Document:

Exhibit 10.1_Q2_2015

Exhibit 10.1

THIRD AMENDMENT TO CREDIT AGREEMENT dated as of June 24, 2015 (this “Third Amendment”), is made by and among WIRECO WORLDGROUP INC., a Delaware corporation (the “U.S. Borrower”), WRCA (LUXEMBOURG) HOLDINGS S.Á R.L., a société à responsabilité limitée incorporated under the laws of Luxembourg, with its registered office at 412F, Route d’Esch L-1030 Luxembourg, whose registration number with the Luxembourg Register of Commerce and Companies is B124385 and whose corporate capital amounts to $19,500 (the “Lux Borrower” and, together with the U.S. Borrower, the “Borrowers”), WIRECO WORLDGROUP (CAYMAN) INC., an exempted company incorporated with limited liability under the laws of the Cayman Islands (“Parent”), each of the other Persons party hereto designated as a Loan Party (the “Loan Parties”), Lenders party hereto, FIFTH THIRD BANK, in its capacity as Administrative Agent (in such capacity, the “Administrative Agent”) and as joint lead arranger, with JPMORGAN SECURITIES LLC, as joint lead arranger and bookrunner (in such capacity, the “Lead Arranger”, and together with Fifth Third Bank in its capacity as joint lead arranger, the “Joint Lead Arrangers”).

RECITALS:
WHEREAS, reference is made to the Credit Agreement dated as of July 12, 2012 (as amended, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement”), by and among the Borrowers, Holdings, the lenders and agents from time to time party thereto, the Administrative Agent and the other Agents named therein;
WHEREAS, the Borrowers have requested that certain amendments and modifications to the Credit Agreement be effected as described herein; and
WHEREAS, Lenders constituting Required Lenders and the Administrative Agent are willing to agree to this Third Amendment on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1.    Defined Terms.  Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Credit Agreement.
SECTION 2.    Amendments to Credit Agreement.  The Credit Agreement is hereby amended effective as of the satisfaction or waiver of the conditions precedent set forth in Section 3 as follows:
(a)    Section 1.01 of the Credit Agreement is hereby amended to add the following definitions thereto in appropriate alphabetical order:
“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to any of the Loan Parties from time to time concerning or relating to bribery or corruption.
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.) as amended from time to time or any successor statute.
“Excluded Swap Obligation” means, with respect to any Subsidiary Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the guarantee of such Subsidiary Loan 

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Party of, or the grant by such Subsidiary Loan Party of a security interest to secure, such Swap Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation, or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Subsidiary Loan Party’s failure for any reason not to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guarantee of such Subsidiary Loan Party or the grant of such security interest becomes effective with respect to such related Swap Obligation.  If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal.
“Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.
“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (on the Third Amendment Effective Date: Crimea, Cuba, Iran, North Korea, Sudan and Syria).
“Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, or by the United Nations Security Council, the European Union or any European Union member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons.
“Swap Obligation” means, with respect to any Subsidiary Loan Party, any obligation to pay or perform under any agreement, contract, or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.
“Third Amendment Effective Date” means June 24, 2015.
(b)    The definitions of “Federal Funds Effective Rate”, “LIBO Rate”, and “Secured Hedging Agreements” in Section 1.01 of the Credit Agreement are hereby amended by replacing such definitions in their entirety as follows:
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York; provided that if such Federal Funds Effective Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.
“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on the page of the Reuters screen which displays the London interbank offered 

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rate as administered by ICE Benchmark Administration or any successor entity (such page currently being LIBOR01) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for Dollar deposits with a maturity comparable to such Interest Period; provided that if the LIBO Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.  In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the arithmetic mean of the rates at which dollar deposits in amounts approximately equal to the amount of each Eurodollar Borrowing and for a maturity comparable to such Interest Period are offered by the principal London offices of three or more major banks selected by the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period; provided that if such LIBO Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.
“Secured Hedging Agreements” means (i) each interest rate Hedging Agreement entered into with any counterparty that was the Administrative Agent or a Lender or Arranger or an Affiliate of the Administrative Agent, a Lender or Arranger at the time such Hedging Agreement was entered into (unless such counterparty agrees with the Borrowers not to be secured by the Collateral under the Loan Documents), and (ii) each other type of Hedging Agreement entered into with any counterparty that was the Administrative Agent, a Lender or Arranger or an Affiliate of the Administrative Agent, a Lender or Arranger at the time such Hedging Agreement was entered into that is designated by the Borrowers to be a Hedging Agreement secured by the Collateral created under the Loan Documents; provided that, to the extent that, and only to the extent that, any Hedging Agreement constitutes an Excluded Swap Obligation it shall not constitute a Secured Hedging Agreement with respect to the applicable Subsidiary Loan Party.
(c)    The reference to “$125,000,000” in Section 2.01(b)(ii)(a) of the Credit Agreement is hereby amended by deleting such reference and replacing it with “$75,000,000”.
(d)    The reference to “2.75:1.00” in Section 2.01(b)(ii)(b) of the Credit Agreement is hereby amended by deleting such reference and replacing it with “2.25:1.00”.
(e)    The Credit Agreement is hereby amended by adding the following Section 3.23 to the end of Article III thereof immediately after existing Section 3.22 of the Credit Agreement:
SECTION 3.23.  Anti-Corruption Laws and Sanctions.  The Loan Parties have implemented and maintain in effect policies and procedures designed to ensure compliance by the Loan Parties and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and the Loan Parties and, to the knowledge of the Loan Parties, their respective officers, employees, directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects and are not knowingly engaged in any activity that would reasonably be expected to result in any Loan Party being designated as a Sanctioned Person.  None of the Loan Parties or, to the knowledge of the Loan Parties, any of their respective directors, officers, employees, or, any agent of any Loan Party that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person.  

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(f)    Section 5.09 of the Credit Agreement is hereby amended by adding the following clause (f) to the end thereof immediately after clause (e) therein:
(f)    The Parent and the Borrowers will maintain in effect and enforce policies and procedures designed to ensure compliance by the Loan Parties and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.
(g)    Section 6.11 of the Credit Agreement is hereby amended by replacing clause (b) thereof in its entirety as follows:
(b)     The Parent and the Borrowers will not permit the Interest Coverage Ratio as of the last day of any fiscal quarter to be less than the correlative ratio indicated below:
	
		
	Fiscal Quarter
	Interest Coverage Ratio

	June 30, 2015
	1.5:1.00

	September 30, 2015
	1.5:1.00

	December 31, 2015
	1.5:1.00

	March 31, 2016
	1.5:1.00

	June 30, 2016 and thereafter
	1.5:1.00

(h)The Credit Agreement is hereby amended by replacing Section 6.14 therein in its entirety as follows:
SECTION 6.14.  Use of Proceeds. Neither Borrower will knowingly request any Borrowing or Letter of Credit, and no Loan Party shall directly or knowingly indirectly use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, to the extent such activities, businesses or transaction would be prohibited by Sanctions if conducted by a corporation incorporated in the United States or in a European Union member state, or (C)  in any manner that would result in the violation of  any Sanctions applicable to any party hereto.
(i)    Section 9.15 of the Credit Agreement is hereby amended by replacing the last sentence therein with the following sentence:
Each Loan Party agrees that it will not claim that any of the Administrative Agent, the Collateral Agent, the Arrangers or the Lenders has rendered advisory services of any nature or respect or owes a fiduciary or similar duty to such Loan Party in connection with such transactions or the process leading thereto.

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SECTION 3.    Conditions Precedent to Third Amendment. This Third Amendment shall become effective only upon the satisfaction or waiver of the following conditions precedent:
(a)    The Administrative Agent shall have received a counterpart signature page of this Third Amendment duly executed by each of the U.S. Borrower, the Lux Borrower, Parent, each other Loan Party party hereto, the Administrative Agent and Lenders representing the Required Lenders.
(b)    The Administrative Agent shall have received for the account of each Lender that executes and delivers this Third Amendment prior to 4:00 p.m. New York time on June 18, 2015, a cash fee in the amount of .25% of such Lender’s aggregate Term Loans and Revolving Facility Exposure on such date.
(c)    The Administrative Agent shall have received on or prior to the Third Amendment Effective Date all fees, premiums (if any) and other amounts due and payable under the Loan Documents, including, reimbursement or other payment, to the extent invoiced, of all out-of-pocket expenses (including reasonable fees, charges and disbursements of Hahn & Hessen LLP, Chapman & Cutler LLP and each local counsel to the Administrative Agent and Joint Lead Arrangers) required to be reimbursed or paid by the Borrowers hereunder or otherwise in connection with the Credit Agreement and the Third Amendment.
(d)    The Lead Arranger shall have received on or prior to the Third Amendment Effective Date all fees and other amounts due and payable under the Fee Letter between the U.S. Borrower and the Lead Arranger and the Fee Letter between the U.S. Borrower and the Administrative Agent, each dated May 28, 2015.
(e)    The Administrative Agent shall have received a certificate signed by the Chief Financial Officer of the U.S. Borrower, certifying on behalf of the U.S. Borrower that (A) the representations and warranties of the Borrowers and each other Loan Party contained in Article III of the Credit Agreement and in any other Loan Document are true and correct in all material respects on and as of the Third Amendment Effective Date; provided that, to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct in all material respects as of such earlier date; provided, further, that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects on such respective dates and (B) no Default or Event of Default has occurred and is continuing on the Third Amendment Effective Date.
SECTION 4.    Representations and Warranties. In order to induce the Lenders to enter into this Third Amendment and to amend the Credit Agreement in the manner provided herein, each of the U.S. Borrower, the Lux Borrower and Parent represents and warrants as of the Third Amendment Effective Date that, both before and after giving effect to the Third Amendment, the following statements are true and correct in all material respects:
(a)    Power and Authority.  Each of the U.S. Borrower, the Lux Borrower, Parent and their Subsidiaries party hereto has all corporate or other organizational power and authority to execute, deliver and perform its obligations under this Third Amendment.

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(b)    Authorization. The execution, delivery and performance by each of the U.S. Borrower, the Lux Borrower, Parent and their Subsidiaries party hereto of this Third Amendment has been duly authorized by all necessary corporate or other organizational action.
(c)    No Contravention.  The execution, delivery and performance by each of the U.S. Borrower, the Lux Borrower, Parent and their Subsidiaries party hereto of this Third Amendment will not (i) contravene the terms of its charter, by-laws or other organizational documents; (ii) result in any breach or contravention of, or the creation of any Lien upon any of the property or assets of the U.S. Borrower, the Lux Borrower or Parent or any of the Subsidiaries (other than as permitted by Section 6.02 of the Credit Agreement) under (A) any contractual obligation to which the U.S. Borrower, the Lux Borrower, Parent or any Subsidiary is a party or affecting the U.S. Borrower, the Lux Borrower, Parent or any Subsidiary or the properties of the U.S. Borrower, the Lux Borrower, Parent or any of their Subsidiaries or (B) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which the U.S. Borrower, the Lux Borrower, Parent, any Subsidiary or their property is subject; or (iii) violate any applicable Law; except with respect to any breach, contravention or violation (but not creation of Liens) referred to in clauses (ii) and (iii), to the extent that such breach, contravention or violation would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(d)    Governmental Approvals.  No material approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority is necessary or required in connection with the execution, delivery or performance by, or enforcement against, the U.S. Borrower, the Lux Borrower, Parent or any Loan Party of this Third Amendment, except for those approvals, consents, exemptions, authorizations or other actions, notices or filings, the failure of which to obtain or make would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(e)    Enforceability. This Third Amendment has been duly executed and delivered by each of the U.S. Borrower, the Lux Borrower, Parent and each other Loan Party.  This Third Amendment constitutes a legal, valid and binding obligation of each of the U.S. Borrower, the Lux Borrower, Parent and each other Loan Party, enforceable against each of the U.S. Borrower, the Lux Borrower, Parent and each other Loan Party in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity and implied covenants of good faith and fair dealing, regardless of whether considered in a proceeding in equity or at law.
SECTION 5.    Reaffirmation of Guarantees and Security Interests. Each of the U.S. Borrower, the Lux Borrower, Parent and each other Loan Party hereto hereby (a) affirms and confirms its guarantees, pledges, grants and other undertakings under the Credit Agreement as amended hereby and by the other Loan Documents to which it is a party, (b) agrees that (i) each Loan Document to which it is a party shall continue to be in full force and effect as amended hereby and (ii) all guarantees, pledges, grants and other undertakings thereunder shall continue to be in full force and effect and shall accrue to the benefit of the Secured Parties. With respect to any Loan Party not party to this Third Amendment, the U.S. Borrower shall deliver to the Administrative Agent an executed reaffirmation from such Loan Party addressing the matters set forth in this Section 5 within 45 days of the Third Amendment Effective Date.
SECTION 6.    Effect on the Credit Agreement.

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(a)    Except as specifically amended by this Third Amendment, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed and this Third Amendment shall not be considered a novation.
(b)    The execution, delivery and performance of this Third Amendment shall not constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Lead Arranger or any Agent or Lender under any Loan Document.
(c)    On and after the Third Amendment Effective Date, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as modified by this Third Amendment.
(d)    This Third Amendment shall constitute a Loan Document as defined in the Credit Agreement.
SECTION 7.    Miscellaneous.
(a)    Amendment, Modification and Waiver. This Third Amendment may not be amended, modified or waived except by an instrument or instruments in writing signed and delivered on behalf of each of the parties hereto.
(b)    Applicable Law.  THIS THIRD AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
(c)    Severability.  If any provision of this Third Amendment is held to be illegal, invalid or unenforceable in any jurisdiction, the legality, validity and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, of this Third Amendment and the other Loan Documents shall not be affected or impaired thereby.
(d)    Counterparts.  This Third Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original but all of which when taken together shall constitute a single contract, and shall become effective.  Delivery of an executed counterpart of a signature page of this Third Amendment by telecopy or other electronic imaging (including in .pdf or .tif format) means shall be effective as delivery of a manually executed counterpart of this Third Amendment.
(e)    Headings.  Section headings herein are included herein for convenience of reference only and shall not constitute a part hereof for any other purpose or be given any substantive effect.
[Remainder of this page intentionally left blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be duly executed by their respective authorized officers as of the day and year first above written.
WIRECO WORLDGROUP INC.
By:  /s/ Christopher L. Ayers    
Name:  Christopher L. Ayers
Title:  President and CEO
By:  /s/ Brian G. Block    
Name:  Brian G. Block
Title:  Sr. VP and CFO
WRCA (LUXEMBOURG) HOLDINGS S.Á R.L.
By:  /s/ José Gramaxo    
Name:  José Gramaxo
Title:  A Manager
By:  /s/ Luca Gallinelli    
Name:  Luca Gallinelli
Title:  B Manager
WIRECO WORLDGROUP (CAYMAN) INC.
By:  /s/ Christopher L. Ayers    
Name:  Christopher L. Ayers
Title:  President and CEO

[Loan Party Signature Pages on File with Borrower]

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FIFTH THIRD BANK, as Administrative Agent
By:  /s/ Jim Esinduy    
Name:  Jim Esinduy
Title:  Vice President

[Lender Signature Pages on File with Administrative Agent]Exhibit 10.1

 

SETTLEMENT
AGREEMENT AND RELEASE

 

This Settlement Agreement
(the “Agreement”) is entered into as of May __, 2015 by and among the ShengdaTech Liquidating Trust (the “Liquidating
Trust”), A. Carl Mudd (“Mudd”), Sheldon B. Saidman (“Saidman” and together
with Mudd, the “Independent Directors”), Federal Insurance Company, (“Federal”), Ironshore
Indemnity, Inc. (“Ironshore”), the Miller Investment Trust, Jura Limited (“Jura”), the Randi
and Clifford Lane Foundation (the “Lane Foundation” and collectively with the Miller Investment Trust and Jura,
the “Miller Trust Plaintiffs”) and Oaktree Capital Management, L.P., on behalf of certain of its managed accounts;
Oaktree (Lux.) Funds – Oaktree Convertible Bond Fund; Oaktree High Income Convertible Fund, L.P.; Oaktree High Income Convertible
Fund II, L.P.; Oaktree Non-U.S. Convertible Fund, L.P.; Oaktree TT Multi-Strategy Fund, L.P.; OCM Global Convertible Securities
Fund; OCM International Convertible Trust; OCM Non-U.S. Convertible Securities Fund; Lazard Asset Management LLC, on behalf of
its managed accounts; HFR CA Lazard Rathmore Master Trust; AG OFCON LTD.; Zazove Associates LLC, on behalf of certain of its managed
funds and accounts; CNH CA Master Account, L.P.; CNH Diversified Opportunities Master Account, L.P.; Advent Claymore Convertible
Securities and Income Fund II; AQR Capital Management, LLC; AQR Convertible Opportunities Bond UCITS Fund; AQR Delta Master Account,
L.P.; AQR Opportunistic Premium Offshore Fund L.P.; AQR Diversified Arbitrage Fund; and Delaware Public Employees’ Retirement
System (the “Oaktree Plaintiffs”). Each of the foregoing persons and entities are sometimes referred to as a
“Party” and collectively as the “Parties.” All capitalized terms used herein will have the
meanings set forth in paragraph 1 of this Agreement.

 

BANKRUPTCY CASE

 

WHEREAS, ShengdaTech
filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code on August 19, 2011 in the Bankruptcy Court, Case
No. 11-52649 (BTB) (the “Bankruptcy Case”);

 

WHEREAS, on
October 1, 2012, the Debtor filed the First Amended Chapter 11 Plan of Reorganization, as Modified [Docket No. 652] (the
“Plan”);

 

WHEREAS, on
October 2, 2012, the Bankruptcy Court entered the Order Confirming the First Amended Chapter 11 Plan of Reorganization, as Modified
[Docket No. 655] (the “Confirmation Order”); and

 

WHEREAS, the
Plan created the Liquidating Trust and the Liquidating Trust Agreement was approved pursuant to the Confirmation Order.

 

OFFICER AND DIRECTOR INSURANCE POLICIES

 

WHEREAS, prior
to the commencement of the Bankruptcy Case, Zurich American Insurance Company (“Zurich”) issued to ShengdaTech
a $5,000,000 Directors & Officers Liability Insurance Policy – Zurich D&O Select Policy No. DOC 5965716-02 for the
period March 13, 2010 through March 13, 2012 (the “Zurich Policy”);

 

    	 		 

     

    

  

WHEREAS, prior
to the commencement of the Bankruptcy Case, Federal issued Excess Policy No. 8211-5057 (the “Federal Policy”)
to ShengdaTech for the Policy Period March 13, 2010 to March 13, 2012;

 

WHEREAS, prior
to the commencement of the Bankruptcy Case, Ironshore issued Excess Policy No. 000176501 (the “Ironshore Policy”)
to ShengdaTech for the Policy Period March 13, 2010 to March 13, 2012;

 

WHEREAS, on
August 14, 2012, the Bankruptcy Court entered the Order Pursuant to Bankruptcy Rule 9019 Approving Settlement Related to Debtor’s
Directors & Officers Insurance Policy [Docket No. 607] (the “Zurich Settlement”) whereby Zurich paid
approximately $3.75 million to ShengdaTech’s estate to settle matters relating to the Zurich Policy and the Zurich Policy
was deemed exhausted;

 

WHEREAS, Federal
subsequently advanced certain payments under the Federal Policy subject to a reservation of its rights; and

 

WHEREAS, the
parties have actual or potential disputes concerning the availability of coverage under the Federal Policy and the Ironshore Policy
(collectively, the “Remaining D&O Insurance Policies”).

 

LITIGATION

 

WHEREAS, on
June 26, 2012, the Miller Trust Plaintiffs filed the Miller Trust Lawsuit in which the Miller Trust Plaintiffs assert claims against
the Independent Directors for violations of the Massachusetts Uniform Securities Act, negligent misrepresentation, common law fraud,
and violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), which
claims are disputed by the Independent Directors;

 

WHEREAS, the
Miller Trust Plaintiffs and the Independent Directors have reached an agreement in principle to settle the Miller Trust Lawsuit,
the payment of which from the Remaining D&O Insurance Policies was enjoined by the Bankruptcy Court in connection with the
Declaratory Judgment Action;

 

WHEREAS, on
March 15, 2013, the Oaktree Plaintiffs filed the Oaktree Lawsuit in which the Oaktree Plaintiffs originally asserted claims against
the Independent Directors for, among other things, negligent misrepresentation, which claims were disputed by the Independent Directors;

 

WHEREAS, on
May 14, 2014, the Bankruptcy Court entered an order granting the Independent Directors’ Motion to Enforce [Docket No. 823;
Bankruptcy Case] and awarded fees and costs against the Oaktree Plaintiffs, which fees and costs have not yet been liquidated,
and which order is now on appeal before the United States District Court for the District of Nevada, Case No. 3:14-CV-00279-RCJ
(the “Appeal”) and set for oral argument on May 18, 2015 [Docket No. 27; Appeal] [Docket No. 944; Bankruptcy
Case];

 

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WHEREAS, after
entry of the order granting the Independent Directors’ Motion to Enforce, the Oaktree Plaintiffs amended the Oaktree Lawsuit
to assert claims against the Independent Directors for gross negligence, which claims are disputed by the Independent Directors;

 

WHEREAS, on
August 19, 2013, the Liquidating Trust filed the Inside Director Lawsuit against the Inside Directors alleging various claims,
including breach of fiduciary duties, in the Bankruptcy Court;

 

WHEREAS, on
October 10, 2014, the Oaktree Plaintiffs filed the Declaratory Judgment Action against Federal, Ironshore, the Miller Trust
Plaintiffs and the Independent Directors seeking certain declaratory relief, including a declaratory judgment that the Federal
Policy and Ironshore Policy and their respective proceeds were property of ShengdaTech’s estate and seeking to enjoin the
use of the proceeds of the Remaining D&O Insurance Policies, which claims are disputed by the defendants in the Declaratory
Judgment Action;

 

WHEREAS, the
Liquidating Trust filed a motion to intervene in the Declaratory Judgment Action as a plaintiff, which motion was granted on December
5, 2014; and

 

WHEREAS, the
Bankruptcy Court has issued an injunction in connection with the Declaration Judgment Action to and including June 17, 2015 [Docket
No. 161; Declaratory Judgment Action].

 

CLASS 4 PROOF OF CLAIM

 

WHEREAS, on
December 19, 2011, ShengdaTech and the Official Committee of Unsecured Creditors of the Debtor (the “Committee”)
entered into the Stipulation by and Among the Debtor and the Official Committee of Unsecured Creditors Regarding Proofs of Claim
to be Filed by Bar Date [Docket No. 283], that subject to approval by the Bankruptcy Court, provisionally allowed a class proof
of claim on behalf of certain purchasers of the 6.0% Notes due 2018 and 6.5% Notes due 2015 offered for sale by ShengdaTech on
May 22, 2008 and December 10, 2012, respectively (collectively, the “Notes”), for any and all claims that they
held against ShengdaTech’s estate, under securities or other laws related to the offer, sale and purchase of such Notes (the
“Class 4 Proof of Claim”);

 

WHEREAS, on
February 26, 2013, the Liquidating Trust filed the Objection of the ShengdaTech Liquidating Trust Seeking Entry of an Order
Pursuant to 11 U.S.C. §§ 105(A) and 502, Fed. R. Bankr. P. 3007 and Local Rule 3007 Disallowing and Expunging Contingent,
Unliquidated and/or Disputed Claims of Certain Noteholders [Docket No. 750] whereby the Liquidating Trust deferred liquidation
of the Class 4 Proof of Claim until a later date;

 

WHEREAS, on
October 15, 2014, certain holders of the Class 4 Proof of Claim filed the Note Purchaser’s Request for Allowance of Claims
and Response to Objection of the ShengdaTech Liquidating Trustee to the Allowance of such Claims [Docket No. 878];

 

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WHEREAS, on
December 2, 2014, the Bankruptcy Court entered the Order Approving Settlement Allowing Class 4 Proof of Claim Pursuant to Rule
9019 of the Federal Rules of Bankruptcy Procedure [Docket No. 913] (the “Class 4 Claim Settlement Order”);
and

 

WHEREAS, pursuant
to the Class 4 Claim Settlement Order, the Class 4 Proof of Claim was deemed allowed in the amount of $50 million (the “Allowed
Class 4 Claim”).

 

GENERAL STATEMENTS

 

WHEREAS, the
Parties have engaged in extensive efforts to reach a global resolution with those Parties to this Agreement with potential demands
for coverage from the Remaining D&O Insurance Policies, or whose losses could be covered by the Remaining D&O Insurance
Policies, or who have brought or could potentially bring actions against Federal or Ironshore with respect to certain coverage
disputes;

 

WHEREAS, the
Parties desire to resolve amicably their disputes as set forth in this Agreement and avoid the costs, risks and uncertainty of
the underlying litigation and coverage litigation by entering into this Agreement;

 

WHEREAS, this
Agreement affords significant benefits to all Parties;

 

WHEREAS, achieving
a resolution expressly depends upon obtaining appropriate orders from the Bankruptcy Court to carry out the purposes of, and approving
all of the terms contained in, this Agreement;

 

WHEREAS, the
Parties acknowledge that the amounts paid pursuant to this Agreement and its terms and conditions, including, without limitation,
the releases incorporated into this Agreement, are part of a global resolution of complex legal and factual issues, the outcomes
of which are uncertain, and constitute good and valuable consideration for this Agreement; and

 

NOW THEREFORE, in
consideration of the mutual covenants and promises contained in this Agreement, and for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

 

1.                 
Defined Terms. For the purposes of this Agreement, the following terms have the following meanings:

 

		a.	“Agreement” means this Settlement Agreement and Release by and between the Liquidating
Trust, the Independent Directors, Federal, Ironshore, the Miller Trust Plaintiffs, and the Oaktree Plaintiffs.

 

		b.	“Allowed Class 4 Claim” has the meaning ascribed to such term in the recitals
of this Agreement.

 

		c.	“Appeal” has the meaning ascribed to such term in the recitals of this Agreement.

 

    	 	4	 

     

    

 

		d.	“Approval Order” means that certain final order approving, among other things,
this Agreement and entered by the Bankruptcy Court in a form reasonably acceptable to all Parties, which order will include releases
and injunctions in favor of all Parties.

 

		e.	“Bankruptcy Case” has the meaning ascribed to such term in the recitals of this
Agreement.

 

		f.	“Bankruptcy Court” means the United States Bankruptcy Court for the District
of Nevada presiding over the Chapter 11 case of ShengdaTech.

 

		g.	“Claim(s)” means any past, present or future, known or unknown, suspected or
unsuspected, asserted or unasserted, foreseen or unforeseen, direct or indirect, fixed or contingent, matured or inchoate, in law
or equity, civil or criminal, claims, liabilities, obligations, damages, debts, cross-claims, counterclaims, complaints, rights,
demands, lawsuits, actions, causes of action, directives, orders, administrative proceedings, arbitrations, requests for information,
notice of partial or total responsibility or governmental actions made, asserted or filed, which seek compensatory damages, punitive
damages, interest, statutory damages, fines, or injunctive or other equitable relief, including the Class 4 Proof of Claim, the
Miller Trust Lawsuit, the Oaktree Lawsuit, the Inside Directors Lawsuit, the Declaratory Judgment Action, Defense Costs incurred
by the Liquidating Trust, the Federal Released Claims, the Ironshore Released Claims, the Liquidating Trust Released Claims, the
Miller Trust Released Claims, the Oaktree Released Claims, the fee and sanction award relating to the Motion to Enforce and any
other claims specifically identified in the recitals of this Agreement.

 

		h.	“Class 4 Proof of Claim” has the meaning ascribed to such term in the recitals
of this Agreement.

 

		i.	“Class 4 Claim Settlement Order” has the meaning ascribed to such term in the
recitals of this Agreement.

 

		j.	“Class 5 Claim” means (i) proof of claim number 9, which was filed by the lead
plaintiffs, Donald P. Yaw and Edward J. Schaul, individually and on behalf of all others similarly situated in the Securities Class
Action in an unliquidated amount, (ii) proof of claim number 10, which was filed by Yaw in the amount of $2,262,701.62 and (iii)
proof of claim number 11, which was filed by Schaul in the amount of $675,864.47. 

 

		k.	“Committee” has the meaning ascribed to such term in the recitals of this Agreement.

 

		l.	“Confirmation Order” has the meaning ascribed to such term in the recitals of
this Agreement.

 

    	 	5	 

     

    

 

		m.	“Declaratory Judgment Action” means that certain lawsuit filed in the United
States Bankruptcy Court for the District of Nevada and captioned Oaktree Capital Management, L.P., et al. vs. Ironshore indemnity,
Inc., et al., Case No. 14-05054.

 

		n.	“Defense Costs” has the meaning ascribed to such term in each of the Remaining
D&O Insurance Policies, except that for purposes of paragraph 5.g., Defense Costs has the meaning set forth in paragraph 5.g.

 

		o.	“Effective Date” means that date on which all of the conditions set forth in
this Agreement have been satisfied or waived and this Agreement becomes effective.

 

		p.	“Exchange Act” has the meaning ascribed to such term in the recitals of this
Agreement.

 

		q.	“Federal” has the meaning ascribed to such term in the recitals of this Agreement.

 

		r.	“Federal Policy” has the meaning ascribed to such term in the recitals of this
Agreement.

 

		s.	“Federal Released Claims” means those Claims released by Federal pursuant to
this Agreement.

 

		t.	“Federal Released Parties” means Federal, its past, present and future parents,
affiliates, subsidiaries, departments, divisions, predecessors, successors, assigns, employees, directors, officers, stockholders,
underwriters, insurers, reinsurers, claims managers, principals, agents, attorneys and representatives.

 

		u.	“Independent Directors” has the meaning ascribed to such term in the recitals
of this Agreement.

 

		v.	“Independent Director Released Claims” means those Claims released by the Independent
Directors pursuant to this Agreement.

 

		w.	“Independent Director Released Parties” means A. Carl Mudd, Sheldon B. Saidman
and their respective agents, assigns, attorneys, estates, heirs, and representatives.

 

		x.	“Insured Claim(s)” means any Claim that has been, or could be, asserted against
any entity or individual that has been or could be the subject of a demand for coverage under either or both of the Remaining D&O
Insurance Policies.

 

		y.	“Ironshore” has the meaning ascribed to such term in the recitals of this Agreement.

 

    	 	6	 

     

    

 

		z.	“Ironshore Policy” has the meaning ascribed to such term in the recitals of
this Agreement.

 

		aa.	“Ironshore Released Claims” means those Claims released by Ironshore pursuant
to this Agreement.

 

		bb.	“Ironshore Released Parties” means Ironshore, its past, present and future parents,
affiliates, subsidiaries, departments, divisions, predecessors, successors, assigns, employees, directors, officers, stockholders,
underwriters, insurers, reinsurers, claims managers, principals, agents, attorneys and representatives.

 

		cc.	“Jura” has the meaning ascribed to such term in the recitals of this Agreement.

 

		dd.	“Lane Foundation” has the meaning ascribed to such term in the recitals of this
Agreement.

 

		ee.	“Liquidating Trust” has the meaning ascribed to such term in the recitals of
this Agreement.

 

		ff.	“Liquidating Trust Agreement” has the meaning ascribed to such term in the Plan.

 

		gg.	“Liquidating Trust Released Claims” means those claims released by the Liquidating
Trust pursuant to this Agreement.

 

		hh.	“Liquidating Trust Released Parties” means the Liquidating Trust, any trustee
of the Liquidating Trust, any advisory board of the Liquidating Trust, and their respective members, affiliates, employees, directors,
officers, principals, representatives, agents, attorneys, successors, assigns and heirs.

 

		ii.	“Loss” has the meaning ascribed to such term in each of the Remaining D&O
Insurance Policies.

 

		jj.	“Miller Trust Lawsuit” means that certain lawsuit filed in the United States
District Court for the Southern District of New York and captioned Miller Investment Trust et al. v. Chen et al., Case No.
1:12-cv-04997-LGS (S.D.N.Y.).

 

		kk.	“Miller Trust Plaintiffs” has the meaning ascribed to such term in the recitals
of this Agreement.

 

		ll.	“Miller Trust Released Claims” means those claims released by the Miller Trust
Plaintiffs pursuant to this Agreement.

 

		mm.	“Miller Trust Released Parties” means each of the Miller Trust Plaintiffs, and
each of its past, present and future parents, affiliates, subsidiaries, departments, divisions, predecessors, successors, assigns,
employees, directors, officers, stockholders, underwriters, insurers, reinsurers, claims managers, principals, agents, attorneys
and representatives.

 

    	 	7	 

     

    

 

		nn.	“Motion to Enforce” means that certain motion to enforce the Plan injunction
filed by the Independent Directors on February 11, 2014 in the Bankruptcy Court [Docket No. 796].

 

		oo.	“Mudd” has the meaning ascribed to such term in the recitals of this Agreement.

 

		pp.	“Notes” has the meaning ascribed to such term in the recitals of this Agreement.

 

		qq.	“Oaktree Lawsuit” means that certain lawsuit against the Independent Directors
by the Oaktree Plaintiffs filed in the District Court of Clark County, Nevada and previously captioned Oaktree Capital Management
LP, et al. v. Xiangzhi Chen, et al., and currently captioned Oaktree Capital Management LP, et al. v.A. Carl Mudd, et al.,
Case No. A-13-678471-B (District Court, Clark County, Nevada).

 

		rr.	“Oaktree Plaintiffs” has the meaning ascribed to such term in the recitals of
this Agreement.

 

		ss.	“Oaktree Released Claims” means those claims released by the Oaktree Plaintiffs
pursuant to this Agreement

 

		tt.	“Oaktree Released Parties” means each of the Oaktree Plaintiffs, and each of
their respective past, present and future parents, affiliates, subsidiaries, departments, divisions, predecessors, successors,
assigns, employees, directors, officers, stockholders, underwriters, insurers, reinsurers, claims managers, principals, agents,
attorneys and representatives.

 

		uu.	“Inside Directors” means Xiangzhi Chen, Anhui Guo and Andrew Chen.

 

		vv.	“Inside Directors Lawsuit” means that certain lawsuit filed by the Liquidating
Trust against Inside Directors in the United States Bankruptcy Court for the District of Nevada and captioned ShengdaTech Liquidating
Trust v. Xiangzhi Chen, et al., Case No. 13-05047-gwz (Bankr. D. Nev.).

 

		ww.	“Party” or “Parties” has the meaning ascribed to such
term in the recitals of this Agreement.

 

		xx.	“Person” means any natural person, class or group of natural persons, corporation,
partnership, association, trust, or any other entity or organization, including, without limitation, any federal, provincial, state,
county, city or municipal governmental or quasi-governmental body or political subdivision, department, agency or instrumentality
thereof.

 

		yy.	“Plan” has the meaning ascribed to such term in the recitals of this Agreement.

 

    	 	8	 

     

    

 

		zz.	“Remaining D&O Insurance Policies” has the meaning ascribed to such term
in the recitals of this Agreement.

 

		aaa.	“Saidman” has the meaning ascribed to such term in the recitals of this Agreement.

 

		bbb.	“Settlement Amount” has the meaning set forth in paragraph 2 of this Agreement.

 

		ccc.	“Securities Class Action” means that certain class action case filed on May
6, 2011 in the United States District Court for the Southern District of New York and captioned In re ShengdaTech, Inc. Securities
Litigation, Case No. 1:11-cv001918-LGS (S.D.N.Y.) for alleged violations of Sections 10(b) and 20(a) of the Exchange Act.

 

		ddd.	“Securities Plaintiffs” means the plaintiffs in the Securities Class Action.

 

		eee.	“ShengdaTech” means ShengdaTech, Inc.

 

		fff.	“ShengdaTech Released Parties” means ShengdaTech, Inc., its past, present and
future parents, affiliates, subsidiaries, departments, divisions, predecessors, successors, assigns, employees, directors, officers,
stockholders, principals, agents, attorneys and representatives. The term “ShengdaTech Released Parties” does not include,
and is not intended to include, any of ShengdaTech’s outside auditors or any underwriter of any ShengdaTech security.

 

		ggg.	“Zurich” has the meaning ascribed to such term in the recitals of this Agreement.

 

		hhh.	“Zurich Policy” has the meaning ascribed to such term in the recitals of this
Agreement.

 

		iii.	“Zurich Settlement” has the meaning ascribed to such term in the recitals of
this Agreement.

 

2.                 
Payment of Settlement Amount. Within fourteen (14) business days after the Approval Order has become a final,
binding and non-appealable order, in full and final settlement of all Claims, Federal and Ironshore will pay a total of $7,900,000
(the “Settlement Amount”) for the following: (a) $1,000,000 to the Liquidating Trust for payment of Defense
Costs incurred by the Liquidating Trust (or as directed by the Liquidating Trust to its counsel, Greenberg Traurig, LLP) and to
the extent any monies remain after payment of Defense Costs, such monies shall be used to fund the ongoing administration of the
Liquidating Trust or distributed to the holders of the Allowed Class 4 Claim, net of costs and fees associated with any such distribution;
(b) $2,400,000 to the Miller Trust Plaintiffs; and (c) the balance of $4,500,000 to the Oaktree Plaintiffs. Each of the Liquidating
Trust, the Miller Trust Plaintiffs and the Oaktree Plaintiffs specifically acknowledges that the Settlement Amount constitutes
payment of Loss for the Insured Claims and constitutes fair and adequate consideration for undertaking to perform the obligations
provided for by this Agreement. Federal and Ironshore each further acknowledge that ShengdaTech and/or the Liquidating Trust has
satisfied any and all retention obligations under the Federal Policy and the Ironshore Policy as applicable. Each of the Miller
Trust Plaintiffs, the Oaktree Plaintiffs and the Liquidating Trust will provide to Federal and Ironshore wire instructions and
tax identification numbers for their portions of the Settlement Amount.

 

    	 	9	 

     

    

  

3.                 
Holders of Allowed Class 4 Claim. The Miller Trust Plaintiffs and the Oaktree Plaintiffs shall not be considered
holders of the Allowed Class 4 Claim and, therefore, will not be entitled to a distribution under paragraph 2(a) of this Agreement
should there be funds available for a distribution to holders of the Allowed Class 4 Claim.

  

4.                 
Full Release by Parties.

 

a.                  
Federal. For and in consideration of Federal’s payment towards the Settlement Amount, the agreements and covenants
contained in this Agreement, and for other good and valuable consideration, the adequacy of which is expressly acknowledged, upon
the Effective Date, except as otherwise provided for herein, (i) the Liquidating Trust, on behalf of itself and, to the fullest
extent legally permissible, the Liquidating Trust Released Parties and the ShengdaTech Released Parties; (ii) the Independent Directors
on behalf of the Independent Director Released Parties; (iii) the Miller Trust Plaintiffs on behalf of the Miller Trust Released
Parties; (iv) the Oaktree Plaintiffs on behalf of the Oaktree Released Parties; and (v) Ironshore on behalf of the Ironshore Released
Parties, each on behalf of itself and to the fullest extent legally permissible, fully and forever release and discharge the Federal
Released Parties from any and all actual or potential Claims, actions, causes of action, suits, claims for sums of money, contracts,
controversies, agreements, costs, attorneys’ fees, expenses, damages, judgments and demands whatsoever in law or in equity,
known or unknown, now existing or hereafter arising, whether contractual, extra-contractual, in tort or otherwise, which the Liquidating
Trust Released Parties, the ShengdaTech Released Parties, the Independent Director Released Parties, the Miller Trust Released
Parties, the Oaktree Released Parties, and the Ironshore Released Parties had, have, or may have in the future against the Federal
Released Parties with respect to the Claims; any of the allegations alleged or that could have been alleged in the Claims; the
Federal Policy; ShengdaTech; the Liquidating Trust and any loss incurred in connection with the Claims, including but not limited
to any action, proceeding or claim arising from any investigation, evaluation or handling of the Claims or alleging any “bad
faith” or breach of any promise, oral or written, or breach of any duty grounded in law or in contract relating thereto.
Furthermore, in exchange for Federal’s payment towards the Settlement Amount and disbursement of the monies as set forth
in paragraph 2 of this Agreement, upon the Effective Date, each of the Releasors set forth in this paragraph 5.a. will be deemed
to have waived any Claim or Insured Claim or claim for insurance coverage under the Federal Policy. Each of the Parties recognizes
and acknowledges that on the Effective Date, neither Federal nor any of the Federal Released Parties will have any further obligations
to any of the other Parties under or in connection with the Federal Policy or for any Claim that has or may be the subject of notice
under the Federal Policy. Each of the Parties recognizes and acknowledges that on the Effective Date, the Federal Policy will be
exhausted.

 

    	 	10	 

     

    

  

b.                 
Ironshore. For and in consideration of Ironshore’s payment towards the Settlement Amount, the agreements and
covenants contained in this Agreement, and for other good and valuable consideration, the adequacy of which is expressly acknowledged,
upon the Effective Date, except as otherwise provided for herein, (i) the Liquidating Trust, on behalf of itself and, to the fullest
extent legally permissible, the Liquidating Trust Released Parties and the ShengdaTech Released Parties; (ii) the Miller Trust
on behalf of the Miller Trust Released Parties; (iii) the Oaktree Plaintiffs on behalf of the Oaktree Released Parties; and (iv)
Federal on behalf of the Federal Released Parties, each on behalf of itself and to the fullest extent legally permissible, fully
and forever release and discharge the Ironshore Released Parties from any and all actual or potential Claims, actions, causes of
action, suits, claims for sums of money, contracts, controversies, agreements, costs, attorneys’ fees, expenses, damages,
judgments and demands whatsoever in law or in equity, known or unknown, now existing or hereafter arising, whether contractual,
extra-contractual, in tort or otherwise, which the Liquidating Trust Released Parties, the ShengdaTech Released Parties, the Miller
Trust Released Parties, the Oaktree Released Parties, and the Federal Released Parties had, have, or may have in the future against
the Ironshore Released Parties with respect to the Claims; any of the allegations alleged or that could have been alleged in the
Claims; the Ironshore Policy; ShengdaTech, the Liquidating Trust; and any loss incurred in connection with the Claims, including
but not limited to any action, proceeding or claim arising from any investigation, evaluation or handling of the Claims or alleging
any “bad faith” or breach of any promise, oral or written, or breach of any duty grounded in law or in contract relating
thereto. Furthermore, in exchange for Ironshore’s payment towards the Settlement Amount and disbursement of the monies as
set forth in paragraph 2 of this Agreement, upon the Effective Date, each of the Releasors set forth in this paragraph 5.b will
be deemed to have waived any Claim or Insured Claim or claim for insurance coverage under the Ironshore Policy, except as otherwise
provided for herein. Each of the Parties recognizes and acknowledges that on the Effective Date, neither Ironshore nor any of the
Ironshore Released Parties will have any further obligations to any of the other Parties under or in connection with the Ironshore
Policy or for any Claim that has or may be the subject of notice under the Ironshore Policy, except the Independent Directors expressly
retain any and all rights to seek Defense Costs and other coverage from the Ironshore Policy as set forth in paragraph 5.g.

 

c.                  
Liquidating Trust. For and in consideration of the agreements and covenants contained in this Agreement, and for
other good and valuable consideration, the adequacy of which is expressly acknowledged, on the Effective Date, except as otherwise
provided for herein, (i) the Independent Directors on behalf of the Independent Director Released Parties, (ii) the Miller Trust
Plaintiffs on behalf of the Miller Trust Released Parties, (iii) the Oaktree Plaintiffs on behalf of the Oaktree Released Parties,
(iv) Federal on behalf of the Federal Released Parties, and (v) Ironshore on behalf of the Ironshore Released Parties, each on
behalf of itself and to the fullest extent legally permissible, will fully and forever release and discharge the Liquidating Trust
Released Parties and the ShengdaTech Released Parties from any and all actual or potential Claims, Insured Claims, actions, causes
of action, suits, claims for sums of money, contracts, controversies, agreements, costs, attorneys’ fees, expenses, damages,
judgments and demands whatsoever in law or in equity, known or unknown, now existing or hereafter arising, whether contractual,
extra-contractual, in tort or otherwise, which any of the respective Releasors set forth in this pargraph 5.c had, have, or may
have in the future against the Liquidating Trust Released Parties and the ShengdaTech Released Parties with respect to the Claims
or Insured Claims, any of the allegations alleged or that could have been alleged in the Claims or Insured Claims; the Federal
Policy; the Ironshore Policy; and any loss incurred in connection with the Claims or Insured Claims.

 

    	 	11	 

     

    

  

d.                 
Independent Directors. For and in consideration of the agreements and covenants contained in this Agreement, and
for other good and valuable consideration, the adequacy of which is expressly acknowledged, on the Effective Date, except as otherwise
provided for herein, (i) the Liquidating Trust, on behalf of itself and, to the fullest extent legally permissible, the Liquidating
Trust Released Parties and the ShengdaTech Released Parties; (ii) the Miller Trust Plaintiffs on behalf of the Miller Trust Released
Parties; (iii) the Oaktree Plaintiffs on behalf of the Oaktree Released Parties; (iv) Federal on behalf of the Federal Released
Parties; and (v) Ironshore on behalf of the Ironshore Released Parties, each on behalf of itself and to the fullest extent legally
permissible will fully and forever release and discharge the Independent Director Released Parties from any and all actual or potential
Claims, Insured Claims, actions, causes of action, suits, claims for sums of money, contracts, controversies, agreements, costs,
attorneys’ fees, expenses, damages, judgments and demands whatsoever in law or in equity, known or unknown, now existing
or hereafter arising, whether contractual, extra-contractual, in tort or otherwise, which any of the respective Releasors set forth
in this paragraph 5.d had, have, or may have in the future against the Independent Director Released Parties with respect to the
Claims or Insured Claims; any of the allegations alleged or that could have been alleged in the Claims or Insured Claims; the Federal
Policy; the Ironshore Policy; and any loss incurred in connection with the Claims or Insured Claims.

 

e.                  
Miller Trust. For and in consideration of the agreements and covenants contained in this Agreement, and for other
good and valuable consideration, the adequacy of which is expressly acknowledged, on the Effective Date, except as otherwise provided
for herein, the (i) Liquidating Trust, on behalf of itself and, to the fullest extent legally permissible, the Liquidating Trust
Released Parties and the ShengdaTech Released Parties; (ii) the Independent Directors on behalf of the Independent Director Released
Parties; (iii) the Oaktree Plaintiffs on behalf of the Oaktree Released Parties; (iv) Federal on behalf of the Federal Released
Parties; and (v) Ironshore on behalf of the Ironshore Released Parties, each on behalf of itself and to the fullest extent legally
permissible, will fully and forever release and discharge the Miller Trust Released Parties from any and all actual or potential
Claims, Insured Claims, actions, causes of action, suits, claims for sums of money, contracts, controversies, agreements, costs,
attorneys’ fees, expenses, damages, judgments and demands whatsoever in law or in equity, known or unknown, now existing
or hereafter arising, whether contractual, extra-contractual, in tort or otherwise, which any of the respective Releasors set forth
in this paragraph 5.e had, have, or may have in the future have against the Miller Trust Released Parties with respect to the Claims
or Insured Claims, any of the allegations alleged or that could have been alleged in the Claims or Insured Claims; the Federal
Policy; the Ironshore Policy; and loss incurred in connection with the Claims or Insured Claims.

 

    	 	12	 

     

    

  

f.                  
Oaktree. For and in consideration of the agreements and covenants contained in this Agreement, and for other good
and valuable consideration, the adequacy of which is expressly acknowledged, on the Effective Date, except as otherwise provided
for herein, (i) the Liquidating Trust, on behalf of itself and, to the fullest extent legally permissible, the Liquidating Trust
Released Parties and the ShengdaTech Released Parties; (ii) the Independent Directors on behalf of the Independent Director Released
Parties; (iii) the Miller Trust Plaintiffs on behalf of the Miller Trust Released Parties; (iv) Federal on behalf of the Federal
Released Parties; and (v) Ironshore on behalf of the Ironshore Released Parties, each on behalf of itself and to the fullest extent
legally permissible, will fully and forever release and discharge the Oaktree Released Parties from any and all actual or potential
Claims, Insured Claims, actions, causes of action, suits, claims for sums of money, contracts, controversies, agreements, costs,
attorneys’ fees, expenses, damages, judgments and demands whatsoever in law or in equity, known or unknown, now existing
or hereafter arising, whether contractual, extra-contractual, in tort or otherwise, which any of the respective Releasors set forth
in this paragraph 5.f had, have, or may have in the future have against the Oaktree Released Parties with respect to the Claims
or Insured Claims; any of the allegations alleged or that could have been alleged in the Claims or Insured Claims; the Federal
Policy; the Ironshore Policy; and the loss incurred in connection with the Claims or Insured Claims.

 

g.                 
Independent Directors’ Defense Costs. Upon the Effective Date, the Independent Directors on behalf of the Independent
Director Released Parties fully and forever release and discharge the Ironshore Released Parties from any Claims or Insured Claims
which the Independent Director Released Parties had, have, or may have in the future against the Ironshore Released Parties for
monies (including payment of settlements or Defense Costs) paid by Zurich, the Federal Released Parties, or the Ironshore Released
Parties to the Independent Director Released Parties, and received by the Independent Directors prior to the Effective Date of
this Agreement, in connection with the Class 4 Proof of Claim, the Miller Trust Lawsuit, the Oaktree Lawsuit, the Inside Directors
Lawsuit, the Declaratory Judgment Action, the Federal Released Claims, the Ironshore Released Claims, the Liquidating Trust Released
Claims, the Miller Trust Released Claims, or the Oaktree Released Claims. Notwithstanding this Agreement, including the foregoing
releases, the Independent Director Released Parties expressly retain any and all rights to seek Defense Costs and other coverage
from the Ironshore Policy in connection with: (1) the Securities Class Action, including but not limited to any settlement or judgment
in connection therewith; and (2) any claim, including but not limited to any third-party discovery request or any other action,
that has been the subject of notice under the Ironshore Policy. For purposes of this paragraph 5.g, Defense Costs means reasonable
and necessary legal fees, costs and expenses incurred in the investigation, defense, or appeal of any Claim or Insured Claim that
has or may be the subject of notice under the Ironshore Policy, including the costs of an appeal bond, attachment bond, or similar
bond.

 

h.                 
Securities Class Action and Class 5 Claim. Notwithstanding the foregoing releases, nothing in this Agreement settles
the Securities Class Action or the Class 5 Claim or provides any distributions on account of the Securities Class Action or the
Class 5 Claim. This Agreement shall, however, resolve the Remaining D&O Insurance Policies to the extent set forth in this
Agreement. For purposes of clarification, given that the various Releasors will waive all claims against the Federal Policy and
the Ironshore Policy and given that the Federal Policy will be deemed exhausted, there will be no available insurance coverage
for the Class 5 Claim.

 

    	 	13	 

     

    

  

i.                   
Agreement Requirements. Notwithstanding the foregoing releases, all Parties to this Agreement are bound to perform
the terms of this Agreement and meet their obligations under this Agreement.

 

5.                 
Withdrawal of Claims. After payment of the Settlement Amount and entry of the Approval Order, the Liquidating
Trust, the Independent Directors, the Miller Trust Plaintiffs, and the Oaktree Plaintiffs will withdraw any demands for coverage
from the Federal Policy or the Ironshore Policy and further agree that they will not institute any actions, litigation or claim
in connection with the Remaining D&O Insurance Policies; except that the Independent Director Released Parties expressly retain
any and all rights to seek Defense Costs and other coverage from the Ironshore Policy as set forth in paragraph 5.g.

 

6.                 
Dismissal of Litigation. After payment of the Settlement Amount and entry of the Approval Order, the Parties
agree that the following lawsuits will be dismissed with prejudice: (a) the Oaktree Lawsuit, (b) the Miller Trust Lawsuit, (c)
the Declaratory Judgment Action, and (d) the Inside Directors Lawsuit. In addition, the Independent Directors will withdraw any
and all requests for fees and costs against the Oaktree Plaintiffs.

 

7.                 
 California Civil Code Section 1542. The Parties acknowledge that they have been advised by their respective
attorneys concerning, and are familiar with California Civil Code Section 1542, which reads as follows:

 

A general release does not extend to
claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if
known by him or her must have materially affected his settlement with the debtor.

 

Each of the Parties expressly waives any
and all rights under California Civil Code Section 1542 and under any other federal or state statute or law of similar effect with
respect to the Claims.

 

8.                 
Further Discovery and Prosecution of Litigation. Each of the Parties represents and warrants that each of the
Parties will refrain from serving or causing any discovery requests to be served on the Liquidating Trust with respect to any Claim;
provided, that a Party may request the Liquidating Trust to consent to any additional discovery requests or, in the event
the Liquidating Trust does not consent, seek relief from the Bankruptcy Court. Should the Liquidating Trust consent or otherwise
become obligated to respond to additional discovery requests by a Party, the requesting Party will be responsible to pay any costs
or fees reasonably incurred by the Liquidating Trust in responding to the requests.

 

    	 	14	 

     

    

  

9.                 
Injunction. The Liquidating Trust will file a motion for entry of an order by the Bankruptcy Court (a) approving
this Agreement and (b) precluding any and all of the Liquidating Trust’s beneficiaries and any and all of ShengdaTech’s
creditors, shareholders, officers, directors, insurers or other parties in interest, who are not signatories to this Agreement
from directly or indirectly bringing, commencing, initiating, instituting, maintaining, prosecuting or otherwise aiding in any
action or other proceeding of any kind or nature, whether for the benefit of the Liquidating Trust, the ShengdaTech Chapter 11
estate, the beneficiaries of the Liquidating Trust or the creditors of ShengdaTech or for the benefit of any third party, against
any of ShengdaTech, the Liquidating Trust, the Liquidating Trust Released Parties, the ShengdaTech Released Parties, the Independent
Directors, the Independent Director Released Parties, the Miller Trust Plaintiffs, the Miller Trust Released Parties, the Oaktree
Plaintiffs, the Oaktree Released Parties, Federal, the Federal Released Parties, Ironshore or the Ironshore Released Parties for
any act committed by such parties with respect to the Federal Policy, the Ironshore Policy, the settlement herein, this Agreement,
or any other action or proceeding relating to the conduct of Federal or Ironshore. The motion will further seek an order by the
Bankruptcy Court precluding any interested party, who is not a signatory to this Agreement from directly or indirectly bringing,
commencing, initiating, instituting, maintaining, prosecuting or otherwise aiding any Claim, action or other proceeding against
the Liquidating Trust, the Liquidating Trust Released Parties, ShengdaTech, the ShengdaTech Released Parties, the Independent Directors,
the Independent Director Released Parties, the Miller Trust Plaintiffs, the Miller Trust Released Parties, the Oaktree Plaintiffs,
the Oaktree Released Parties, Federal, the Federal Released Parties, Ironshore or the Ironshore Released Parties in connection
with the Federal Policy or the Ironshore Policy. Notwithstanding the foregoing, the Securities Plaintiffs shall maintain the right
to pursue their pending action against the Independent Directors, and the Independent Director Released Parties expressly retain
any and all rights to seek Defense Costs and other coverage from the Ironshore Policy as set forth in paragraph 5.g. Further notwithstanding
anything to the contrary herein, KPMG’s and Morgan Stanley’s rights will be subject to the terms of the Plan and Confirmation
Order and any agreements that might exist between either or both of KPMG and Morgan Stanley, on the one hand, and the Liquidating
Trust Released Parties or the ShengdaTech Released Parties, on the other hand.

 

10.             
Contribution Bar Order. The Liquidating Trust will file a motion for entry of an order by the Bankruptcy
Court precluding any and all of the Liquidating Trust's beneficiaries and any and all of ShengdaTech's creditors, shareholders,
officers, directors, insurers or other parties in interest who are not signatories to this Agreement from bringing or maintaining
any claims in any jurisdiction for contribution or indemnification of any kind against the Independent Director Released Parties
that arise out of or in any way relate to the Claims.

 

11.             
Court Approval. As soon as practicable after the execution of this Agreement by all Parties, the Liquidating
Trust will file a motion with the Bankruptcy Court seeking approval of this Agreement in its entirety and will serve the motion
and schedule a hearing in accordance with the Federal Rules of Bankruptcy Procedure. Any order obtained from the Bankruptcy Court
approving this Agreement will be in a form acceptable to all Parties.

 

12.             
Agreement Not an Admission. This Agreement and the payments referred to in it are for the negotiated compromise
of disputed Claims and will not be construed as an admission of coverage by Federal or Ironshore, or an admission of liability
by ShengdaTech or the Independent Directors. Neither this Agreement nor the allocation of the Settlement Amount will constitute
a determination or evidence that the Federal Policy or the Ironshore Policy does or does not provide coverage for Insured Claims
against ShengdaTech or the Independent Directors. The definitions or terms used in this Agreement will not be construed as an admission
of any kind by any of the Parties.

 

    	 	15	 

     

    

  

13.             
Notices. Any notice which the Parties wish to give, or are required to give, under this Agreement will be
given in writing, unless the urgency of a situation would render written notice impracticable, in which case oral notice will be
given. Any oral notice or communication will be confirmed in writing as soon as reasonably possible after such oral notice or communication
is given. All written notices or communications, including confirmations of oral notices or communications, will be made by hand,
by overnight courier, by email (with hard copy sent by hand, overnight delivery or facsimile) or by facsimile (with an original
sent by U.S. Mail), to the Parties, as set forth below, or to such other representative(s) or addresses as each of the Parties,
respectively, may designate in writing in accordance with the notice provisions of this paragraph 13. Notice to fewer than the
following representatives of the Parties, or as subsequently designated, will not constitute notice under this Agreement.

 

For the Liquidating Trust:

 

Michael D. Kang

Alvarez & Marsal North America LLC

100 Pine Street, Suite 900

San Francisco, CA 94111

Telephone: (415) 490-2308

Facsimile: (415) 358-5835

Email: mkang@alvarezandmarsal.com

 

and

 

Nancy A. Peterman, Esq.

Greenberg Traurig, LLP

77 West Wacker Drive, Suite 3100

Chicago, IL 60601

Telephone: (312) 456-8410

Facsimile: (312) 456-8435

Email: petermann@gtlaw.com

 

For the Independent Directors:

 

A. Carl Mudd

5318 Royal Crest Dr.

Dallas, TX 75229

Telephone: (214) 361-1721

Facsimile: (509) 757-9211

Email: acmudd@aol.com

 

    	 	16	 

     

    

 

Sheldon B. Saidman

Saidman & Associates, Inc.

5912 Via Verona View

Colorado Springs, CO 80919

Telephone: (719) 548-9963

Facsimile:

Email: Saidmaninc@aol.com

 

and

 

Stephen Mark Dollar, Esq.

Norton Rose Fulbright US LLP

666 Fifth Avenue

New York, NY 10103-3198

Telephone: (212) 318-3211

Facsimile: (212) 318-3400

Email: Steve.Dollar@nortonrosefulbright.com

 

For Federal

 

Kenneth West

Assistant Vice President

Chubb Group of Insurance Companies

82 Hopmeadow Street

Post Office Box 2002

Simsbury, CT 06070-7683

kwest@chubb.com

 

and

 

Merril Hirsh

Troutman Sanders, LLP

401 – 9th St., N.W., Suite 1000

Washington, D.C. 20004

merril.hirsh@troutmansanders.com

 

For Ironshore

 

Michael Adler

Senior Vice President

Claims

IRONSHORE

One State Street Plaza, 7th Floor

New York, NY 10004

michael.adler@ironshore.com

 

    	 	17	 

     

    

 

and

 

Mary Jo Barry

D'Amato & Lynch, LLP

Two World Financial Center

New York, NY 10281

MJBarry@Damato-Lynch.com

 

For the Miller Trust Plaintiffs

 

Laurence M. Rosen

The Rosen Law Firm

275 Madison Avenue, 34th Floor

New York, NY 10016

 

For the Oaktree Plaintiffs

 

Stuart Grant

Grant & Eisenhofer, P.A.

485 Lexington Avenue

New York, NY 10017

 

14.             
Miscellaneous Provisions. 

 

a.                  
Recitals. This Agreement has been entered into upon reliance on the recitals set forth above and are incorporated
into this Agreement as though fully set forth herein.

 

b.                 
Entire Agreement. This Agreement comprises the entire understanding of the Parties with respect to the subject
matter of the Agreement. All prior communications, including correspondence and drafts of this Agreement, are merged into this
Agreement, and only this Agreement contains the actual and final agreement of the Parties.

 

c.                  
Agreement is Freely Entered. This Agreement is the product of informed, arm’s-length negotiations with
each Party having the advice of counsel, and involves compromises of the Parties’ previously-stated legal positions. Each
of the Parties acknowledges that it or they know all of its or their rights in connection with this Agreement, and that it or they
have not been improperly influenced, coerced, or induced to make this compromise settlement by any action on the part of any employee,
agent, attorney, or representative of any Party to this Agreement.

 

d.                 
Representations and Warranties.

 

		i.	Subject to entry of the Approval Order, each Party to
this Agreement represents and warrants that it (or he) has the authority to enter into this Agreement and to perform the duties
and obligations to which it or they have agreed herein.

 

    	 	18	 

     

    

 

		ii.	The Liquidating Trust and the Independent Director Released
Parties warrant that they have not sold, assigned, or otherwise transferred any interest in the matters, demands, rights, or insurance
policies that are the subject of the releases herein, and that they are the only Persons entitled to recover under the Remaining
D&O Insurance Policies for such released matters.

 

		iii.	Each of the Parties further represents and warrants that
to the extent necessary, it or they have taken all necessary corporate and internal legal actions to duly approve of the making
and performance of this Agreement and that no further corporate or other internal approval is necessary.

 

e.                  
Rules of Interpretation. This Agreement is the product of arm’s-length negotiation between the Parties, and
the Parties have entered into this Agreement freely and voluntarily and with the advice of legal counsel. This Agreement is not
a contract of insurance and no special rules of construction or interpretation of insurance policies will apply. Instead, only
the rules of interpretation or construction of contracts in general will apply. None of the Parties will be deemed the drafter
of this Agreement. In the event that a dispute arises over the meaning or application of any term of this Agreement, such term
will not be construed by reference to any doctrine calling for ambiguities to be construed against an insurer or against the drafter
of a document.

 

f.                  
Agreement Not to Confer Rights on Third Parties. This Agreement is intended to confer rights and benefits only on
the Parties to it and only with respect to the matters described in it. No Person other than the Parties will have any legally
enforceable rights under this Agreement. This Agreement will not be assigned without the written consent of each of the Parties.

 

g.                 
Execution in Counterparts. To facilitate execution, this Agreement may be executed in several counterparts by one
or more of the undersigned Parties and all such counterparts when so executed will together be deemed to constitute a single agreement
as if one document had been signed by all Parties. Facsimile or electronic (pdf) signatures will be deemed original, valid and
binding signatures to this Agreement.

 

h.                 
Governing Law. This Agreement will be governed by the laws of the State of Nevada and will be construed and
interpreted in accordance with its laws, notwithstanding its conflict of law principles or any other rule, regulation or principle
that would result in the application of any other state’s law.

 

i.                   
Bankruptcy Court Jurisdiction. The Bankruptcy Court will retain jurisdiction to resolve any disputes or controversies
arising from or related to this Agreement. All Parties agree and consent to the jurisdiction of the Bankruptcy Court to resolve
any disputes or controversies between the Parties hereto arising from or related to this Agreement. Any motion, application or
other action or proceeding brought before the Bankruptcy Court to resolve a dispute arising from or related to this Agreement will
be brought on proper notice in accordance with the Federal Rules of Bankruptcy Procedure and the Local Rules of the Bankruptcy
Court. In the event the Bankruptcy Court is deemed to lack jurisdiction over this matter, the Parties consent to jurisdiction in
the United States District Court for the District of Nevada to the extent that it is otherwise lawfully available.

 

    	 	19	 

     

    

  

j.                   
Attorneys’ Fees. Each Party will bear its or their own attorneys’ fees, costs and expenses incurred in
negotiating and drafting this Agreement.

 

k.                 
Severability. To the extent that any provision of this Agreement may be held to be invalid or legally unenforceable
by a court of competent jurisdiction, such provision may be severed from the remainder of this Agreement only if and to the extent
agreed upon by the Parties.

 

l.                   
Effective Date of Agreement; Conditions Precedent. The effectiveness of this Agreement is subject to the following
conditions precedent, which if not satisfied, will render this Agreement null and void; provided, however, that (a)
the negotiations among the Parties will remain confidential and (b) this Agreement, the terms of this Agreement and the negotiations
among the Parties with respect thereto will not be admissible in any case or proceeding:

 

		i.	This Agreement will have been executed and delivered
by all Parties;

 

		ii.	The Bankruptcy Court will have entered the Approval Order
in a form acceptable to all Parties, which Approval Order will contain agreed upon releases and injunctions, and such Approval
Order will have become a final, binding and non-appealable order that has not been stayed, reversed or modified in any respect;
and

 

		iii.	The Liquidating Trust, the Miller Trust Plaintiffs, and
the Oaktree Plaintiffs will have received the Settlement Amount as set forth in paragraph 2 of this Agreement.

 

m.               
Waiver of Conditions. To the extent that they are not otherwise required by law, any or all of the conditions for
making this Agreement effective may be waived by written agreement of each of the Parties to this Agreement. However, the agreement
to waive any condition or to waive a condition in any particular instance will not be construed as an agreement to waive any other
condition in any other instance.

 

n.                 
Amendments. This Agreement may not be amended, modified or otherwise altered in any respect other than in a writing
signed by all Parties.

 

    	 	20	 

     

    

  

o.                 
Divisions and Headings. The divisions of this Agreement into paragraphs and subparagraphs and the use of captions
or headings in connection therewith are solely for convenience and will have no legal effect in construing this Agreement.

 

 

[Signature page to follow - Remainder
of this page left intentionally blank]

 

 

 

 

 

 

 

 

 

 

    	 	21	 

     

    

  

IN WITNESS WHEREOF, the undersigned, by their respective duly
authorized representatives, affix their signatures hereto.

 

	 	LIQUIDATING TRUST
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

	 	FEDERAL 
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

  

	 	IRONSHORE 
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

	 	MILLER TRUST PLAINTIFFS 
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

	 	OAKTREE PLAINTIFFS
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

	 	A. CARL MUDD and SHELDON SAIDMAN
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

	 	NORTON
ROSE FULBRIGHT US, LLP
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 	22

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