Document:

Exhibit 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (the “Agreement”) is made and entered into as of September 17, 2018 (the “Effective Date”) by and between MIDSTATES PETROLEUM COMPANY, INC. (the “Company”) and Richard W. McCullough (the “Executive”).

 

In consideration of the respective agreements and covenants set forth in this Agreement, the receipt of which is hereby acknowledged, the parties intending to be legally bound agree as follows:

 

AGREEMENTS

 

1.                                      Term. The Company agrees to employ Executive, and Executive agrees to be employed by the Company, upon the terms and conditions set forth in this Agreement for a period (the “Initial Term”) commencing on the Effective Date and ending on the third anniversary of such date, unless earlier terminated in accordance with Section 3. If neither party gives at least sixty (60) days written notice to the other party that it intends for this Agreement to terminate on such third anniversary, then this Agreement shall continue for successive one year terms (each a “Renewal Term”), unless earlier terminated in accordance with Section 3, until either party gives at least sixty (60) days written notice to the other party that it intends for this Agreement to terminate at the end of any such one year period. The Initial Term and any Renewal Terms shall, together, constitute the “Term”.

 

2.                                      Terms of Employment.

 

(a)                                 Position and Duties.

 

(1)                                 During the Term, the Executive shall serve as Chief Accounting Officer/Vice President — Accounting, and in so doing, shall possess the duties and responsibilities consistent with the position set forth above in a company of the size and nature of the Company, and such other duties, responsibilities, and authority assigned to and assumed by the Executive from time to time by the Board of Directors of the Company (the “Board”) or such other officer of the company as shall be designated by the Board.

 

(2)                                 During the Term, the Executive agrees to devote substantially all of his working time to the business and affairs of the Company. The Executive covenants, warrants and represents that during the course of the performance of Executive’s duties hereunder, Executive shall: (i) devote substantially all of his working time and his reasonable best efforts to the fulfillment of his employment obligations; (ii) exercise the highest degree of fiduciary loyalty and care and the highest standards of conduct in the performance of his duties; and (iii) endeavor to prevent any harm, in any way, to the business or reputation of the Company or its affiliates.

 

(b)                                 Compensation.

 

(1)                                 Base Salary. During the Term, the Executive shall receive an annualized base salary (“Base Salary”), which shall be paid in accordance with the customary payroll practices of the Company, in an amount equal to $288,400.00. The Board (or a committee of the Board, designated by the Board to make such decisions), in its sole discretion, may at any time adjust (but not decrease) the amount of the Base Salary as it may deem appropriate, and the term “Base Salary,” as used in this Agreement, shall refer to the Base Salary as it may be so adjusted.

 

 

(2)                                 Bonus, Incentive, Savings, Profit Sharing and Retirement Plans. For each calendar year ending during the Term beginning with the 2018 calendar year, the Executive shall be paid an annual cash performance bonus (an “Annual Bonus”), to the extent earned based on performance against objective, reasonably attainable performance criteria; provided that the Board, in consultation with the Company’s Chief Executive Officer, may determine that subjective criteria may be used to determine the Executive’s Annual Bonus. The performance criteria for any particular calendar year shall be determined in good faith by the Board, after consultation with the Employer’s Chief Executive Officer, no later than ninety (90) days after the commencement of the relevant bonus period. The Executive’s annual bonus opportunity for a calendar year shall equal 50% of the Executive’s Base Salary (the “Target Bonus”) for that year if target levels of performance for that year are achieved.  Furthermore, to the extent that the Board establishes threshold, target and maximum (or other similar) ranges or metrics against which Company performance for annual bonuses will be measured, the Executive’s Annual Bonus may be adjusted to reflect the Company’s performance relative to such metrics and/or ranges.  The Executive’s Annual Bonus for a bonus period shall be determined by the Board after the end of the applicable bonus period and shall be paid to the Executive when annual bonuses for that year are paid to other senior executives of the Employer generally, but in no event later than March 15 of the year following the year to which such Annual Bonus relates. In carrying out its functions under this Section 2(b), the Board shall at all times act reasonably and in good faith.  For the 2018 calendar year, the Executive will be eligible to earn incentive compensation in accordance with the terms of the Company’s 2018 Short Term Incentive Plan.

 

(3)                                 Welfare Benefit Plans. During the Term, and subject to the terms and conditions of applicable plans or programs, the Executive and/or the Executive’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under the welfare benefit plans, practices, policies and programs applicable generally to other similarly situated employees of the Company (which may include programs such as salary continuance, medical, prescription, dental, disability, employee life, group life, accidental death and travel accident insurance plans and programs), as adopted or amended from time to time (“Welfare Plans”).

 

(4)                                 Perquisites. During the Term, the Executive shall be entitled to receive (in addition to the benefits described above) such perquisites and fringe benefits appertaining to his position in accordance with any policies, practices, and procedures established by the Board, as amended from time to time.

 

(5)                                 Expenses. Executive is authorized to incur reasonable business expenses that, in Executive’s reasonable business judgment, are necessary to carry out his duties for the Company under this Agreement. Executive shall be entitled to reimbursement for such expenses, in accordance with the Company’s standard procedures and policies, for all reasonable travel, entertainment and other expenses incurred in connection with the Company’s business and the performance of his duties hereunder.

 

(6)                                 Vacation. During the Term, the Executive shall be entitled to five (5) weeks of paid vacation each calendar year, subject to the Company’s standard carryover policy.

 

3.                                      Termination of Employment.

 

(a)                                 Death or Disability. The Executive’s employment shall terminate automatically upon the Executive’s death during the Term. If the Disability of the Executive has occurred during the Term (pursuant to the definition of Disability set forth below), the Company may give to the Executive written notice in accordance with Section 9(c) of its intention to terminate the Executive’s employment.

 

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In such event, the Executive’s employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive (the “Disability Effective Date”), provided that, within the 30 days after such receipt, the Executive shall not have returned to perform, with or without reasonable accommodation, the essential functions of his position. For purposes of this Agreement, “Disability” shall mean the Executive’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months as determined by a medical doctor mutually agreed upon by the Company and the Executive or the Executive’s legal representative.

 

(b)                                 Cause. The Company may terminate the Executive’s employment at any time during the Term for Cause or without Cause. For purposes of this Agreement, “Cause” shall mean (1) a breach by the Executive of the Executive’s obligations under this Agreement, which constitutes nonperformance by the Executive of his obligations and duties hereunder, as determined by the Board, that is not cured within 15 days of the Executive’s receipt of written notice thereof from the Board, (2) commission by the Executive of an act of fraud, embezzlement, misappropriation, willful misconduct or breach of fiduciary duty against the Company, (3) a material breach by the Executive of any restrictive covenants contained within this Agreement that is not cured within 15 days after the Executive’s receipt of written notice thereof from the Board, (4) the Executive’s conviction, plea of no contest or nolo contendere, deferred adjudication or unadjudicated probation for any felony or any crime involving fraud, dishonesty, or moral turpitude or causing material harm, financial or otherwise, to the Company, (5) the willful refusal or intentional failure of the Executive to carry out, or comply with, in any material respect, any lawful and material written directive of the Board (of which the Board will give the Executive written notice of and a reasonable opportunity to remedy), (6) the Executive’s unlawful use (including being under the influence) or possession of illegal drugs, or (7) the Executive’s willful and material violation of any federal, state, or local law or regulation applicable to the Company or its business which adversely affects the Company that is not cured after written notice from the Board.  For purposes of the definition of “Cause”, no act or failure to act on the Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive’s action or omission was in the best interest of the Company. For purposes of this Agreement, a termination “without Cause” shall mean a termination by the Company of the Executive’s employment during the Term at the Company’s sole discretion for any reason other than a termination based upon Cause, death or Disability.

 

(c)                                  Good Reason. The Executive’s employment may be terminated during the Term by the Executive for Good Reason or without Good Reason; provided, however, that the Executive agrees not to terminate his employment for Good Reason unless (i) the Executive has given the Company written notice of his intent to terminate his employment for Good Reason no later than 30 days following the initial existence of the condition that the Executive believes gives rise to his right to terminate his employment for Good Reason, which notice shall specify the facts and circumstances constituting Good Reason, (ii) the Company was given a period of 30 days during which it may remedy the condition (the “Company Cure Period”) and, if the condition is remedied during that period, the Executive would no longer have a right to terminate employment for Good Reason based on that occurrence of the condition, (iii) the Company did not remedy the facts and circumstances constituting Good Reason within the Company Cure Period, and (iv) the Executive separates from service on or before the 60th day after the Company Cure Period. For purposes of this Agreement, “Good Reason” shall mean any of the following, but only if occurring without the Executive’s consent: (1) a material diminution in the Executive’s Base Salary or Target Bonus opportunity, (2) a material diminution in the Executive’s titles, positions, authority, duties, or responsibilities, (3) the relocation of the Executive’s principal office to an area more than 50 miles from its location immediately prior to such relocation, or (4) the failure of the Company to comply with any material provision of the Executive’s employment agreement or equity agreement. Such

 

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termination by the Executive shall not preclude the Company from terminating the Executive’s employment prior to the Date of Termination (as defined below) established by the Executive’s Notice of Termination (as defined below).

 

(d)                                 Notice of Termination. Any termination by the Company for Cause or without Cause or because of the Executive’s Disability, or by the Executive for Good Reason or without Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 9(c). For purposes of this Agreement, a “Notice of Termination” means a written notice which (1) indicates the specific termination provision in this Agreement relied upon, (2) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (3) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall not be more than 30 days after the giving of such notice). The failure by the Company or the Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause or Good Reason, as applicable shall not waive any right of the Company or the Executive under this Agreement or preclude the Company or the Executive from asserting such fact or circumstance in enforcing the Company’s or Executive’s rights under this Agreement.

 

(e)                                  Date of Termination. “Date of Termination” means (1) if the Executive’s employment is terminated by the Company for Cause or without Cause, or by the Executive for Good Reason or without Good Reason, the date of receipt of the Notice of Termination or any later date specified therein pursuant to Section 3(d), as the case may be, provided that if such date is not also the date of Executive’s “Separation from Service” with the Company (within the meaning of Treasury Regulation 1.409A-1(h)) then the “Date of Termination” shall instead be the date of the Executive’s Separation from Service, or (2) if the Executive’s employment is terminated by reason of death or Disability, the date of death of the Executive or the Disability Effective Date, as the case may be.

 

4.                                      Obligations of the Company upon Termination.

 

(a)                                 For Cause; Without Good Reason; Other Than for Death or Disability. If the Company shall terminate the Executive’s employment for Cause or the Executive resigns from his employment without Good Reason, and the termination of the Executive’s employment in any case is not due to his death or Disability, the Company shall have no further payment obligations to the Executive or his legal representatives, other than for the payment of: (1) in a cash lump sum within thirty (30) days after the Date of Termination (or such earlier date as required by applicable law) that portion of the Executive’s Annual Base Salary accrued through the Date of Termination to the extent not previously paid, any expense reimbursement accrued and unpaid, any employee benefits pursuant to the terms of the applicable employee benefit plan, and any accrued but unused vacation (the “Accrued Obligations”); and (2) any earned but unpaid annual bonus (prorated through the end of the month of termination) and any accrued or vested amount arising from the Executive’s participation in, or benefits under, any other Incentive Plans (the “Accrued Incentives”), which amounts shall be payable in accordance with the terms and conditions of such Incentive Plans.

 

(b)                                 Death. If the Executive’s employment is terminated by reason of the Executive’s death, the Company shall have no further payment obligations to the Executive or Executive’s legal representatives, other than for payment of: (1) the Accrued Obligations, which shall be payable in a cash lump sum within thirty (30) days after the Date of Termination (or such earlier date as required by applicable law); (2) the Accrued Incentives, which shall be payable in accordance with the terms and conditions of the Incentive Plans; and (3) a monthly cash payment equal to the cost of continued medical, dental and vision coverage for the Executive and his spouse and any eligible dependents until the end of

 

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the twelve (12) month period beginning on the Date of Termination. In addition to the payment obligations described in the preceding sentence, if the Executive’s employment is terminated by reason of the Executive’s death, all unvested awards granted to the Executive under the Midstates Petroleum Company, Inc. 2016 Long Term Incentive Plan (the “MIP”) shall immediately vest.

 

(c)                                  Disability. If the Executive’s employment is terminated by reason of the Executive’s Disability, the Company shall have no further payment obligations to the Executive or his legal representatives, other than for payment of: (1) the Accrued Obligations, which shall be payable in a cash lump sum within thirty (30) days after the Date of Termination (or such earlier date as required by applicable law); (2) the Accrued Incentives, which shall be payable in accordance with the terms and conditions of the Incentive Plans; and (3) beginning on the Initial Severance Payment Date (as defined below) and thereafter in accordance with the customary payroll practices of the Company, a monthly cash payment equal to the cost of continued medical, dental and vision coverage for the Executive and his spouse and any eligible dependents until the end of the twelve (12) month period beginning on the Date of Termination. In addition to the payment obligations described in the preceding sentence, if the Executive’s employment is terminated by reason of the Executive’s Disability, subject to Section 4(e) below, all unvested awards granted to the Executive under the MIP shall immediately vest.

 

(d)                                 Without Cause; For Good Reason or due to the Non-Extension of the Agreement by the Company. If the Executive’s employment is terminated by the Company without Cause,  if the Executive resigns for Good Reason, or the Company does not renew the Term of the Agreement as provided in Section 1, the Company shall have no further payment obligations to the Executive or his legal representatives, other than for payment of: (1) the Accrued Obligations, which shall be payable in a cash lump sum within thirty (30) days after the Date of Termination (or such earlier date as required by applicable law); (2) the Accrued Incentives, which shall be payable in accordance with the terms and conditions of the Incentive Plans; (3) subject to Section 4(e) below, a lump-sum cash payment, to be made on the first normal payroll date following the Release Consideration Period, but no later than March 14 of the calendar year following the calendar year in which the Date of Termination occurs (the “Initial Severance Payment Date”) in an amount equal to 1.0 times the sum of (x) the Executive’s Base Salary and (y) the Executive’s Target Bonus; and (4) subject to Section 4(e) and Section 4(f) below, beginning on the Initial Severance Payment Date and thereafter in accordance with the customary payroll practices of the Company, a monthly cash payment equal to the cost of continued medical, dental and vision coverage for the Executive and his spouse and any eligible dependents until the end of the twelve (12) month period beginning on the Date of Termination (the “COBRA Payment”). Any installments of the COBRA Payment that, in accordance with customary payroll practices, would have typically been made during the Release Consideration Period shall accumulate and shall then be paid on the Initial Severance Payment Date. The payments described in clause (3) and (4) above shall be referred to collectively as the “Severance Payments”. In addition to the payment obligations described in the preceding sentence, if the Executive’s employment is terminated by the Company without Cause,  if the Executive resigns for Good Reason, or the Company does not renew the Term of the Agreement as provided in Section 1, subject to Section 4(e) below, on the Initial Severance Payment Date, all unvested awards granted to the Executive under the MIP shall vest.

 

(e)                                  Release and Compliance with this Agreement. The obligation of the Company to pay any portion of the amounts due pursuant to Section 4, with the exception of Accrued Obligations and Accrued Incentives, shall be expressly conditioned on the Executive’s (1) execution (and, if applicable, non-revocation) of the release agreement attached hereto as Exhibit A no later than the 60th day following the Date of Termination (such period, the “Release Consideration Period”) and (2) continued compliance with the requirements of Sections 6 and 7.

 

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(f)                                   Section 409A. The amounts payable pursuant to Section 4 of this Agreement are intended to be exempt from Section 409A of the Code. However, if any amounts payable under this Agreement are not excepted from Section 409A of the Code, it is intended that this Agreement be administered in a manner that complies with Section 409A of the Code to the extent applicable. To the extent that the Executive is a “specified employee” within the meaning of the Treasury Regulations issued pursuant to Section 409A of the Code as of the Executive’s Date of Termination, no amount that constitutes a deferral of compensation which is payable on account of the Executive’s separation from service shall be paid to the Executive before the date (the “Delayed Payment Date”) which is the first day of the seventh month after the Executive’s Date of Termination or, if earlier, the date of the Executive’s death following such Date of Termination. All such amounts that would, but for this Section 4(g), become payable prior to the Delayed Payment Date will be accumulated and paid on the Delayed Payment Date. No interest will be paid by the Company with respect to any such delayed payments. For purposes of Section 409A of the Code, each payment or amount due under this Agreement shall be considered a separate payment, and the Executive’s entitlement to a series of payments under this Agreement is to be treated as an entitlement to a series of separate payments. To the extent that any in-kind benefits or reimbursements pursuant to this Agreement are taxable to Executive and constitute deferred compensation subject to Section 409A of the Code, any reimbursement payment due to Executive shall be paid to Executive on or before the last day of the Executive’s taxable year following the taxable year in which the related expense was incurred. In addition, any such in-kind benefit or reimbursement is not subject to liquidation or exchange for another benefit and the amount of such benefit or reimbursement that Executive receives in one taxable year shall not affect the amount of such benefit and reimbursements that Executive receives in any other taxable year.

 

5.                                      Excise Taxes. If the Board determines, in its good faith discretion, that Section 280G of the Code applies to any compensation payable to the Executive, then the provisions of this Section 5 shall apply. If any payments or benefits to which the Executive is entitled from the Company, any affiliate, any successor to the Company or an affiliate, or any trusts established by any of the foregoing by reason of, or in connection with, any transaction that occurs after the Effective Date (collectively, the “Payments,” which shall include, without limitation, the vesting of any equity awards or other non-cash benefit or property) are, alone or in the aggregate, more likely than not, if paid or delivered to the Executive, to be subject to the tax imposed by Section 4999 of the Code or any successor provisions to that section, then the Payments (beginning with any Payment to be paid in cash hereunder), shall be either (a) reduced (but not below zero) so that the present value of such total Payments received by the Executive will be one dollar ($1.00) less than three times the Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code) and so that no portion of such Payments received by the Executive shall be subject to the excise tax imposed by Section 4999 of the Code, such parachute payments shall be reduced to the extent necessary to avoid application of the excise tax in the following order:  (i) any cash severance based on a multiple of Base Salary or Annual Bonus, (ii) any other cash amounts payable to the Executive, (iii) benefits valued as parachute payments, and (iv) acceleration of vesting of any equity awards, or (b) paid in full, whichever of (a) or (b) produces the better net after tax position to the Executive (taking into account any applicable excise tax under Section 4999 of the Code and any other applicable taxes). The determination as to whether any Payments are more likely than not to be subject to taxes under Section 4999 of the Code and as to whether reduction or payment in full of the amount of the Payments provided hereunder results in the better net after tax position to the Executive shall be made by the Board and the Executive in good faith. If, as a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination hereunder, it is subsequently determined that additional Payments could have been made to the Executive without the imposition of the excise tax imposed by Section 4999 of the Code (an “Underpayment”), the Underpayment shall be paid by the Company to the Executive within thirty (30) days after such determination.

 

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6.                                      Confidential Information.

 

(a)                                 The Executive acknowledges that the Company has trade, business and financial secrets and other confidential and proprietary information (collectively, the “Confidential Information”) which shall be provided to the Executive during the Executive’s employment by the Company. Confidential information includes, but is not limited to, sales materials, technical information, strategic information, business plans, processes and compilations of information, records, specifications and information concerning customers or venders, customer lists, and information regarding methods of doing business.

 

(b)                                 The Executive is aware of those policies implemented by the Company to keep its Confidential Information secret, including those policies limiting the disclosure of information on a need-to-know basis, requiring the labeling of documents as “confidential,” and requiring the keeping of information in secure areas. The Executive acknowledges that the Confidential Information has been developed or acquired by the Company through the expenditure of substantial time, effort and money and provides the Company with an advantage over competitors who do not know or use such Confidential Information. The Executive acknowledges that all such Confidential Information is the sole and exclusive property of the Company.

 

(c)                                  During, and all times following, the Executive’s employment by the Company, the Executive shall hold in confidence and not directly or indirectly disclose or use or copy or make lists of any Confidential Information: except (i) to the extent authorized in writing by the Board; (ii) where such information is, at the time of disclosure by the Executive, generally available to the public other than as a result of any direct or indirect act or omission of the Executive in breach of this Agreement; or (iii) where the Executive is compelled by legal process, other than to an employee of the Company or a person to whom disclosure is reasonably necessary or appropriate in connection with the performance by the Executive of his duties as an employee of the Company. The Executive agrees to use reasonable efforts to give the Company notice of any and all attempts to compel disclosure of any Confidential Information, in such a manner so as to provide the Company with written notice at least five (5) days before disclosure or within one (1) business day after the Executive is informed that such disclosure is being or will be compelled, whichever is earlier. Such written notice shall include a description of the information to be disclosed, the court, government agency, or other forum through which the disclosure is sought, and the date by which the information is to be disclosed, and shall contain a copy of the subpoena, order or other process used to compel disclosure.

 

(d)                                 The Executive will take all necessary precautions to prevent disclosure to any unauthorized individual or entity. The Executive further agrees not to use, whether directly or indirectly, any Confidential Information for the benefit of any person, business, corporation, partnership, or any other entity other than the Company.

 

(e)                                  All equipment, documents or files concerning the Company, including, but not limited to, Company cell phones, desktop and laptop computers, devices (including USB, external hard drives, etc.), keys, access cards, passwords, ID cards, customer data, materials, processes, letters, financial data, Confidential Information, or other written or electronically recorded material (in whatsoever form, format or medium), whether or not produced by the Executive (collectively, “Company Property”), belongs to the Company. Upon termination of employment, the Executive agrees to return to the Company all Company Property.

 

(f)                                   As used in this Section 6, “Company” shall include Midstates Petroleum Company, Inc. and any of its affiliates.

 

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7.                                      Non-Competition; Non-Solicitation.

 

(a)                                 The Executive acknowledges that the Company shall, during the time that the Executive is employed by Company, (a) disclose or entrust to the Executive, and provide the Executive access to, or place the Executive in a position to create or develop, Confidential Information, (b) place the Executive in a position to develop business goodwill belonging to the Company, and (c) disclose or entrust to the Executive business opportunities to be developed for the Company. In consideration of the foregoing, as a condition of the Executive’s employment hereunder and in order to protect the Company’s legitimate business interests, including the preservation of its goodwill and Confidential Information, the Executive agrees to the restrictions set forth in this Section 7. Executive expressly promises and agrees that he will not (other than for the benefit of the Company pursuant to this Agreement) directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity (whether as an officer, director, employee, shareholder, consultant, contractor, partner, joint venturer, agent, equity owner or in any capacity whatsoever):

 

(1)                                 during the term of Non-Competition (as defined below), carry on or engage in the business of developing and/or implementing drilling and completion techniques to oil-prone resources in previously discovered yet underdeveloped hydrocarbon trends or in any other business activity that the Company is conducting, or has made material plans to conduct (provided the Executive is aware of such plans) as of the Date of Termination, in each case in Woods or Alfalfa Counties in the State of Oklahoma and any other geographical area in which the Company is actively conducting material business as of the Executive’s Date of Termination (collectively, such area is referred to as the “Restricted Area”) and to which the Executive’s duties as an employee of the Company related (a “Competing Business”), or

 

(2)                                 during the Term of Non-Solicitation (as defined below) directly hire, attempt to hire, or contact or solicit with respect to hiring any employee or officer of the Company; provided, however, that nothing contained herein shall be deemed to prohibit the Executive from (i) conducting any general solicitation not specifically targeted at any such employee or officer and hiring any employee or officer who responds to such general solicitation shall not be deemed a breach of this Section 7, or (ii) soliciting for employment or hiring any employee or officer of the Company who was terminated by the Company.

 

The “Term of Non-Solicitation” and “Term of Non-Competition” shall each be defined as that term beginning on the Effective Date and continuing until (x) if the Executive’s employment is terminated by reason of death or Disability, the Date of Termination, or (y) if the Executive’s employment is terminated by the Company for Cause or without Cause, or by the Executive for Good Reason or without Good Reason, the date that is the one year anniversary of the Date of Termination.

 

(b)                                 Notwithstanding the restrictions contained in Section 7(a), the Executive or any of the Executive’s affiliates may own an aggregate of not more than 2.0% of the outstanding stock of any class of a Competing Business, if such stock is listed on a national securities exchange or regularly traded in the over-the-counter market by a member of a national securities exchange, without violating the provisions of Section 7(a), provided that neither the Executive nor any of the Executive’s affiliates has the power, directly or indirectly, to control or direct the management or affairs of any such corporation and is not involved in the management of such corporation.

 

(c)                                  The Executive acknowledges that the geographic boundaries, scope of prohibited activities, and time duration of the preceding paragraphs are reasonable in nature and are no broader than are necessary to maintain the confidentiality and the goodwill of the Company and the confidentiality of

 

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its Confidential Information and to protect the other legitimate business interests of the Company. The Executive further represents and acknowledges that (i) he has been advised by the Company to consult his or her own legal counsel in respect of this Agreement, and (ii) that he has had full opportunity, prior to executing this Agreement, to review thoroughly this Agreement with his counsel.

 

(d)                                 If any court determines that any portion of this Section 7 is invalid or unenforceable, the remainder of this Section 7 shall not thereby be affected and shall be given full effect without regard to the invalid provisions. If any court construes any of the provisions of this Section 7, or any part thereof, to be unreasonable because of the duration or scope of such provision, such court shall have the power to reduce the duration or scope of such provision and to enforce such provision as so reduced.

 

(e)                                  The Executive’s covenants under this Section 7 of the Agreement shall be construed as an agreement independent of any other provision of this Agreement; and the existence of any claim or cause of action of Executive against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of these covenants.

 

(f)                                   As used in this Section 7, “Company” shall include Midstates Petroleum Company, Inc. and any of its affiliates.

 

8.                                      Mutual Non-Disparagement. The Executive agrees not to intentionally make, or intentionally cause any other person to make, any public statement that is intended to criticize or disparage the Company, any of its affiliates, or any of their respective officers, managers or directors. The Company agrees to use commercially reasonable efforts to cause its officers and members of its Board not to intentionally make, or intentionally cause any other person to make, any public statement that is intended to criticize or disparage the Executive. This Section 8 shall not be construed to prohibit any person from responding publicly to incorrect public statements or from making truthful statements when required by law, subpoena, court order, or the like.

 

9.                                      Miscellaneous.

 

(a)                                 Survival and Construction. Executive’s obligations under this Agreement will be binding upon Executive’s heirs, executors, assigns, and administrators and will inure to the benefit of the Company, its subsidiaries, successors, and assigns. The language of this Agreement shall in all cases be construed as a whole according to its fair meaning, and not strictly for or against any of the parties. The section and paragraph headings used in this Agreement are intended solely for the convenience of reference and shall not in any manner amplify, limit, modify, or otherwise be used in the interpretation of any of the provisions hereof.

 

(b)                                 Definitions. As used in this Agreement, “affiliate” means, with respect to a person, any other person controlling, controlled by or under common control with the first person; the term “control,” and correlative terms, means the power, whether by contract, equity ownership or otherwise, to direct the policies or management of a person; and “person” means an individual, partnership, corporation, limited liability company, trust or unincorporated organization, or a government or agency or political subdivision thereof.

 

(c)                                  Notices. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 

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If to the Executive:
 To the address on file with the Company

 

If to the Company:
 Midstates Petroleum Company

Attn: General Counsel
 321 South Boston Avenue, Suite 1000
 Tulsa, Oklahoma 74103

 

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

 

(d)                                 Enforcement. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

 

(e)                                  Withholding. The Company may withhold from any amounts payable under this Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation as determined by the Company.

 

(f)                                   No Waiver. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at any time.

 

(g)                                  Equitable and Other Relief. The Executive acknowledges that money damages would be both incalculable and an insufficient remedy for a breach of Sections 6 or 7 by the Executive and that any such breach would cause the Company irreparable harm. Accordingly, the Company, in addition to any other remedies at law or in equity it may have, shall be entitled, without the requirement of posting of bond or other security, to equitable relief, including injunctive relief and specific performance, in connection with a breach of Sections 6 or 7 by the Executive. In addition to the remedies the Company may have at law or in equity, violation of Sections 6 or 7 herein will entitle the Company at its sole option (i) not to pay any unpaid amount of the Initial Severance Payment, the COBRA Payment or the CIC Severance Payment, as applicable, and (ii) to require repayment of a pro-rated portion of any previously paid Initial Severance Payment, COBRA Payment or CIC Severance Payment, as applicable, with such pro-ration based on the time at which the material breach occurred relative to the remaining period of time of the applicable restrictive covenant that was materially breached. Such remedies shall not be deemed to be liquidated damages and shall not be deemed the exclusive remedies for a breach of this Section 6 or 7 but shall be in addition to all remedies available, at law or in equity, including the recovery of damages from the Executive and his agents. No action taken by the Company under this Section 9(g) shall affect the enforceability of the release and waiver of claims executed by the Executive pursuant to Section 4(e).

 

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(h)                                 Complete Agreement. The provisions of this Agreement constitute the entire and complete understanding and agreement between the parties with respect to the subject matter hereof, and supersedes all prior and contemporaneous oral and written agreements, representations and understandings of the parties, which are hereby terminated. Other than expressly set forth herein, the Executive and Company acknowledge and represent that there are no other promises, terms, conditions or representations (or written) regarding any matter relevant hereto. This Agreement may be executed in two or more counterparts.

 

(i)                                     Arbitration. The Company and the Executive agree to the resolution by binding arbitration of all claims, demands, causes of action, disputes, controversies or other matters in question (“claims”), whether or not arising out of this Agreement or the Executive’s employment (or its termination), whether sounding in contract, tort or otherwise and whether provided by statute or common law, that the Company may have against the Executive or that the Executive may have against the Company or its parents, subsidiaries and affiliates, and each of the foregoing entities’ respective officers, directors, employees or agents in their capacity as such or otherwise; except that this agreement to arbitrate shall not limit the Company’s right to seek equitable relief, including injunctive relief and specific performance, and damages and any other remedy or relief (including the recovery of attorney fees, costs and expenses) in a court of competent jurisdiction for an alleged breach of Sections 6 or 7 of this Agreement, and the Executive expressly consents to the non-exclusive jurisdiction of the district courts of the State of Oklahoma for any such claims. Claims covered by this agreement to arbitrate also include claims by the Executive for breach of this Agreement, wrongful termination, discrimination (based on age, race, sex, disability, national origin or any other factor) and retaliation. The Company and the Executive agree that any arbitration shall be in accordance with the Federal Arbitration Act (“FAA”) and, to the extent an issue is not addressed by the FAA, with the then-current National Rules for the Resolution of Employment Disputes of the American Arbitration Association (“AAA”) or such other rules of the AAA as applicable to the claims being arbitrated. If a party refuses to honor its obligations under this agreement to arbitrate, the other party may compel arbitration in either federal or state court. The arbitrator shall apply the substantive law of the State of Oklahoma (excluding, to the extent applicable, choice-of-law principles that might call for the application of some other state’s law), or federal law, or both as applicable to the claims asserted. In the event of any breach of this Agreement by the Company, it is expressly agreed that notwithstanding any other provision of this Agreement, the only damages to which the Executive shall be entitled is lost compensation and benefits in accordance with Section 2(b) or 4. The arbitrator shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this agreement to arbitrate, including any claim that all or part of this Agreement is void or voidable and any claim that an issue is not subject to arbitration. The parties agree that venue for arbitration will be in Tulsa County, Oklahoma, and that any arbitration commenced in any other venue will be transferred to Tulsa County, Oklahoma, upon the written request of any party to this Agreement. In the event that an arbitration is actually conducted pursuant to this Section 9(i), the party in whose favor the arbitrator renders the award shall be entitled to have and recover from the other party all costs and expenses incurred, including reasonable attorneys’ fees, expert witness fees, and costs actually incurred. Any and all of the arbitrator’s orders, decisions and awards may be enforceable in, and judgment upon any award rendered by the arbitrator may be confirmed and entered by, any federal or state court having jurisdiction. All proceedings conducted pursuant to this agreement to arbitrate, including any order, decision or award of the arbitrator, shall be kept confidential by all parties. THE EMPLOYEE ACKNOWLEDGES THAT, BY SIGNING THIS AGREEMENT, THE EMPLOYEE IS WAIVING ANY RIGHT THAT THE EMPLOYEE MAY HAVE TO A JURY TRIAL OR, EXCEPT AS EXPRESSLY PROVIDED HEREIN, A COURT TRIAL OF ANY EMPLOYMENT-RELATED CLAIM THAT THE EMPLOYEE MAY ALLEGE.

 

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(j)                                    Survival. Sections 6, 7 and 8 of this Agreement shall survive the termination of this Agreement.

 

(k)                                 Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Oklahoma without reference to principles of conflict of laws of Oklahoma or any other jurisdiction, and, where applicable, the laws of the United States.

 

(l)                                     Amendment. This Agreement may not be amended or modified at any time except by a written instrument approved by the Board and executed by the Company and the Executive.

 

(m)                             Assignment. This Agreement is personal as to the Executive and accordingly, the Executive’s duties may not be assigned by the Executive. This Agreement may be assigned by the Company without the Executive’s consent to any entity which is a successor in interest to the Company’s business, provided such successor expressly assumes the Company’s obligations hereunder.

 

(n)                                 Severability. If an arbitrator or court of competent jurisdiction determines that any provision of this Agreement (or part thereof) is invalid or unenforceable, then such provision (or part thereof) shall be severable and the invalidity or unenforceability of that provision (or part thereof) shall not affect the validity or enforceability of any other provision (or parts thereof) of this Agreement, and all other provisions (and parts thereof) shall remain in full force and effect.

 

(o)                                 Stock Ownership Guidelines. During the Term, Executive shall be subject to the Employee Stock Ownership Guidelines, (the “Guidelines”) as maintained by the Company from time to time.  Executive acknowledges the Company has made the Guidelines available to Executive, and Executive has read the Guidelines and acknowledges adherence to the Guidelines.  In addition, the Executive acknowledges the failure by Executive to comply with the Guidelines is a material breach by the Executive of a material policy maintained by the Company.  If the Company finds the Executive to be in noncompliance with the Guidelines, the Company may reduce future long-term incentive equity grants, may impose individual holding requirements, and/or may prohibit Executive from selling or transferring any Company stock then held by Executive, including any stock acquired upon the vesting and/or exercise of any Company equity-based awards, less any amounts necessary to pay income tax liabilities related to that vesting and/or exercise.

 

(p)                                 Executive Acknowledgment. The Executive acknowledges that he has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representatives or promises made by the Company other than those contained in writing herein, and has entered into this Agreement freely based on his own judgment.

 

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IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the authorization from the Board, the Company has caused this Agreement to be executed in its name on its behalf, all as of the day and year first above written.

 

 

	
 
    	
EXECUTIVE:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Richard W. McCullough
    
	
 
    	
Richard   W. McCullough
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MIDSTATES PETROLEUM COMPANY, INC.,
    
	
 
    	
 
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David   J. Sambrooks
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
David J.   Sambrooks
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
President   and Chief Executive Officer
    

 

 

EXHIBIT A

 

SEPARATION OF EMPLOYMENT AGREEMENT AND GENERAL RELEASE

 

THIS SEPARATION OF EMPLOYMENT AGREEMENT AND GENERAL RELEASE (the “Agreement”) is made as of this       day of            ,      , by and between MIDSTATES PETROLEUM COMPANY, INC., (the “Company”) and Richard W. McCullough (“Executive”).

 

WHEREAS, the Company advises Executive to consult with Executive’s own legal counsel before signing this Agreement; and

 

WHEREAS, Executive formerly was employed by the Company as Chief Accounting Officer/Vice President — Accounting; and

 

WHEREAS, the Company employs Executive pursuant to the terms and conditions set forth in that certain Executive Employment Agreement dated as of September 17, 2018 between Executive and the Company, (as amended from time to time, the “Employment Agreement”) which provides for certain payments and benefits in the event that Executive’s employment is terminated under certain circumstances; and

 

WHEREAS, an express condition of Executive’s entitlement to the payments and benefits under the Employment Agreement is the execution of a general release in the form set forth below; and

 

WHEREAS, Executive and the Company mutually desire to terminate Executive’s employment effective                   ,      (“Date of Termination”).

 

NOW, THEREFORE, IT IS HEREBY AGREED by and between Executive and the Company as follows:

 

1. (a) To the fullest extent permitted by law, Executive, for and in consideration of the commitments of the Company as set forth in paragraph 5 of this Agreement, and intending to be legally bound, does hereby REMISE, RELEASE AND FOREVER DISCHARGE the Company, its affiliates, predecessors, subsidiaries and parents, and their present or former officers, directors, shareholders, employees, and agents, and its and their respective successors, assigns, heirs, executors, and administrators and the current and former trustees or administrators of any pension or other benefit plan applicable to the employees or former employees of the Company (collectively, “Releasees”) from all causes of action, suits, debts, claims and demands whatsoever in law or in equity, which Executive ever had, now has, or hereafter may have, whether known or unknown, or which Executive’s heirs, executors, or administrators may have, by reason of any matter, cause or thing whatsoever, from any time prior to the date of this Agreement, and particularly, but without limitation of the foregoing general terms, any claims arising from or relating in any way to Executive’s employment relationship with the Company and/or its affiliates, the terms and conditions of that employment relationship, and the termination of that employment relationship, including, but not limited to, any claims arising under the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Employee Retirement Income Security Act of 1974,

 

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and any other claims under any federal, state or local common law, statutory, or regulatory provision, now or hereafter recognized, and any claims for attorneys’ fees and costs; provided, that Executive does not release or discharge the Releasees from (i) any rights to any payments, benefits or reimbursements due to Executive under the Employment Agreement or any equity or other award agreement or otherwise; (ii) any rights of Executive to indemnification under any applicable directors’ and officers’ liability insurance policies maintained by the Company; (iii) any rights to any vested benefits due to Executive under any employee benefit plans sponsored or maintained by the Company; or (iv) any rights of Executive as a shareholder or equity holder of the Company.  This Agreement is effective without regard to the legal nature of the claims raised and without regard to whether any such claims are based upon tort, equity, implied or express contract or discrimination of any sort.  This release is intended to be a general release, and excludes only those claims expressly set forth herein or that Executive cannot release as a matter of law under any statute or common law.  Executive is advised to seek independent legal counsel if Executive seeks clarification on the scope of this release.

 

(b) To the fullest extent permitted by law, and subject to the provisions of paragraph 10 and paragraph 12 below, Executive represents and affirms that Executive has not filed or caused to be filed on Executive’s behalf any charge, complaint or claim for relief against the Company or any Releasee that would be barred by the terms of this Agreement and, to the best of Executive’s knowledge and belief, no outstanding charges, complaints or claims for relief that would be barred by the terms of this Agreement have been filed or asserted against the Company or any Releasee on Executive’s behalf.  In the event that there is outstanding any such charge, complaint or claim for relief, Executive agrees to seek its immediate withdrawal and dismissal with prejudice.  In the event that for any reason said charge, complaint or claim for relief cannot be withdrawn, Executive shall not voluntarily testify, provide documents or otherwise participate in any investigation or litigation arising therefrom or associated therewith and shall execute such other papers or documents as the Company’s counsel determines may be necessary to have said charge, complaint or claim for relief dismissed with prejudice.  Nothing herein shall prevent Executive from testifying in any cause of action when required to do so by process of law.  Executive shall promptly inform the Company if called upon to testify.

 

(c) Executive does not waive any right to file a charge with the Equal Employment Opportunity Commission (“EEOC”) or participate in an investigation or proceeding conducted by the EEOC, but explicitly waives any right to file a personal lawsuit or receive monetary damages that the EEOC might recover if said charge results in an EEOC lawsuit against the Company or Releasees.  Executive does not waive the right to challenge the validity of this Agreement.

 

2. In consideration of the Company’s agreements as set forth in paragraph 5 herein, Executive agrees to comply with the limitations described in Section 6 and Section 7 of the Employment Agreement.

 

3. Executive further agrees and recognizes that Executive has permanently and irrevocably severed Executive’s employment relationship with the Company, that Executive shall not seek employment with the Company or any affiliated entity at any time in the future, and that the Company has no obligation to employ him in the future.  Effective as of the Date of Termination, Executive is removed from all boards and committees of the Company and its affiliates on which Executive may have previously served.

 

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4. Executive further agrees that Executive will not publicly disparage or subvert the Company or any Releasee, or make any public statement reflecting negatively on the Company, its affiliated corporations or entities, or any of their officers, directors, employees, agents or representatives, including, but not limited to, any matters relating to the operation or management of the Company or any Releasee, Executive’s employment and the termination of Executive’s employment, irrespective of the truthfulness or falsity of such statement.  Company agrees that Company will not, and Company will instruct its officers and directors to not, publicly disparage or subvert Executive or make any public statement reflecting negatively on Executive, including, but not limited to, any matters relating to Executive’s performance, Executive’s employment and the termination of Executive’s employment, irrespective of the truthfulness or falsity of such statement.

 

5. In consideration for Executive’s promises, as set forth herein, the Company agrees to pay or provide to or for Executive the payments and benefits described in the Employment Agreement, the provisions of which are incorporated herein by reference.  Except as set forth in this Agreement, it is expressly agreed and understood that Releasees do not have, and will not have, any obligations to provide Executive at any time in the future with any payments, benefits or considerations other than those recited in this paragraph, or those required by law, other than under the terms of any benefit plans which provide benefits or payments to former employees according to their terms.

 

6. Executive understands and agrees that the payments, benefits and agreements provided in this Agreement are being provided to him in consideration for Executive’s acceptance and execution of, and in reliance upon Executive’s representations in, this Agreement.  Executive agrees that absent execution without revocation of this Agreement containing a release of all claims against the Releasees, Executive is not entitled to the payments and benefits set forth in the Employment Agreement.

 

7. Executive acknowledges and agrees that this Agreement and the Employment Agreement supersede any employment agreement or offer letter Executive has with the Company or any Releasee.  To the extent Executive has entered into any other enforceable written agreement with the Company or any Releasee that contains provisions that are outside the scope of this Agreement and the Employment Agreement and are not in direct conflict with the provisions in this Agreement or the Employment Agreement, the terms in this Agreement and the Employment Agreement shall not supersede, but shall be in addition to, any other such agreement.  Except as set forth expressly herein, no promises or representations have been made to Executive in connection with the termination of Executive’s Employment Agreement, if any, or offer letter, if any, with the Company, or the terms of this Agreement.

 

8. Executive agrees not to disclose the terms of this Agreement or the Employment Agreement to anyone, except Executive’s spouse, attorney and, as necessary, tax/financial advisor.  It is expressly understood that any violation of the confidentiality obligation imposed hereunder constitutes a material breach of this Agreement.

 

9. Executive represents that Executive does not, without the Company’s prior written consent, presently have in Executive’s possession any records and business documents, whether on computer or hard copy, and other materials (including but not limited to computer disks and

 

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tapes, computer programs and software, office keys, correspondence, files, customer lists, technical information, customer information, pricing information, business strategies and plans, sales records and all copies thereof) (collectively, the “Corporate Records”) provided by the Company and/or its predecessors, subsidiaries or affiliates or obtained as a result of Executive’s prior employment with the Company and/or its predecessors, subsidiaries or affiliates, or created by Executive while employed by or rendering services to the Company and/or its predecessors, subsidiaries or affiliates.  Executive acknowledges that all such Corporate Records are the property of the Company.  In addition, Executive shall promptly return in good condition any and all Company owned equipment or property, including, but not limited to, automobiles, personal data assistants, facsimile machines, copy machines, pagers, credit cards, cellular telephone equipment, business cards, laptops, computers, and any other items requested by the Company.  As of the Date of Termination, the Company will make arrangements to remove, terminate or transfer any and all business communication lines including network access, cellular phone, fax line and other business numbers.

 

10. Nothing in this Agreement shall prohibit or restrict Executive from: (i) making any disclosure of information required by law; (ii) providing information to, or testifying or otherwise assisting in any investigation or proceeding brought by, any federal regulatory or law enforcement agency or legislative body, any self-regulatory organization, or the Company’s designated legal, compliance or human resources officers; or (iii) filing, testifying, participating in or otherwise assisting in a proceeding relating to an alleged violation of any federal, state or municipal law relating to fraud, or any rule or regulation of the Securities and Exchange Commission or any self-regulatory organization.

 

11. The parties agree and acknowledge that the agreement by the Company described herein, and the settlement and termination of any asserted or unasserted claims against the Releasees, are not and shall not be construed to be an admission of any violation of any federal, state or local statute or regulation, or of any duty owed by any of the Releasees to Executive.

 

12. Executive agrees and recognizes that should Executive breach any of the obligations or covenants set forth in this Agreement, the Company will have no further obligation to provide Executive with the consideration set forth herein, and will have the right to seek repayment of all consideration paid up to the time of any such breach.  Further, Executive acknowledges in the event of a breach of this Agreement, Releasees may seek any and all appropriate relief for any such breach, including equitable relief and/or money damages, attorneys’ fees and costs.  Notwithstanding the foregoing, in the event the Company fails to perform any material obligation under the Employment Agreement, including, without limitation, the failure of the Company to make timely payments of monies due to Executive under Section 4 of the Employment Agreement, this Release shall be null and void and Executive shall have the right to pursue any and all appropriate relief for any such failure, including monetary damages, attorneys’ fees and costs; provided, that (i) Executive has notified the Company in writing within 30 days of the date of the failure of the Company to perform such material obligation and (ii) such failure remains uncorrected and/or uncontested by the Company for 15 days following the date of such notice.

 

13. Executive further agrees that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as to an equitable accounting of all earnings, profits and other benefits arising from any violations of this

 

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Agreement, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled.  The dispute resolution provisions set forth in Section 9(i) of the Employment Agreement apply to any dispute regarding the termination of Executive’s employment, and any dispute related to and/or arising under this Agreement, including without limitation any challenge Executive may make regarding the validity of this Agreement.

 

14. This Agreement and the obligations of the parties hereunder shall be construed, interpreted and enforced in accordance with the laws of the State of Oklahoma.

 

15. The parties agree that this Agreement shall be deemed to have been made and entered into in Tulsa County, Oklahoma.  Jurisdiction and venue in any proceeding by the Company or Executive to enforce their rights hereunder is specifically limited to any court geographically located in Tulsa, Oklahoma.

 

16. Executive certifies and acknowledges as follows:

 

(a) That Executive has read the terms of this Agreement, and that Executive understands its terms and effects, including the fact that Executive has agreed to RELEASE AND FOREVER DISCHARGE the Releasees from any legal action arising out of Executive’s employment relationship with the Company and the termination of that employment relationship; and

 

(b) That Executive has signed this Agreement voluntarily and knowingly in exchange for the consideration described herein, which Executive acknowledges is adequate and satisfactory to him and which Executive acknowledges is in addition to any other benefits to which Executive is otherwise entitled; and

 

(c) That Executive has been and is hereby advised in writing to consult with an attorney prior to signing this Agreement; and

 

(d) That Executive does not waive rights or claims that may arise after the date this Agreement is executed; and

 

(e) That the Company has provided Executive with a period of [twenty-one (21)] or [forty-five (45)] days within which to consider this Agreement, and that Executive has signed on the date indicated below after concluding that this Separation of Employment Agreement and General Release is satisfactory to Executive; and

 

(f) Executive acknowledges that this Agreement may be revoked by him within seven (7) days after execution, and it shall not become effective until the expiration of such seven (7) day revocation period.  In the event of a timely revocation by Executive, this Agreement will be deemed null and void and the Company will have no obligations hereunder.

 

[SIGNATURE PAGE FOLLOWS]

 

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Intending to be legally bound hereby, Executive and the Company executed the foregoing Separation of Employment Agreement and General Release this        day of               ,      .

 

	
 
    	
 
    	
Witness:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
MIDSTATES PETROLEUM COMPANY, INC.
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
Witness:
    	
 
    
	
Name:
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    	
 
    

 

Signature Page to Separation and Employment AgreementExhibit 10.1

 

Execution Version

 

FORBEARANCE AGREEMENT

 

This FORBEARANCE AGREEMENT, dated as of September 18, 2018 (this “Agreement”), is by and among Egalet Corporation, a corporation organized under the laws of Delaware (the “Company”), the Guarantors (together with the Company, the “Obligors”) and the undersigned beneficial holders or investment managers or advisors for such beneficial holders (together with any party that executes a Forbearance Joinder Agreement (as defined below) after the date hereof, the “Supporting Holders”) of the Company’s 13% Senior Secured Notes (the “Secured Notes”).

 

WHEREAS, the Company, the Guarantors and U.S. Bank National Association, as Trustee (the “Trustee”) and Collateral Agent (the “Collateral Agent”), are parties to (1) the Indenture, dated as of August 31, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “Secured Notes Indenture”) under which the Secured Notes were issued and (2) the Collateral Agreement, dated as of August 31, 2016, and any related documents and instruments that serves to grant and provide collateral to the Collateral Agent (as amended, restated, supplemented or otherwise modified from time to time, collectively, the “Security Documents,” and together with the Secured Notes, the Secured Notes Indenture, and the Security Documents, collectively, “Secured Notes Documents”).

 

WHEREAS, the current principal amount outstanding of such Secured Notes is $80,000,000;

 

WHEREAS, the Company is exploring a potential restructuring or recapitalization transaction involving the Secured Notes (the “Potential Transaction”);

 

WHEREAS, on July 11, 2018, the listing of the Company’s common stock was transferred from The Nasdaq Global Market to The Nasdaq Capital Market (the “Nasdaq Transfer”), which constituted a “Fundamental Change” under the indenture governing the Company’s 5.50% Convertible Senior Notes due 2020 (the “5.50% Notes,” and the indenture governing the 5.50% Notes, as amended, restated, supplemented or otherwise modified from time to time, the “5.50% Notes Indenture”);

 

WHEREAS, pursuant to the terms and conditions of the 5.50% Notes Indenture, due to the Nasdaq Transfer and the Fundamental Change resulting therefrom, on July 31, 2018, the Company made an offer (the “Repurchase Offer”) to each holder of 5.50% Notes to repurchase the 5.50% Notes on September 19, 2018 (the “Fundamental Change Repurchase Date”) for a price in cash equal to 100% of the aggregate principal amount of 5.50% Notes repurchased plus accrued and unpaid interest thereon (the “Fundamental Change Repurchase Price”);

 

WHEREAS, failure by the Company to pay the Fundamental Change Repurchase Price on the Fundamental Change Repurchase Date with respect to any 5.50% Notes tendered pursuant to the Repurchase Offer (including as a result of an early termination of the Repurchase Offer) would constitute an “Event of Default” under the 5.50% Notes Indenture, which would trigger an immediate Event of Default under section 6.01(d) of the Secured Notes Indenture (such Event of Default under section 6.01(d) of the Secured Notes Indenture solely with respect

 

 

to the Company’s failure to pay the Fundamental Change Repurchase Price on the Fundamental Change  Repurchase Date and any corresponding cross-default under Section 6.01(g) of that certain Indenture (the “6.50% Notes Indenture”), dated December 27, 2017, by and among the Company, the guarantors party thereto and the Bank of New York Mellon governing the Company’s 6.50% Convertible Senior Notes due 2024, the “Specified Default”);

 

WHEREAS, if the Specified Default occurs, the Holders, the Trustee and the Collateral Agent will have the immediate right to exercise any and all remedies under the Secured Notes Documents, including, without limitation, (a) charging default rate interest, (b) the initiation or continuation of any legal action against the Company or any Guarantor, and (c) instructing the Collateral Agent or the Trustee to take any action permitted under the Secured Notes Documents or applicable law (collectively, all such rights and remedies the “Rights and Remedies”);

 

WHEREAS, to facilitate discussions in respect of a Potential Transaction, the Obligors have requested that each of the Supporting Holders agree temporarily to forbear in the exercise of their Rights and Remedies solely to the extent arising from the occurrence and continuation of the Specified Default, subject to the terms and conditions of this Agreement; and

 

WHEREAS, capitalized terms used and not otherwise defined herein have the meanings given to them in the Secured Notes Indenture.

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

SECTION I.  ACKNOWLEDGMENTS

 

1.01                        Each of the Obligors hereby acknowledges and agrees, upon execution and delivery of this Agreement, but subject to the terms of this Agreement, that:

 

(a)                                 The recital of facts set forth in this Agreement is true and correct in all material respects;

 

(b)                                 Obligors hereby ratify and affirm the Secured Notes Documents, and acknowledge that (i) the Secured Notes Documents are and shall remain unchanged and in full force and effect, and (ii) the Collateral Agent has a perfected security interest in, among other things, all cash, cash equivalents and other securities held as of the date hereof in the accounts identified on Annex I hereto.  Obligors agree that the Secured Notes Documents constitute valid and binding obligations and agreements of Obligors enforceable in accordance with their respective terms;

 

(c)                                  The Supporting Holders have not waived, released or compromised, do not hereby waive, release or compromise, and may never waive, release or compromise any events, occurrences, acts, or omissions that may constitute or give rise to any Defaults or Events of Default, including without limitation the Specified Default, that existed or may have existed, exist, or may arise in the future, nor does any Supporting 

 

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Holder waive any Rights and Remedies, including without limitation, the right to direct the Trustee to exercise the remedy of foreclosure as to any property pledged as collateral in connection with the Secured Notes Documents upon termination of this Agreement;

 

(d)                                 The execution and delivery of this Agreement shall not: (i) constitute an extension, modification, or waiver of any aspect of the Secured Notes Indenture; (ii) extend the terms of the Secured Notes or the due date of any of the Secured Notes; (iii) give rise to any obligation on the part of the Supporting Holders to extend, modify or waive any term or condition of the Secured Notes; (iv) establish any course of dealing with respect to the Notes; or (v) give rise to any defenses or counterclaims to the right of the Supporting Holders to enforce their rights and remedies set forth in the Secured Notes Documents;

 

(e)                                  Except as expressly provided herein, the Supporting Holders’ agreement to forbear in the exercise of their Rights and Remedies and to perform as provided herein shall not invalidate, impair, negate or otherwise affect the Trustee’s or Supporting Holders’ ability to exercise their Rights and Remedies under the Secured Notes Documents, and otherwise.

 

SECTION II.  FORBEARANCE

 

2.01                        Forbearance.  In consideration of the Obligors’ agreement of compliance with the terms of this Agreement, and in reliance upon the representations, warranties, agreements and covenants of Obligors set forth herein, from the Agreement Effective Date (as defined below) until the Termination Date (as defined below), each Supporting Holder (severally and not jointly) hereby agrees to forbear and direct the Trustee to forbear (the “Forbearance”) from exercising any of the Rights and Remedies under the Secured Notes Documents or applicable law solely with respect to the Specified Default Notwithstanding anything herein to the contrary, during the Forbearance Period the Supporting Holders may deliver a notice of acceleration substantially in the form attached hereto as Annex II (but shall not otherwise exercise any Rights and Remedies in connection therewith during the Forbearance Period).

 

2.02                        Forbearance Period.

 

(a)                                 The Forbearance shall commence on the Agreement Effective Date (as defined below) and continue until the earlier of (i) October 14, 2018 at 11:59 p.m. New York City time and (ii) (A) 5:01 p.m. New York City time on the first (1st) business day following the date on which any Event of Termination (as defined below), other than the Events of Termination set forth in Sections 3.01(b), 3.01(f) or 3.01(h), shall have occurred, or (B) immediately upon the occurrence of the Events of Termination set forth in Sections 3.01(b), 3.01(f) or 3.01(h) (the earlier of (i) and (ii), the “Termination Date” and the period commencing on the Agreement Effective Date and ending on the Termination Date, the “Forbearance Period”).  From and after the Termination Date, the Forbearance shall immediately and automatically terminate and have no further force or effect, and each of the Supporting Holders shall be released from any and all obligations and agreements under this Agreement and shall be entitled to exercise any of the Rights and Remedies as if this Agreement had never existed, and all of the Rights and Remedies under the Secured Notes Documents and in law and in equity shall be available without restriction or modification, as if this Forbearance had not occurred.

 

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(b)                                 The parties hereto agree that the running of all as yet unexpired statutes of limitations and the doctrine of laches applicable to all claims or causes of action that any Supporting Holder may be entitled to take or bring in order to enforce its Rights and Remedies against any Obligor are, to the fullest extent permitted by law, tolled and suspended during the Forbearance Period.

 

SECTION III.  EVENTS OF TERMINATION.

 

3.01                        Events of Termination.  The Forbearance Period shall automatically terminate if any of the following events shall occur (each, an “Event of Termination”):

 

(a)                                 the failure of any Obligor to comply with any term, condition or covenant set forth in this Agreement;

 

(b)                                 any Obligor (i) makes any payment, dividend, distribution or transfer or provides any other consideration to any holder of, or on account of, the 5.50% Notes, the Company’s 6.50% Convertible Senior Notes due 2024 (together with the 5.50% Notes, the “Convertible Notes”) or any Equity Interests of the Company, (ii) purchases, redeems, defeases, exchanges, or otherwise acquires for value any Convertible Notes or Equity Interests of the Company, (iii)(A) Incurs, directly or indirectly, any Indebtedness or (B) creates, Incurs or suffers to exist any Lien upon any of its property or assets or income or profits therefrom, or collaterally assigns or conveys as collateral any right to receive income therefrom, or (iv) takes any action (including any authorization by the board of directors (or similar governing body)) for the purpose of effecting any of the foregoing;

 

(c)                                  the failure of the Company to pay the reasonable and documented fees and expenses of Paul, Weiss, Rifkind, Wharton & Garrison LLP (“Paul, Weiss”) in accordance with Section 4.01 of this Agreement;

 

(d)                                 the failure of any representation or warranty made by any Obligor under this Agreement to be true and correct in all respects as of the date when made, except to the extent such representations and warranties expressly relate to an earlier date in which case they will be true and correct in all respects as of such earlier date;

 

(e)                                  other than (i) the Specified Default, or (ii) an Event of Default under Section 6.01(d) of the Secured Notes Indenture as a result of the failure by the Company to pay principal or interest when due under the 5.50% Notes Indenture or 6.50% Notes Indenture, there occurs any Event of Default under the Secured Notes Indenture;

 

(f)                                   any Obligor commences a case under title 11 of the United States Code or any equivalent;

 

(g)                                  the Company notifies any Supporting Holder or its representatives that it is terminating discussions with the Supporting Holder regarding a Potential Transaction; or

 

(h)                                 the failure of any Obligor to make any payment of principal or interest with respect to the Secured Notes when the same becomes due and payable (without giving effect to any cure or grace period).

 

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SECTION IV.  OTHER AGREEMENTS

 

4.01                        Retention of Professionals; Expenses. The Company hereby acknowledges and agrees that the Supporting Holders have hired Paul, Weiss in connection with the execution of this Agreement and the Potential Transaction.  The Company shall pay the reasonable and documented fees and expenses of Paul, Weiss in accordance with the fee reimbursement letter between the Company and Paul, Weiss dated August 14, 2018.

 

4.02                        Information.  The Obligors shall provide to Paul, Weiss, as counsel to the Supporting Holders:

 

(a)                                 no later than the date set forth in Section 4.02 of the Secured Notes Indenture, the quarterly reports described therein;

 

(b)                                 promptly and in any event within one business day of the occurrence thereof, written notice regarding the occurrence of (i) any Event of Termination or (ii) any other event which could reasonably be expected to have a material adverse effect on the Obligors or their businesses or assets;

 

(c)                                  weekly reports regarding the status of or any developments in connection with the Potential Transaction, provided that, any such reports may be replaced with a conference call between representatives of the Company and the Supporting Holders to discuss the topics referred to above; and

 

(d)                                 upon written request of Paul, Weiss, any information that is reasonably necessary to evaluate the Company and its Affiliates, the Potential Transaction (including copies of any term sheets, letters of intent, or other similar agreements received by or delivered to the Company), any underlying financial information necessary to evaluate any Potential Transaction, and to verify the Obligors’ compliance with the terms of this Agreement and the Secured Notes Indenture (other than with respect to the Specified Default), such information shall be provided to Paul, Weiss as promptly as practicable following Paul, Weiss’s written request for such information.

 

4.03                        Releases.  Each Obligor (for itself and its Subsidiaries and Affiliates and the successors, assigns, heirs and representatives of each of the foregoing) (collectively, the “Releasors”) does hereby fully, finally, unconditionally and irrevocably release, waive and forever discharge each of the Supporting Holders, together with each of their respective Affiliates and investment managers, and each of the directors, officers, members, employees, agents, attorneys and consultants of each of the foregoing (collectively, the “Released Parties”), from any and all debts, claims, allegations, obligations, damages, costs, attorneys’ fees, suits, demands, liabilities, actions, proceedings and causes of action, in each case, whether known or unknown, contingent or fixed, direct or indirect, and of whatever nature or description, and whether in law or in equity, under contract, tort, statute or otherwise, which any Releasor has heretofore had or now or hereafter can, shall or may have against any Released Party by reason of any act, omission or thing whatsoever done or omitted to be done, in each case, on or prior to the date hereof directly arising out of, connected with or related to this Agreement, the Secured Notes Indenture or any other Secured Notes Document, or any act, event or transaction related or

 

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attendant thereto, or the agreements of any Supporting Holder contained therein, or the possession, use, operation or control of any of the assets of any Obligor.  Each Obligor represents and warrants that it has no knowledge of any claim by any Releasor against any Released Party or of any facts or acts or omissions of any Released Party which on the date hereof would be the basis of a claim by any Releasor against any Released Party which would not be released hereby.

 

4.04                        Confidentiality.  The Obligors agree that all information provided by the Supporting Holders hereunder, including the identity of and amount of Secured Notes held by each Supporting Holder, will be maintained in confidence and will not be disclosed publicly or to third parties other than the Company’s advisors and agents, except as may be required by a court or other governmental agency, or except as required (based on the advice of the Company’s outside counsel) to be filed pursuant to the Company’s reporting obligations under the U.S. Securities laws or the rules and regulations of any securities exchange on which the Company’s securities then trade.  If the Company publicly files a copy of this Agreement with the SEC or otherwise it shall redact each of the Supporting Holder’s signature pages in any such filing so as to not disclose such Supporting Holder’s identity or holdings information.

 

SECTION V.  REPRESENTATIONS AND WARRANTIES

 

In consideration of the foregoing agreements, the Company and each Guarantor jointly and severally hereby represent and warrant to each Supporting Holder, and each Supporting Holder severally but not jointly hereby represents and warrants to the Company and the Guarantors, as follows:

 

5.01                        Such party is duly organized, is validly existing and is not in violation in any respect of any term of its charter, bylaws or other constitutive documents; the execution, delivery and performance of this Agreement are within such party’s power and have been duly authorized by all necessary action; and such party is voluntarily entering into this Agreement.

 

5.02                        This Agreement constitutes a valid and legally binding agreement, enforceable against such party in accordance with its terms.

 

5.03                        Other than the filing of a Current Report on Form 8-K by the Company announcing (in a manner that complies with Section 4.04) its entry into this Agreement, no consent or authorization of, filing with, notice to or other act by or in respect of, any governmental or regulatory authority or any other person is required in connection with such party’s entry into, and performance of, this Agreement, except for consents, authorizations, filings and notices which have been obtained or made and are in full force and effect or which are immaterial in nature; and the entry into and performance of this Agreement by such party does and will not conflict with, or result in the default under, any material agreement or document of such party, its constituent documents or any applicable law, regulation or court order, consent or ruling.

 

5.04                        Each Supporting Holder represents and warrants that, as of the date hereof, it beneficially holds, or advises or manages for a beneficial holder, the principal amount of Secured Notes set forth on the signature page attached hereto; and to that extent it advises or manages the

 

6

 

Secured Notes for any beneficial holder, it has the authority to enter into this Agreement on behalf of any such beneficial holder and that this Agreement is a valid and legally binding agreement, enforceable against that holder and such party.

 

5.05                        The Company represents, as of the date of this Agreement that there are no Events of Default that have occurred and are continuing under the Secured Notes.

 

5.06                        The parties to this Agreement acknowledge that nothing in this Agreement, including the presentation of drafts from one party to another, constitutes the making of an offer to sell or the solicitation of an offer to buy securities or loans of any kind or the solicitation of a consent or waiver of any rights under any of the Secured Notes Documents and the entry into this Agreement shall not constitute, directly or indirectly, an incurrence, a refinancing, an extension or a modification in any way of any debt or a recapitalization or restructuring in any way of the obligations of the Obligors.

 

5.07                        The Supporting Holders have not made any assurances concerning (a) the manner in which or whether the Specified Default may be resolved, should it occur, or (b) any additional forbearance, waiver, restructuring or other accommodations.

 

SECTION VI.  RATIFICATION OF EXISTING AGREEMENTS

 

6.01                        During the Forbearance Period, no Supporting Holder may transfer its rights under the Secured Notes or the Secured Notes Indenture to another party unless (a) the party acquiring such rights (i) is a Supporting Holder or (ii) agrees in writing to be bound by this Agreement and enters into the Forbearance Joinder Agreement and (b) such Supporting Holder promptly notifies the Company and the other Supporting Holders party hereto of such transfer.

 

6.02                        This Agreement shall in no way be construed to preclude any Supporting Holder from acquiring additional Secured Notes, provided, however, that any such additional Secured Notes automatically shall be counted as part of the Secured Notes subject to the terms of this Agreement.

 

6.03                        The Obligors and the Supporting Holders hereby acknowledge and agree that, (a) the relationships between the Obligors and the Supporting Holders are governed by the Secured Notes Documents and this Agreement, (b) no fiduciary duty or special relationship is or will be created by any discussions regarding any possible amendment, waiver or forbearance, (c) the rights and obligations of the Supporting Holders under this Agreement are several and not joint and no Supporting Holder shall be liable or responsible for obligations of any other Supporting Holder, (d) no Supporting Holder has made to any Obligor, and no Obligor has made to any Supporting Holder, any promise, commitment or representation of any kind or character with respect to any forbearance or other matter as of the date of this Agreement other than as set forth in this Agreement, (e) no Person has any obligation to engage in discussions with any other Person after the date hereof regarding any further forbearance and (f) no Supporting Holder and no Obligor has any obligation under any circumstances to amend, waive, supplement or otherwise modify the terms of the Secured Notes Documents, offer any discounted payoff of the Secured Notes, refinance or exchange the Secured Notes, vote or refrain from voting or otherwise acting with respect to its Secured Notes, extend the forbearance period, grant any other

 

7

 

forbearance, agree to any amendment, supplement, waiver or other modification or any Potential Transaction, enter into any definitive documentation in connection with a Potential Transaction, or extend any other accommodation, financial or otherwise, to any Obligor or any of its Affiliates.

 

SECTION VII.  MISCELLANEOUS

 

7.01                        Condition Precedent to Effectiveness of this Agreement.   This Agreement and the Forbearance shall become effective upon receipt by the parties hereto of counterparts of this Agreement duly executed by (i) the Company, (ii) the Guarantors, and (iii) beneficial holders, or investment managers or advisors for such beneficial holders, of more than 75% of the outstanding principal amount of the Secured Notes (the date on which such conditions are satisfied, the “Agreement Effective Date”).

 

7.02                        More Favorable Agreements.  If the Company has entered into or at any time on or after the date hereof enters into a forbearance or similar agreement with any other holder of Secured Notes that contains terms more favorable to such holder than those contained in this Agreement (each such agreement, a “More Favorable Agreement”), such terms shall automatically be incorporated herein at the option of the Supporting Holders.  The Company shall (a) promptly notify the Supporting Holders of its entry into a More Favorable Agreement, including the identity of the other party to such More Favorable Agreement, and (b) promptly provide a copy of such More Favorable Agreement to the Supporting Holders.

 

7.03                        Counterparts.  This Agreement may be executed and delivered in any number of counterparts with the same effect as if the signatures on each counterpart were upon the same instrument.  Any counterpart delivered by facsimile or by other electronic method of transmission shall be deemed an original signature thereto.

 

7.04                        Interpretive Matters.

 

(a)                                 Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, and the term “including” is not limiting.  The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement.  Section, subsection and clause references herein are to this Agreement unless otherwise specified.

 

(b)                                 The term “person” as used in this Agreement shall be broadly interpreted to include, without limitation, any individual, corporation, company, partnership or other entity.

 

7.05                        Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York.  Each party hereto hereby irrevocably and unconditionally consents to submit to the non-exclusive jurisdiction of the federal and state courts in the Borough of Manhattan, City of New York for any action, suit, or proceeding arising out of or relating to this Agreement and the transactions contemplated by this Agreement.  Each party hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any action, suit, or proceeding arising out of this Agreement in any such court and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court

 

8

 

that any such action, suit, or proceeding brought in any such court has been brought in an inconvenient forum.

 

7.06                        Successors and Assigns.  This Agreement shall be binding upon each of the Company, the Guarantors, the Supporting Holders and their respective successors and assigns, and shall inure to the benefit of each such person and their permitted successors and assigns.

 

7.07                        Additional Parties.  Without in any way limiting the provisions hereof, additional holders or beneficial owners of Secured Notes may elect to become parties to this Agreement by executing and delivering to the Company a joinder agreement substantially in the form of Exhibit  A hereto.  Such additional holder or beneficial owner of Secured Notes shall become a Supporting Holder under this Agreement in accordance with the terms of this Agreement.

 

7.08                        Headings.  Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

 

7.09                        Integration.  This Agreement contains the entire understanding of the parties hereto with regard to the subject matter contained herein.  This Agreement supersedes all prior or contemporaneous negotiations, promises, covenants, agreements and representations of every nature whatsoever with respect to the matters referred to in this Agreement, all of which have become merged and finally integrated into this Agreement.  Each of the parties hereto understands that in the event of any subsequent litigation, controversy or dispute concerning any of the terms, conditions or provisions of this Agreement, no party shall be entitled to offer or introduce into evidence any oral promises or oral agreements between the parties relating to the subject matter of this Agreement not included or referred to herein and not reflected by a writing included or referred to herein.

 

7.10                        Jury Trial Waiver.  The Company, the Guarantors and the Supporting Holders, by acceptance of this Agreement, mutually hereby knowingly, voluntarily and intentionally waive the right to a trial by jury in respect of any litigation based herein, arising out of, under or in connection with this Agreement and the Secured Notes Documents or any other documents contemplated to be executed in connection herewith, or any course of conduct, course of dealings, statements (whether verbal or written) or actions of any party, including, without limitation, any course of conduct, course of dealings, statements or actions of any Supporting Holder relating to the administration of the Secured Notes or enforcement of the Secured Notes Documents arising out of tort, strict liability, contract or any other law, and agree that no party will seek to consolidate any such action with any other action in which a jury trial cannot be or has not been waived.

 

7.11                        Amendment.  This Agreement may only be amended or modified in writing by the Company, the Guarantors and each Supporting Holder.

 

[Remainder of page intentionally left blank; signature pages follow]

 

9

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

	
 
    	
EGALET CORPORATION
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Robert S. Radie
    
	
 
    	
 
    	
Name: 
    	
Robert S. Radie
    
	
 
    	
 
    	
Title: 
    	
President & Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
EGALET US INC.

EGALET LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert S. Radie
    
	
 
    	
 
    	
Name: 
    	
Robert S. Radie
    
	
 
    	
 
    	
Title: 
    	
Authorized Signatory
    

 

[Signature Page to Forbearance Agreement]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

	
 
    	
[NOTEHOLDER]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
Supporting Holder’s principal amount of   Secured Notes: $
    

 

 

Exhibit A

 

[FORM OF FORBEARANCE JOINDER AGREEMENT]

 

[·], 2018

 

Egalet Corporation 
 600 Lee Road, Suite 100
 Wayne, PA 19087
 Attention: [·]

 

RE:                           Forbearance Agreement

 

Ladies and Gentlemen:

 

Reference is made to the Forbearance Agreement dated as of September 18, 2018 entered into between the Company, the Guarantors; and the Supporting Holders party thereto (such Forbearance Agreement, as in effect on the date hereof and as it may hereafter be amended, supplemented or otherwise modified from time to time, together with this Forbearance Joinder Agreement, being the “Forbearance Agreement”).  Any capitalized terms not defined in this Forbearance Joinder Agreement have the meanings given to them in the Forbearance Agreement.

 

SECTION I.  Joining Obligations Under the Forbearance Agreement.  The undersigned hereby agrees, as of the date first above written, to join and to be bound as a Supporting Holder by all of the terms and conditions of the Forbearance Agreement to the same extent as each of the other Supporting Holders thereunder.  The undersigned further agrees, as of the date first above written, that each reference in the Forbearance Agreement to a “Supporting Holder” shall also mean and be a reference to the undersigned, including the making of each representation and warranty set forth in Section 5 of the Forbearance Agreement.

 

SECTION II.  Execution and Delivery.  Delivery of an executed counterpart of a signature page to this Forbearance Joinder Agreement by telecopier or in .PDF or similar format by electronic mail shall be effective as delivery of an original executed counterpart of this Forbearance Joinder Agreement.

 

SECTION III.  Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.  The parties hereto hereby agree that Sections 7.05 and 7.11 of the Forbearance Agreement shall apply mutatis mutandis to this Forbearance Joinder Agreement.

 

[Signature Page Follows]

 

[Signature Page to Forbearance Agreement]

 

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
[·]
    
	
 
    	
 
    
	
 
    	
By 
    	
 
    
	
 
    	
 
    	
Name: 
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Noteholder’s principal amount of Secured   Notes: $

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