Name: 
    	
Richard Little
    
	
 
    	
 
    	
Title:
    	
Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
HALCÓN ENERGY PROPERTIES, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Richard Little
    
	
 
    	
 
    	
Name: 
    	
Richard Little
    
	
 
    	
 
    	
Title:
    	
Chief Executive Officer
    

 

[Signature Page to Restructuring Support Agreement]

 

 

	
 
    	
HALCÓN PERMIAN, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Richard Little
    
	
 
    	
 
    	
Name: 
    	
Richard Little
    
	
 
    	
 
    	
Title:
    	
Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
HALCÓN FIELD SERVICES, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Richard Little
    
	
 
    	
 
    	
Name: 
    	
Richard Little
    
	
 
    	
 
    	
Title:
    	
Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
HALCÓN OPERATING CO., INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Richard Little
    
	
 
    	
 
    	
Name: 
    	
Richard Little
    
	
 
    	
 
    	
Title:
    	
Chief Executive Officer
    

 

[Signature Page to Restructuring Support Agreement]

 

 

CONSENTING CREDITOR

 

BLUE FALCON LIMITED

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

CITY OF PHOENIX EMPLOYEES’ RETIREMENT PLAN

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

NORTHROP GRUMMAN PENSION MASTER TRUST

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

GOLDMAN SACHS TRUST II - GOLDMAN SACHS MULTI-MANAGER

NON-CORE FIXED INCOME FUND

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

ILLINOIS STATE BOARD OF INVESTMENT

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

FCA CANADA INC. ELECTED MASTER TRUST

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

FCA US LLC MASTER RETIREMENT TRUST

By Brigade Capital Management, LP as Investment Manager

 

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

JPMORGAN FUNDS - MULTI-MANAGER ALTERNATIVES FUND

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

LOS ANGELES COUNTY EMPLOYEES RETIREMENT ASSOCIATION

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

MEDIOLANUM BEST BRANDS

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

NEW YORK CITY FIRE DEPARTMENT PENSION FUND, SUBCHAPTER TWO

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

NEW YORK CITY POLICE PENSION FUND, SUBCHAPTER 2

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

TEACHERS’ RETIREMENT SYSTEM OF THE CITY OF NEW YORK

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

U.S. HIGH YIELD BOND FUND

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

SEI GLOBAL MASTER FUND PLC THE SEI HIGH YIELD FIXED INCOME FUND

By Brigade Capital Management, LP as Investment Manager

 

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

SEI INSTITUTIONAL INVESTMENTS TRUST-HIGH YIELD BOND FUND

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

SEI INSTITUTIONAL MANAGED TRUST-HIGH YIELD BOND FUND

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

GIC PRIVATE LIMITED

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

ST. JAMES’S PLACE DIVERSIFIED BOND UNIT TRUST

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

SAS TRUSTEE CORPORATION

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

TCORPIM HIGH YIELD FUND

By Brigade Capital Management, LP as Investment Manager

 

	
By:
    	
/s/Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Patrick   Criscillo
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

399 Park Avenue

New York, NY 10022

 

Fax:

Attention: Scott Hoffman

Email: sh@brigadecapital.com

 

 

CONSENTING CREDITOR

 

LION POINT MASTER, LP

By: Lion Point Capital GP, LLC, its general partner

 

	
By:
    	
/s/ James   Murphy
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
James   Murphy
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

250 W 55th Street

New York, NY 10019

 

Fax:

Attention: Irshad Karim

Email: legal@lionpoint.com

 

 

CONSENTING CREDITOR

 

LUMINUS ENERGY PARTNERS MASTER FUND, LTD

 

	
By:
    	
/s/ Shawn   R. Singh
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Shawn R.   Singh
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

1700 Broadway

New York, NY 10019

 

Fax:

Attention: Shawn R. Singh

Email: ssingh@luminusmgmt.com

 

 

CONSENTING CREDITOR

 

OAKTREE OPPORTUNITIES FUND X HOLDINGS (DELAWARE), L.P.

 

By: Oaktree Fund GP, LLC, its General Partner

By: Oaktree Fund GP I, L.P., its Managing Member

 

	
By:
    	
/s/ Allen   Li
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Allen Li
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

	
By:
    	
/s/ Emily   Stephens
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Emily   Stephens
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

333 S. Grand Avenue

Los Angeles, CA 90071

 

Fax:

Attention: Allen Li

Email: ali@oaktreecapital.com

 

 

CONSENTING CREDITOR

 

OAKTREE OPPS XB HOLDCO LTD.

By: Oaktree Capital Management, L.P., its Director

 

	
By:
    	
/s/ Allen   Li
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Allen Li
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Vice   President
    	
 
    

 

 

	
By:
    	
/s/ Emily   Stephens
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Emily   Stephens
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Managing   Director
    	
 
    

 

 

Notice Address:

 

333 S. Grand Avenue

Los Angeles, CA 90071

 

Fax:

Attention: Allen Li

Email: ali@oaktreecapital.com

 

 

CONSENTING CREDITOR

 

OAKTREE OPPORTUNITIES FUND XB HOLDINGS (DELAWARE), L.P.

By: Oaktree Fund GP, LLC, its General Partner

By: Oaktree Fund GP I, L.P., its Managing Member

 

	
By:
    	
/s/ Allen   Li
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Allen Li
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

	
By:
    	
/s/ Emily   Stephens
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Emily   Stephens
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Authorized   Signatory
    	
 
    

 

 

Notice Address:

 

333 S. Grand Avenue

Los Angeles, CA 90071

 

Fax:

Attention: Allen Li

Email: ali@oaktreecapital.com

 

 

CONSENTING CREDITOR

 

OAKTREE VALUE OPPORTUNITIES FUND HOLDINGS, L.P.

By: Oaktree Value Opportunities Fund GP, L.P., its General Partner

By: Oaktree Value Opportunities Fund GP Ltd., its General Partner

By: Oaktree Capital Management, L.P., its Director

 

	
By:
    	
/s/ Allen   Li
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Allen Li
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Vice   President
    	
 
    

 

 

	
By:
    	
/s/ Emily   Stephens
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Emily   Stephens
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Managing   Director
    	
 
    

 

 

Notice Address:

 

333 S. Grand Avenue

Los Angeles, CA 90071

 

Fax:

Attention: Allen Li

Email: ali@oaktreecapital.com

 

 

CONSENTING CREDITOR

 

GEN IV INVESTMENT OPPORTUNITIES, LLC

 

	
By:
    	
/s/ Paul   Segal
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Paul   Segal
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
President
    	
 
    

 

Notice Address:

 

1700 Broadway, 38th Floor

New York, NY 10019

 

Fax:

Attention: David Chang

Email: dchang@lspower.com

 

 

EXHIBIT A

 

RESTRUCTURING TERM SHEET

 

 

HALCÓN RESOURCES CORPORATION

 

RESTRUCTURING TERM SHEET

 

August 2, 2019

 

This restructuring term sheet (this “Term Sheet”) presents the principal terms of a proposed financial restructuring (the “Restructuring”) of the existing indebtedness of Halcón Resources Corporation (“Parent”) and its subsidiaries identified below (collectively, the “Company” or the “Debtors”), which Restructuring will be consummated by commencing cases under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) to pursue a prepackaged chapter 11 plan containing the terms set forth herein.  This is the Term Sheet referred to in, and appended to, the Restructuring Support Agreement dated as of August 2, 2019, by and among the Company and the other parties signatory thereto (as amended, supplemented, or otherwise modified from time to time, the “RSA”).  Capitalized terms used but not otherwise defined herein will have the meanings ascribed to such terms in Annex 1.

 

THIS TERM SHEET DOES NOT CONSTITUTE (NOR WILL IT BE CONSTRUED AS) AN OFFER WITH RESPECT TO ANY SECURITIES OR A SOLICITATION OF ACCEPTANCES OR REJECTIONS AS TO ANY PLAN OF REORGANIZATION, IT BEING UNDERSTOOD THAT SUCH AN OFFER, IF ANY, ONLY WILL BE MADE IN COMPLIANCE WITH APPLICABLE PROVISIONS OF SECURITIES, BANKRUPTCY, AND/OR OTHER APPLICABLE LAWS.

 

THIS TERM SHEET DOES NOT PURPORT TO SUMMARIZE ALL OF THE TERMS, CONDITIONS, REPRESENTATIONS, WARRANTIES, AND OTHER PROVISIONS WITH RESPECT TO THE TRANSACTIONS DESCRIBED HEREIN, WHICH TRANSACTIONS WILL BE SUBJECT TO THE COMPLETION OF DEFINITIVE DOCUMENTS INCORPORATING THE TERMS SET FORTH HEREIN.  THE CLOSING OF ANY TRANSACTION WILL BE SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN SUCH DEFINITIVE DOCUMENTS.  EXCEPT AS SET FORTH IN THE RSA, NO BINDING OBLIGATIONS WILL BE CREATED BY THIS TERM SHEET UNLESS AND UNTIL BINDING DEFINITIVE DOCUMENTS ARE EXECUTED AND DELIVERED BY ALL APPLICABLE PARTIES.

 

 

	
OVERVIEW
    
	
 
    
	
Company:
    	
 
    	
Parent, Halcón Resources Operating, Inc.,   Halcón Holdings, Inc., Halcón Energy Properties, Inc., Halcón   Permian, LLC, Halcón Field Services, LLC, and Halcón Operating Co., Inc.
    
	
 
    	
 
    	
 
    
	
Proposed Filing Date and Venue:
    	
 
    	
No later than August 7, 2019 (the “Petition Date”) in the United   States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”).
    
	
 
    	
 
    	
 
    
	
Claims and Interests to be Restructured:
    	
 
    	
Revolving Credit Agreement Claims:   consisting of up to $225 million in principal amount, including reimbursement   obligations in respect of letters of credit, plus all other secured   obligations, including secured swap obligations, plus unpaid interest   (including interest at the default rate that has accrued but not been paid   during the Chapter 11 Cases), fees, and other expenses arising and payable   under that certain Amended and Restated Senior Secured Revolving Credit   Agreement, dated as of September 7, 2017 (as amended, modified, or   otherwise supplemented from time to time, the “Revolving   Credit Agreement”), by and among Parent, as borrower, JPMorgan   Chase Bank, N.A., as administrative agent (the “Revolving   Credit Agreement Agent”), and the lenders thereunder (together   with the other Secured Parties (as defined therein), the “Revolving Credit Agreement Lenders”)   (the Claims thereunder, the “Revolving Credit   Agreement Claims”) party thereto from time to time.

 

Senior Notes Claims: consisting of   approximately $625,005,000 in principal amount, plus unpaid interest, fees,   and other expenses arising and payable pursuant to the 6.75% Senior Notes due   2025 (the “Senior Notes,” and the   holders thereof, the “Senior Noteholders”)   or that certain indenture, dated as of February 16, 2017 (as amended,   modified, or otherwise supplemented from time to time, the “Senior Notes Indenture,” and the   Claims thereunder, the “Senior Notes Claims”),   under which the Senior Notes were issued by and among Parent, as issuer, each   of the guarantors named therein, and U.S. Bank National Association, as   indenture trustee.

 

General Unsecured Claims:   consisting of any prepetition Claim against the Company that is not a   Revolving Credit Agreement Claim, a Senior Notes Claim, an Intercompany   Claim, or a Claim that is secured, subordinated, or entitled to priority   under the Bankruptcy Code (the “General Unsecured Claims”).

 

Existing Equity Interests:   consisting of shares of the class of common stock of Parent that existed   immediately prior to the Effective Date, including any restricted stock of   Parent that vests prior to the Effective Date.

 

Other Equity Interests: consisting   of all Interests in Parent other than 
    

 

2

 

	
 
    	
 
    	
Existing Equity Interests.
    
	
 
    	
 
    	
 
    
	
TRANSACTION OVERVIEW
    
	
 
    	
 
    	
 
    
	
Overview of the Restructuring:
    	
 
    	
The Restructuring will be implemented through the   commencement of prepackaged Chapter 11 Cases by the Company to pursue   confirmation of the Plan, which will be solicited to holders of Senior Notes   Claims prior to the Petition Date.

 

As a component of the Restructuring and consistent   with the Equity Rights Offering Documents, (i) each Senior Noteholder   will be offered the right to purchase its Pro Rata share of New Common Shares   for an aggregate purchase price of $150,150,000 (the “Senior   Noteholder Rights Offering”) and (ii) subject to the   Existing Equity Cash Out (as defined below), each holder of Existing Equity   Interests will be offered the right to purchase its Pro Rata share of New   Common Shares for an aggregate purchase price of up to $14,850,000   (the “Existing Equity Interests Rights Offering,”   and together with the Senior Noteholder Rights Offering, the “Equity Rights Offerings”), in each   case, at a price per share equal to a 26% discount to Plan Value based on the   lower of (A) the Total Enterprise Value or (B) an assumed total   enterprise value of $425 million. The proceeds of the Equity Rights Offerings   will be used by the Company to (i) provide additional liquidity for   working capital and general corporate purposes, (ii) pay all reasonable   and documented Restructuring Expenses, and (iii) fund Plan   distributions.

 

As of the Effective Date, the Revolving Credit   Agreement Claims, Senior Notes Claims, Existing Equity Interests, and Other   Equity Interests will be cancelled, released, and extinguished and will be of   no further force and effect.
    
	
 
    	
 
    	
 
    
	
DIP Financing; Use of Cash Collateral:
    	
 
    	
The Restructuring will be financed by   (i) consensual use of cash collateral and (ii) a new money   post-petition junior secured term loan facility in an aggregate amount of up   to $35 million (the “DIP Financing”),   provided by the DIP Lenders and on terms and conditions consistent with the   material terms set forth in the term sheet attached hereto as Exhibit A (the “DIP Term Sheet”).

 

The prepetition liens on the Debtors’ assets pledged   as collateral under the Revolving Credit Facility Agreement (the “Prepetition Collateral”) and the   adequate protection replacement liens (the “AP   Revolver Liens”) granted in favor of the Revolving Credit Agreement   Lenders on the Prepetition Collateral under the DIP Order shall be senior to   the liens granted to the DIP Lenders under the DIP Documents on the   Prepetition Collateral, and the AP Revolver Liens shall be senior to the DIP   Lenders’ liens granted under the DIP Documents with respect to unencumbered   property.

 

The DIP Documents shall be in form and substance   acceptable to the Company and the DIP Lenders.
    

 

3

 

	
TREATMENT OF CLAIMS AND INTEREST
    
	
 
    	
 
    	
 
    
	
Administrative Expense Claims, DIP Claims, and   Priority Tax Claims:
    	
 
    	
Except to the extent that a holder of an Allowed   Administrative Expense Claim, an Allowed DIP Claim, or an Allowed Priority   Tax Claim agrees to a less favorable treatment, each holder of an Allowed   Administrative Expense Claim, an Allowed DIP Claim, and an Allowed Priority   Tax Claim will receive, in full and final satisfaction of such Claim, Cash in   an amount equal to such Allowed Claim on the Effective Date or as soon as practicable   thereafter or such other treatment consistent with the provisions of section   1129(a)(9) of the Bankruptcy Code.

 

Unimpaired — Presumed to Accept.
    
	
 
    	
 
    	
 
    
	
Other Secured Claims:
    	
 
    	
Except to the extent that a holder of an Allowed   Other Secured Claim agrees to a less favorable treatment, in full and final   satisfaction of such Allowed Other Secured Claim, at the option of the   Debtors or the Reorganized Debtors (in consultation with the Consenting   Creditors), (i) each such holder will receive payment in full in Cash,   payable on the later of the Effective Date and the date that is ten   (10) Business Days after the date on which such Other Secured Claim   becomes an Allowed Other Secured Claim, in each case, or as soon as   reasonably practicable thereafter, (ii) such holder’s Allowed Other   Secured Claim will be reinstated, or (iii) such holder will receive such   other treatment so as to render such holder’s Allowed Other Secured Claim   unimpaired pursuant to section 1124 of the Bankruptcy Code.

 

Unimpaired — Presumed to Accept.
    
	
 
    	
 
    	
 
    
	
Other Priority Claims:
    	
 
    	
Except to the extent that a holder of an Allowed   Other Priority Claim agrees to a less favorable treatment, in full and final   satisfaction of such Allowed Other Priority Claim, each holder of an Allowed   Other Priority Claim will, at the option of the Debtors or the Reorganized   Debtors (in consultation with the Consenting Creditors), (i) be paid in   full in Cash or (ii) otherwise receive treatment consistent with the   provisions of section 1129(a)(9) of the Bankruptcy Code, payable on the   later of the Effective Date and the date that is ten (10) Business Days   after the date on which such Other Priority Claim becomes an Allowed Other   Priority Claim, in each case, or as soon as reasonably practicable   thereafter.

 

Unimpaired — Presumed to Accept.
    
	
 
    	
 
    	
 
    
	
Revolving Credit Agreement Claims:

Up to $225 million in principal amount plus all   other outstanding secured obligations thereunder
    	
 
    	
On the Effective Date, each holder of an Allowed   Revolving Credit Agreement Claim will receive payment in full, in Cash,   including by a refinancing, and all outstanding letters of credit will be   replaced, cash collateralized or otherwise secured to the satisfaction of the   Issuing Bank (as defined in the Revolving Credit Agreement) in accordance   with the terms of the Revolving Credit Agreement.
    

 

4

 

	
Senior Notes Claims:

$625,005,000 Allowed Claim
    	
 
    	
On the Effective Date, each holder of an Allowed   Senior Notes Claim will receive, in full and final satisfaction of such   Allowed Senior Notes Claim, its Pro Rata share of (i) 91% of the total   New Common Shares issued pursuant to the Plan on the Effective Date, subject   to dilution by the Rights Offering Equity, the Warrant Equity, the MIP   Equity, and the New Common Shares issued pursuant to the Backstop Commitment   Premium, and (ii) the right to participate in the Senior Noteholder   Rights Offering.

 

Impaired — Entitled to Vote.
    
	
 
    	
 
    	
 
    
	
General Unsecured Claims:
    	
 
    	
Each holder of a General Unsecured Claim will be   paid in the ordinary course of business without regard to the automatic stay   or other restrictions on the payment of prepetition Claims under the   Bankruptcy Code, but subject to all defenses and disputes the Debtors or the   Reorganized Debtors may assert as to the validity or amount of such Claims,   or will receive such other treatment as may be required to deem such General   Unsecured Claim unimpaired under the Bankruptcy Code.

 

Unimpaired — Presumed to Accept.
    
	
 
    	
 
    	
 
    
	
Existing Equity Interests:
    	
 
    	
On the Effective Date, Existing Equity Interests   will be cancelled, released, and extinguished and will be of no further force   and effect. Each holder of Existing Equity Interests will receive either:

 

(1) if a   Registered Holder holds fewer than or equal to 2,000 shares of Existing   Equity Interests, Cash in an amount equal to the inherent value of such   Registered Holder’s Pro Rata share of (i) 9% of the total New Common   Shares issued pursuant to the Plan on the Effective Date, subject to dilution   by the Rights Offering Equity, the Warrant Equity, the MIP Equity, and the   New Common Shares issued pursuant to the Backstop Commitment Premium,   (ii) the Warrants, and (iii) the right to participate in the   Existing Equity Interests Rights Offering (the “Existing   Equity Cash Out”); or

 

(2) for any other   holder of Existing Equity Interests, such holder’s Pro Rata share of   (i) 9% of the total New Common Shares issued pursuant to the Plan on the   Effective Date, subject to dilution by the Rights Offering Equity, the   Warrant Equity, the MIP Equity, and the New Common Shares issued pursuant to   the Backstop Commitment Premium; provided, however, that the amount of total New Common Shares   available to be issued pursuant to this provision shall be reduced by the   amount of New Common Shares that would have been distributed to holders of   Existing Equity Interests in the absence of the Existing Equity Cash Out,   (ii) the Warrants, and (iii) the right to participate in the   Existing Equity Interests 
    

 

5

 

	
 
    	
 
    	
Rights Offering.

 

Impaired — Entitled to Vote.
    
	
 
    	
 
    	
 
    
	
Other Equity Interests
    	
 
    	
On the Effective Date, Other Equity Interests will   be cancelled, released, and extinguished and will be of no further force and   effect.

 

Impaired — Presumed to Reject.
    
	
 
    	
 
    	
 
    
	
Intercompany Claims:
    	
 
    	
All Intercompany Claims will be adjusted,   reinstated, or discharged in the Company’s discretion (in consultation with   the Consenting Creditors).

 

Unimpaired — Presumed to Accept.
    
	
 
    	
 
    	
 
    
	
OTHER MATERIAL PROVISIONS
    
	
 
    	
 
    	
 
    
	
Senior Noteholder Rights Offering:
    	
 
    	
In connection with the Senior Noteholder Rights   Offering, each Senior Noteholder will be offered the right to purchase its   Pro Rata share of New Common Shares for an aggregate purchase price of   $150,150,000 (subject to dilution by the MIP Equity, the Warrant Equity, and   the New Common Shares issued pursuant to the Backstop Commitment Premium).   The Senior Noteholder Rights Offering will be backstopped by the Backstop   Parties in exchange for the Backstop Commitment Premium.

 

Discount: New Common Shares in the   Senior Noteholder Rights Offering will be issued at an aggregate purchase   price of $150,150,000 at a price per share equal to a 26% discount to Plan   Value based on the lower of (A) the Total Enterprise Value or   (B) an assumed total enterprise value of $425 million.
    
	
 
    	
 
    	
 
    
	
Existing Equity Interests Rights Offering:
    	
 
    	
In connection with the Existing Equity Interests   Rights Offering, each holder of Existing Equity Interests will be offered the   right to purchase its Pro Rata share of New Common Shares for an aggregate   purchase price of up to $14,850,000 (subject to dilution by the MIP Equity,   the Warrant Equity, and the New Common Shares issued pursuant to the Backstop   Commitment Premium); provided, however, that the amount of total New Common Shares   available to be purchased pursuant to the Existing Equity Interests Rights   Offering will be reduced by the amount of New Common Shares that would have   been distributed to holders of Existing Equity Interests in the absence of   the Existing Equity Cash Out.

 

Discount: New Common Shares in the   Existing Equity Interests Rights Offering will be issued as an aggregate   purchase price of up to $14,850,000 at a price per share equal to a 26%   discount to Plan Value based on the lower of (A) the Total Enterprise   Value or (B) an assumed total enterprise value of $425 million.
    

 

6

 

	
GENERAL PROVISIONS
    
	
 
    	
 
    	
 
    
	
Executory Contracts and Unexpired Leases:
    	
 
    	
As of and subject to the occurrence of the Effective   Date and the payment of any applicable Cure Amount, all executory contracts   and unexpired leases to which any of the Debtors are parties shall be deemed   assumed, unless such contract or lease (i) was previously assumed or   rejected by the Debtors, pursuant to a Final Order of the Bankruptcy Court,   (ii) previously expired or terminated pursuant to its own terms or by   agreement of the parties thereto, (iii) is the subject of a motion to reject   filed by the Debtors on or before the Confirmation Date, (iv) is   specifically designated as a contract or lease to be rejected on the Schedule   of Rejected Contracts (as defined in the Plan); provided,   however, that the Requisite Creditors   consent to such rejection, or (v) is specifically designated as a   contract or lease to be rejected as reasonably requested by the Requisite   Creditors in the Plan Supplement; provided, however,   that such rejection shall be deemed unreasonable if it would give rise to a   potential Cure Amount that cannot be satisfied on the Effective Date or   otherwise cause the Plan to not be feasible pursuant to section 1129 of the   Bankruptcy Code.
    
	
 
    	
 
    	
 
    
	
Board of Directors:
    	
 
    	
The Board of Directors will consist of (i) the   Reorganized Debtors’ chief executive officer and (ii) the members   selected by the Requisite Creditors to be disclosed in the plan supplement   (the “New Board”).
    
	
 
    	
 
    	
 
    
	
Charter, By-Laws and Organizational Documents:
    	
 
    	
The Amended Organizational Documents will become   effective as of the Effective Date.
    
	
 
    	
 
    	
 
    
	
Management Incentive Plan:
    	
 
    	
The Plan will provide for the establishment of a   post-emergence management incentive plan to be adopted by the New Board   (the “Management Incentive Plan”),   which will include restricted stock units, options, New Common Shares, or   other rights exercisable, exchangeable, or convertible into New Common Shares   representing 7.5% - 10% of the New Common Shares on a fully diluted basis   (the “MIP Equity”). The MIP   Equity will be reserved for grants made from time to time to directors,   officers, or other management and employees of the Company, in a form,   amounts, and at times to be determined by the New Board.
    
	
 
    	
 
    	
 
    
	
Cancellation of Notes, Instruments,   Certificates and other Documents:
    	
 
    	
On the Effective Date of the Plan, all notes,   instruments, certificates evidencing debt of the Company and Interests in   Parent will be cancelled and obligations of the Company thereunder will be   discharged.
    
	
 
    	
 
    	
 
    
	
Vesting of Assets:
    	
 
    	
On the Effective Date, pursuant to section   1141(b)-(c) of the Bankruptcy Code, all operating assets of the Company   will vest in the Reorganized Debtors free and clear of all liens, Claims, and   encumbrances.
    
	
 
    	
 
    	
 
    
	
Survival of Indemnification Obligations and D&O   Insurance:
    	
 
    	
Any obligations of the Company pursuant to corporate   charters, bylaws, limited liability company agreements, or other   organizational documents to
    

 

7

 

	
 
    	
 
    	
indemnify current and former officers, directors,   agents, or employees with respect to all present and future actions, suits,   and proceedings against the Company or such directors, officers, agents, or   employees, based upon any act or omission for or on behalf of the Company will   not be discharged or impaired by confirmation of the Plan. All such   obligations will be deemed and treated as executory contracts to be assumed   by the Company under the Plan and will continue as obligations of the   Reorganized Debtors. Any Claim based on the Company’s obligations herein will   be an Allowed Claim.

 

In addition, after the Effective Date, the   Reorganized Debtors will not terminate or otherwise reduce the coverage under   any directors’ and officers’ insurance policies (including any “tail policy”)   in effect or purchased as of the Petition Date, and all members, managers,   directors, and officers of the Company who served in such capacity at any   time prior to the Effective Date or any other individuals covered by such   insurance policies, will be entitled to the full benefits of any such policy   for the full term of such policy regardless of whether such members,   managers, directors, officers, or other individuals remain in such positions   after the Effective Date.
    
	
 
    	
 
    	
 
    
	
Conditions to Effectiveness:
    	
 
    	
Effectiveness of the Plan will be subject to the   satisfaction of customary conditions, including the following (as   applicable):

 

i.                       the   Definitive Documents (as defined in the RSA) will contain terms and   conditions consistent in all material respects with this Term Sheet and the   RSA;

 

ii.                    the   Bankruptcy Court will have entered the Confirmation Order, and such   Confirmation Order will not have been stayed or modified;

 

iii.                 the Exit   Facility, including all documentation related thereto, will have been consummated;

 

iv.                all governmental   approvals, including Bankruptcy Court approval, necessary to effectuate the   Restructuring will have been obtained and all applicable waiting periods will   have expired; and

 

v.                   all   Restructuring Expenses will have been paid in full.

 

The conditions to effectiveness may be waived, in   whole or in part, in writing by the Debtors and the Requisite Creditors.
    
	
 
    	
 
    	
 
    
	
Releases by Debtors:
    	
 
    	
As of the Effective Date, except for the rights and   remedies that remain in effect from and after the Effective Date to enforce   the Plan and the obligations contemplated by the Definitive Documents and the   documents in the plan supplement or as otherwise provided in any order of the   Bankruptcy Court, on and after the Effective Date, the Released Parties will   be deemed conclusively, absolutely, unconditionally, irrevocably, and forever   released and discharged, to the maximum extent permitted by law, by the   Debtors, the Reorganized Debtors, and the Estates, in each case on
    

 

8

 

	
 
    	
 
    	
behalf of themselves and their respective   successors, assigns, and representatives and any and all other Persons that   may purport to assert any Cause of Action derivatively, by or through the   foregoing Persons, from any and all Claims and Causes of Action (including   any derivative claims, asserted or assertable on behalf of the Debtors, the   Reorganized Debtors, or the Estates), whether liquidated or unliquidated,   fixed or contingent, matured or unmatured, known or unknown, foreseen or   unforeseen, existing or hereinafter arising, in law, equity, contract, tort,   or otherwise, by statute, violations of federal or state securities laws or   otherwise that the Debtors, the Reorganized Debtors, the Estates, or their   affiliates 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 or other Person, based on or relating to, or in any manner   arising from, in whole or in part, the Debtors, the Chapter 11 Cases, the   Restructuring, the purchase, sale, or rescission of the purchase or sale of   any security of the Debtors or the Reorganized Debtors, the subject matter   of, or the transactions or events giving rise to, any Claim or Interest that   is treated in the Plan, the business or contractual arrangements between any   Debtor and any Released Party, the restructuring of Claims and Interests   before or during the Chapter 11 Cases, the negotiation, formulation,   preparation, or consummation of the Plan, the RSA, the Definitive Documents   and the documents in the plan supplement or related agreements, instruments,   or other documents relating thereto, or the solicitation of votes with   respect to the Plan, in all cases based upon any act or omission,   transaction, agreement, event, or other occurrence taking place on or before   the Effective Date; provided, however, that nothing herein will be construed   to release any Person from willful misconduct or intentional fraud as   determined by a Final Order.
    
	
 
    	
 
    	
 
    
	
Releases by Third- Parties:
    	
 
    	
As of the Effective Date, except for the rights that   remain in effect from and after the Effective Date to enforce the Plan, the   Definitive Documents, and the documents in the plan supplement and the   obligations contemplated by the Restructuring, on and after the Effective   Date, the Released Parties will be deemed conclusively, absolutely,   unconditionally, irrevocably, and forever released and discharged, to the   maximum extent permitted by law, by the Releasing Parties, in each case from   any and all Claims and Causes of Action whatsoever (including any derivative   claims, asserted or assertable on behalf of the Debtors, the Reorganized   Debtors, or their Estates), whether liquidated or unliquidated, fixed or   contingent, matured or unmatured, known or unknown, foreseen or unforeseen,   asserted or unasserted, accrued or unaccrued, existing or hereinafter   arising, whether in law or equity, whether sounding in tort or contract,   whether arising under federal or state statutory or common law, or any other   applicable international, foreign, or domestic law, rule, statute,   regulation, treaty, right, duty, requirement or otherwise, that such holders   or their estates, affiliates, heirs, executors, administrators, successors,   assigns, managers, accountants, attorneys, representatives, consultants,   agents, and any other Persons
    

 

9

 

	
 
    	
 
    	
claiming under or through them 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 or other   Person, based on or relating to, or in any manner arising from, in whole or   in part, the Debtors, the Reorganized Debtors, or their Estates, the Chapter   11 Cases, the purchase, sale, or rescission of the purchase or sale of any   security of the Debtors or the Reorganized Debtors, the subject matter of, or   the transactions or events giving rise to, any Claim or Interest that is   treated in the Plan, the business or contractual arrangements or interactions   between any Debtor and any Released Party, the Restructuring, the   restructuring of any Claim or Interest before or during the Chapter 11 Cases,   the Definitive Documents and the documents in the plan supplement, and   related agreements, instruments, and other documents, and the negotiation,   formulation, preparation, or implementation thereof, the solicitation of   votes with respect to the Plan, or any other act or omission; provided,   however, that nothing herein will be construed to release any Person from   willful misconduct or intentional fraud as determined by a Final Order.
    
	
 
    	
 
    	
 
    
	
Exculpation:
    	
 
    	
To the fullest extent permitted by applicable law,   no Exculpated Party will have or incur, and each Exculpated Party will be   released and exculpated from, any Claim or Cause of Action in connection with   or arising out of the administration of the Chapter 11 Cases; the negotiation   and pursuit of the DIP Facility, the Exit Facility, the Equity Rights   Offerings, the Management Incentive Plan, the Disclosure Statement, the RSA,   the Restructuring, and the Plan (including the Definitive Documents and the   documents in the plan supplement), or the solicitation of votes for, or   confirmation of, the Plan; the funding of the Plan; the occurrence of the   Effective Date; the administration of the Plan or the property to be   distributed under the Plan; the issuance of securities under or in connection   with the Plan; the purchase, sale, or rescission of the purchase or sale of   any security of the Debtors or the Reorganized Debtors; or the transactions   in furtherance of any of the foregoing; other than Claims or Causes of Action   arising out of or related to any act or omission of an Exculpated Party that   is a criminal act or constitutes intentional fraud or willful misconduct as   determined by a Final Order, but in all respects such Persons will 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   acted in compliance with the applicable provisions of the Bankruptcy Code   with regard to the solicitation and distribution of securities pursuant to   the Plan and, therefore, are not, and on account of such distributions will   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, including the issuance   of securities thereunder. The exculpation will be in addition to, and not in   limitation of, all other releases, indemnities, exculpations, and any other   applicable law or rules protecting such Exculpated Parties from   liability.
    

 

10

 

	
Discharge and Injunction:
    	
 
    	
The Plan will contain standard discharge and   injunction provisions.
    
	
 
    	
 
    	
 
    
	
Exemption from SEC Registration:
    	
 
    	
The issuance and distribution under the Plan of the   (i) New Common Shares (other than New Common Shares issued pursuant to   the Senior Noteholder Backstop Agreement, including the Backstop Commitment   Premium), (ii) the Warrants, and (iii) the Warrant Equity will be   issued in reliance on the exemption from registration under the Securities   Act or applicable securities laws pursuant to section 1145(a) of the   Bankruptcy Code and the New Common Shares issued pursuant to the Senior   Noteholder Backstop Agreement, including on account of the Backstop Commitment   Premium, will be issued in reliance on the exemption from registration under   the Securities Act pursuant to Section 4(a)(2) and/or Regulation D   of the Securities Act (each, a “Securities Exception”).
    
	
 
    	
 
    	
 
    
	
Securities Issuance Requirements/

Registration Rights Agreement:
    	
 
    	
The issuance of the New Common Shares will be   subject to the following requirements (the “Securities   Issuance Requirements”):

 

·                  the issuance   of the New Common Shares under the Plan on the Effective Date will be made   through the facilities of DTC in accordance with the customary practices of   DTC for a mandatory distribution and the Reorganized Debtors will reflect   ownership of the New Common Shares through the facilities of DTC; provided, however, that   to the extent the New Common Shares are not eligible for distribution in   accordance with DTC’s customary practices, Reorganized Parent shall take all   such reasonable actions as may be required to cause the distributions of the   New Common Shares under this Plan, provided, further, however, that   Holders of Existing Equity Interests that are entitled to receive New Common   Shares, but had held such Existing Equity Interests outside of the facilities   of DTC, may receive their New Common Shares by means of book-entry with the   Reorganized Parent’s transfer agent;

 

·                  no later than   seven (7) calendar days prior to the Voting Deadline, the Debtors, with   the consent of the Requisite Creditors, shall make a determination as to   whether Reorganized Parent will continue to be a reporting company under the   Exchange Act, 15 U.S.C. §§ 78(a) — 78(pp) following December 31,   2019. If the Debtors determine that Reorganized Parent will continue to be a   reporting company under the Exchange Act following December 31, 2019,   the Debtors shall use their commercially reasonable efforts to have the New   Common Shares listed on the New York Stock Exchange, or another nationally   recognized exchange, as soon as practicable, subject to meeting applicable   listing requirements following the Effective Date. If the Debtors determine pursuant   to this provision that Reorganized Parent will not continue to be a reporting   company
    

 

11

 

	
 
    	
 
    	
under the Exchange Act   following December 31, 2019, the Debtors shall file a governance term   sheet, in form and substance reasonably acceptable to the Company and   Requisite Creditors, with the Plan Supplement;

 

·                  the   composition of the New Board will comply in all respects with the   rules applicable to the nationally recognized exchange on which the New   Common Shares are listed (and the Consenting Creditors will agree to such   modifications to the New Board as are necessary to comply with such   requirements); and

 

·                  after the   Effective Date, the sale or transfer of the New Common Shares will not be   subject to any right of first refusal or right of first offer restrictions in   favor of other holders of the New Common Shares.

 

Furthermore, on the Effective Date, the Reorganized   Debtors, the Consenting Creditors and any holder of 10% or more of the New   Common Shares will be party to a registration rights agreement (the “Registration Rights Agreement”).
    
	
 
    	
 
    	
 
    
	
Tax Structure:
    	
 
    	
To the extent practicable, the Restructuring   contemplated by this Term Sheet will be structured (in consultation with the   Consenting Creditors) so as to obtain the most beneficial structure for the   Company, its equity holders post-transaction, holders of Existing Equity   Interests, and holders of Senior Notes Claims as determined by the Company.
    
	
 
    	
 
    	
 
    
	
Consent Rights of Consenting Creditors:
    	
 
    	
Notwithstanding anything to the contrary herein or   in the Plan, any and all consent rights of the Consenting Creditors set forth   in the RSA with respect to the Definitive Documents, including any   amendments, restatements, supplements, or other modifications to such   documents, will be incorporated into the Plan by reference and fully   enforceable as if stated in full in the Plan.
    
	
 
    	
 
    	
 
    
	
Restructuring Expenses:
    	
 
    	
The Company will pay, immediately prior to the   Petition Date, all Restructuring Expenses, including fees and expenses   estimated to be incurred prior to the filing of the Chapter 11 Cases, for   which invoices or receipts are furnished by the Consenting Creditor Advisors   at least one (1) Business Day prior thereto.

 

On the Effective Date, without the need to file a   fee or retention application in the Chapter 11 Cases, the Company will pay   all Restructuring Expenses, including fees and expenses estimated to be   incurred through the Effective Date to the extent invoiced at least one (1) Business   Day before the Effective Date by the Consenting Creditor Advisors.
    
	
 
    	
 
    	
 
    
	
Retention of Jurisdiction:
    	
 
    	
The Plan will provide for a broad retention of   jurisdiction by the Bankruptcy Court for (i) resolution of Claims,   (ii) allowance of 
    

 

12

 

	
 
    	
 
    	
compensation and expenses for pre-Effective Date   services, (iii) resolution of motions, adversary proceedings, or other   contested matters, (iv) entry of such orders as necessary to implement   or consummate the Plan and any related documents or agreements, and   (v) other purposes.
    

 

13

 

ANNEX 1

 

Defined Terms

 

 

	
Defined Terms
    
	
 
    
	
“Ad Hoc Noteholder Group”
    	
 
    	
The ad hoc group of Senior Noteholders represented   by Paul, Weiss, Rifkind, Wharton & Garrison LLP, as counsel, and   Ducera Partners LLC, as financial advisor.
    
	
 
    	
 
    	
 
    
	
“Administrative Expense   Claim”
    	
 
    	
Any right to payment constituting a cost or expense   of administration incurred during the Chapter 11 Cases of a kind specified   under section 503(b) of the Bankruptcy Code and entitled to priority under   sections 507(a)(2), 507(b), or 1114(e)(2) of the Bankruptcy Code,   including (i) the actual and necessary costs and expenses incurred after   the Petition Date and through the Effective Date of preserving the Estates   and operating the businesses of the Debtors (such as wages, salaries, or   commissions for services and payments for goods and other services and leased   premises), (ii) Fee Claims, and (iii) Restructuring Expenses.
    
	
 
    	
 
    	
 
    
	
“Allowed”
    	
 
    	
With reference to any Claim or Interest,   (i) any Claim or Interest arising on or before the Effective Date   (a) as to which no objection to allowance has been interposed within the   time period set forth in the Plan or (b) as to which any objection has   been determined by a Final Order of the Bankruptcy Court to the extent such   objection is determined in favor of the respective holder, (ii) any   Claim or Interest as to which the liability of the Debtors and the amount   thereof are determined by a Final Order of a court of competent jurisdiction   other than the Bankruptcy Court, or (iii) any Claim or Interest   expressly allowed under the Plan; provided, however, that notwithstanding the foregoing, the   Reorganized Debtors will retain all claims and defenses with respect to   Allowed Claims that are reinstated or otherwise unimpaired pursuant to the   Plan.
    
	
 
    	
 
    	
 
    
	
“Amended Organizational   Documents”
    	
 
    	
The forms of certificate of incorporation,   certificate of formation, bylaws, limited liability company agreements,   shareholder agreement (if any), or other similar organizational documents, as   applicable, of the Reorganized Parent.
    
	
 
    	
 
    	
 
    
	
“Backstop Commitment   Premium”
    	
 
    	
The amount to be paid as consideration to the   Backstop Parties on the Effective Date, pursuant to the terms and conditions   set forth in the Plan and the Senior Noteholder Backstop Agreement, in the   form of New Common Shares, issued at a price per share equal to a 26%   discount to Plan Value based on the lower of (A) the Total Enterprise Value   or (B) an assumed total enterprise value of $425 million, equal to 6% of the   aggregate amount of the Senior Noteholder Rights Offering, subject to   dilution by the MIP Equity and the Warrant Equity.
    
	
 
    	
 
    	
 
    
	
“Backstop Parties”
    	
 
    	
Senior Noteholders that are signatories to the   Senior Noteholder Backstop Agreement.
    
	
 
    	
 
    	
 
    
	
“Business Day”
    	
 
    	
Any day other than a Saturday, a Sunday, or any   other day on which 
    

 

 

	
 
    	
 
    	
banking institutions in New York, NY are authorized   or required by law or executive order to close.
    
	
 
    	
 
    	
 
    
	
“Cash”
    	
 
    	
Legal tender of the United States of America.
    
	
 
    	
 
    	
 
    
	
“Cause of Action”
    	
 
    	
Any action, claim, cross-claim, third-party claim,   cause of action, controversy, dispute, demand, right, lien, indemnity,   contribution, guaranty, suit, obligation, liability, loss, debt, fee or   expense, damage, interest, judgment, cost, account, defense, remedy, offset,   power, privilege, proceeding, license, and franchise of any kind or character   whatsoever, known, unknown, foreseen or unforeseen, existing or hereafter   arising, contingent or non-contingent, matured or unmatured, suspected or   unsuspected, liquidated or unliquidated, disputed or undisputed, secured or   unsecured, assertable directly or derivatively (including any alter ego   theories), whether arising before, on, or after the Petition Date, in   contract or in tort, in law or in equity or pursuant to any other theory of   law (including under any state or federal securities laws). For the avoidance   of doubt, Cause of Action also includes (i) any right of setoff,   counterclaim, or recoupment and any claim for breach of contract or for   breach of duties imposed by law or in equity, (ii) the right to object   to Claims or Interests, (iii) any claim pursuant to section 362 or   chapter 5 of the Bankruptcy Code, (iv) any claim or defense including   fraud, mistake, duress, and usury and any other defenses set forth in section   558 of the Bankruptcy Code, and (v) any state law fraudulent transfer   claim.
    
	
 
    	
 
    	
 
    
	
“Chapter 11 Cases”
    	
 
    	
The jointly administered cases under chapter 11 of   the Bankruptcy Code commenced by the Debtors on the Petition Date in the   Bankruptcy Court.
    
	
 
    	
 
    	
 
    
	
“Claim”
    	
 
    	
A “claim,” as defined in section 101(5) of the   Bankruptcy Code, as against any Debtor.
    
	
 
    	
 
    	
 
    
	
“Confirmation Date”
    	
 
    	
The date on which the Bankruptcy Court enters the   Confirmation Order.
    

 

2

 

	
“Confirmation Order”
    	
 
    	
The order of the Bankruptcy Court confirming the   Plan in the Chapter 11 Cases and approving the Disclosure Statement and   Solicitation Materials.
    
	
 
    	
 
    	
 
    
	
“Consenting Creditors”
    	
 
    	
Senior Noteholders that are signatories to the RSA,   and any subsequent Senior Noteholder that becomes party thereto in accordance   with the terms of the RSA.
    
	
 
    	
 
    	
 
    
	
“DIP Claim”
    	
 
    	
All Claims held by the DIP Lenders on account of,   arising under, or relating to the DIP Financing or the DIP Orders, which   includes Claims for all principal amounts outstanding, interest, reasonable   and documented fees, expenses, costs, and other charges of the DIP Lenders.
    
	
 
    	
 
    	
 
    
	
“DIP Credit Agreement”
    	
 
    	
The credit agreement governing the terms of the DIP   Financing, which shall be in form and substance consistent in all material   respects with the DIP Term Sheet and acceptable to the DIP Lenders.
    
	
 
    	
 
    	
 
    
	
“DIP Documents”
    	
 
    	
The DIP Credit Agreement, any guaranty or   intercreditor agreements related thereto, any collateral and security   documentation related thereto, and any ancillary documentation related   thereto.
    
	
 
    	
 
    	
 
    
	
“DIP Lenders”
    	
 
    	
Certain of the Consenting Creditors in their   capacity as lenders under the DIP Financing.
    
	
 
    	
 
    	
 
    
	
“DIP Order”
    	
 
    	
The interim and final order(s) of the   Bankruptcy Court authorizing, among other things, the Debtors to enter into   and make borrowings under the DIP Financing and granting certain rights,   protections, and liens to and for the benefit of the DIP Lenders.
    
	
 
    	
 
    	
 
    
	
“Disclosure Statement”
    	
 
    	
The disclosure statement in respect of the Plan,   including all exhibits and schedules thereto, as approved or ratified by the   Bankruptcy Court pursuant to section 1125 of the Bankruptcy Code.
    
	
 
    	
 
    	
 
    
	
“DTC”
    	
 
    	
The Depository Trust Company.
    
	
 
    	
 
    	
 
    
	
“Effective Date”
    	
 
    	
The date upon which all conditions to the   effectiveness of the Plan have been satisfied or waived in accordance with   the terms thereof and the Plan becomes effective.
    
	
 
    	
 
    	
 
    
	
“Entity”
    	
 
    	
An “entity,” as defined in section 101(15) of the   Bankruptcy Code.
    
	
 
    	
 
    	
 
    
	
“Equity Rights Offering   Documents”
    	
 
    	
Collectively, the Senior Noteholder Backstop   Agreement and the Rights Offering Procedures.
    

 

3

 

	
“Estate(s)”
    	
 
    	
Individually or collectively, the estate or estates   of the Debtors created under section 541 of the Bankruptcy Code.
    
	
 
    	
 
    	
 
    
	
“Exculpated Parties”
    	
 
    	
Collectively, (i) the Debtors, (ii) the   Reorganized Debtors, (iii) any statutory committee appointed in the   Chapter 11 Cases, and (iv) with respect to each of the foregoing Persons   in clauses (i) through (iii), such Persons’ predecessors, successors,   assigns, subsidiaries, affiliates, current and former officers and directors,   principals, equity holders, members, partners, managers, employees, agents,   advisory board members, financial advisors, attorneys, accountants,   investment bankers, consultants, representatives, management companies, fund   advisors, and other professionals, and such Persons’ respective heirs,   executors, estates, and nominees, in each case in their capacity as such.
    
	
 
    	
 
    	
 
    
	
“Existing Equity   Interests”
    	
 
    	
Shares of the class of common stock of Parent that   existed immediately prior to the Effective Date, including any restricted   stock of Parent that vests prior to the Effective Date.
    
	
 
    	
 
    	
 
    
	
“Exit Facility”
    	
 
    	
The financing to be provided to the Reorganized   Debtors on the Effective Date in accordance with the Plan and that certain   commitment letter among the Debtors, BMO Harris Bank N.A. and BMO Capital   Markets Corp. dated as of even date herewith.
    
	
 
    	
 
    	
 
    
	
“Fee Claim”
    	
 
    	
A Claim for professional services rendered or costs   incurred on or after the Petition Date through the Confirmation Date by   professional persons retained by an order of the Bankruptcy Court pursuant to   sections 327, 328, 329, 330, 331, or 503(b) of the Bankruptcy Code in   the Chapter 11 Cases.
    
	
 
    	
 
    	
 
    
	
“Final Order”
    	
 
    	
An order or judgment of a court of competent   jurisdiction that has been entered on the docket maintained by the clerk of   such court, which has not been reversed, vacated, or stayed and as to which   (i) the time to appeal, petition for certiorari,   or move for a new trial, reargument, or rehearing has expired and as to which   no appeal, petition for certiorari,   or other proceedings for a new trial, reargument, or rehearing shall then be   pending, or (ii) if an appeal, writ of certiorari,   new trial, reargument, or rehearing thereof has been sought, such order or   judgment shall have been affirmed by the highest court to which such order   was appealed, or certiorari   shall have been denied, or a new trial, reargument, or rehearing shall have   been denied or resulted in no modification of such order, and the time to   take any further appeal, petition for certiorari,   or move for a new trial, reargument, or rehearing shall have expired; provided, however,   that no order or judgment shall fail to be a “Final Order” solely because of   the possibility that a motion under Rules 59 or
    

 

4

 

	
 
    	
 
    	
60 of the Federal Rules of Civil Procedure or   any analogous Bankruptcy Rule (or any analogous rules applicable in   another court of competent jurisdiction) or sections 502(j) or 1144 of   the Bankruptcy Code has been or may be filed with respect to such order or   judgment.
    
	
 
    	
 
    	
 
    
	
“Intercompany Claim”
    	
 
    	
Any Claim against a Debtor held by another Debtor.
    
	
 
    	
 
    	
 
    
	
“Interest”
    	
 
    	
Any equity interest (as defined in section 101(16)   of the Bankruptcy Code) in the Company, including all ordinary shares, units,   common stock, preferred stock, membership interest, partnership interest or   other instrument, evidencing any fixed or contingent ownership interest in   the Company, whether or not transferable, including any option, warrant, or   other right, contractual or otherwise, to acquire any such interest in the   Company, that existed immediately before the Effective Date.
    
	
 
    	
 
    	
 
    
	
“New Common Shares”
    	
 
    	
Shares of common stock of Reorganized Parent.
    
	
 
    	
 
    	
 
    
	
“Other Equity Interests”
    	
 
    	
All Interests in Parent other than Existing Equity   Interests.
    
	
 
    	
 
    	
 
    
	
“Other Priority Claim”
    	
 
    	
Any Claim other than an Administrative Expense Claim   or a Priority Tax Claim that is entitled to priority of payment as specified   in section 507(a) of the Bankruptcy Code.
    
	
 
    	
 
    	
 
    
	
“Other Secured Claim”
    	
 
    	
A Secured Claim other than a Priority Tax Claim, a   DIP Claim, or a Revolving Credit Agreement Claim.
    
	
 
    	
 
    	
 
    
	
“Person”
    	
 
    	
Any individual, corporation, partnership, joint   venture, association, joint stock company, limited liability company, limited   partnership, trust, estate, unincorporated organization, governmental unit   (as defined in section 101(27) of the Bankruptcy Code), or other Entity.
    
	
 
    	
 
    	
 
    
	
“Plan”
    	
 
    	
The prepackaged chapter 11 plan of reorganization of   the Company implementing the Restructuring, including all appendices,   exhibits, schedules, and supplements thereto, as may be modified from time to   time in accordance with its terms and the RSA.
    
	
 
    	
 
    	
 
    
	
“Plan Value”
    	
 
    	
The value of a New Common Share as of the Effective   Date.
    
	
 
    	
 
    	
 
    
	
“Priority Tax Claim”
    	
 
    	
Any Secured Claim or unsecured Claim of a governmental   unit of the kind entitled to priority of payment as specified in sections   502(i) and 507(a)(8) of the Bankruptcy Code.
    

 

5

 

	
“Pro Rata”
    	
 
    	
The proportion that an Allowed Claim or Interest in   a particular class bears to the aggregate amount of Allowed Claims or   Interests in that class.
    
	
 
    	
 
    	
 
    
	
“Registered Holder”
    	
 
    	
A holder of Existing Equity Interests whose   ownership interest is registered directly on the books and records of the Company’s   transfer agent.
    
	
 
    	
 
    	
 
    
	
“Released Parties”
    	
 
    	
Collectively, (i) the Debtors, (ii) the   Reorganized Debtors, (iii) the Consenting Creditors, (iv) the Ad   Hoc Noteholder Group, (v) the Senior Notes Trustee, (vi) the   arrangers, agents and lenders under the Exit Facility, (vii) the agent   and DIP Lenders under the DIP Financing, (viii) the Revolving Credit   Agreement Agent and the Revolving Credit Agreement Lenders, (ix) with   respect to each of the foregoing Persons, in clauses (i) through (viii),   each of their affiliates, and (x) with respect to each of the foregoing   Persons in clauses (i) through (ix), such Persons’ predecessors,   successors, assigns, subsidiaries, affiliates, current and former officers   and directors, principals, equity holders, members, partners, managers,   employees, agents, advisory board members, financial advisors, attorneys,   accountants, investment bankers, consultants, representatives, management   companies, fund advisors, and other professionals, and such Persons’   respective heirs, executors, estates, and nominees, in each case in their   capacity as such.
    
	
 
    	
 
    	
 
    
	
“Releasing Parties”
    	
 
    	
Collectively, (i) the holders of all Claims or   Interests who vote to accept the Plan, (ii) the holders of all Claims or   Interests whose vote to accept or reject the Plan is solicited but who do not   vote either to accept or to reject the Plan, (iii) the holders of all   Claims or Interests who vote, or are deemed, to reject the Plan but do not   opt out of granting the releases set forth herein, (iv) the holders of   all Claims and Interests who were given notice of the opportunity to opt out   of granting the releases set forth herein but did not opt out, and   (v) all other holders of Claims and Interests to the maximum extent   permitted by law.
    
	
 
    	
 
    	
 
    
	
“Reorganized Debtors”
    	
 
    	
Each of the Debtors as reorganized on the Effective   Date in accordance with the Plan.
    
	
 
    	
 
    	
 
    
	
“Reorganized Parent”
    	
 
    	
Parent as reorganized on the Effective Date in   accordance with the Plan.
    
	
 
    	
 
    	
 
    
	
“Requisite Creditors”
    	
 
    	
As of the date of determination, Consenting   Creditors holding at least two-thirds of the outstanding Senior Notes held by   the Consenting Creditors as of such date.
    

 

6

 

	
“Restructuring Expenses”
    	
 
    	
The reasonable and documented fees and expenses   incurred by the Consenting Creditors Advisors pursuant to the terms of their   fee letters.
    
	
 
    	
 
    	
 
    
	
“Rights Offering Equity”
    	
 
    	
New Common Shares issued pursuant to the Equity   Rights Offerings.
    
	
 
    	
 
    	
 
    
	
“Rights Offering   Procedures”
    	
 
    	
The rights offering procedures filed with the   Bankruptcy Court, which set forth the procedures for the Senior Noteholders   and holders of Existing Equity Interests to participate in the Equity Rights   Offerings.
    
	
 
    	
 
    	
 
    
	
“Senior Notes Trustee”
    	
 
    	
U.S. Bank National Association, as trustee under the   Senior Notes Indenture and its successors, assigns, or any replacement   trustee appointed pursuant to the terms of the Senior Notes Indenture.
    
	
 
    	
 
    	
 
    
	
“Secured Claim”
    	
 
    	
A Claim (i) secured by a lien on collateral to   the extent of the value of such collateral as (a) set forth in the Plan,   (b) agreed to by the holder of such Claim and the Debtors, or   (c) determined by a Final Order in accordance with section   506(a) of the Bankruptcy Code, or (ii) secured by the amount of any   right of setoff of the holder thereof in accordance with section 553 of the   Bankruptcy Code.
    
	
 
    	
 
    	
 
    
	
“Securities Act”
    	
 
    	
Securities Act of 1933, as amended, 15 U.S.C. §§   77a—77aa, and any rules and regulations promulgated thereby.
    
	
 
    	
 
    	
 
    
	
“Senior Noteholder   Backstop Agreement”
    	
 
    	
The Backstop Commitment Agreement entered into   simultaneously with the RSA, and attached thereto as Exhibit B.
    
	
 
    	
 
    	
 
    
	
“Solicitation Materials”
    	
 
    	
Collectively, the Disclosure Statement and the   related solicitation materials.
    
	
 
    	
 
    	
 
    
	
“Total Enterprise Value”
    	
 
    	
The total enterprise value of the Reorganized   Debtors.
    
	
 
    	
 
    	
 
    
	
“Unimpaired”
    	
 
    	
With respect to a Claim, Interest, or a class   of Claims or Interests, not “impaired” within the meaning of sections   1123(a)(4) and 1124 of the Bankruptcy Code.
    
	
 
    	
 
    	
 
    
	
“Warrant Agreement”
    	
 
    	
One or more warrant agreement(s) to be entered   into by and among Reorganized Parent and the warrant agent named therein that   will govern the terms of the Warrants.
    
	
 
    	
 
    	
 
    
	
“Warrants”
    	
 
    	
The Series A Warrants, the Series B   Warrants, and the Series C Warrants issued pursuant to the Plan as of   the Effective Date.

 

(i)                                     “Series A   Warrants” means warrants issued to holders of 
    

 

7

 

	
 
    	
 
    	
Existing Equity   Interests pursuant to the Plan that will be exercisable in Cash for a 3-year   period after the Effective Date for a number of shares equal to 10% of the   New Common Shares issued and outstanding as of the Effective Date, less the   number of New Common Shares that would have been issued but for the Existing   Equity Cash Out (subject to dilution by the MIP Equity), in an amount equal   to an implied 75% recovery to Senior Noteholders on account of the Senior   Notes Claims (inclusive of non-default interest under the Senior Notes   through the date of such exercise calculated as though the Senior Notes   remained outstanding through the date of such exercise and all accrued and   unpaid interest had been added to the outstanding principal amount of the   Notes daily; provided, however,   that to the extent DTC requirements are applicable, if DTC is not able to   provide for daily accretion, the Consenting Creditors agree to negotiate in   good faith with the Debtors on alternative accretion schedules to address any   such impediment in accordance with section 4(a)(viii) of the RSA.

 

(ii)                                  “Series B   Warrants” means warrants issued to holders of Existing Equity Interests   pursuant to the Plan that will be exercisable in Cash for a 3-year period   after the Effective Date for a number of shares equal to 10% (20% cumulative)   of the New Common Shares issued and outstanding as of the Effective Date,   less the number of New Common Shares that would have been issued but for the   Existing Equity Cash Out (subject to dilution by the MIP Equity), in an   amount equal to an implied 95% recovery to Senior Noteholders on account of   the Senior Notes Claims (inclusive of non-default interest under the Senior   Notes through the date of such exercise calculated as though the Senior Notes   remained outstanding through the date of such exercise and all accrued and unpaid   interest had been added to the outstanding principal amount of the Notes   daily; provided, however,   that to the extent DTC requirements are applicable, if DTC is not able to   provide for daily accretion, the Consenting Creditors agree to negotiate in   good faith with the Debtors on alternative accretion schedules to address any   such impediment in accordance with section 4(a)(viii) of the RSA.

 

(iii)                               “Series C   Warrants” means warrants issued to holders of Existing Equity Interests   pursuant to the Plan that will be exercisable in Cash for a 3-year period   after the Effective Date for a number of shares equal to 10% (30% cumulative)   of the New Common Shares issued and outstanding as of the Effective Date,   less the number of New Common Shares that would have 
    

 

8

 

	
 
    	
 
    	
been issued but for the Existing Equity Cash Out   (subject to dilution by the MIP Equity), in an amount equal to an implied   125% recovery to Senior Noteholders on account of the Senior Notes Claims   (inclusive of non-default interest under the Senior Notes through the date of   such exercise calculated as though the Senior Notes remained outstanding through   the date of such exercise and all accrued and unpaid interest had been added   to the outstanding principal amount of the Notes daily; provided,   however, that to the extent DTC   requirements are applicable, if DTC is not able to provide for daily accretion,   the Consenting Creditors agree to negotiate in good faith with the Debtors on   alternative accretion schedules to address any such impediment in accordance   with section 4(a)(viii) of the RSA.
    
	
 
    	
 
    	
 
    
	
“Warrant Equity”
    	
 
    	
The New Common Shares issuable upon the exercise of   the Warrants, subject to dilution by the MIP Equity.
    

 

9

 

Exhibit A

 

DIP Term Sheet

 

 

Key Terms   Noteholder DIP Financing Borrower Halcón Resources Corporation Guarantor(s)   All existing or future domestic subsidiaries of the Borrower Administrative   Agent Wilmington Trust, National Association DIP Facility $35 million   multi-draw DIP term loan facility, available in one borrowing on the entry of   the Interim Order in an amount to be agreed and one borrowing on entry of the   Final Order Tenor 6 months Pricing Interest: L+550 Undrawn Spread: 1.00% Fees   Upfront Fee: 2.00% on allocated commitment amount, earned and paid in full on   the closing date Administrative Agent Fees: $20,000 per annum and a $5,000   acceptance fee Security Subject to a professional fee carve-out, junior lien   on all assets encumbered by the prepetition RBL facility, and a lien on any   unencumbered assets (but subject to the adequate protection lien in favor of   the RBL facility in such assets) Ranking Subject to the RBL liens, any   recovery from the foreclosure of collateral shall be applied, first to   post-petition secured hedges and second, to the obligations outstanding under   the DIP facility Milestones 30 days after petition date for final DIP order   75 days after petition date for confirmation of a plan of reorganization 95   days after the petition date for effective date of a plan of reorganization

    

 

Key Terms   Noteholder DIP Financing Financial Maintenance Covenants Rolling 13-week   budget recast every four weeks subject to majority lender approval 4 week   variance reporting with initial variance test performed 4 weeks after   petition date and then performed every 4 weeks thereafter 120% permitted   variance on aggregate operating disbursements Positive variance carryforward   for immediately succeeding 4-week period Reporting Requirements Consolidated   financial statements: monthly, quarterly, annual (audited) 4 week variance   reporting with first variance report due 4 weeks after petition date   Bi-weekly cash flow and operations update call Use of Proceeds Incremental   liquidity purposes during the Borrower’s bankruptcy proceeding, subject to   budget agreed to by majority lenders and permitted variances Closing   Conditions Usual and customary conditions to closing for facilities and   transactions of this type, including: Approval by the majority lenders of the   initial budget Execution of credit documentation Delivery of PATRIOT Act   information Grant of security interest and lien on DIP collateral Entry into   interim DIP order Payment of fees and expenses

    

 

 

EXHIBIT B

 

SENIOR NOTEHOLDER BACKSTOP AGREEMENT

 

(Filed as Exhibit 10.2 to this Form 8-K)

 

 

EXHIBIT C

 

PLAN

 

 

IN THE UNITED STATES BANKRUPTCY COURT
 FOR THE SOUTHERN DISTRICT OF TEXAS
 HOUSTON DIVISION

 

 

	
 
    	
§
    	
 
    
	
In re:
    	
§
    	
Chapter 11
    
	
 
    	
§
    	
 
    
	
HALCÓN RESOURCES
    	
§
    	
 
    
	
CORPORATION, et al.,
    	
§
    	
Case   No. 19-         (      )
    
	
 
    	
§
    	
 
    
	
 
    	
§
    	
(Joint Administration Requested)
    
	
Debtors.(1)
    	
§
    	
 
    
	
 
    	
§
    	
 
    

 

JOINT PREPACKAGED CHAPTER 11 PLAN OF
  HALCÓN CORPORATION AND ITS AFFILIATED DEBTORS

 

	
WEIL, GOTSHAL & MANGES   LLP
    	
WEIL, GOTSHAL & MANGES   LLP
    
	
Alfredo R. Pérez   (15776275)
    	
Gary T. Holtzer
    
	
700 Louisiana Street,   Suite 1700
    	
Lauren Tauro
    
	
Houston, Texas 77002
    	
767 Fifth Avenue
    
	
Telephone: (713)   546-5000
    	
New York, New York   10153
    
	
Facsimile: (713)   224-9511
    	
Telephone: (212)   310-8000
    
	
 
    	
Facsimile: (212) 310-8007
    
	
 
    	
 
    
	
Proposed Counsel for the   Debtors and Debtors in Possession
    	
 
    
	
 
    	
 
    
	
Dated:
    	
August 2, 2019
    	
 
    
	
 
    	
Houston, Texas
    	
 
    

 

(1)  The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, as applicable, are:  Halcón Resources Corporation (0684), Halcón Resources Operating, Inc. (4856), Halcón Holdings, Inc. (5102), Halcón Energy Properties, Inc. (5292), Halcón Permian, LLC (6153), Halcón Field Services, LLC (0280), and Halcón Operating Co., Inc. (3588).  The Debtors’ mailing address is 1000 Louisiana St., Suite 1500, Houston, TX 77002.

 

 

Table of Contents

 

	
ARTICLE I.
    	
Definitions and Interpretation
    	
1
    
	
 
    	
 
    	
 
    
	
1.1
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
1.2
    	
Interpretation;   Application of Definitions; Rules of Construction
    	
12
    
	
 
    	
 
    	
 
    
	
1.3
    	
Reference to Monetary   Figures
    	
13
    
	
 
    	
 
    	
 
    
	
1.4
    	
Consent Rights of   Consenting Creditors
    	
13
    
	
 
    	
 
    	
 
    
	
1.5
    	
Controlling Document
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE II.
    	
Administrative Expense Claims,   Fee Claims, priority tax claims, and DIP Claims
    	
13
    
	
 
    	
 
    	
 
    
	
2.1
    	
Treatment of   Administrative Expense Claims
    	
13
    
	
 
    	
 
    	
 
    
	
2.2
    	
Treatment of Fee Claims
    	
14
    
	
 
    	
 
    	
 
    
	
2.3
    	
Treatment of Priority   Tax Claims
    	
15
    
	
 
    	
 
    	
 
    
	
2.4
    	
Treatment of DIP Claims
    	
15
    
	
 
    	
 
    	
 
    
	
2.5
    	
Restructuring Expenses
    	
15
    
	
 
    	
 
    	
 
    
	
2.6
    	
Statutory Fees
    	
15
    
	
 
    	
 
    	
 
    
	
ARTICLE III.
    	
Classification of Claims and   Interests
    	
16
    
	
 
    	
 
    	
 
    
	
3.1
    	
Classification in   General
    	
16
    
	
 
    	
 
    	
 
    
	
3.2
    	
Formation of Debtor   Groups for Convenience Only
    	
16
    
	
 
    	
 
    	
 
    
	
3.3
    	
Summary of   Classification of Claims and Interests
    	
16
    
	
 
    	
 
    	
 
    
	
3.4
    	
Special Provision   Governing Unimpaired Claims
    	
17
    
	
 
    	
 
    	
 
    
	
3.5
    	
Elimination of Vacant   Classes
    	
17
    
	
 
    	
 
    	
 
    
	
3.6
    	
Voting Classes;   Presumed Acceptance by Non-Voting Classes
    	
17
    
	
 
    	
 
    	
 
    
	
3.7
    	
Voting; Presumptions;   Solicitation
    	
17
    
	
 
    	
 
    	
 
    
	
3.8
    	
Cramdown
    	
17
    
	
 
    	
 
    	
 
    
	
3.9
    	
No Waiver
    	
18
    
	
 
    	
 
    	
 
    
	
ARTICLE IV.
    	
Treatment of Claims and   Interests
    	
18
    
	
 
    	
 
    	
 
    
	
4.1
    	
Class 1: Other   Priority Claims
    	
18
    
	
 
    	
 
    	
 
    
	
4.2
    	
Class 2: Other   Secured Claims
    	
18
    
	
 
    	
 
    	
 
    
	
4.3
    	
Class 3: RBL   Claims
    	
19
    
	
 
    	
 
    	
 
    
	
4.4
    	
Class 4: Senior   Notes Claims
    	
19
    
	
 
    	
 
    	
 
    
	
4.5
    	
Class 5: General   Unsecured Claims
    	
19
    

 

 

	
4.6
    	
Class 6:   Intercompany Claims
    	
20
    
	
 
    	
 
    	
 
    
	
4.7
    	
Class 7: Existing   Equity Interests
    	
20
    
	
 
    	
 
    	
 
    
	
4.8
    	
Class 8: Other   Equity Interests
    	
21
    
	
 
    	
 
    	
 
    
	
4.9
    	
Class 9:   Intercompany Interests
    	
21
    
	
 
    	
 
    	
 
    
	
ARTICLE V.
    	
Means for Implementation
    	
21
    
	
 
    	
 
    	
 
    
	
5.1
    	
Sources of   Consideration for Plan Distributions
    	
21
    
	
 
    	
 
    	
 
    
	
5.2
    	
Compromise and   Settlement of Claims, Interests, and Controversies
    	
22
    
	
 
    	
 
    	
 
    
	
5.3
    	
Continued Corporate Existence; Effectuating   Documents; Further Transactions
    	
22
    
	
 
    	
 
    	
 
    
	
5.4
    	
Cancellation of Existing Securities and Agreements
    	
23
    
	
 
    	
 
    	
 
    
	
5.5
    	
Cancellation of Certain Existing Security Interests
    	
23
    
	
 
    	
 
    	
 
    
	
5.6
    	
Officers and Boards of Directors
    	
23
    
	
 
    	
 
    	
 
    
	
5.7
    	
Management Incentive Plan
    	
24
    
	
 
    	
 
    	
 
    
	
5.8
    	
Authorization and Issuance of New Common Shares and   Warrants
    	
24
    
	
 
    	
 
    	
 
    
	
5.9
    	
Securities Exemptions
    	
25
    
	
 
    	
 
    	
 
    
	
5.10
    	
Equity Rights Offerings
    	
26
    
	
 
    	
 
    	
 
    
	
5.11
    	
Exit RBL Agreement
    	
27
    
	
 
    	
 
    	
 
    
	
5.12
    	
Registration Rights Agreement
    	
27
    
	
 
    	
 
    	
 
    
	
5.13
    	
Intercompany Interests
    	
28
    
	
 
    	
 
    	
 
    
	
5.14
    	
Senior Notes Trustee Expenses and Certain Senior   Notes Trustee Rights
    	
28
    
	
 
    	
 
    	
 
    
	
5.15
    	
Restructuring Transactions
    	
28
    
	
 
    	
 
    	
 
    
	
5.16
    	
Separate Plans
    	
28
    
	
 
    	
 
    	
 
    
	
ARTICLE VI.
    	
Distributions
    	
28
    
	
 
    	
 
    	
 
    
	
6.1
    	
Distributions Generally
    	
28
    
	
 
    	
 
    	
 
    
	
6.2
    	
Postpetition Interest on Claims
    	
29
    
	
 
    	
 
    	
 
    
	
6.3
    	
Date of Distributions
    	
29
    
	
 
    	
 
    	
 
    
	
6.4
    	
Distribution Record Date
    	
29
    
	
 
    	
 
    	
 
    
	
6.5
    	
Distributions after Effective Date
    	
30
    
	
 
    	
 
    	
 
    
	
6.6
    	
Disbursing Agent
    	
30
    
	
 
    	
 
    	
 
    
	
6.7
    	
Delivery of Distributions
    	
30
    
	
 
    	
 
    	
 
    
	
6.8
    	
Unclaimed Property
    	
31
    
	
 
    	
 
    	
 
    
	
6.9
    	
Satisfaction of Claims
    	
31
    

 

ii

 

	
6.10
    	
Manner of Payment under   Plan
    	
31
    
	
 
    	
 
    	
 
    
	
6.11
    	
Fractional Shares
    	
31
    
	
 
    	
 
    	
 
    
	
6.12
    	
Minimum Distribution
    	
32
    
	
 
    	
 
    	
 
    
	
6.13
    	
No Distribution in   Excess of Amount of Allowed Claim
    	
32
    
	
 
    	
 
    	
 
    
	
6.14
    	
Allocation of   Distributions Between Principal and Interest
    	
32
    
	
 
    	
 
    	
 
    
	
6.15
    	
Setoffs and Recoupments
    	
32
    
	
 
    	
 
    	
 
    
	
6.16
    	
Rights and Powers of Disbursing   Agent
    	
32
    
	
 
    	
 
    	
 
    
	
6.17
    	
Expenses of Disbursing   Agent
    	
33
    
	
 
    	
 
    	
 
    
	
6.18
    	
Withholding and   Reporting Requirements
    	
33
    
	
 
    	
 
    	
 
    
	
ARTICLE VII.
    	
Procedures for Resolving Claims
    	
34
    
	
 
    	
 
    	
 
    
	
7.1
    	
Disputed Claims Process
    	
34
    
	
 
    	
 
    	
 
    
	
7.2
    	
Objections to Claims
    	
34
    
	
 
    	
 
    	
 
    
	
7.3
    	
Estimation of Claims
    	
34
    
	
 
    	
 
    	
 
    
	
7.4
    	
Claim Resolution   Procedures Cumulative
    	
35
    
	
 
    	
 
    	
 
    
	
7.5
    	
No Distributions   Pending Allowance
    	
35
    
	
 
    	
 
    	
 
    
	
7.6
    	
Distributions after   Allowance
    	
35
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII.
    	
Executory Contracts and   Unexpired Leases
    	
35
    
	
 
    	
 
    	
 
    
	
8.1
    	
General Treatment
    	
35
    
	
 
    	
 
    	
 
    
	
8.2
    	
Determination of   Assumption and Cure Disputes; Deemed Consent
    	
36
    
	
 
    	
 
    	
 
    
	
8.3
    	
Rejection Damages   Claims
    	
37
    
	
 
    	
 
    	
 
    
	
8.4
    	
Survival of the   Debtors’ Indemnification Obligations
    	
37
    
	
 
    	
 
    	
 
    
	
8.5
    	
Compensation and   Benefit Plans
    	
37
    
	
 
    	
 
    	
 
    
	
8.6
    	
Insurance Policies
    	
37
    
	
 
    	
 
    	
 
    
	
8.7
    	
Reservation of Rights
    	
38
    
	
 
    	
 
    	
 
    
	
ARTICLE IX.
    	
Conditions Precedent to the   Occurrence of the Effective Date
    	
38
    
	
 
    	
 
    	
 
    
	
9.1
    	
Conditions Precedent to   Effective Date
    	
38
    
	
 
    	
 
    	
 
    
	
9.2
    	
Waiver of Conditions   Precedent
    	
39
    
	
 
    	
 
    	
 
    
	
9.3
    	
Effect of Failure of a   Condition
    	
39
    
	
 
    	
 
    	
 
    
	
ARTICLE X.
    	
Effect of Confirmation
    	
40
    
	
 
    	
 
    	
 
    
	
10.1
    	
Binding Effect
    	
40
    
	
 
    	
 
    	
 
    
	
10.2
    	
Vesting of Assets
    	
40
    

 

iii

 

	
10.3
    	
Discharge of Claims   against and Interests in Debtors
    	
40
    
	
 
    	
 
    	
 
    
	
10.4
    	
Pre-Confirmation Injunctions   and Stays
    	
40
    
	
 
    	
 
    	
 
    
	
10.5
    	
Injunction against   Interference with Plan
    	
41
    
	
 
    	
 
    	
 
    
	
10.6
    	
Plan Injunction
    	
41
    
	
 
    	
 
    	
 
    
	
10.7
    	
Releases
    	
41
    
	
 
    	
 
    	
 
    
	
10.8
    	
Exculpation
    	
43
    
	
 
    	
 
    	
 
    
	
10.9
    	
Injunction Related to   Releases and Exculpation
    	
43
    
	
 
    	
 
    	
 
    
	
10.10
    	
Subordinated Claims
    	
44
    
	
 
    	
 
    	
 
    
	
10.11
    	
Retention of Causes of   Action and Reservation of Rights
    	
44
    
	
 
    	
 
    	
 
    
	
10.12
    	
Ipso Facto and Similar   Provisions Ineffective
    	
44
    
	
 
    	
 
    	
 
    
	
ARTICLE XI.
    	
Retention of Jurisdiction
    	
44
    
	
 
    	
 
    	
 
    
	
11.1
    	
Retention of   Jurisdiction
    	
44
    
	
 
    	
 
    	
 
    
	
ARTICLE XII.
    	
Miscellaneous Provisions
    	
46
    
	
 
    	
 
    	
 
    
	
12.1
    	
Exemption from Certain   Transfer Taxes
    	
46
    
	
 
    	
 
    	
 
    
	
12.2
    	
Request for Expedited   Determination of Taxes
    	
47
    
	
 
    	
 
    	
 
    
	
12.3
    	
Dates of Actions to   Implement Plan
    	
47
    
	
 
    	
 
    	
 
    
	
12.4
    	
Amendments
    	
47
    
	
 
    	
 
    	
 
    
	
12.5
    	
Revocation or   Withdrawal of Plan
    	
47
    
	
 
    	
 
    	
 
    
	
12.6
    	
Severability
    	
48
    
	
 
    	
 
    	
 
    
	
12.7
    	
Governing Law
    	
48
    
	
 
    	
 
    	
 
    
	
12.8
    	
Immediate Binding   Effect
    	
48
    
	
 
    	
 
    	
 
    
	
12.9
    	
Successors and Assigns
    	
48
    
	
 
    	
 
    	
 
    
	
12.10
    	
Entire Agreement
    	
49
    
	
 
    	
 
    	
 
    
	
12.11
    	
Computing Time
    	
49
    
	
 
    	
 
    	
 
    
	
12.12
    	
Exhibits to Plan
    	
49
    
	
 
    	
 
    	
 
    
	
12.13
    	
Notices
    	
49
    
	
 
    	
 
    	
 
    
	
12.14
    	
Reservation of Rights
    	
50
    

 

iv

 

Each of Halcón Resources Corporation, Halcón Resources Operating, Inc., Halcón Holdings, Inc., Halcón Energy Properties, Inc., Halcón Permian, LLC, Halcón Field Services, LLC, and Halcón Operating Co., Inc. (each, a “Debtor” and collectively, the “Debtors”) proposes the following joint prepackaged chapter 11 plan of reorganization pursuant to section 1121(a) of the Bankruptcy Code.  Capitalized terms used herein shall have the meanings set forth in section 1.1 below.

 

ARTICLE I.                                                                          DEFINITIONS AND INTERPRETATION.

 

1.1                               Definitions.

 

The following terms shall have the respective meanings specified below:

 

Administrative Expense Claim means any Claim (other than DIP Claims) for costs and expenses of administration of the Chapter 11 Cases pursuant to sections 327, 328, 330, 365, 503(b), 507(a)(2), or 507(b) of the Bankruptcy Code, including (i) the actual and necessary costs and expenses incurred on or after the Petition Date and through the Effective Date of preserving the Estates and operating the Debtors’ businesses, (ii) Fee Claims, and (iii) Restructuring Expenses.

 

Ad Hoc Noteholder Group means those certain holders of Senior Notes represented by the Consenting Creditor Advisors.

 

Allowed means, with respect to any Claim against or Interest in a Debtor, (i) any Claim to which the Debtors and the holder of the Claim agree to the amount of the Claim or a court of competent jurisdiction has determined the amount of the Claim by Final Order, (ii) any Claim or Interest that is compromised, settled, or otherwise resolved pursuant to the authority of the Debtors or Reorganized Debtors, as applicable, in a Final Order of the Bankruptcy Court, (iii) any Claim that is listed in the Schedules, if any are filed, as liquidated, non-contingent, and undisputed, or (iv) any Claim or Interest expressly allowed hereunder; provided, however, that, the Reorganized Debtors shall retain all claims and defenses with respect to Allowed Claims that are reinstated or otherwise Unimpaired pursuant to this Plan.

 

Amended Organizational Documents means, with respect to each Reorganized Debtor, the form of certificate of incorporation, certificate of formation, bylaws, limited liability company agreement, shareholder agreement (if any), or other similar organizational documents, as applicable, for such Reorganized Debtor.

 

Asset means all of the rights, title, and interests of a Debtor in and to property of whatever type or nature, including real, personal, mixed, intellectual, tangible, and intangible property.

 

Backstop Commitment Premium has the meaning ascribed to such term in the Senior Noteholder Backstop Agreement.

 

 

Backstop Parties means the Senior Noteholders that are signatories to the Senior Noteholder Backstop Agreement.

 

Backstop Purchase has the meaning ascribed to such term in the Senior Noteholder Backstop Agreement.

 

Bankruptcy Code means title 11 of the United States Code, as amended from time to time, as applicable to these Chapter 11 Cases.

 

Bankruptcy Court means the United States Bankruptcy Court for the Southern District of Texas having jurisdiction over the Chapter 11 Cases and, to the extent of any reference made under section 157 of title 28 of the United States Code or if the Bankruptcy Court is determined not to have authority to enter a Final Order on an issue, the unit of such District Court having jurisdiction over the Chapter 11 Cases under section 151 of title 28 of the United States Code.

 

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, as amended from time to time, applicable to the Chapter 11 Cases, and any local rules of the Bankruptcy Court.

 

Business Day means any day other than a Saturday, a Sunday, or any other day on which banking institutions in New York, New York are authorized or required by law or executive order to close.

 

Cash means legal tender of the United States of America.

 

Cause of Action means any action, claim, cross-claim, third-party claim, cause of action, controversy, dispute, demand, right, lien, indemnity, contribution, guaranty, suit, obligation, liability, loss, debt, fee or expense, damage, interest, judgment, cost, account, defense, remedy, offset, power, privilege, proceeding, license, and franchise of any kind or character whatsoever, known, unknown, foreseen or unforeseen, existing or hereafter arising, contingent or non-contingent, matured or unmatured, suspected or unsuspected, liquidated or unliquidated, disputed or undisputed, secured or unsecured, assertable directly or derivatively (including any alter ego theories), whether arising before, on, or after the Petition Date, in contract or in tort, in law or in equity or pursuant to any other theory of law (including under any state or federal securities laws).  For the avoidance of doubt, Cause of Action also includes (i) any right of setoff, counterclaim, or recoupment and any claim for breach of contract or for breach of duties imposed by law or in equity, (ii) the right to object to Claims or Interests, (iii) any claim pursuant to section 362 or chapter 5 of the Bankruptcy Code, (iv) any claim or defense including fraud, mistake, duress, and usury and any other defenses set forth in section 558 of the Bankruptcy Code, and (v) any state law fraudulent transfer claim.

 

Chapter 11 Case means, with respect to a Debtor, such Debtor’s case under chapter 11 of the Bankruptcy Code commenced on the Petition Date in the Bankruptcy Court, jointly administered with all other Debtors’ cases under chapter 11 of the Bankruptcy Code.

 

2

 

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

 

Class means any group of Claims or Interests classified under this Plan pursuant to section 1122(a) of the Bankruptcy Code.

 

Collateral means any Asset of an Estate that is subject to a Lien securing the payment or performance of a Claim, which Lien is not invalid and has not been avoided under the Bankruptcy Code or applicable nonbankruptcy law.

 

Confirmation Date means the date on which the Clerk of the Bankruptcy Court enters the Confirmation Order.

 

Confirmation Hearing means the hearing to be held by the Bankruptcy Court regarding confirmation of this Plan, as such hearing may be adjourned or continued from time to time.

 

Confirmation Order means the order of the Bankruptcy Court (i) approving (a) the Disclosure Statement pursuant to sections 1125 and 1126(b), (b) the solicitation of votes and voting procedures, (c) the form of ballots, and (d) the Rights Offering Procedures, and (ii) confirming this Plan pursuant to section 1129 of the Bankruptcy Code.

 

Consenting Creditors has the meaning set forth in the RSA.

 

Consenting Creditor Advisors means, together, the Consenting Creditor Counsel and Ducera Partners, LLC, as financial advisor to the Ad Hoc Noteholder Group.

 

Consenting Creditor Counsel means (i) Paul, Weiss, Rifkind, Wharton & Garrison LLP, as counsel and (ii) Porter Hedges LLP, as local counsel, to the Ad Hoc Noteholder Group.

 

Cure Amount means the payment of Cash or the distribution of other property (as the parties may agree or the Bankruptcy Court may order) as necessary to (i) cure a monetary default by the Debtors in accordance with the terms of an executory contract or unexpired lease of the Debtors and (ii) permit the Debtors to assume such executory contract or unexpired lease under section 365(a) of the Bankruptcy Code.

 

Debtor(s) has the meaning set forth in the introductory paragraph of this Plan.

 

Definitive Documents has the meaning ascribed to such term in the RSA.

 

DIP Agent means Wilmington Trust, National Association, solely in its capacity as administrative agent under the DIP Facility, or its successors, assigns, or any replacement agent appointed pursuant to the terms of the DIP Agreement.

 

DIP Agreement means that certain Junior Secured Debtor-In-Possession Credit Agreement, to be dated after the Petition Date, by and among, Halcón Parent, as borrower, the other Debtors, as guarantors, the DIP Lenders, and the DIP Agent, as the same may be amended,

 

3

 

restated, supplemented, or otherwise modified from time to time in accordance with the terms thereof.

 

DIP Claim means all Claims held by the DIP Lenders on account of, arising under, or relating to the DIP Agreement, the DIP Facility, or the DIP Orders, including Claims for all principal amounts outstanding, interest, reasonable and documented fees, expenses, costs, and other charges of the DIP Lenders.

 

DIP Facility means that certain debtor-in-possession financing facility provided by the DIP Lenders in an aggregate principal amount of $35,000,000 made available pursuant to the terms of the DIP Agreement.

 

DIP Lenders means lenders from time to time party to the DIP Agreement.

 

DIP Orders means, collectively, (i) the Interim Order (I) Authorizing Debtors (A) to Obtain Postpetition Financing Pursuant to 11 U.S.C. §§ 105, 361, 362, 363(b), 364(c)(2), 364(c)(3), and 364(e) and (B) to Utilize Cash Collateral Pursuant to 11 U.S.C. § 363, (II) Granting Adequate Protection to Prepetition Secured Parties Pursuant to 11 U.S.C. §§ 361, 362, 363, 364, and 507(b) and (III) Scheduling Final Hearing Pursuant to Bankruptcy Rules 4001(b) and (c) and (ii) a Final Order entered by the Bankruptcy Court authorizing the Debtors to enter into the DIP Agreement and access the DIP Facility, which DIP Orders shall be in form and substance acceptable to the DIP Lenders.

 

Disbursing Agent means any Entity in its capacity as a disbursing agent under section 6.6 hereof, including any Debtor or Reorganized Debtor, as applicable, that acts in such capacity to make distributions pursuant to this Plan.

 

Disclosure Statement means the disclosure statement for this Plan, including all exhibits, schedules, supplements, modifications, amendments, and annexes thereto, each as supplemented from time to time, which is prepared and distributed in accordance with sections 1125, 1126(b), or 1145 of the Bankruptcy Code, Bankruptcy Rules 3016 and 3018, or other applicable law.

 

Disputed means, with respect to a Claim, (i) any Claim, which Claim is disputed under ARTICLE VII of this Plan or as to which the Debtors have interposed and not withdrawn an objection or request for estimation that has not been determined by a Final Order, (ii) any Claim, proof of which was required to be filed by order of the Bankruptcy Court but as to which a proof of Claim was not timely or properly filed, (iii) any Claim that is listed in the Schedules, if any are filed, as unliquidated, contingent or disputed, and as to which no request for payment or proof of Claim has been filed, or (iv) any Claim that is otherwise disputed by any of the Debtors or Reorganized Debtors in accordance with applicable law or contract, which dispute has not been withdrawn, resolved or overruled by a Final Order.  To the extent the Debtors dispute only the amount of a Claim, such Claim shall be deemed Allowed in the amount the Debtors do not dispute, if any, and Disputed as to the balance of such Claim.

 

Distribution Record Date means, except as otherwise provided in this Plan or the Plan Documents, the Effective Date.

 

4

 

DTC means Depository Trust Company, a limited-purpose trust company organized under the New York State Banking Law.

 

Effective Date means the date which is the first Business Day on which (i) all conditions to the effectiveness of this Plan set forth in section 9.1 of this Plan have been satisfied or waived in accordance with the terms of this Plan and (ii) no stay of the Confirmation Order is in effect.

 

Entity has the meaning set forth in section 101(15) of the Bankruptcy Code.

 

Equity Rights Offerings means, collectively, the Senior Noteholder Rights Offering and the Existing Equity Interests Rights Offering.

 

Estate(s) means individually or collectively, the estate or estates of the Debtors created under section 541 of the Bankruptcy Code.

 

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

 

Exculpated Parties means, collectively, and in each case in their capacities as such during the Chapter 11 Cases, (i) the Debtors, (ii) the Reorganized Debtors, (iii) any statutory committee appointed in the Chapter 11 Cases, and (iv) with respect to each of the foregoing Persons in clauses (i) through (iii), such Persons’ predecessors, successors, assigns, subsidiaries, affiliates, managed accounts and funds, and all of their respective current and former officers and directors, principals, equity holders, members, partners, managers, employees, agents, advisory board members, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, investment managers, investment advisors, management companies, fund advisors, and other professionals, and such Persons’ respective heirs, executors, estates, and nominees, in each case in their capacity as such.

 

Existing Equity Cash Out has the meaning set forth in the Restructuring Term Sheet.

 

Existing Equity Interests means shares of the class of common stock of Halcón Parent that existed immediately prior to the Effective Date, including any restricted stock of Halcón Parent that vests prior to the Effective Date.

 

Existing Equity Interests Rights Offering means that certain rights offering pursuant to which, subject to the Existing Equity Cash Out, each holder of Allowed Existing Equity Interests is entitled to receive Existing Equity Interests Subscription Rights to acquire New Common Shares in accordance with the applicable Rights Offering Procedures.

 

Existing Equity Interests Subscription Rights means the Subscription Rights allocated to holders of Allowed Existing Equity Interests in accordance with the Rights Offering Procedures.

 

Exit RBL Agent means the administrative agent under the Exit RBL Agreement.

 

5

 

Exit RBL Agreement means that certain senior secured revolving credit agreement, to be dated as of the Effective Date, by and among Halcón Parent, as borrower, the Exit RBL Agent, and the Exit RBL Lenders, the form of which shall be contained in the Plan Supplement, and which shall otherwise be in form and substance substantially consistent with the Exit RBL Commitment Letter.

 

Exit RBL Commitment Letter means that certain commitment letter among the Halcón Parent, BMO Harris Bank N.A. and BMO Capital Markets Corp., attached to the Disclosure Statement as Exhibit G that sets forth the principal terms of the Exit RBL Agreement and as approved by order of the Bankruptcy Court.

 

Exit RBL Lenders means the lenders party to the Exit RBL Agreement as of the Effective Date.

 

Exit RBL Facility means a revolving loan facility in an aggregate principal amount of $750,000,000, with an initial borrowing base at $275,000,000, governed by the Exit RBL Agreement, the proceeds of which shall be used, subject to the terms thereof, to (i) provide the Reorganized Debtors with additional liquidity for working capital and general corporate purposes, (ii) pay all reasonable and documented Restructuring Expenses, and (iii) fund Plan Distributions, in each case consistent with the Restructuring Term Sheet.  For the avoidance of doubt, the Exit RBL Facility is the same as, and is referred to in the RSA as, the “Exit Facility.”

 

Fee Claim means a Claim for professional services rendered or costs incurred on or after the Petition Date through the Confirmation Date by Professional Persons.

 

Fee Escrow Account means an interest-bearing account in an amount equal to the total estimated amount of Fee Claims funded by the Debtors on the Effective Date.

 

Final Order means an order or judgment of a court of competent jurisdiction that has been entered on the docket maintained by the clerk of such court, which has not been reversed, vacated, or stayed and as to which (i) the time to appeal, petition for certiorari, or move for a new trial, reargument, or rehearing has expired and as to which no appeal, petition for certiorari, or other proceedings for a new trial, reargument, or rehearing shall then be pending, or (ii) if an appeal, writ of certiorari, new trial, reargument, or rehearing thereof has been sought, such order or judgment shall have been affirmed by the highest court to which such order was appealed, or certiorari shall have been denied, or a new trial, reargument, or rehearing shall have been denied or resulted in no modification of such order, and the time to take any further appeal, petition for certiorari, or move for a new trial, reargument, or rehearing shall have expired; provided, however, that no order or judgment shall fail to be a “Final Order” solely because of the possibility that a motion under Rules 59 or 60 of the Federal Rules of Civil Procedure or any analogous Bankruptcy Rule (or any analogous rules applicable in another court of competent jurisdiction) or sections 502(j) or 1144 of the Bankruptcy Code has been or may be filed with respect to such order or judgment.

 

Governance Term Sheet means a term sheet, in accordance with section 5.8 of this Plan, setting forth the post-Effective Date corporate governance of Reorganized Halcón Parent.

 

6

 

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

 

General Unsecured Claim means any Claim, other than a RBL Claim, Senior Notes Claim, Other Secured Claim, Administrative Expense Claim, Priority Tax Claim, Other Priority Claim, DIP Claim, or Intercompany Claim that is not entitled to priority under the Bankruptcy Code or any Final Order of the Bankruptcy Court.

 

Halcón Parent means Halcón Resources Corporation.

 

Impaired means, with respect to a Claim, Interest, or a Class of Claims or Interests, “impaired” within the meaning of such term in section 1124 of the Bankruptcy Code.

 

Intercompany Claim means any Claim against a Debtor held by another Debtor.

 

Intercompany Interest means any Interests in any of the Debtors held by another Debtor.

 

Interest means any equity security (as defined in section 101(16) of the Bankruptcy Code) in a Debtor, including all ordinary shares, units, common stock, preferred stock, membership interest, partnership interest or other instrument, evidencing any fixed or contingent ownership interest in any Debtor, whether or not transferable and whether fully vested or vesting in the future, including any option, warrant, or other right, contractual or otherwise, to acquire any such interest in the applicable Debtor, that existed immediately before the Effective Date.

 

Lien has the meaning set forth in section 101(37) of the Bankruptcy Code.

 

Management Incentive Plan means a post-emergence management incentive plan to be implemented by the New Board after the Effective Date as further described in section 5.7 of this Plan.

 

MIP Equity means New Common Shares issued in connection with the Management Incentive Plan.

 

New Board means the initial board of directors of Reorganized Halcón Parent.

 

New Common Shares means the shares of common stock of Reorganized Halcón Parent to be issued (i) on the Effective Date pursuant to this Plan, including pursuant to the Equity Rights Offerings and Backstop Commitment Premium, (ii) upon implementation of the Management Incentive Plan, (iii) upon exercise of the Warrants, or (iv) as otherwise permitted pursuant to the Amended Organizational Documents of Reorganized Halcón Parent.

 

Other Equity Interests means all Interests in Halcón Parent other than Existing Equity Interests.

 

7

 

Other Priority Claim means any Claim other than an Administrative Expense Claim, a DIP Claim, or a Priority Tax Claim that is entitled to priority of payment as specified in section 507(a) of the Bankruptcy Code.

 

Other Secured Claim means any Secured Claim other than a Priority Tax Claim, a DIP Claim, or a RBL Claim.

 

Person means any individual, corporation, partnership, joint venture, association, joint stock company, limited liability company, limited partnership, trust, estate, unincorporated organization, Governmental Unit, or other Entity.

 

Petition Date means, with respect to a Debtor, the date on which such Debtor commenced its Chapter 11 Case.

 

Plan means this joint prepackaged chapter 11 plan, including all appendices, exhibits, schedules, and supplements hereto (including any appendices, schedules, and supplements to this Plan contained in the Plan Supplement), as may be modified from time to time in accordance with the Bankruptcy Code, the terms hereof, and the RSA.

 

Plan Distribution means the payment or distribution of consideration to holders of Allowed Claims and Allowed Interests under this Plan.

 

Plan Document means any Definitive Document or document in the Plan Supplement.

 

Plan Supplement means a supplement or supplements to this Plan containing certain documents relevant to the implementation of this Plan, to be filed with the Bankruptcy Court no later than seven (7) calendar days before the Voting Deadline, which shall include (i) the Amended Organizational Documents of Reorganized Halcón Parent, (ii) the slate of directors to be appointed to the New Board to the extent known and determined, (iii) with respect to the members of the New Board, information required to be disclosed in accordance with section 1129(a)(5) of the Bankruptcy Code, (iv) the Exit RBL Agreement, (v) the Warrant Agreement(s), (vi) a schedule of retained Causes of Action, (vii) the Registration Rights Agreement, (viii) and the Governance Term Sheet, if applicable; provided, however, that, through the Effective Date, the Debtors shall have the right to amend documents contained in, and exhibits to, the Plan Supplement in accordance with the terms of this Plan and the RSA.

 

Priority Tax Claim means any Claim of a Governmental Unit of the kind entitled to priority of payment as specified in sections 502(i) and 507(a)(8) of the Bankruptcy Code.

 

Pro Rata means the proportion that an Allowed Claim or Interest in a particular Class bears to the aggregate amount of Allowed Claims or Interests in that Class.

 

Professional Person means any Person retained by order of the Bankruptcy Court in connection with these Chapter 11 Cases pursuant to sections 327, 328, 330, 331, 503(b), or 1103 of the Bankruptcy Code, excluding any ordinary course professional retained pursuant to an order of the Bankruptcy Court.

 

8

 

Registration Rights Agreement means the registration agreement to be entered into on the Effective Date by Reorganized Halcón Parent and the Registration Rights Parties, the terms of which shall be consistent in all material respects with the Restructuring Term Sheet.

 

Registration Rights Parties means the Consenting Creditors and any recipient of New Common Shares that receives (together with its affiliates and related funds) 10% or more of the voting Securities of Reorganized Halcón Parent issued pursuant to this Plan.

 

Released Parties means, collectively, (i) the Debtors, (ii) the Reorganized Debtors, (iii) the Consenting Creditors, (iv) the Ad Hoc Noteholder Group and each of its members, (v) the Senior Notes Trustee, (vi) the Exit RBL Agent, Exit RBL Lenders, and any arranger under the Exit RBL Facility, (vii) the DIP Agent and DIP Lenders, (viii) the RBL Agent and the RBL Lenders, (ix) with respect to each of the foregoing Persons in clauses (i) through (viii), each of their affiliates, and (x) with respect to each of the foregoing Persons in clauses (i) through (ix) such Persons’ predecessors, successors, assigns, subsidiaries, affiliates, managed accounts and funds, and all of their respective current and former officers and directors, principals, equity holders, members, partners, managers, employees, agents, advisory board members, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, investment managers, investment advisors, management companies, fund advisors, and other professionals, and such Persons’ respective heirs, executors, estates, and nominees, in each case in their capacity as such.

 

Releasing Parties means, collectively, (i) the holders of all Claims or Interests who vote to accept this Plan, (ii) the holders of all Claims or Interests whose vote to accept or reject this Plan is solicited but who do not vote either to accept or to reject this Plan, (iii) the holders of all Claims or Interests who vote, or are deemed, to reject this Plan but do not opt out of granting the releases set forth herein, (iv) the holders of all Claims and Interests who were given notice of the opportunity to opt out of granting the releases set forth herein but did not opt out, (v) all other holders of Claims and Interests to the maximum extent permitted by law, and (vi) the Released Parties.

 

Reorganized Halcón Parent means Halcón Parent, as reorganized on the Effective Date in accordance with this Plan.

 

Reorganized Debtor(s) means, with respect to each Debtor, such Debtor as reorganized as of the Effective Date in accordance with this Plan.

 

Requisite Creditors has the meaning set forth in the RSA.

 

Restructuring has the meaning set forth in the RSA.

 

Restructuring Expenses means the reasonable and documented fees and expenses incurred by the Consenting Creditors Advisors and the DIP Agent in connection with the Restructuring, as provided by the RSA, payable in accordance with the terms of the applicable fee letters executed with such parties, and any applicable law or orders of the Bankruptcy Court.

 

Restructuring Term Sheet means that certain term sheet attached as Exhibit A to the RSA.

 

9

 

Restructuring Transactions means one or more transactions pursuant to section 1123(a)(5)(D) of the Bankruptcy Code to occur on the Effective Date or as soon as reasonably practicable thereafter, that may be necessary or appropriate to effect any transaction described in, approved by, contemplated by, or necessary to effectuate this Plan, including (i) the consummation of the transactions provided for under or contemplated by the RSA and the Restructuring Term Sheet, (ii) the execution and delivery of appropriate agreements or other documents containing terms that are consistent with or reasonably necessary to implement the terms of this Plan, the RSA, and the Restructuring Term Sheet, and that satisfy the requirements of applicable law, (iii) the execution and delivery of appropriate instruments of transfer, assignment, assumption, or delegation of any property, right, liability, duty, or obligation on terms consistent with the terms of this Plan, the RSA, and the Restructuring Term Sheet, and (iv) all other actions that the Debtors or Reorganized Debtors, as applicable, determine are necessary or appropriate and consistent with the RSA and the Restructuring Term Sheet.

 

RBL Agent means JPMorgan Chase Bank, N.A., in its capacity as administrative agent under the RBL Agreement.

 

RBL Agreement means that certain Amended and Restated Senior Secured Revolving Credit Agreement, dated as of September 7, 2017 (as amended, modified, or otherwise supplemented from time to time), by and among Halcón Parent, as borrower, the RBL Agent, and the RBL Lenders party thereto from time to time.

 

RBL Claims means all Claims against the Debtors arising under or in connection with the RBL Agreement and all documents relating thereto, including all Letters of Credit, Loan Documents, and Secured Swap Agreements (each as defined in the RBL Agreement).

 

RBL Lenders means the lenders from time to time party to the RBL Agreement and all other Secured Parties (as defined in the RBL Agreement).

 

Registered Holder means a holder of an Existing Equity Interest whose ownership interest is registered directly on the books and records of Halcón Parent’s transfer agent.

 

Rights Offering Equity means New Common Shares issued pursuant to the Equity Rights Offerings.

 

Rights Offering Participant means each holder of an Existing Equity Interest (subject to the Existing Equity Cash Out) or Senior Notes Claim as of the Rights Offering Record Date.

 

Rights Offering Procedures means the procedures for the implementation of the Equity Rights Offerings, as applicable, in substantially the form attached to the Disclosure Statement as Exhibit E and Exhibit F.

 

Rights Offering Record Date means August 30, 2019.

 

RSA means that certain Restructuring Support Agreement, dated as of August 2, 2019, by and among the Debtors and the Consenting Creditors, attached to the Disclosure

 

10

 

Statement as Exhibit A, as the same may be amended, restated, or otherwise modified in accordance with its terms.

 

Schedule of Rejected Contracts means the schedule of executory contracts and unexpired leases to be rejected by the Debtors pursuant to this Plan, if any, as the same may be amended, modified, or supplemented from time to time.

 

Schedules means, the schedules of Assets and liabilities, statements of financial affairs, lists of holders of Claims and Interests and all amendments or supplements thereto filed by the Debtors with the Bankruptcy Court to the extent such filing is not waived pursuant to an order of the Bankruptcy Court.

 

Secured Claim means a Claim to the extent (i) secured by a Lien on property of a Debtor’s Estate, the amount of which is equal to or less than the value of such property (a) as set forth in this Plan, (b) as agreed to by the holder of such Claim and the Debtors, or (c) as determined by a Final Order in accordance with section 506(a) of the Bankruptcy Code or (ii) subject to any setoff right of the holder of such Claim under section 553 of the Bankruptcy Code.

 

Senior Notes Claim means any Claim arising from, or related to, the Senior Notes.

 

Senior Notes Indenture means that certain indenture, dated as of February 16, 2017 (as amended, modified, or otherwise supplemented from time to time), under which the Senior Notes were issued, by and among Halcón Parent, as issuer, each of the guarantors named therein, and the Senior Notes Trustee.

 

Senior Noteholder means a holder of Senior Notes.

 

Senior Noteholder Backstop Agreement means the Backstop Commitment Agreement, dated August 2, 2019, by and among Halcón Parent and the Backstop Commitment Parties and attached to the RSA as Exhibit B.

 

Senior Noteholder Rights Offering means that certain rights offering pursuant to which each holder of Allowed Senior Notes Claim is entitled to receive Senior Noteholder Subscription Rights to acquire New Common Shares in accordance with the applicable Rights Offering Procedures.

 

Senior Noteholder Subscription Rights means the Subscription Rights allocated to holders of Allowed Senior Notes Claims in accordance with the applicable Rights Offering Procedures.

 

Senior Notes means the 6.75% Senior Notes due 2025 issued pursuant to the Senior Notes Indenture in the aggregate principal amount of $625,005,000.

 

Senior Notes Trustee means U.S. Bank National Association in its capacity as trustee under the Senior Notes Indenture and its successors, assigns, or any replacement trustee appointed pursuant to the terms of the Senior Notes Indenture.

 

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Securities Act means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

Security means any “security” as such term is defined in section 101(49) of the Bankruptcy Code.

 

Statutory Fees means all fees and charges assessed against the Estates pursuant to sections 1911 through 1930 of chapter 123 of title 28 of the United States Code.

 

Subscription Rights means the subscription rights to acquire New Common Shares in accordance with the Rights Offering Procedures.

 

Tax Code means the Internal Revenue Code of 1986, as amended from time to time.

 

Unimpaired means, with respect to a Claim, Interest, or Class of Claims or Interests, not “impaired” within the meaning of such term in section 1124 of the Bankruptcy Code.

 

U.S. Trustee means the United States Trustee for Region 7.

 

Voting Deadline means September 5, 2019 at 5:00 p.m. prevailing Central Time, or such other date and time as may set by the Bankruptcy Court.

 

Warrant Agreement(s) means one or more warrant agreement(s) to be entered into by and among Reorganized Parent and the warrant agent named therein that shall govern the terms of the Warrants, the form(s) of which shall be included in the Plan Supplement.

 

Warrants has the meaning set forth in the Restructuring Term Sheet.

 

Warrant Equity means New Common Shares issuable upon the exercise of the Warrants, subject to dilution by the MIP Equity.

 

1.2                               Interpretation; Application of Definitions; Rules of Construction.

 

Unless otherwise specified, all section or exhibit references in this Plan are to the respective section in or exhibit to this Plan, as the same may be amended, waived, or modified from time to time in accordance with the terms hereof and the RSA.  The words “herein,” “hereof,” “hereto,” “hereunder,” and other words of similar import refer to this Plan as a whole and not to any particular section, subsection, or clause contained therein and have the same meaning as “in this Plan,” “of this Plan,” “to this Plan,” and “under this Plan,” respectively.  The words “includes” and “including” are not limiting.  The headings in this Plan are for convenience of reference only and shall not limit or otherwise affect the provisions hereof.  For purposes herein: (a) in the appropriate context, each term, whether stated in the singular or plural, shall include both the singular and plural, and pronouns stated in the masculine, feminine, or neuter gender shall include the masculine, feminine, and the neuter gender; (b) any reference herein to a contract, lease, instrument, release, indenture, or other agreement or document being in a particular form or on particular terms and conditions means that the referenced document shall 

 

12

 

be substantially in that form or substantially on those terms and conditions; (c) the rules of construction set forth in section 102 of the Bankruptcy Code shall apply; and (d) any term used in capitalized form herein that is not otherwise defined but that is used in the Bankruptcy Code or the Bankruptcy Rules shall have the meaning assigned to that term in the Bankruptcy Code or the Bankruptcy Rules, as the case may be.

 

1.3                               Reference to Monetary Figures.

 

All references in this Plan to monetary figures shall refer to the legal tender of the United States of America unless otherwise expressly provided.

 

1.4                               Consent Rights of Consenting Creditors.

 

Notwithstanding anything herein to the contrary, any and all consent rights of the Consenting Creditors set forth in the RSA with respect to the form and substance of this Plan, and any other Definitive Documents, including any amendments, restatements, supplements, or other modifications to such documents, and any consents, waivers, or other deviations under or from any such documents, shall be incorporated herein by this reference and fully enforceable as if stated in full herein.

 

1.5                               Controlling Document.

 

In the event of an inconsistency between this Plan and the Plan Supplement, the terms of the relevant document in the Plan Supplement shall control unless otherwise specified in such Plan Supplement document.  In the event of an inconsistency between this Plan and any other instrument or document created or executed pursuant to this Plan, or between this Plan and the Disclosure Statement, this Plan shall control.  The provisions of this Plan and of the Confirmation Order shall be construed in a manner consistent with each other so as to effectuate the purposes of each; provided, however, that if there is determined to be any inconsistency between any provision of this Plan and any provision of the Confirmation Order that cannot be so reconciled, then, solely to the extent of such inconsistency, the provisions of the Confirmation Order shall govern, and any such provisions of the Confirmation Order shall be deemed a modification of this Plan.

 

ARTICLE II.                                                                     ADMINISTRATIVE EXPENSE CLAIMS, FEE CLAIMS, PRIORITY TAX CLAIMS, AND DIP CLAIMS.

 

2.1                               Treatment of Administrative Expense Claims.

 

Except to the extent that a holder of an Allowed Administrative Expense Claim agrees to a different treatment, each holder of an Allowed Administrative Expense Claim (other than Restructuring Expenses or a Fee Claim) shall receive, in full and final satisfaction of such Claim, Cash in an amount equal to such Allowed Administrative Expense Claim on, or as soon thereafter as is reasonably practicable, the later of (i) the Effective Date and (ii) the first Business Day after the date that is thirty (30) calendar days after the date such Administrative Expense Claim becomes an Allowed Administrative Expense Claim; provided, however, that Allowed 

 

13

 

Administrative Expense Claims representing liabilities incurred in the ordinary course of business by the Debtors shall be paid by the Debtors or the Reorganized Debtors, as applicable, in the ordinary course of business, consistent with past practice and in accordance with the terms and subject to the conditions of any orders or agreements governing, instruments evidencing, or other documents establishing, such liabilities.

 

2.2                               Treatment of Fee Claims.

 

(a)                                 All Professional Persons seeking awards by the Bankruptcy Court of compensation for services rendered or reimbursement of expenses incurred through and including the Confirmation Date under sections 327, 328, 330, 331, 503(b)(2), 503(b)(3), 503(b)(4), 503(b)(5), or 1103 of the Bankruptcy Code shall (i) file, on or before the date that is forty five (45) days after the Confirmation Date, their respective applications for final allowances of compensation for services rendered and reimbursement of expenses incurred and (ii) be paid in full, in Cash, in such amounts as are Allowed by the Bankruptcy Court or authorized to be paid in accordance with the order(s) relating to or allowing any such Fee Claim.  The Debtors are authorized to pay compensation for professional services rendered and reimbursement of expenses incurred after the Confirmation Date in the ordinary course and without the need for Bankruptcy Court approval.

 

(b)                                 On the Effective Date, the Debtors shall establish and fund the Fee Escrow Account.  The Debtors shall fund the Fee Escrow Account with Cash equal to the Professional Persons’ good faith estimates of the Fee Claims.  Funds held in the Fee Escrow Account shall not be considered property of the Debtors’ Estates or property of the Reorganized Debtors, but shall revert to the Reorganized Debtors only after all Fee Claims allowed by the Bankruptcy Court have been irrevocably paid in full.  The Fee Escrow Account shall be held in trust for Professional Persons retained by the Debtors and for no other parties until all Fee Claims Allowed by the Bankruptcy Court have been paid in full.  Fee Claims shall be paid in full, in Cash, in such amounts as are Allowed by the Bankruptcy Court (i) on the date upon which a Final Order relating to any such Allowed Fee Claim is entered or (ii) on such other terms as may be mutually agreed upon between the holder of such an Allowed Fee Claim and the Debtors or the Reorganized Debtors, as applicable.  The Reorganized Debtors’ obligations with respect to Fee Claims shall not be limited by nor deemed limited to the balance of funds held in the Fee Escrow Account.  To the extent that funds held in the Fee Escrow Account are insufficient to satisfy the amount of accrued Fee Claims owing to the Professional Persons, such Professional Persons shall have an Allowed Administrative Expense Claim for any such deficiency, which shall be satisfied in accordance with section 2.1 of this Plan.  No Liens, claims, or interests shall encumber the Professional Fee Escrow in any way, other than customary liens in favor of the depository bank at which the Fee Escrow Account is maintained.

 

(c)                                  Any objections to Fee Claims shall be served and filed (i) no later than twenty one (21) days after the filing of the final applications for compensation or reimbursement or (ii) such later date as ordered by the Bankruptcy Court upon a motion of the Reorganized Debtors.

 

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2.3                               Treatment of Priority Tax Claims.

 

Except to the extent that a holder of an Allowed Priority Tax Claim agrees to a different treatment, each holder of an Allowed Priority Tax Claim shall receive, in full and final satisfaction of such Allowed Priority Tax Claim, at the sole option of the Debtors or the Reorganized Debtors, as applicable (i) Cash in an amount equal to such Allowed Priority Tax Claim on, or as soon thereafter as is reasonably practicable, the later of (a) the Effective Date, to the extent such Claim is an Allowed Priority Tax Claim on the Effective Date, (b) the first Business  Day after the date that is thirty (30) calendar days after the date such Priority Tax Claim becomes an Allowed Priority Tax Claim, and (c) the date such Allowed Priority Tax Claim is due and payable in the ordinary course as such obligation becomes due, or (ii) such other treatment consistent with the provisions of section 1129(a)(9) of the Bankruptcy Code.

 

2.4                               Treatment of DIP Claims.

 

On the Effective Date, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, each Allowed DIP Claim, each such Allowed DIP Claim (a) shall be paid in full in Cash by the Debtors equal to the Allowed amount of such DIP Claim and all commitments under the DIP Agreement shall terminate, or (b) shall be otherwise satisfied by the Debtors in a manner acceptable to the DIP Agent, any affected DIP Lender under the DIP Agreement, and any other holder of a DIP Claim, as applicable.  Upon the indefeasible payment or satisfaction in full in Cash, or other satisfactory treatment, of the DIP Claims in accordance with the terms of this Plan, on the Effective Date, all Liens granted to secure such obligations shall be terminated and of no further force and effect.

 

2.5                               Restructuring Expenses.

 

The Restructuring Expenses incurred, or estimated to be incurred, up to and including the Effective Date, shall be paid in full in Cash on the Effective Date or as soon as reasonably practicable thereafter (to the extent not previously paid during the course of the Chapter 11 Cases) in accordance with, and subject to, the terms of the RSA, without any requirement to file a fee application with the Bankruptcy Court or without any requirement for Bankruptcy Court review or approval.  All Restructuring Expenses to be paid on the Effective Date shall be estimated prior to and as of the Effective Date and such estimates shall be delivered to the Debtors at least three (3) Business Days before the anticipated Effective Date; provided, however, that such estimates shall not be considered an admission or limitation with respect to such Restructuring Expenses.  On the Effective Date, final invoices for all Restructuring Expenses incurred prior to and as of the Effective Date shall be submitted to the Debtors.

 

2.6                               Statutory Fees.

 

All Statutory Fees due and payable prior to the Effective Date shall be paid by the Debtors or the Reorganized Debtors.  On and after the Effective Date, the Reorganized Debtors shall pay any and all Statutory Fees when due and payable, and shall file with the Bankruptcy Court quarterly reports in a form reasonably acceptable to the U.S. Trustee.  Each Debtor or Reorganized Debtor, as applicable, shall remain obligated to pay quarterly fees to the U.S.

 

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Trustee until the earliest of that particular Debtor’s, or Reorganized Debtor’s, as applicable, case being closed, dismissed, or converted to a case under Chapter 7 of the Bankruptcy Code.

 

ARTICLE III.                                                              CLASSIFICATION OF CLAIMS AND INTERESTS.

 

3.1                               Classification in General.

 

A Claim or Interest is placed in a particular Class for all purposes, including voting, confirmation, and distribution under this Plan and under sections 1122 and 1123(a)(1) of the  Bankruptcy Code; provided, however, that a Claim or Interest is placed in a particular Class for the purpose of receiving distributions pursuant to this Plan only to the extent that such Claim or Interest is an Allowed Claim or Allowed Interest in that Class and such Claim or Interest has not been satisfied, released, or otherwise settled prior to the Effective Date.

 

3.2                               Formation of Debtor Groups for Convenience Only.

 

This Plan groups the Debtors together solely for the purpose of describing treatment under this Plan, confirmation of this Plan, and making Plan Distributions in respect of Claims against and Interests in the Debtors under this Plan.  Such groupings shall not affect any Debtor’s status as a separate legal entity, change the organizational structure of the Debtors’ business enterprise, constitute a change of control of any Debtor for any purpose, cause a merger or consolidation of any legal entities, or cause the transfer of any Assets; and, except as otherwise provided by or permitted under this Plan, all Debtors shall continue to exist as separate legal entities.

 

3.3                               Summary of Classification of Claims and Interests.

 

The following table designates the Classes of Claims against and Interests in the Debtors and specifies which Classes are (i) Impaired and Unimpaired under this Plan, (ii) entitled to vote to accept or reject this Plan in accordance with section 1126 of the Bankruptcy Code, and (iii) deemed to accept or reject this Plan.  In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Expense Claims and Priority Tax Claims have not been classified.  The classification of Claims and Interests set forth herein shall apply separately to each Debtor.

 

	
Class
    	
 
    	
Type of Claim or Interest
    	
 
    	
Impairment
    	
 
    	
Entitled to Vote
    
	
Class 1
    	
 
    	
Other Priority Claims
    	
 
    	
Unimpaired
    	
 
    	
No (Deemed to accept)
    
	
Class 2
    	
 
    	
Other Secured Claims
    	
 
    	
Unimpaired
    	
 
    	
No (Deemed to accept)
    
	
Class 3
    	
 
    	
RBL Claims
    	
 
    	
Unimpaired
    	
 
    	
No (Deemed to accept)
    
	
Class 4
    	
 
    	
Senior Notes Claims
    	
 
    	
Impaired
    	
 
    	
Yes
    
	
Class 5
    	
 
    	
General Unsecured Claims
    	
 
    	
Unimpaired
    	
 
    	
No (Deemed to accept)
    
	
Class 6
    	
 
    	
Intercompany Claims
    	
 
    	
Unimpaired
    	
 
    	
No (Deemed to accept)
    
	
Class 7
    	
 
    	
Existing Equity Interests
    	
 
    	
Impaired
    	
 
    	
Yes
    
	
Class 8
    	
 
    	
Other Equity Interests
    	
 
    	
Impaired
    	
 
    	
No (Deemed to reject)
    
	
Class 9
    	
 
    	
Intercompany Interests
    	
 
    	
Unimpaired
    	
 
    	
No (Deemed to accept)
    

 

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3.4                               Special Provision Governing Unimpaired Claims.

 

Except as otherwise provided in this Plan, nothing under this Plan shall affect the rights of the Debtors or the Reorganized Debtors, as applicable, in respect of any Unimpaired Claims, including all rights in respect of legal and equitable defenses to, or setoffs or recoupments against, any such Unimpaired Claims.

 

3.5                               Elimination of Vacant Classes.

 

Any Class that, as of the commencement of the Confirmation Hearing, does not have at least one holder of a Claim or Interest that is Allowed in an amount greater than zero for voting purposes shall be considered vacant, deemed eliminated from this Plan for purposes of voting to accept or reject this Plan, and disregarded for purposes of determining whether this Plan satisfies section 1129(a)(8) of the Bankruptcy Code with respect to such Class.

 

3.6                               Voting Classes; Presumed Acceptance by Non-Voting Classes.

 

With respect to each Debtor, if a Class contained Claims eligible to vote and no holder of Claims eligible to vote in such Class votes to accept or reject this Plan, this Plan shall be presumed accepted by the holders of such Claims in such Class.

 

3.7                               Voting; Presumptions; Solicitation.

 

(a)                                 Acceptance by Certain Impaired Classes.  Only holders of Claims in Class 4 and Interests in Class 7 are entitled to vote to accept or reject this Plan.  An Impaired Class of Claims shall have accepted this Plan if (i) the holders of at least two-thirds (2/3) in amount of the Allowed Claims actually voting in such Class have voted to accept this Plan and (ii) the holders of more than one-half (1/2) in number of the Allowed Claims actually voting in such Class have voted to accept this Plan.  An Impaired Class of Interests shall have accepted this Plan if the holders of at least two-thirds (2/3) in amount of the Allowed Interests actually voting in such Class have voted to accept this Plan.  Holders of Claims in Class 4 and Interests in Class 7 shall receive ballots containing detailed voting instructions.

 

(b)                                 Deemed Acceptance by Unimpaired Classes.  Holders of Claims and Interests in Classes 1, 2, 3, 5, 6, and 9 are conclusively deemed to have accepted this Plan pursuant to section 1126(f) of the Bankruptcy Code.  Accordingly, such holders are not entitled to vote to accept or reject this Plan.

 

(c)                                  Deemed Rejection by Impaired Class.  Holders of Interests in Class 8 are deemed to have rejected this Plan pursuant to section 1126(g) of the Bankruptcy Code.  Accordingly, such holders are not entitled to vote to accept or reject this Plan.

 

3.8                               Cramdown.

 

If any Class is deemed to reject this Plan or is entitled to vote on this Plan and does not vote to accept this Plan, the Debtors may (i) seek confirmation of this Plan under section 1129(b) of the Bankruptcy Code or (ii) amend or modify this Plan in accordance with the terms hereof and the Bankruptcy Code, including by (A) modifying the treatment applicable to a 

 

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Class of Claims or Interests to render such Class of Claims or Interests Unimpaired to the extent permitted by the Bankruptcy Code and the Bankruptcy Rules or (B) withdrawing the Plan as to an individual Debtor at any time before the Confirmation Date.  If a controversy arises as to whether any Claims or Interests, or any class of Claims or Interests, are impaired, the Bankruptcy Court shall, after notice and a hearing, determine such controversy on or before the Confirmation Date.

 

3.9                               No Waiver.

 

Nothing contained in this Plan shall be construed to waive a Debtor’s or other Person’s right to object on any basis to any Claim.

 

ARTICLE IV.                                                                 TREATMENT OF CLAIMS AND INTERESTS.

 

4.1                               Class 1:  Other Priority Claims.

 

(a)                                 Treatment:  The legal, equitable, and contractual rights of the holders of Allowed Other Priority Claims are unaltered by this Plan.  Except to the extent that a holder of an Allowed Other Priority Claim agrees to different treatment, on the later of the Effective Date and the date that is ten (10) Business Days after the date such Other Priority Claim becomes an Allowed Claim, or as soon as reasonably practicable thereafter, each holder of an Allowed Other Priority Claim shall receive, on account of such Allowed Claim, at the option of the Reorganized Debtors (i) Cash in an amount equal to the Allowed amount of such Claim or (ii) other treatment consistent with the provisions of section 1129 of the Bankruptcy Code.

 

(b)                                 Impairment and Voting:  Allowed Other Priority Claims are Unimpaired.  In accordance with section 1126(f) of the Bankruptcy Code, the holders of Allowed Other Priority Claims are conclusively presumed to accept this Plan and are not entitled to vote to accept or reject this Plan, and the votes of such holders shall not be solicited with respect to such Allowed Other Priority Claims.

 

4.2                               Class 2:  Other Secured Claims.

 

(a)                                 Treatment:  The legal, equitable, and contractual rights of the holders of Allowed Other Secured Claims are unaltered by this Plan.  Except to the extent that a holder of an Allowed Other Secured Claim agrees to different treatment, on the later of the Effective Date and the date that is ten (10) Business Days after the date such Other Secured Claim becomes an Allowed Claim, or as soon as reasonably practicable thereafter, each holder of an Allowed Other Secured Claim shall receive, on account of such Allowed Claim, at the option of the Reorganized Debtors (i) Cash in an amount equal to the Allowed amount of such Claim, (ii) reinstatement or such other treatment sufficient to render such holder’s Allowed Other Secured Claim Unimpaired pursuant to section 1124 of the Bankruptcy Code, or (iii) such other recovery necessary to satisfy section 1129 of the Bankruptcy Code.

 

(b)                                 Impairment and Voting:  Allowed Other Secured Claims are Unimpaired.  In accordance with section 1126(f) of the Bankruptcy Code, the holders of Allowed

 

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Other Secured Claims are conclusively presumed to accept this Plan and are not entitled to vote to accept or reject this Plan, and the votes of such holders shall not be solicited with respect to such Allowed Other Secured Claims.

 

4.3                               Class 3:  RBL Claims

 

(a)                                 Treatment:  The legal, equitable, and contractual rights of the holders of Allowed RBL Claims are unaltered by this Plan.  On the Effective Date, each holder of an Allowed RBL Claim shall receive payment in full, in Cash of all Allowed RBL Claims, including by a refinancing, and all outstanding letters of credit shall either be replaced, cash collateralized or otherwise secured to the satisfaction of the Issuing Bank (as defined in the RBL Agreement) in accordance with the terms of the RBL Agreement.

 

(b)                                 Impairment and Voting:  Allowed RBL Claims are Unimpaired.  In accordance with section 1126(f) of the Bankruptcy Code, the holders of Allowed RBL Claims are conclusively presumed to accept this Plan and are not entitled to vote to accept or reject this Plan, and the votes of such holders shall not be solicited with respect to such Allowed RBL Claims.

 

(c)                                  Allowance:  The RBL Claims shall be deemed Allowed on the Effective Date in the aggregate principal amount up to $225 million, plus all amounts owing by the Debtors under the Secured Swap Agreements (as defined in the RBL Agreement) that have terminated as of or prior to the Effective Date, plus all accrued and unpaid interest and fees (including interest and fees at the default rate that has accrued but not been paid during the Chapter 11 Cases), and all other amounts that are outstanding under the RBL Agreement as of the Effective Date.

 

4.4                               Class 4:  Senior Notes Claims.

 

(a)                                 Treatment:  On the Effective Date, each holder of an Allowed Senior Notes Claim shall receive, in full and final satisfaction of such Claim, such holder’s Pro Rata share of (i) 91% of the total New Common Shares issued pursuant to this Plan on the Effective Date, subject to dilution by the Rights Offering Equity, the Warrant Equity, the MIP Equity, and the New Common Shares issued pursuant to the Backstop Commitment Premium, and (ii) the Senior Noteholder Subscription Rights.

 

(b)                                 Impairment and Voting:  Senior Notes Claims are Impaired.  Holders of Senior Notes Claims are entitled to vote on this Plan.

 

(c)                                  Allowance:  The Senior Notes Claims shall be deemed Allowed on the Effective Date in the aggregate principal amount of $625,005,000.

 

4.5                               Class 5:  General Unsecured Claims.

 

(a)                                 Treatment:  The legal, equitable, and contractual rights of the holders of Allowed General Unsecured Claims are unaltered by this Plan.  Except to the extent that a holder of an Allowed General Unsecured Claim agrees to different treatment, on and after the Effective Date, or as soon as reasonably practicable thereafter, the Debtors shall continue to pay or dispute 

 

19

 

each General Unsecured Claim in the ordinary course of business as if the Chapter 11 Cases had never been commenced.

 

(b)                                 Impairment and Voting:  Allowed General Unsecured Claims are Unimpaired.  In accordance with section 1126(f) of the Bankruptcy Code, the holders of Allowed General Unsecured Claims are conclusively presumed to accept this Plan and are not entitled to vote to accept or reject this Plan, and the votes of such holders shall not be solicited with respect to such Allowed General Unsecured Claims.

 

4.6                               Class 6:  Intercompany Claims.

 

(a)                                 Treatment:  On or after the Effective Date, all Intercompany Claims shall be paid, adjusted, continued, settled, reinstated, discharged, or eliminated, in each case to the extent determined to be appropriate by the Debtors or Reorganized Debtors, as applicable, in their discretion and in consultation with the Consenting Creditors.

 

(b)                                 Impairment and Voting:  All Allowed Intercompany Claims are deemed Unimpaired.  In accordance with section 1126(f) of the Bankruptcy Code, the holders of Allowed Intercompany Claims are conclusively presumed to accept this Plan and are not entitled to vote to accept or reject this Plan, and the votes of such holders shall not be solicited with respect to such Allowed Intercompany Claims.

 

4.7                               Class 7:  Existing Equity Interests.

 

(a)                                 Treatment:  On the Effective Date, Existing Equity Interests shall be cancelled, released, and extinguished and shall be of no further force and effect.  Each holder of Existing Equity Interests shall receive on account of such holder’s Existing Equity Interests:

 

(1) if a Registered Holder holds fewer than or equal to 2,000 shares of Existing Equity Interests, Cash in an amount equal to the inherent value of such Registered Holder’s Pro Rata share of (i) 9% of the total New Common Shares issued pursuant to this Plan on the Effective Date, subject to dilution by the Rights Offering Equity, the Warrant Equity, the MIP Equity, and the New Common Shares issued pursuant to the Backstop Commitment Premium, (ii) the Warrants and (iii) the Existing Equity Interests Subscription Rights; or

 

(2) for any other holder of Existing Equity Interests, such holder’s Pro Rata share of (i) 9% of the total New Common Shares issued pursuant to this Plan on the Effective Date, subject to dilution by the Rights Offering Equity, the Warrant Equity, the MIP Equity, and the New Common Shares issued pursuant to the Backstop Commitment Premium; provided, however, that the amount of total New Common Shares available to be issued pursuant to this provision shall be reduced by the amount of New Common Shares that would have been distributed to holders of Existing Equity Interests in the absence of the immediately preceding clause (1), (ii) the Warrants, and (iii) the Existing Equity Interests Subscription Rights.

 

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(b)                                 Impairment and Voting:  Existing Equity Interests are Impaired.  Holders of Existing Equity Interests are entitled to vote on this Plan.

 

4.8                               Class 8:  Other Equity Interests.

 

(a)                                 Treatment:  On the Effective Date, Other Equity Interests shall be cancelled, released, and extinguished and shall be of no further force and effect.

 

(b)                                 Impairment and Voting:  Other Equity Interests are Impaired.  In accordance with section 1126(g) of the Bankruptcy Code, holders of Other Equity Interests are conclusively presumed to reject this Plan and are not entitled to vote to accept or reject this Plan, and the votes of such holders shall not be solicited with respect to Other Equity Interests.

 

4.9                               Class 9:  Intercompany Interests.

 

(a)                                 Treatment:  Intercompany Interests are Unimpaired.  On the Effective Date, all Intercompany Interests shall be treated as set forth in section 5.13 of this Plan.

 

(b)                                 Impairment and Voting:  Intercompany Interests are Unimpaired.  In accordance with section 1126(f) of the Bankruptcy Code, the holders of Allowed Intercompany Interests are conclusively presumed to accept this Plan and are not entitled to vote to accept or reject this Plan, and the votes of such holders shall not be solicited with respect to such Allowed Intercompany Interests.

 

ARTICLE V.                                                                      MEANS FOR IMPLEMENTATION.

 

5.1                               Sources of Consideration for Plan Distributions.

 

(a)                                 Cash on Hand.  The Reorganized Debtors shall use Cash on hand to fund distributions to certain holders of Claims against the Debtors.

 

(b)                                 New Common Shares and Warrants.  On or as soon as reasonably practicable after the Effective Date, Reorganized Halcón Parent shall issue and distribute the New Common Shares and the Warrants to holders of Allowed Senior Notes Claims and Existing Equity Interests entitled to receive New Common Shares and Warrants pursuant to the Plan or notwithstanding anything to the contrary in this Plan, such holder’s designated affiliates to the extent permitted by DTC.

 

(c)                                  Exit RBL Facility.  On the Effective Date, the Reorganized Debtors shall enter into the Exit RBL Facility, the proceeds of which may be used to (i) provide the Reorganized Debtors with additional liquidity for working capital and general corporate purposes, (ii) pay all reasonable and documented Restructuring Expenses, and (iii) fund Plan Distributions.

 

(d)                                 Plan Funding.  Plan Distributions of Cash shall be funded from the Debtors’ Cash on hand as of the applicable date of such Plan Distribution and from the proceeds of the Equity Rights Offerings and Exit RBL Facility.

 

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5.2          Compromise and Settlement of Claims, Interests, and Controversies.

 

Pursuant to section 363 and 1123(b)(2) of the Bankruptcy Code and Bankruptcy Rule 9019 and in consideration for the distributions and other benefits provided pursuant to this Plan, the provisions of this Plan shall constitute a good faith compromise of Claims, Interests, and controversies relating to the contractual, legal, and subordination rights that a creditor or an Interest holder may have with respect to any Allowed Claim or Interest or any distribution to be made on account of such Allowed Claim or Interest.  The entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval of the compromise or settlement of all such Claims, Interests, and controversies, as well as a finding by the Bankruptcy Court that such compromise or settlement is in the best interests of the Debtors, their Estates, and holders of such Claims and Interests, and is fair, equitable, and reasonable.

 

5.3          Continued Corporate Existence; Effectuating Documents; Further Transactions.

 

(a)           Except as otherwise provided in this Plan, the Debtors shall continue to exist after the Effective Date as Reorganized Debtors in accordance with the applicable laws of the respective jurisdictions in which they are incorporated or organized and pursuant to the Amended Organizational Documents.

 

(b)           On and after the Effective Date, all actions contemplated by the Plan shall be deemed authorized and approved by the Bankruptcy Court in all respects without any further corporate or equity holder action.  On or after the Effective Date, without prejudice to the rights of any party to a contract or other agreement with any Reorganized Debtor and subject to the terms of each such contract or other agreement, each Reorganized Debtor may, in its sole discretion, take such action as permitted by applicable law and the Amended Organizational Documents, as such Reorganized Debtor may determine is reasonable and appropriate, including causing (i) a Reorganized Debtor to be merged into another Reorganized Debtor or an affiliate of a Reorganized Debtor, (ii) a Reorganized Debtor to be dissolved, (iii) the legal name of a Reorganized Debtor to be changed, or (iv) the closure of a Reorganized Debtor’s Chapter 11 Case on the Effective Date or any time thereafter, and such action and documents are deemed to require no further action or approval (other than any requisite filings required under applicable state, federal, or foreign law).

 

(c)           On the Effective Date or as soon thereafter as is reasonably practicable, the Reorganized Debtors may take all actions as may be necessary or appropriate to effect any transaction described in, approved by, or necessary or appropriate to effectuate this Plan, including (i) the execution and delivery of appropriate agreements or other documents of merger, consolidation, restructuring, conversion, disposition, transfer, dissolution, or liquidation containing terms that are consistent with the terms of this Plan and the Definitive Documents and that satisfy the requirements of applicable law and any other terms to which the applicable entities may agree, (ii) the execution and delivery of appropriate instruments of transfer, assignment, assumption, or delegation of any Asset, property, right, liability, debt, or obligation on terms consistent with the terms of this Plan and having other terms to which the applicable parties agree, (iii) the filing of appropriate certificates or articles of incorporation or formation and amendments thereto, reincorporation, merger, consolidation, conversion, or dissolution

 

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pursuant to applicable law, (iv) the Restructuring Transactions, (v) if the Debtors expect to qualify for and elect to utilize the special bankruptcy exception under section 382(l)(5) of the Tax Code, the Debtors may seek Bankruptcy Court approval of certain procedures and potential restrictions on the accumulation of Claims with respect to Persons who are or will be substantial claimholders and the charter, bylaws, and other organizational documents may restrict certain transfers of the New Common Shares, and (vi) all other actions that the applicable entities determine to be necessary or appropriate, including, without limitation, making filings or recordings that may be required by applicable law.

 

5.4          Cancellation of Existing Securities and Agreements.

 

Except for the purpose of evidencing a right to a distribution under this Plan and except as otherwise set forth in this Plan, or in any Plan Document, including with respect to refinancing the RBL Agreement, on the Effective Date, all agreements, instruments, notes, certificates, indentures, mortgages, Securities and other documents evidencing any Claim or Interest (other than Intercompany Interests that are not modified by this Plan) and any rights of any holder in respect thereof shall be deemed cancelled and of no force or effect and the obligations of the Debtors thereunder shall be deemed fully satisfied, released, and discharged and, as applicable, shall be deemed to have been surrendered to the Disbursing Agent.  The holders of or parties to such cancelled instruments, Securities, and other documentation shall have no rights arising from or related to such instruments, Securities, or other documentation or the cancellation thereof, except the rights provided for pursuant to this Plan.

 

5.5          Cancellation of Certain Existing Security Interests.

 

Upon the full payment or other satisfaction of an Allowed Other Secured Claim, or promptly thereafter, the holder of such Allowed Other Secured Claim shall deliver to the Debtors or Reorganized Debtors, as applicable, any Collateral or other property of a Debtor held by such holder, together with any termination statements, instruments of satisfaction, or releases of all security interests with respect to its Allowed Other Secured Claim that may be reasonably required to terminate any related financing statements, mortgages, mechanics’ or other statutory Liens, or lis pendens, or similar interests or documents.

 

5.6          Officers and Boards of Directors.

 

(a)           On the Effective Date, the New Board shall consist of (i) the Reorganized Debtors’ chief executive officer and (ii) the members selected by the Requisite Creditors to be disclosed in the Plan Supplement to the extent known and determined.  The identity and affiliations of any person proposed to serve on the New Board shall be disclosed in accordance with section 1129(a)(5) of the Bankruptcy Code.

 

(b)           Except as otherwise provided in the Plan Supplement, the officers of the respective Reorganized Debtors immediately before the Effective Date, as applicable, shall serve as the initial officers of each of the respective Reorganized Debtors on and after the Effective Date.  After the Effective Date, the selection of officers of the Reorganized Debtors shall be as provided by their respective Amended Organizational Documents.

 

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(c)           Except to the extent that a member of the board of directors or a manager, as applicable, of a Debtor continues to serve as a director or manager of such Debtor on and after the Effective Date, the members of the board of directors or managers of each Debtor prior to the Effective Date, in their capacities as such, shall have no continuing obligations or duties to the Reorganized Debtors on or after the Effective Date and each such director or manager shall be deemed to have resigned or shall otherwise cease to be a director or manager of the applicable Debtor on the Effective Date.  Commencing on the Effective Date, each of the directors and managers of each of the Reorganized Debtors shall be elected and serve pursuant to the terms of the applicable Amended Organizational Documents of such Reorganized Debtor and may be replaced or removed in accordance with such organizational documents.

 

5.7          Management Incentive Plan.

 

After the Effective Date, the New Board shall adopt the Management Incentive Plan.  The participants and amounts allocated under the Management Incentive Plan and other terms and conditions thereof shall be determined in the sole discretion of the New Board; provided, however, that the Management Incentive Plan shall include restricted stock units, options, New Common Shares, or other rights exercisable, exchangeable, or convertible into New Common Shares representing 7.5% to 10% of the New Common Shares authorized to be issued pursuant to this Plan and the Equity Rights Offerings on a fully diluted basis.

 

5.8          Authorization and Issuance of New Common Shares and Warrants.

 

(a)           On the Effective Date, (i) Reorganized Halcón Parent is authorized to issue or cause to be issued and shall issue (A) the New Common Shares (including the New Common Shares issuable in connection with the Backstop Commitment Premium and the Equity Rights Offerings) and (B) the Warrants, and (ii) the issuance of Subscription Rights by Reorganized Halcón Parent in connection with the Equity Rights Offerings is authorized, ratified, and confirmed in all respects; each in accordance with the terms of this Plan without the need for any further corporate or shareholder action.  All of the New Common Shares and the Warrants issuable under this Plan, when so issued, shall be duly authorized, validly issued, and, in the case of the New Common Shares, fully paid, and non-assessable.  The Warrant Equity (upon payment of the exercise price in accordance with the terms of such Warrants) issued pursuant to this Plan shall be duly authorized, validly issued, fully paid, and non-assessable.

 

(b)           No later than seven (7) calendar days prior to the Voting Deadline, the Debtors, with the consent of the Requisite Creditors, shall make a determination as to whether Reorganized Halcón Parent will continue to be a reporting company under the Exchange Act, 15 U.S.C. §§ 78(a) — 78(pp) following December 31, 2019.  If the Debtors determine pursuant to this provision that Reorganized Halcón Parent will continue to be a reporting company under the Exchange Act following December 31, 2019, the Debtors shall use their commercially reasonable efforts to have the New Common Shares listed on the New York Stock Exchange, or another nationally recognized exchange, as soon as practicable, subject to meeting applicable listing requirements following the Effective Date.  If the Debtors determine pursuant to this provision that Reorganized Halcón Parent will not continue to be a reporting company under the Exchange Act following December 31, 2019, the Debtors shall file the Governance Term Sheet.

 

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(c)           The Warrants shall be issuable pursuant to the terms of the respective Warrant Agreements, the form and substance of which shall be consistent with the Restructuring Term Sheet and filed with the Plan Supplement.  Each Warrant shall, subject to the terms of the respective Warrant Agreements, be exercisable for one (1) New Common Share.

 

5.9          Securities Exemptions.

 

(a)           The issuance and distribution of the New Common Shares, the Warrants (and the Warrant Equity), and the Subscription Rights to holders of Allowed Senior Notes Claims and Allowed Existing Equity Interests, as applicable, under Article IV of this Plan shall be exempt, pursuant to section 1145 of the Bankruptcy Code, without further act or actions by any Person, from registration under the Securities Act, and all rules and regulations promulgated thereunder, and any other applicable securities laws, to the fullest extent permitted by section 1145 of the Bankruptcy Code.  The New Common Shares and the Warrants (and the Warrant Equity issuable upon exercise thereof) issued pursuant to section 1145(a) of the Bankruptcy Code may be resold without registration under the Securities Act or other federal securities laws pursuant to the exemption provided by section 4(a)(1) of the Securities Act, unless the holder is an “underwriter” with respect to such Securities, as that term is defined in section 1145(b) of the Bankruptcy Code.  In addition, such section 1145 exempt Securities generally may be resold without registration under state securities laws pursuant to various exemptions provided by the respective laws of the several states.

 

(b)           The issuance and sale, as applicable, of the New Common Shares to be issued pursuant to the Backstop Commitment Agreement, including those to be issued in respect of the Backstop Commitment Premium, are being made in reliance on the exemption from registration set forth in section 4(a)(2) of the Securities Act and Regulation D thereunder.  Such Securities will be considered “restricted securities” and may not be transferred except pursuant to an effective registration statement or under an available exemption from the registration requirements of the Securities Act, such as under certain conditions, the resale provisions of Rule 144 of the Securities Act.

 

(c)           On the Effective Date, the ownership of the New Common Shares shall be reflected through the facilities of the DTC.  None of the Debtors, the Reorganized Debtors, or any other Person shall be required to provide any further evidence other than the Plan or the Confirmation Order with respect to the treatment of the New Common Shares or the Warrants under applicable securities laws.  DTC and any transfer agent shall be required to accept and conclusively rely upon the Plan or Confirmation Order in lieu of a legal opinion regarding whether the New Common Shares or the Warrants are exempt from registration and/or eligible for DTC book-entry delivery, settlement, and depository services.

 

(d)           The Debtors may elect to deliver the Warrants through the facilities of DTC; provided, however, that delivery of the Warrants through the facilities of DTC shall not be mandatory.

 

(e)           Notwithstanding anything to the contrary in this Plan, no Person (including DTC and any transfer agent) shall be entitled to require a legal opinion regarding the validity of any transaction contemplated by this Plan, including whether the New Common

 

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Shares, the Warrants, and the Warrant Equity are exempt from registration and/or eligible for DTC book-entry delivery, settlement, and depository services.

 

5.10        Equity Rights Offerings.

 

The Equity Rights Offerings shall be conducted by the Debtors and consummated on the terms and subject to the conditions set forth in the Rights Offering Procedures and the Senior Noteholder Backstop Agreement. To facilitate the Senior Noteholder Rights Offering and the other Restructuring Transactions, and in exchange for the Backstop Commitment Premium, the Backstop Parties have agreed to consummate the Backstop Purchase, subject to the terms and conditions set forth in the Senior Noteholder Backstop Agreement.  The Backstop Parties’ obligation to consummate the Backstop Purchase pursuant to the Senior Noteholder Backstop Agreement shall be contingent upon all conditions set forth in the Senior Noteholder Backstop Agreement being satisfied or otherwise waived in accordance with the Senior Noteholder Backstop Agreement.  Confirmation shall constitute Bankruptcy Court approval of the Equity Rights Offerings (including the transactions contemplated thereby, and all actions to be undertaken, undertakings to be made, and obligations to be incurred by the Reorganized Debtors in connection therewith).

 

(a)           Existing Equity Interests Rights Offering.  After the Petition Date, subject to interim approval of the Disclosure Statement by the Bankruptcy Court, subject to the Existing Equity Cash Out, the Debtors shall distribute the Existing Equity Interests Subscription Rights to holders of Existing Equity Interests as set forth in the Plan and the applicable Rights Offering Procedures. Each Rights Offering Participant in the Existing Equity Interests Rights Offering shall be offered the Existing Equity Interests Subscription Rights to purchase its Pro Rata share of the New Common Shares to be issued pursuant to the Existing Equity Interests Rights Offering.  On the Effective Date, the Debtors shall consummate the Existing Equity Interests Rights Offering.  The Existing Equity Interests Subscription Rights may not be sold, transferred, or assigned.

 

(b)           Senior Noteholder Rights Offering.

 

(i)            After the Petition Date, subject to interim approval of the Disclosure Statement by the Bankruptcy Court, the Debtors shall distribute the Senior Noteholder Subscription Rights to holders of Senior Notes Claim as set forth in the Plan and the applicable Rights Offering Procedures. Each Rights Offering Participant in the Senior Noteholder Rights Offering shall be offered the Senior Noteholder Subscription Rights to purchase its Pro Rata share of the New Common Shares to be issued pursuant to the Senior Noteholder Rights Offering.  On the Effective Date, the Debtors shall consummate the Senior Noteholder Rights Offering.  The Senior Noteholder Subscription Rights may not be sold, transferred, or assigned.  The Senior Noteholder Rights Offering shall be fully backstopped by the Backstop Parties in accordance with and subject to the terms and conditions of the Senior Noteholder Backstop Agreement.

 

(ii)           In accordance with the Senior Noteholder Backstop Agreement and subject to the terms and conditions thereof, each of the Backstop Parties has agreed, severally but not jointly, to purchase, on or prior to the Effective Date, the amount of New

 

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Common Shares equal to its respective Backstop Commitment (as defined in the Senior Noteholder Backstop Agreement).  The Backstop Commitment for the Senior Noteholder Rights Offering, shall be treated as a put option and the Backstop Commitment Premium shall be treated as remuneration for agreeing to enter into such put option.  Upon the Effective Date, the Backstop Commitment Premium shall be immediately and automatically payable and issued.

 

(c)           Proceeds.  The proceeds of the Equity Rights Offerings shall be used to (i) fund Plan distributions, (ii) provide the Reorganized Debtors with additional liquidity for working capital and general corporate purposes, and (iii) pay all reasonable and documented Restructuring Expenses.

 

5.11        Exit RBL Agreement.

 

(a)           On the Effective Date, the Reorganized Debtors are authorized to and shall enter into the Exit RBL Agreement and all other documents, notes, agreements, guaranties, and other collateral documents contemplated thereby.  The Exit RBL Agreement shall constitute legal, valid, binding, and authorized joint and several obligations of the Reorganized Debtors enforceable in accordance with its terms and such obligations shall not be enjoined or subject to discharge, impairment, release, avoidance, recharacterization, or subordination under applicable law, this Plan, or the Confirmation Order.  On the Effective Date, all Liens and security interests granted pursuant to, or in connection with the Exit RBL Agreement (x) shall be valid, binding, perfected, enforceable first priority Liens and security interests in the property subject to a security interest granted by the applicable Reorganized Debtors pursuant to the Exit RBL Agreement, with the priorities established in respect thereof under applicable non-bankruptcy law and (y) shall not be enjoined or subject to discharge, impairment, release, avoidance, recharacterization, or subordination under any applicable law, this Plan, or the Confirmation Order.

 

(b)           The Exit RBL Agent is hereby authorized to file, with the appropriate authorities, financing statements, amendments thereto or assignments thereof and other documents, including mortgages or amendments or assignments thereof in order to evidence the first priority Liens, pledges, mortgages, and security interests granted in connection with the Exit RBL Agreement.  The guaranties, mortgages, pledges, Liens, and other security interests granted in connection with the Exit RBL Agreement are granted in good faith as an inducement to the Exit RBL Lenders to extend credit thereunder and shall be deemed not to constitute a fraudulent conveyance or fraudulent transfer, shall not otherwise be subject to avoidance and the priorities of such Liens, mortgages, pledges, and security interests shall be as set forth in the Exit RBL Agreement and the collateral documents executed and delivered in connection therewith.

 

5.12        Registration Rights Agreement.

 

On the Effective Date, Reorganized Halcón Parent and the Registration Rights Parties shall enter into the Registration Rights Agreement.  The Registration Rights Agreement shall provide the Registration Rights Parties with commercially reasonable demand and piggyback registration rights and other customary terms and conditions.

 

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5.13        Intercompany Interests.

 

On the Effective Date and without the need for any further corporate action or approval of any board of directors, board of managers, managers, management, or shareholders of any Debtor or Reorganized Debtor, as applicable, the certificates and all other documents representing the Intercompany Interests shall be deemed to be in full force and effect.  For the avoidance of doubt, to the extent reinstated pursuant to the Plan, on and after the Effective Date, all Intercompany Interests shall be owned by the same Reorganized Debtor that corresponds with the Debtor that owned such Intercompany Interests prior to the Effective Date.

 

5.14        Senior Notes Trustee Expenses and Certain Senior Notes Trustee Rights.

 

Notwithstanding anything herein to the contrary, distributions under the Plan on account of the Senior Notes Claims shall be subject to the rights of the Senior Notes Trustee under the Senior Notes Indenture, including the right of the Senior Notes Trustee to assert and exercise their charging lien.  To allow the holders of Senior Notes Claims to receive the full treatment set forth in this Plan without reduction by the charging lien or the expenses of the Senior Notes Trustee, the Debtors or Reorganized Debtors shall, on account of the Senior Notes Claims, pay to the Senior Notes Trustee all reasonable and documented fees and out-of-pocket costs and expenses incurred on or prior to the Effective Date by the Senior Notes Trustee that are required to be paid under the Senior Notes Indenture.

 

5.15        Restructuring Transactions.

 

On the Effective Date or as soon as reasonably practicable thereafter, the Debtors or Reorganized Debtors, as applicable, may take all actions consistent with this Plan as may be necessary or appropriate to effect any transaction described in, approved by, contemplated by, or necessary to effectuate the Restructuring Transactions under and in connection with this Plan.

 

5.16        Separate Plans.

 

Notwithstanding the combination of separate plans of reorganization for the Debtors set forth in this Plan for purposes of economy and efficiency, this Plan constitutes a separate chapter 11 plan for each Debtor.  Accordingly, if the Bankruptcy Court does not confirm this Plan with respect to one or more Debtors, it may still confirm this Plan with respect to any other Debtor that satisfies the confirmation requirements of section 1129 of the Bankruptcy Code.

 

ARTICLE VI.                      DISTRIBUTIONS.

 

6.1          Distributions Generally.

 

The Disbursing Agent shall make all Plan Distributions to the appropriate holders of Allowed Claims and Allowed Interests in accordance with the terms of this Plan.

 

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6.2          Postpetition Interest on Claims.

 

Except as otherwise provided in this Plan, the Plan Documents, or the Confirmation Order, postpetition interest shall accrue, and shall be paid, on any Claim (except for Senior Notes Claims) in the ordinary course of business in accordance with any applicable law, agreement, document, or Final Order, as the case may be, as if the Chapter 11 Cases had never been commenced; provided, however, that nothing herein shall expand any Person’s right to receive, or the Debtors’ or Reorganized Debtors’ obligation to pay, postpetition interest.

 

 

6.3          Date of Distributions.

 

Unless otherwise provided in this Plan, any distributions and deliveries to be made under this Plan shall be made on the Effective Date or as soon as practicable thereafter; provided, however, that the Reorganized Debtors may implement periodic distribution dates to the extent they determine them to be appropriate.

 

6.4          Distribution Record Date.

 

(a)           As of the close of business on the Distribution Record Date, the various lists of holders of Claims in each Class, as maintained by the Debtors or their agents, shall be deemed closed, and there shall be no further changes in the record holders of any Claims after the Distribution Record Date.  Neither the Debtors nor the Disbursing Agent shall have any obligation to recognize any transfer of a Claim occurring after the close of business on the Distribution Record Date.  In addition, with respect to payment of any Cure Amounts or disputes over any Cure Amounts, neither the Debtors nor the Disbursing Agent shall have any obligation to recognize or deal with any party other than the non-Debtor party to the applicable executory contract or unexpired lease, even if such non-Debtor party has sold, assigned, or otherwise transferred its Claim for a Cure Amount.

 

(b)           Notwithstanding anything in this Plan to the contrary, in connection with any Plan Distribution to be effected through the facilities of DTC (whether by means of book entry exchange, free delivery, or otherwise), the Debtors and the Reorganized Debtors, as applicable, shall be entitled to recognize and deal for all purposes under this Plan with holders of New Common Shares to the extent consistent with the customary practices of DTC used in connection with such distributions.  All New Common Shares to be distributed under this Plan shall be issued in the names of such holders or their nominees in accordance with DTC’s book entry exchange procedures to the extent that the holders of New Common Shares held their Existing Equity Interests or Senior Notes through the facilities of DTC; provided, however, that such New Common Shares are permitted to be held through DTC’s book entry system; provided, further, however, that to the extent the New Common Shares are not eligible for distribution in accordance with DTC’s customary practices, Reorganized Halcón Parent shall take all such reasonable actions as may be required to cause the distributions of the New Common Shares under this Plan.  Holders of Existing Equity Interests that are entitled to receive New Common Shares, but had held such Existing Equity Interests outside of the facilities of DTC, may receive their New Common Shares by means of book-entry with the Reorganized Debtor’s transfer agent.  Notwithstanding anything in this Plan to the contrary, no Person (including, for the avoidance of doubt, DTC) may require a legal opinion regarding the validity of any transaction

 

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contemplated by this Plan, including, whether the New Common Shares are exempt from registration and/or eligible for DTC book-entry delivery, settlement, and depository services.

 

6.5          Distributions after Effective Date.

 

Distributions made after the Effective Date to holders of Disputed Claims that are not Allowed Claims as of the Effective Date but which later become Allowed Claims shall be deemed to have been made on the Effective Date.

 

6.6          Disbursing Agent.

 

All distributions under this Plan shall be made by the Disbursing Agent on and after the Effective Date as provided herein.  The Disbursing Agent shall not be required to give any bond or surety or other security for the performance of its duties.  The Reorganized Debtors shall use commercially reasonable efforts to provide the Disbursing Agent (if other than the Reorganized Debtors) with the amounts of Claims and the identities and addresses of holders of Claims, in each case, as set forth in the Debtors’ or Reorganized Debtors’ books and records.  The Reorganized Debtors shall cooperate in good faith with the applicable Disbursing Agent (if other than the Reorganized Debtors) to comply with the reporting and withholding requirements outlined in section 6.18 of this Plan.

 

6.7          Delivery of Distributions.

 

Subject to Bankruptcy Rule 9010, the Disbursing Agent shall make all distributions to any holder of an Allowed Claim as and when required by this Plan at (i) the address of such holder on the books and records of the Debtors or their agents or (ii) at the address in any written notice of address change delivered to the Debtors or the Disbursing Agent, including any addresses included on any transfers of Claim filed pursuant to Bankruptcy Rule 3001.  In the event that any distribution to any holder is returned as undeliverable, no distribution or payment to such holder shall be made unless and until the Disbursing Agent has been notified of the then-current address of such holder, at which time or as soon thereafter as reasonably practicable such distribution shall be made to such holder without interest.

 

Except as otherwise provided in this Plan, all distributions to holders of RBL Claims shall be governed by the RBL Agreement and shall be deemed completed when made to the RBL Agent, which shall be deemed to be the holder of all RBL Claims for purposes of distributions to be made hereunder.  The RBL Agent shall hold or direct such distributions for the benefit of the holders of Allowed RBL Claims, as applicable.  As soon as practicable in accordance with the requirements set forth in this provision, the RBL Agent shall arrange to deliver such distributions to or on behalf of such holders of Allowed RBL Claims.

 

Except as otherwise provided in this Plan, all distributions to holders of Senior Notes Claims shall be governed by the Senior Notes Indenture and shall be deemed completed when made to the Senior Notes Trustee, which shall be deemed to be the holder of all Senior Notes Claims for purposes of distributions to be made hereunder.  The Senior Notes Trustee shall hold or direct such distributions for the benefit of the holders of Allowed Senior Notes Claims, as applicable.  As soon as practicable in accordance with the requirements set forth in this provision, the Senior Notes Trustee shall arrange to deliver such distributions to or on behalf of

 

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such holders of Allowed Senior Notes Claims.  Notwithstanding anything to the contrary in this Plan, the distribution of New Common Shares shall be made through the facilities of DTC in accordance with the customary practices of DTC for a mandatory distribution, as and to the extent practicable, and the Distribution Record Date shall not apply.  In connection with such distribution, the Senior Notes Trustee shall deliver instructions to DTC instructing DTC to effect distributions on a Pro Rata basis as provided under this Plan with respect to the Senior Notes Claims.

 

Notwithstanding anything to the contrary in this Plan, the distribution of Warrants (provided the Warrants are DTC-eligible and the Debtors elect, subject to approval by the Requisite Creditors, to deliver such Warrants through the facilities of DTC) shall be made through the facilities of DTC in accordance with the customary practices of DTC for a mandatory distribution, as and to the extent practicable, and the Distribution Record Date shall not apply.  To the extent the Warrants are not delivered through the facilities of DTC, the Debtors shall facilitate registration of the Warrants into the names of the relevant beneficial owners as soon as practicable following the Effective Date.

 

6.8          Unclaimed Property.

 

One year from the later of: (i) the Effective Date and (ii) the date that is ten (10) Business Days after the date a Claim is first Allowed, all distributions payable on account of such Claim shall be deemed unclaimed property under section 347(b) of the Bankruptcy Code and shall revert to the Reorganized Debtors or their successors or assigns, and all claims of any other Person (including the holder of a Claim in the same Class) to such distribution shall be discharged and forever barred.  The Reorganized Debtors and the Disbursing Agent shall have no obligation to attempt to locate any holder of an Allowed Claim other than by reviewing the Debtors’ books and records and the Bankruptcy Court’s filings.

 

6.9          Satisfaction of Claims.

 

Unless otherwise provided in this Plan, any distributions and deliveries to be made on account of Allowed Claims under this Plan shall be in complete and final satisfaction, settlement, and discharge of and exchange for such Allowed Claims.

 

6.10        Manner of Payment under Plan.

 

Except as specifically provided herein, at the option of the Debtors or the Reorganized Debtors, as applicable, any Cash payment to be made under this Plan may be made by a check or wire transfer or as otherwise required or provided in applicable agreements or customary practices of the Debtors.

 

6.11        Fractional Shares.

 

No fractional shares of New Common Shares shall be distributed.  When any distribution would otherwise result in the issuance of a number of shares of New Common Shares that is not a whole number, the New Common Shares subject to such distribution shall be rounded to the next higher or lower whole number as follows: (i) fractions equal to or greater than 1/2 shall be rounded to the next higher whole number, and (ii) fractions less than 1/2 shall

 

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be rounded to the next lower whole number. The total number of New Common Shares to be distributed on account of Allowed Claims shall be adjusted as necessary to account for the rounding provided for herein.  No consideration shall be provided in lieu of fractional shares that are rounded down.  Fractional amounts of New Common Shares that are not distributed in accordance with this section shall be returned to, and ownership thereof shall vest in, Reorganized Halcón Parent.

 

6.12                        Minimum Distribution.

 

Neither the Reorganized Debtors nor the Disbursing Agent, as applicable, shall have an obligation to make a distribution pursuant to this Plan that is less than one (1) share of New Common Shares or less than $100.00 in Cash; provided, however, that Registered Holders of Existing Equity Interests receiving a Plan Distribution under section 4.7(a)(1) of this Plan shall receive such distributions notwithstanding this section 6.12.

 

6.13                        No Distribution in Excess of Amount of Allowed Claim.

 

Notwithstanding anything to the contrary in this Plan, no holder of an Allowed Claim shall receive, on account of such Allowed Claim, Plan Distributions in excess of the Allowed amount of such Claim (plus any postpetition interest on such Claim solely to the extent permitted by section 6.2 of this Plan).

 

6.14                        Allocation of Distributions Between Principal and Interest.

 

Except as otherwise provided in this Plan and subject to section 6.2 of this Plan or as otherwise required by law (as determined by the Reorganized Debtors), distributions with respect to an Allowed Claim shall be allocated first to the principal portion of such Allowed Claim (as determined for United States federal income tax purposes) and, thereafter, to the remaining portion of such Allowed Claim, if any.

 

6.15                        Setoffs and Recoupments.

 

Each Reorganized Debtor, or such entity’s designee as instructed by such Reorganized Debtor, may, pursuant to section 553 of the Bankruptcy Code or applicable nonbankruptcy law, set off or recoup against any Allowed Claim and the distributions to be made pursuant to this Plan on account of such Allowed Claim, any and all claims, rights, and Causes of Action of any nature whatsoever that a Reorganized Debtor or its successors may hold against the holder of such Allowed Claim after the Effective Date; provided, however, that neither the failure to effect a setoff or recoupment nor the allowance of any Claim hereunder shall constitute a waiver or release by a Reorganized Debtor or its successor of any claims, rights, or Causes of Action that a Reorganized Debtor or its successor or assign may possess against the holder of such Claim.

 

6.16                        Rights and Powers of Disbursing Agent.

 

The Disbursing Agent shall be empowered to (i) effect all actions and execute all agreements, instruments, and other documents necessary to perform its duties hereunder, (ii) make all applicable distributions or payments provided for under this Plan, (iii) employ

 

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professionals to represent it with respect to its responsibilities, and (iv) exercise such other powers as may be vested in the Disbursing Agent by order of the Bankruptcy Court (including any Final Order issued after the Effective Date) or pursuant to this Plan, or as deemed by the Disbursing Agent to be necessary and proper to implement the provisions hereof.

 

6.17                        Expenses of Disbursing Agent.

 

Except as otherwise ordered by the Bankruptcy Court and subject to the written agreement of the Reorganized Debtors, the amount of any reasonable fees and expenses incurred by the Disbursing Agent on or after the Effective Date (including taxes) and any reasonable compensation and expense reimbursement Claims (including for reasonable attorneys’ fees and other professional fees and expenses) made by the Disbursing Agent shall be paid in Cash by the Reorganized Debtors in the ordinary course of business.

 

6.18                        Withholding and Reporting Requirements.

 

In connection with this Plan, any Person issuing any instrument or making any distribution or payment in connection therewith, shall comply with all applicable withholding and reporting requirements imposed by any federal, state, or local taxing authority.  In the case of a non-Cash distribution that is subject to withholding, the distributing party may require the intended recipient of such distribution to provide the withholding agent with an amount of Cash sufficient to satisfy such withholding tax as a condition to receiving such distribution or withhold an appropriate portion of such distributed property and either (i)  sell such withheld property to generate Cash necessary to pay over the withholding tax (or reimburse the distributing party for any advance payment of the withholding tax) or (ii) pay the withholding tax using its own funds and retain such withheld property.  The distributing party shall have the right not to make a distribution under this Plan until its withholding or reporting obligation is satisfied pursuant to the preceding sentences.  Any amounts withheld pursuant to this Plan shall be deemed to have been distributed to and received by the applicable recipient for all purposes of this Plan.

 

Any party entitled to receive any property as an issuance or distribution under this Plan shall, upon request, deliver to the withholding agent or such other Person designated by the Reorganized Debtors a Form W-8, Form W-9 and/or any other forms or documents, as applicable, requested by any Reorganized Debtor to reduce or eliminate any required federal, state, or local withholding.  If the party entitled to receive such property as an issuance or distribution fails to comply with any such request for a one hundred eighty (180) day period beginning on the date after the date such request is made, the amount of such issuance or distribution shall irrevocably revert to the applicable Reorganized Debtor and any Claim in respect of such distribution under this Plan shall be discharged and forever barred from assertion against such Reorganized Debtor or its respective property.

 

Notwithstanding the above, each holder of an Allowed Claim or Interest that is to receive a distribution under this Plan shall have the sole and exclusive responsibility for the satisfaction and payment of any tax obligations imposed on such holder by any Governmental Unit, including income, withholding, and other tax obligations, on account of such Plan Distribution.

 

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ARTICLE VII.                                                            PROCEDURES FOR RESOLVING CLAIMS.

 

7.1                               Disputed Claims Process.

 

Notwithstanding section 502(a) of the Bankruptcy Code, and except as otherwise set forth in this Plan, holders of Claims need not file proofs of Claim with the Bankruptcy Court, and the Reorganized Debtors and holders of Claims shall determine, adjudicate, and resolve any disputes over the validity and amounts of such Claims in the ordinary course of business as if the Chapter 11 Cases had not been commenced.  The holders of Claims shall not be subject to any claims resolution process in the Bankruptcy Court in connection with their Claims and shall retain all their rights under applicable non-bankruptcy law to pursue their Claims against the Debtors or Reorganized Debtors in any forum with jurisdiction over the parties.  Except for (i) proofs of Claim asserting damages arising out of the rejection of an executory contract or unexpired lease by any of the Debtors pursuant to section 8.3 of this Plan and (ii) proofs of Claim that have been objected to by the Debtors before the Effective Date, upon the Effective Date, any filed Claim, regardless of the time of filing, and including Claims filed after the Effective Date, shall be deemed withdrawn.  To the extent not otherwise provided in this Plan, the deemed withdrawal of a proof of Claim is without prejudice to such claimant’s rights under section 7.1 of this Plan to assert its Claims in any forum as though the Debtors’ Chapter 11 Cases had not been commenced.  From and after the Effective Date, the Reorganized Debtors may satisfy, dispute, settle, or otherwise compromise any Claim without approval of the Bankruptcy Court.

 

7.2                               Objections to Claims.

 

Except insofar as a Claim is Allowed under this Plan, only the Debtors or the Reorganized Debtors shall be entitled to object to Claims.  Any objections to Claims shall be served and filed (i) on or before the ninetieth (90th) day following the later of (a) the Effective Date and (b) the date that a proof of Claim is filed or amended or a Claim is otherwise asserted or amended in writing by or on behalf of a holder of such Claim, or (ii) such later date as ordered by the Bankruptcy Court upon motion filed by the Debtors or the Reorganized Debtors.

 

7.3                               Estimation of Claims.

 

The Debtors or the Reorganized Debtors, as applicable, may at any time request that the Bankruptcy Court estimate any contingent, unliquidated, or Disputed Claim pursuant to section 502(c) of the Bankruptcy Code, regardless of whether the Debtors had previously objected to or otherwise disputed such Claim or whether the Bankruptcy Court has ruled on any such objection.  The Bankruptcy Court shall retain jurisdiction to estimate any Claim at any time during litigation concerning any objection to any Claim, including during the pendency of any appeal relating to any such objection.  In the event that the Bankruptcy Court estimates any contingent, unliquidated, or Disputed Claim, the amount so estimated shall constitute either the Allowed amount of such Claim or a maximum limitation on such Claim, as determined by the Bankruptcy Court.  If the estimated amount constitutes a maximum limitation on the amount of such Claim, the Debtors or the Reorganized Debtors may pursue supplementary proceedings to object to the allowance of such Claim.

 

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7.4                               Claim Resolution Procedures Cumulative.

 

All of the objection, estimation, and resolution procedures in this Plan are intended to be cumulative and not exclusive of one another.  Claims may be estimated and subsequently settled, compromised, withdrawn, or resolved in accordance with this Plan without further notice or Bankruptcy Court approval.

 

7.5                               No Distributions Pending Allowance.

 

If an objection, motion to estimate, or other challenge to a Claim is filed, no payment or distribution provided under this Plan shall be made on account of such Claim unless and until (and only to the extent that) such Claim becomes an Allowed Claim.

 

7.6                               Distributions after Allowance.

 

To the extent that a Disputed Claim ultimately becomes an Allowed Claim, distributions (if any) shall be made to the holder of such Allowed Claim in accordance with the provisions of this Plan.  As soon as practicable after the date on which the order or judgment of the Bankruptcy Court allowing any Disputed Claim becomes a Final Order, the Disbursing Agent shall provide to the holder of such Claim the distribution (if any) to which such holder is entitled under this Plan as of the Effective Date, without any interest to be paid on account of such Claim unless required by the Bankruptcy Code.

 

ARTICLE VIII.                                                       EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

 

8.1                               General Treatment.

 

(a)                                 As of and subject to the occurrence of the Effective Date and the payment of any applicable Cure Amount, all executory contracts and unexpired leases to which any of the Debtors are parties shall be deemed assumed, unless such contract or lease (i) was previously assumed or rejected by the Debtors, pursuant to a Final Order of the Bankruptcy Court, (ii) previously expired or terminated pursuant to its own terms or by agreement of the parties thereto, (iii) is the subject of a motion to reject filed by the Debtors on or before the Confirmation Date, (iv) is specifically designated as a contract or lease to be rejected on the Schedule of Rejected Contracts; provided, however, that the Requisite Creditors consent to such rejection, or (v) is specifically designated as a contract or lease to be rejected as reasonably requested by the Requisite Creditors in the Plan Supplement; provided, however, that such rejection shall be deemed unreasonable if it would give rise to a potential Cure Amount that cannot be satisfied on the Effective Date or otherwise cause the Plan to not be feasible pursuant to Section 1129 of the Bankruptcy Code.

 

(b)                                 Subject to (i) satisfaction of the conditions set forth in section 8.1(a) of this Plan, (ii) resolution of any disputes in accordance with section 8.2 of this Plan with respect to the contracts or leases subject to such dispute, and (iii) the occurrence of the Effective Date, entry of the Confirmation Order by the Bankruptcy Court shall constitute approval of the assumptions or rejections provided for in this Plan pursuant to sections 365(a) and 1123 of the Bankruptcy Code.  Each executory contract and unexpired lease assumed pursuant to this Plan shall vest in and be fully enforceable by the applicable Reorganized Debtor in accordance with

 

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its terms, except as modified by the provisions of this Plan, any Final Order of the Bankruptcy Court authorizing and providing for its assumption, or applicable law.

 

8.2                               Determination of Assumption and Cure Disputes; Deemed Consent.

 

(a)                                 Following the Petition Date, the Debtors shall have served a notice to parties of executory contracts and unexpired leases to be assumed reflecting the Debtors’ intention to assume such contracts or leases in connection with this Plan and indicating that Cure Amounts (if any) shall be asserted against the Debtors or the Reorganized Debtors, as applicable, in the ordinary course.  Any monetary amounts by which any executory contract or unexpired lease to be assumed under this Plan is in default shall be satisfied, under section 365(b)(1) of the Bankruptcy Code, by the Debtors or Reorganized Debtors, as applicable, upon assumption thereof.

 

(b)                                 If there is a dispute regarding (i) any Cure Amount, (ii) the ability of the Debtors to provide adequate assurance of future performance (within the meaning of section 365 of the Bankruptcy Code) under the contract or lease to be assumed, or (iii) any other matter pertaining to assumption, such dispute shall be heard by the Bankruptcy Court prior to such assumption being effective.  Notwithstanding the foregoing, to the extent the dispute relates solely to any Cure Amounts, the applicable Debtor may assume the executory contract or unexpired lease prior to the resolution of any such dispute; provided, however, that the Debtor reserves Cash in an amount sufficient to pay the full amount reasonably asserted as the required Cure Amount by the contract counterparty; provided, further, however, that following entry of a Final Order resolving any such dispute, the Debtor shall have the right to reject any executory contract or unexpired lease within thirty (30) days of such resolution.

 

(c)                                  Any counterparty to an executory contract or unexpired lease that fails to object timely to the notice of the proposed assumption of such executory contract or unexpired lease in accordance with the procedures set forth therein, shall be deemed to have assented to such assumption and shall be forever barred, estopped, and enjoined from challenging the validity of such assumption thereafter.

 

(d)                                 Subject to resolution of any dispute regarding any Cure Amount, all Cure Amounts shall be satisfied by the Debtors or Reorganized Debtors, as the case may be, upon assumption of the underlying contracts and unexpired leases.  Assumption of any executory contract or unexpired lease pursuant to this Plan, or otherwise, shall result in the full release and satisfaction of any Claims or defaults, subject to satisfaction of the Cure Amount, whether monetary or nonmonetary, including defaults of provisions restricting the change in control or ownership interest composition or other bankruptcy-related defaults, arising under any assumed executory contract or unexpired lease at any time before the effective date of the assumption.  Any proofs of Claim filed with respect to an executory contract or unexpired lease that has been assumed or assigned shall be deemed disallowed and expunged, without further notice to or action, order or approval of the Bankruptcy Court or any other Entity, upon the deemed assumption of such contract or unexpired lease.

 

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8.3                               Rejection Damages Claims.

 

Any counterparty to a contract or lease that is identified on the Schedule of Rejected Contracts or is otherwise rejected by the Debtors must file and serve a proof of Claim on the applicable Debtor that is party to the contract or lease to be rejected no later than thirty (30) days after the later of (i) the Confirmation Date or (ii) the effective date of rejection of such executory contract or unexpired lease.

 

8.4                               Survival of the Debtors’ Indemnification Obligations.

 

Any obligations of the Debtors pursuant to their corporate charters, bylaws, limited liability company agreements, or other organizational documents to indemnify current and former officers, directors, members, managers, agents, or employees with respect to all present and future actions, suits, and proceedings against the Debtors or such officers, directors, members, managers, agents, or employees based upon any act or omission for or on behalf of the Debtors shall not be discharged, impaired, or otherwise affected by this Plan.  All such obligations shall be deemed and treated as executory contracts to be assumed by the Debtors under this Plan and shall continue as obligations of the Reorganized Debtors.  Any claim based on the Debtors’ obligations herein shall not be a Disputed Claim or subject to any objection in either case by reason of section 502(e)(1)(B) of the Bankruptcy Code.

 

8.5                               Compensation and Benefit Plans.

 

All employment policies, and all compensation and benefits plans, policies, and programs of the Debtors applicable to their respective employees, retirees, and nonemployee directors, including all savings plans, retirement plans, healthcare plans, disability plans, severance benefit plans, incentive plans, and life and accidental death and dismemberment insurance plans, are deemed to be, and shall be treated as, executory contracts under this Plan and, on the Effective Date, shall be assumed pursuant to sections 365 and 1123 of the Bankruptcy Code.

 

8.6                               Insurance Policies.

 

(a)                                 All insurance policies to which any Debtor is a party as of the Effective Date, including any directors’ and officers’ insurance policies, shall be deemed to be and treated as executory contracts and shall be assumed by the applicable Debtor or Reorganized Debtor and shall continue in full force and effect thereafter in accordance with their respective terms.  All other insurance policies shall vest in the Reorganized Debtors.

 

(b)                                 In addition, after the Effective Date, the Reorganized Debtors shall not terminate or otherwise reduce the coverage under any directors’ and officers’ insurance policies (including any “tail policy”) in effect or purchased as of the Petition Date, and all members, managers, directors, and officers of the Company who served in such capacity at any time prior to the Effective Date or any other individuals covered by such insurance policies, shall be entitled to the full benefits of any such policy for the full term of such policy regardless of whether such members, managers, directors, officers, or other individuals remain in such positions after the Effective Date.

 

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8.7                               Reservation of Rights.

 

(a)                                 Neither the exclusion nor the inclusion by the Debtors of any contract or lease on any exhibit, schedule, or other annex to this Plan or in the Plan Supplement, nor anything contained in this Plan, shall constitute an admission by the Debtors that any such contract or lease is or is not an executory contract or unexpired lease or that the Debtors or the Reorganized Debtors or their respective affiliates has any liability thereunder.

 

(b)                                 Except as explicitly provided in this Plan, nothing in this Plan shall waive, excuse, limit, diminish, or otherwise alter any of the defenses, claims, Causes of Action, or other rights of the Debtors or the Reorganized Debtors under any executory or non-executory contract or unexpired or expired lease.

 

(c)                                  Nothing in this Plan shall increase, augment, or add to any of the duties, obligations, responsibilities, or liabilities of the Debtors or the Reorganized Debtors, as applicable, under any executory or non-executory contract or unexpired or expired lease.

 

(d)                                 If there is a dispute regarding whether a contract or lease is or was executory or unexpired at the time of its assumption under this Plan, the Debtors or Reorganized Debtors, as applicable, shall have thirty (30) days following entry of a Final Order resolving such dispute to alter their treatment of such contract or lease.

 

ARTICLE IX.                                                                CONDITIONS PRECEDENT TO THE OCCURRENCE OF THE EFFECTIVE DATE.

 

9.1                               Conditions Precedent to Effective Date.

 

The Effective Date shall not occur unless all of the following conditions precedent have been satisfied:

 

(a)                                 the Plan Supplement has been filed;

 

(b)                                 the Bankruptcy Court has entered the Confirmation Order and such Confirmation Order has not been stayed, modified, or vacated;

 

(c)                                  the conditions to the effectiveness of the Exit RBL Facility, and all documentation related thereto, have been satisfied or waived in accordance with the terms thereof and the Exit RBL Agreement is in full force and effect;

 

(d)                                 all governmental approvals, including Bankruptcy Court approval, necessary to effectuate the Restructuring shall have been obtained and all applicable waiting periods have expired;

 

(e)                                  all Restructuring Expenses shall have been paid in Cash;

 

(f)                                   the RSA shall be in full force and effect and binding on all parties thereto;

 

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(g)                                  the Senior Noteholder Backstop Agreement shall be in full force and effect and binding on all parties thereto, and the Backstop Order (as defined in the RSA) shall be entered;

 

(h)                                 each of the Definitive Documents shall have satisfied the consent requirements of the Requisite Creditors in accordance with the RSA;

 

(i)                                     the amended certificate of incorporation of Reorganized Halcón Parent shall have been filed with the appropriate Governmental Unit, as applicable; and

 

(j)                                    the Debtors, together with the Subscription Agent (as defined in the Rights Offering Procedures), shall have received proceeds of at least $150,150,000 for the issuance of the New Common Shares in connection with the Senior Noteholder Rights Offering.

 

9.2                               Waiver of Conditions Precedent.

 

(a)                                 Each of the conditions precedent to the occurrence of the Effective Date may be waived in writing by the Debtors and the Requisite Creditors without leave of or order of the Bankruptcy Court.  If any such condition precedent is waived pursuant to this section and the Effective Date occurs, each party agreeing to waive such condition precedent shall be estopped from withdrawing such waiver after the Effective Date or otherwise challenging the occurrence of the Effective Date on the basis that such condition was not satisfied, the waiver of such condition precedent shall benefit from the “equitable mootness” doctrine, and the occurrence of the Effective Date shall foreclose any ability to challenge this Plan in any court.  If this Plan is confirmed for fewer than all of the Debtors, only the conditions applicable to the Debtor or Debtors for which this Plan is confirmed must be satisfied or waived for the Effective Date to occur.

 

(b)                                 Except as otherwise provided herein, all actions required to be taken on the Effective Date shall take place and shall be deemed to have occurred simultaneously and no such action shall be deemed to have occurred prior to the taking of any other such action.

 

(c)                                  The stay of the Confirmation Order pursuant to Bankruptcy Rule 3020(e) shall be deemed waived by and upon the entry of the Confirmation Order, and the Confirmation Order shall take effect immediately upon its entry.

 

9.3                               Effect of Failure of a Condition.

 

If the conditions listed in section 9.1 of this Plan are not satisfied or waived in accordance with section 9.2 of this Plan on or before the first Business Day that is more than sixty (60) days after the date on which the Confirmation Order is entered or by such later date set forth by the Debtors in a notice filed with the Bankruptcy Court prior to the expiration of such period, this Plan shall be null and void in all respects and nothing contained in this Plan or the Disclosure Statement shall (i) constitute a waiver or release of any Claims by or against or any Interests in the Debtors, (ii) prejudice in any manner the rights of any Person, or (iii) constitute an admission, acknowledgement, offer, or undertaking by the Debtors, any of the Consenting Creditors, or any other Person.

 

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ARTICLE X.                                                                     EFFECT OF CONFIRMATION.

 

10.1                        Binding Effect.

 

Except as otherwise provided in section 1141(d)(3) of the Bankruptcy Code, and subject to the occurrence of the Effective Date, on and after the entry of the Confirmation Order, the provisions of this Plan shall bind every holder of a Claim against or Interest in any Debtor and inure to the benefit of and be binding on such holder’s respective successors and assigns, regardless of whether the Claim or Interest of such holder is Impaired under this Plan and whether such holder has accepted this Plan.

 

10.2                        Vesting of Assets.

 

Except as otherwise provided in this Plan, or any Plan Document, on and after the Effective Date, pursuant to sections 1141(b) and (c) of the Bankruptcy Code, all Assets of the Estates, including all claims, rights, and Causes of Action and any property acquired by the Debtors under or in connection with this Plan, shall vest in each respective Reorganized Debtor free and clear of all Claims, Liens, encumbrances, charges, and other interests.  Subject to the terms of this Plan, on and after the Effective Date, the Reorganized Debtors may operate their businesses and may use, acquire, and dispose of property and prosecute, compromise, or settle any Claims (including any Administrative Expense Claims) and Causes of Action without supervision of or approval by the Bankruptcy Court and free and clear of any restrictions of the Bankruptcy Code or the Bankruptcy Rules other than restrictions expressly imposed by this Plan or the Confirmation Order.  Without limiting the foregoing, the Reorganized Debtors may pay the charges that they incur on or after the Confirmation Date for Professional Persons’ fees, disbursements, expenses, or related support services without application to the Bankruptcy Court.

 

10.3                        Discharge of Claims against and Interests in Debtors.

 

Upon the Effective Date and in consideration of the distributions to be made under this Plan, except as otherwise expressly provided in this Plan or in the Confirmation Order, each holder (as well as any trustee or agents on behalf of each holder) of a Claim or Interest and any affiliate of such holder shall be deemed to have forever waived, released, and discharged the Debtors, to the fullest extent permitted by section 1141 of the Bankruptcy Code, of and from any and all Claims, Interest, rights, and liabilities that arose prior to the Effective Date.  Except as otherwise provided in this Plan, upon the Effective Date, all such holders of Claims and Interests and their affiliates shall be forever precluded and enjoined, pursuant to sections 105, 524, and 1141 of the Bankruptcy Code, from prosecuting or asserting any such discharged Claim against or terminated Interest in any Debtor or Reorganized Debtor.

 

10.4                        Pre-Confirmation Injunctions and Stays.

 

Unless otherwise provided in this Plan or a Final Order of the Bankruptcy Court, all injunctions and stays arising under or entered during the Chapter 11 Cases, whether under sections 105 or 362 of the Bankruptcy Code or otherwise, and in existence on the date of entry of the Confirmation Order, shall remain in full force and effect until the later of the Effective Date and the date indicated in the order providing for such injunction or stay.

 

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10.5                        Injunction against Interference with Plan.

 

Upon the entry of the Confirmation Order, all holders of Claims and Interests and all other parties in interest, along with their respective present and former affiliates, employees, agents, officers, directors, and principals, shall be enjoined from taking any action to interfere with the implementation or the occurrence of the Effective Date.

 

10.6                        Plan Injunction.

 

(a)                                 Except as otherwise provided in this Plan, in the Plan Documents, or in the Confirmation Order, as of the entry of the Confirmation Order but subject to the occurrence of the Effective Date, all Persons who have held, hold, or may hold Claims against or Interests in any or all of the Debtors and other parties in interest, along with their respective present or former employees, agents, officers, directors, principals, and affiliates, are permanently enjoined after the entry of the Confirmation Order from (i) commencing, conducting, or continuing in any manner, directly or indirectly, any suit, action, or other proceeding of any kind (including any proceeding in a judicial, arbitral, administrative, or other forum) against or affecting, directly or indirectly, a Debtor, a Reorganized Debtor, or an Estate or the property of any of the foregoing, or any direct or indirect transferee of any property of, or direct or indirect successor in interest to, any of the foregoing Persons mentioned in this subsection (i) or any property of any such transferee or successor, (ii) enforcing, levying, attaching (including any prejudgment attachment), collecting, or otherwise recovering in any manner or by any means, whether directly or indirectly, any judgment, award, decree, or order against a Debtor, a Reorganized Debtor, or an Estate or its property, or any direct or indirect transferee of any property of, or direct or indirect successor in interest to, any of the foregoing Persons mentioned in this subsection (ii) or any property of any such transferee or successor, (iii) creating, perfecting, or otherwise enforcing in any manner, directly or indirectly, any encumbrance of any kind against a Debtor, a Reorganized Debtor, or an Estate or any of its property, or any direct or indirect transferee of any property of, or successor in interest to, any of the foregoing Persons mentioned in this subsection (iii) or any property of any such transferee or successor, (iv) acting or proceeding in any manner, in any place whatsoever, that does not conform to or comply with the provisions of this Plan, and the Plan Documents, to the full extent permitted by applicable law, and (v) commencing or continuing, in any manner or in any place, any action that does not comply with or is inconsistent with the provisions of this Plan and the Plan Documents.

 

(b)                                 By accepting distributions pursuant to this Plan, each holder of an Allowed Claim or Interest shall be deemed to have affirmatively and specifically consented to be bound by this Plan, including the injunctions set forth in section 10.6 of this Plan.

 

10.7                        Releases.

 

(a)                                 Releases by Debtors.  As of the Effective Date, except for the rights and remedies that remain in effect from and after the Effective Date to enforce this Plan and the obligations contemplated by the Plan Documents or as otherwise provided in any order of the Bankruptcy Court, for good and valuable consideration, the adequacy of which is hereby confirmed, including the service of the Released Parties to facilitate the reorganization of the Debtors and the implementation of the Restructuring Transactions,

 

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on and after the Effective Date, the Released Parties shall be deemed conclusively, absolutely, unconditionally, irrevocably, and forever released and discharged, to the maximum extent permitted by law, by the Debtors, the Reorganized Debtors, and the Estates, in each case on behalf of themselves and their respective successors, assigns, and representatives and any and all other Persons that may purport to assert any Cause of Action derivatively, by or through the foregoing Persons, from any and all claims and Causes of Action (including any derivative claims, asserted or assertable on behalf of the Debtors, the Reorganized Debtors, or the Estates), whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, existing or hereinafter arising, in law, equity, contract, tort, or otherwise, by statute, violations of federal or state securities laws or otherwise that the Debtors, the Reorganized Debtors, the Estates, or their affiliates 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 or other Person, based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Chapter 11 Cases, the Restructuring Transactions, the purchase, sale, or rescission of the purchase or sale of any Security of the Debtors or the Reorganized Debtors, the subject matter of, or the transactions or events giving rise to, any Claim or Interest that is treated in this Plan, the business or contractual arrangements between any Debtor and any Released Party, the restructuring of Claims and Interests before or during the Chapter 11 Cases, the negotiation, formulation, preparation, or consummation of this Plan, the RSA, the Plan Documents or related agreements, instruments, or other documents relating thereto, or the solicitation of votes with respect to this Plan, in all cases based upon any act or omission, transaction, agreement, event, or other occurrence taking place on or before the Effective Date; provided, however, that nothing herein shall be construed to release any Person from willful misconduct or intentional fraud as determined by a Final Order.

 

(b)                                 Releases by Holders of Claims or Interests.  As of the Effective Date, except for the rights that remain in effect from and after the Effective Date to enforce this Plan and the Plan Documents and the obligations contemplated by the Restructuring Transactions, for good and valuable consideration, the adequacy of which is hereby confirmed, including the service and contribution of the Released Parties to facilitate the reorganization of the Debtors and the implementation of the Restructuring Transactions, on and after the Effective Date, the Released Parties shall be deemed conclusively, absolutely, unconditionally, irrevocably, and forever released and discharged, to the maximum extent permitted by law, by the Releasing Parties, in each case from any and all claims and Causes of Action whatsoever (including any derivative claims, asserted or assertable on behalf of the Debtors, the Reorganized Debtors, or their Estates), whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, asserted or unasserted, accrued or unaccrued, existing or hereinafter arising, whether in law or equity, whether sounding in tort or contract, whether arising under federal or state statutory or common law, or any other applicable international, foreign, or domestic law, rule, statute, regulation, treaty, right, duty, requirement or otherwise, that such holders or their estates, affiliates, heirs, executors, administrators, successors, assigns, managers, accountants, attorneys, representatives, consultants, agents, and any other Persons claiming under or through them would have been legally entitled to assert in their own right (whether individually or collectively) or on

 

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behalf of the holder of any Claim or Interest or other Person, based on or relating to, or in any manner arising from, in whole or in part, the Debtors, the Reorganized Debtors, or their Estates, the Chapter 11 Cases, the purchase, sale, or rescission of the purchase or sale of any Security of the Debtors or the Reorganized Debtors, the subject matter of, or the transactions or events giving rise to, any Claim or Interest that is treated in this Plan, the business or contractual arrangements or interactions between any Debtor and any Released Party, the Restructuring Transactions, the restructuring of any Claim or Interest before or during the Chapter 11 Cases, the Plan Documents, and related agreements, instruments, and other documents, and the negotiation, formulation, preparation, or implementation thereof, the solicitation of votes with respect to this Plan, or any other act or omission; provided, however, that nothing herein shall be construed to release any Person from willful misconduct or intentional fraud as determined by a Final Order.

 

10.8                        Exculpation.

 

To the fullest extent permitted by applicable law, no Exculpated Party shall have or incur, and each Exculpated Party shall be released and exculpated from, any claim or Cause of Action in connection with or arising out of the administration of the Chapter 11 Cases; the negotiation and pursuit of the DIP Facility, the Exit RBL Facility, the Equity Rights Offerings, the Management Incentive Plan, the Disclosure Statement, the RSA, the Restructuring Transactions, and this Plan (including the Plan Documents), or the solicitation of votes for, or confirmation of, this Plan; the funding of this Plan; the occurrence of the Effective Date; the administration of this Plan or the property to be distributed under this Plan; the issuance of Securities under or in connection with this Plan; the purchase, sale, or rescission of the purchase or sale of any Security of the Debtors or the Reorganized Debtors; or the transactions in furtherance of any of the foregoing; other than claims or Causes of Action arising out of or related to any act or omission of an Exculpated Party that is a criminal act or constitutes intentional fraud or willful misconduct as determined by a Final Order, but in all respects such Persons shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities pursuant to this Plan.  The Exculpated Parties have acted in compliance with the applicable provisions of the Bankruptcy Code with regard to the solicitation and distribution of Securities pursuant to this 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 this Plan or such distributions made pursuant to this Plan, including the issuance of Securities thereunder.  This exculpation shall be in addition to, and not in limitation of, all other releases, indemnities, exculpations, and any other applicable law or rules protecting such Exculpated Parties from liability.

 

10.9                        Injunction Related to Releases and Exculpation.

 

The Confirmation Order shall permanently enjoin the commencement or prosecution by any Person, whether directly, derivatively, or otherwise, of any Claims, obligations, suits, judgments, damages, demands, debts, rights, Causes of Action, losses, or liabilities released pursuant to this Plan, including, without limitation, the claims, obligations,

 

43

 

suits, judgments, damages, demands, debts, rights, Causes of Action, and liabilities released or exculpated in this Plan or the Confirmation Order.

 

10.10                 Subordinated Claims.

 

The allowance, classification, and treatment of all Allowed Claims and Interests and the respective distributions and treatments thereof under this Plan take into account and conform to the relative priority and rights of the Claims and Interests in each Class in connection with any contractual, legal, and equitable subordination rights relating thereto, whether arising under general principles of equitable subordination, sections 510(a), 510(b), or 510(c) of the Bankruptcy Code, or otherwise.  Pursuant to section 510 of the Bankruptcy Code, the Debtors reserve the right to reclassify any Allowed Claim or Interest in accordance with any contractual, legal, or equitable subordination relating thereto.

 

10.11                 Retention of Causes of Action and Reservation of Rights.

 

Except as otherwise provided in this Plan, including sections 10.6, 10.7, 10.8, and 10.9, nothing contained in this Plan or the Confirmation Order shall be deemed to be a waiver or relinquishment of any rights, claims, Causes of Action, rights of setoff or recoupment, or other legal or equitable defenses that the Debtors had immediately prior to the Effective Date on behalf of the Estates or of themselves in accordance with any provision of the Bankruptcy Code or any applicable nonbankruptcy law, including any affirmative Causes of Action against parties with a relationship with the Debtors.  The Reorganized Debtors shall have, retain, reserve, and be entitled to assert all such claims, Causes of Action, rights of setoff or recoupment, and other legal or equitable defenses as fully as if the Chapter 11 Cases had not been commenced, and all of the Debtors’ legal and equitable rights in respect of any Unimpaired Claim may be asserted after the Confirmation Date and Effective Date to the same extent as if the Chapter 11 Cases had not been commenced.

 

10.12                 Ipso Facto and Similar Provisions Ineffective.

 

Any term of any prepetition policy, prepetition contract, or other prepetition obligation applicable to a Debtor shall be void and of no further force or effect with respect to any Debtor to the extent that such policy, contract, or other obligation is conditioned on, creates an obligation of the Debtor as a result of, or gives rise to a right of any Entity based on (i) the insolvency or financial condition of a Debtor, (ii) the commencement of the Chapter 11 Cases, (iii) the confirmation or consummation of this Plan, including any change of control that shall occur as a result of such consummation, or (iv) the Restructuring Transactions.

 

ARTICLE XI.                                                                RETENTION OF JURISDICTION.

 

11.1                        Retention of Jurisdiction.

 

On and after the Effective Date, the Bankruptcy Court shall retain exclusive jurisdiction, pursuant to 28 U.S.C. §§ 1334 and 157, over all matters arising in or related to the Chapter 11 Cases for, among other things, the following purposes:

 

44

 

(a)                                 to hear and determine motions and/or applications for the assumption or rejection of executory contracts or unexpired leases and any disputes over Cure Amounts resulting therefrom;

 

(b)                                 to determine any motion, adversary proceeding, application, contested matter, and other litigated matter pending on or commenced after the entry of the Confirmation Order;

 

(c)                                  to hear and resolve any disputes arising from or related to (i) any orders of the Bankruptcy Court granting relief under Bankruptcy Rule 2004 or (ii) any protective orders entered by the Bankruptcy Court in connection with the foregoing;

 

(d)                                 to ensure that distributions to holders of Allowed Claims are accomplished as provided in this Plan and the Confirmation Order and to adjudicate any and all disputes arising from or relating to distributions under this Plan;

 

(e)                                  to consider Claims or the allowance, classification, priority, compromise, estimation, or payment of any Claim;

 

(f)                                   to enter, implement, or enforce such orders as may be appropriate in the event that the Confirmation Order is for any reason stayed, reversed, revoked, modified, or vacated;

 

(g)                                  to issue and enforce injunctions, enter and implement other orders, and take such other actions as may be necessary or appropriate to restrain interference by any Person with the consummation, implementation, or enforcement of this Plan, the Confirmation Order, or any other order of the Bankruptcy Court;

 

(h)                                 to hear and determine any application to modify this Plan in accordance with section 1127 of the Bankruptcy Code to remedy any defect or omission or reconcile any inconsistency in this Plan, the Disclosure Statement, or any order of the Bankruptcy Court, including the Confirmation Order, in such a manner as may be necessary to carry out the purposes and effects thereof;

 

(i)                                     to hear and determine all Fee Claims;

 

(j)                                    to resolve disputes concerning any reserves with respect to Disputed Claims or the administration thereof;

 

(k)                                 to hear and determine disputes arising in connection with the interpretation, implementation, or enforcement of this Plan, the Confirmation Order, any transactions or payments in furtherance of either (including the Equity Rights Offerings), or any agreement, instrument, or other document governing or related to any of the foregoing, other than the Exit Facility;

 

(l)                                     to take any action and issue such orders, including any such action or orders as may be necessary after entry of the Confirmation Order or the occurrence of the

 

45

 

Effective Date, as may be necessary to construe, enforce, implement, execute, and consummate this Plan;

 

(m)                             to determine such other matters and for such other purposes as may be provided in the Confirmation Order;

 

(n)                                 to hear and determine matters concerning state, local, and federal taxes in accordance with sections 346, 505, and 1146 of the Bankruptcy Code (including any requests for expedited determinations under section 505(b) of the Bankruptcy Code);

 

(o)                                 to hear and determine any other matters related to the Chapter 11 Cases and not inconsistent with the Bankruptcy Code or title 28 of the United States Code;

 

(p)                                 to resolve any disputes concerning whether a Person had sufficient notice of the Chapter 11 Cases, the Disclosure Statement, any solicitation conducted in connection with the Chapter 11 Cases, any bar date established in the Chapter 11 Cases, or any deadline for responding or objecting to a Cure Amount, in each case, for the purpose for determining whether a Claim or Interest is discharged hereunder or for any other purposes;

 

(q)                                 to hear, adjudicate, decide, or resolve any and all matters related to ARTICLE X of this Plan, including, without limitation, the releases, discharge, exculpations, and injunctions issued thereunder;

 

(r)                                    to hear and determine any rights, Claims, or Causes of Action held by or accruing to the Debtors pursuant to the Bankruptcy Code or pursuant to any federal statute or legal theory;

 

(s)                                   to recover all Assets of the Debtors and property of the Estates, wherever located; and

 

(t)                                    to enter a final decree closing each of the Chapter 11 Cases.

 

ARTICLE XII.                                                           MISCELLANEOUS PROVISIONS.

 

12.1                        Exemption from Certain Transfer Taxes.

 

Pursuant to section 1146 of the Bankruptcy Code, (i) the issuance, transfer or exchange of any Securities, instruments or documents, (ii) the creation of any Lien, mortgage, deed of trust or other security interest, (iii) all sale transactions consummated by the Debtors and approved by the Bankruptcy Court on and after the Confirmation Date through and including the Effective Date, including any transfers effectuated under this Plan, (iv) any assumption, assignment, or sale by the Debtors of their interests in unexpired leases of nonresidential real property or executory contracts pursuant to section 365(a) of the Bankruptcy Code, (v) the grant of Collateral under the Exit RBL Agreement, and (vi) the issuance, renewal, modification, or securing of indebtedness by such means, and the making, delivery or recording of any deed or other instrument of transfer under, in furtherance of, or in connection with, this Plan, including

 

46

 

the Confirmation Order, shall not be subject to any document recording tax, stamp tax, conveyance fee or other similar tax, mortgage tax, real estate transfer tax, mortgage recording tax, Uniform Commercial Code filing or recording fee, regulatory filing or recording fee, sales tax, use tax or other similar tax or governmental assessment.  Consistent with the foregoing, each recorder of deeds or similar official for any county, city or Governmental Unit in which any instrument hereunder is to be recorded shall, pursuant to the Confirmation Order, be ordered and directed to accept such instrument without requiring the payment of any filing fees, documentary stamp tax, deed stamps, stamp tax, transfer tax, intangible tax or similar tax.

 

12.2                        Request for Expedited Determination of Taxes.

 

The Debtors shall have the right to request an expedited determination under section 505(b) of the Bankruptcy Code with respect to tax returns filed, or to be filed, for any and all taxable periods ending after the Petition Date through the Effective Date.

 

12.3                        Dates of Actions to Implement Plan.

 

In the event that any payment or act under this Plan is required to be made or performed on a date that is not a Business Day, then the making of such payment or the performance of such act may be completed on or as soon as reasonably practicable after the next succeeding Business Day but shall be deemed to have been completed as of the required date.

 

12.4                        Amendments.

 

(a)                                       Plan Modifications.  This Plan may be amended, modified, or supplemented by the Debtors in the manner provided for by section 1127 of the Bankruptcy Code or as otherwise permitted by law, without additional disclosure pursuant to section 1125 of the Bankruptcy Code, except as otherwise ordered by the Bankruptcy Court in accordance with the RSA.  In addition, after the Confirmation Date, so long as such action does not materially and adversely affect the treatment of holders of Allowed Claims pursuant to this Plan, the Debtors may remedy any defect or omission or reconcile any inconsistencies in this Plan or the Confirmation Order with respect to such matters as may be necessary to carry out the purposes of effects of this Plan, and any holder of a Claim or Interest that has accepted this Plan shall be deemed to have accepted this Plan as amended, modified, or supplemented; provided, however, that any such modification is acceptable to the Requisite Creditors.

 

(b)                                       Certain Technical Amendments.  Subject to the RSA, prior to the Effective Date, the Debtors may make appropriate technical adjustments and modifications to this Plan without further order or approval of the Bankruptcy Court; provided, however, that such technical adjustments and modifications do not adversely affect in a material way the treatment of holders of Claims or Interests under this Plan.

 

12.5                        Revocation or Withdrawal of Plan.

 

Subject to the terms of the RSA, the Debtors reserve the right to revoke or withdraw this Plan prior to the Effective Date as to any or all of the Debtors.  If, with respect to a Debtor, this Plan has been revoked or withdrawn prior to the Effective Date, or if confirmation or the occurrence of the Effective Date as to such Debtor does not occur on the Effective Date,

 

47

 

then, with respect to such Debtor (i) this Plan shall be null and void in all respects, (ii) any settlement or compromise embodied in this Plan (including the fixing or limiting to an amount any Claim or Interest or Class of Claims or Interests), assumption or rejection of executory contracts or unexpired leases affected by this Plan, and any document or agreement executed pursuant to this Plan shall be deemed null and void, and (iii) nothing contained in this Plan shall (a) constitute a waiver or release of any Claim by or against, or any Interest in, such Debtor or any other Person, (b) prejudice in any manner the rights of such Debtor or any other Person, or (c) constitute an admission of any sort by any Debtor or any other Person.

 

12.6                        Severability.

 

If, prior to the entry of the Confirmation Order, any term or provision of this Plan is held by the Bankruptcy Court to be invalid, void, or unenforceable, the Bankruptcy Court, at the request of the Debtors, subject to the terms of the RSA, shall have the power to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void, or unenforceable, and such term or provision shall then be applicable as altered or interpreted.  Notwithstanding any such holding, alteration, or interpretation by the Bankruptcy Court, the remainder of the terms and provisions of this Plan shall remain in full force and effect and shall in no way be affected, impaired, or invalidated by such holding, alteration, or interpretation.  The Confirmation Order shall constitute a judicial determination and shall provide that each term and provision of this Plan, as it may have been altered or interpreted in accordance with this section, is (i) valid and enforceable pursuant to its terms, (ii) integral to this Plan and may not be deleted or modified without the consent of the Debtors or the Reorganized Debtors (as the case may be), and (iii) nonseverable and mutually dependent.

 

12.7                        Governing Law.

 

Except to the extent that the Bankruptcy Code or other federal law is applicable or to the extent that a Plan Document provides otherwise, the rights, duties, and obligations arising under this Plan and the Plan Documents shall be governed by, and construed and enforced in accordance with, the internal laws of the State of New York, without giving effect to the principles of conflicts of laws thereof (other than section 5-1401 and section 5-1402 of the New York General Obligations Law).

 

12.8                        Immediate Binding Effect.

 

Notwithstanding Bankruptcy Rules 3020(e), 6004(h), 7062, or otherwise, upon the occurrence of the Effective Date, the terms of this Plan and the Plan Documents shall be immediately effective and enforceable and deemed binding upon and inure to the benefit of the Debtors, the Reorganized Debtors, the holders of Claims and Interests, the Released Parties, and each of their respective successors and assigns.

 

12.9                        Successors and Assigns.

 

The rights, benefits, and obligations of any Person named or referred to in this Plan shall be binding on and shall inure to the benefit of any heir, executor, administrator, successor, or permitted assign, if any, of each such Person.

 

48

 

12.10                 Entire Agreement.

 

On the Effective Date, this Plan, the Plan Supplement, and the Confirmation Order shall supersede all previous and contemporaneous negotiations, promises, covenants, agreements, understandings, and representations on such subjects, all of which have become merged and integrated into this Plan.

 

12.11                 Computing Time.

 

In computing any period of time prescribed or allowed by this Plan, unless otherwise set forth in this Plan or determined by the Bankruptcy Court, the provisions of Bankruptcy Rule 9006 shall apply.

 

12.12                 Exhibits to Plan.

 

All exhibits, schedules, supplements, and appendices to this Plan (including the Plan Supplement) are incorporated into and are a part of this Plan as if set forth in full in this Plan.

 

12.13                 Notices.

 

All notices, requests, and demands hereunder shall be in writing (including by facsimile transmission) and, unless otherwise provided herein, shall be deemed to have been duly given or made only when actually delivered or, in the case of notice by facsimile transmission, when received and telephonically confirmed, addressed as follows:

 

(a)                                 if to the Debtors or Reorganized Debtors:

 

Halcón Resources Corporation

1000 Louisiana St., Suite 1500
 Houston, Texas 7702
 Attn: David Elkouri, Executive Vice President and Chief Legal Officer

 

— and —

 

WEIL, GOTSHAL & MANGES LLP
 700 Louisiana Street, Suite 1700
 Houston, Texas 77002
 Attn: Alfredo R. Pérez
 Telephone: (713) 546-5000
 Facsimile:  (713) 224-9511

 

— and —

 

49

 

WEIL, GOTSHAL & MANGES LLP
 767 Fifth Avenue
 New York, New York 10153
 Attn:  Gary T. Holtzer, Esq., and Lauren Tauro, Esq.
 Telephone:  (212) 310-8000
 Facsimile:  (212) 310-8007

 

Attorneys for Debtors

 

(b)                                 if to the Consenting Creditors:

 

PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
 1285 Avenue of the Americas
 New York, New York 10019
 Attn:  Andrew Rosenberg, Esq., Robert Britton, Esq., Samuel Lovett, Esq.
 Telephone:  (212) 450-4000
 Facsimile:  (212) 701-5361

 

Attorneys for Consenting Creditors

 

After the occurrence of the Effective Date, the Reorganized Debtors have authority to send a notice to Entities that, to continue to receive documents pursuant to Bankruptcy Rule 2002, such entities must file a renewed request to receive documents pursuant to Bankruptcy Rule 2002; provided, however, that the U.S. Trustee need not file such a renewed request and shall continue to receive documents without any further action being necessary.  After the occurrence of the Effective Date, the Reorganized Debtors are authorized to limit the list of entities receiving documents pursuant to Bankruptcy Rule 2002 to those Entities that have filed such renewed requests.

 

12.14                 Reservation of Rights.

 

Except as otherwise provided herein, this Plan shall be of no force or effect unless the Bankruptcy Court enters the Confirmation Order.  None of the filing of this Plan, any statement or provision of this Plan, or the taking of any action by the Debtors with respect to this Plan shall be or shall be deemed to be an admission or waiver of any rights of the Debtors with respect to any Claims or Interests prior to the Effective Date.

 

50

 

	
Dated:
    	
 
    
	
Houston, Texas
    	
 
    
	
 
    	
Respectfully submitted,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Name: Richard Little
    
	
 
    	
Title: Chief Executive   Officer
    
	
 
    	
 
    
	
 
    	
on behalf of
    
	
 
    	
 
    
	
 
    	
Halcón Resources   Corporation
    
	
 
    	
Halcón Resources   Operating, Inc.
    
	
 
    	
Halcón   Holdings, Inc.
    
	
 
    	
Halcón Energy   Properties, Inc.
    
	
 
    	
Halcón Permian, LLC
    
	
 
    	
Halcón Field Services,   LLC
    
	
 
    	
Halcón Operating   Co., Inc.
    

 

 

EXHIBIT D

 

FORM OF JOINDER AGREEMENT FOR CONSENTING CREDITORS

 

This Joinder Agreement to the Restructuring Support Agreement, dated as of August 2, 2019 (as amended, supplemented, or otherwise modified from time to time, the “Agreement”), by and among the Company and certain holders of the Senior Notes (together with their respective successors and permitted assigns, the “Consenting Creditors” and each, a “Consenting Creditor”) is executed and delivered by  (the “Joining Party”) as of [·], 2019.  Each capitalized term used herein but not otherwise defined shall have the meaning set forth 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 Agreement as Annex I (as the same has been or may be hereafter amended, restated, or otherwise modified from time to time in accordance with the provisions hereof).  The Joining Party shall hereafter be deemed to be a “Consenting Creditor” and a “Party” for all purposes under the Agreement and with respect to any and all Claims and Interests held by such Joining Party.

 

2.              Representations and Warranties.  With respect to the aggregate principal amount of the Senior Notes and the number of shares of Existing Equity Interests, in each case, set forth below its name on the signature page hereto, the Joining Party hereby makes the representations and warranties of the Consenting Creditors set forth in Section 8 and Section 24 of the Agreement to each other Party to the Agreement.

 

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

 

[Signature Page Follows]

 

 

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

 

CONSENTING CREDITOR

 

[·]

 

	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    

 

Principal Amount of Senior Notes:  $

 

Number of Shares of Existing Equity Interests:

 

Notice Address:

 

	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Fax:
    	
 
    	
 
    
	
Attention:
    	
 
    	
 
    
	
Email:
    	
 
    	
 
    

 

	
 
    	
Acknowledged:
    
	
 
    	
 
    
	
 
    	
HALCÓN RESOURCES CORPORATION AND EACH OF ITS   SUBSIDIARIES
    
	
 
    	
 
    	
 
    
	
 
    	
By: 
    	
 
    
	
 
    	
Name: 
    
	
 
    	
Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00298-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00298-of-00352.parquet"}]]