Goodrich Petroleum Corp. (fka GDPMQ)

[Stockminder]

EMERGENCY MOTION FOR ORDER (I) APPROVING TERM SHEET AND
COMMITMENT LETTER AND (II) AUTHORIZING PAYMENT OF FEES AND
EXPENSES RELATED THERETO

Docket #410 Pages 5 & 6

Term Sheet


... 9. The Term Sheet agreed upon by the Debtors and the Purchasers, and incorporated as an attachment to the Commitment Letter, Provides for a new issuance of Convertible Senior Secured Second Lien Notes (the “New 2L Notes”) in an initial aggregate principal amount of $40 million. The proceeds of the New 2L Notes will be applied as follows: (i) $20 million to repay outstanding obligations under the Debtors’ existing first lien RBL facility and (ii) $20 million to fund the initial development of the Haynesville Shale drilling program as generally described in a previously delivered Management Presentation dated June 2016.

10. In turn, the Debtors agree to an interest rate of 13.5% per annum payable quarterly and to grant Purchasers their pro rata share of 10-year costless warrants for common stock in the reorganized Goodrich Petroleum Corporation in an amount equal to 20% of its Total New Equity. Additionally, the Purchasers have the right to appoint two members of the board of directors of the reorganized Debtors; provided that at no time shall the directors appointed by the Purchasers constitute less than 2/7 of the board of directors. As collateral, the purchasers take a second priority lien (second only to the liens of the first lien RBL) on all assets of the Debtors.

11. The Term Sheet further provides that the aggregate outstanding principal amount of the New 2L Notes (excluding any Additional PIK Principal) will be convertible at the option
of the Purchasers at any time prior to the Scheduled Maturity Date (the date of any such conversion, the “Conversion Date”) into a number of common shares equal to 15% of the common stock of the reorganized Issuer at closing calculated on a fully-diluted basis, including shares allocated to (i) the holders of the Issuer’s 8.000% second lien senior secured notes due 2018 and 8.875% second lien senior secured notes due 2018, (ii) the management incentive plan (the “MIP”) as described in the previously filed Restructuring Support Agreement (Docket No.34), (iii) the conversion of the New 2L Notes, (iv) the warrants granted to the Purchasers at closing, and (v) any warrants or stock granted to holders of the Issuer’s unsecured indebtedness
(collectively, the “Total New Equity”). The Additional PIK Principal, if any, will not be convertible and will be earned on the Conversion Date and payable in cash on the later of (i) the Conversion Date and (ii) the date the RBL Exit Facility is paid in full.

12. The Term Sheet further provides that the scheduled maturity date will be the later of (i) August 30, 2019 and (ii) the date that is six months after the scheduled maturity date (including after giving effect to the exercise of the RBL Extension Option) of the RBL Exit
Facility or any replacement RBL Exit Facility permitted by the terms of the New 2L Notes, but in any event no later than March 30, 2020. The Term Sheet contains customary provisions for exit financing agreements, including, but not limited to, conditions to closing, representations
and warranties, covenants, events of default, and reimbursement of expenses with a delayed commitment fee (discussed further below). The Debtors have agreed that its Plan of Reorganization will be consistent with the terms of the Term Sheet...