application of debtors pursuant to 11 u.s.c. §§ 327(a) … · 3 26732146.1 employees of its...

26732146.1

9IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

------------------------------------------------------------ x

In re : Chapter 11

:

CHISHOLM OIL AND GAS OPERATING, : Case No. 20–11593 (BLS)

LLC, et al., :

Debtors.1 : (Jointly Administered)

:

: Hearing Date: August 4, 2020 at 10:00 a.m. (ET)

------------------------------------------------------------ x Objection Deadline: July 17, 2020 at 4:00 p.m. (ET)

APPLICATION OF DEBTORS PURSUANT TO 11 U.S.C. §§ 327(a)

AND 328 AND FED. R. BANKR. P. 2014(a) AND 2016 FOR AUTHORITY

TO RETAIN AND EMPLOY ALVAREZ & MARSAL NORTH AMERICA, LLC

AS FINANCIAL ADVISOR NUNC PRO TUNC TO PETITION DATE

Chisholm Oil and Gas Operating, LLC and its debtor affiliates, as debtors and

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

respectfully represent as follows in support of this application (the “Application”):

Background

1. On June 17, 2020 (the “Petition Date”), the Debtors each commenced with

the Court a voluntary case under chapter 11 of title 11 of the United States Code

(the “Bankruptcy Code”). The Debtors are authorized to continue to operate their business and

manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the

Bankruptcy Code. No trustee or examiner has been appointed in these chapter 11 cases. On July

1, 2020, the Office for the United States Trustee for the District of Delaware (the “U.S. Trustee”)

appointed the Official Committee of Unsecured Creditors [Docket No. 90].

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, as applicable, are Chisholm Oil and Gas Operating II, LLC (8730); Chisholm Oil and Gas Operating, LLC

(5382); Cottonmouth SWD, LLC (9849); Chisholm Oil and Gas Nominee, Inc. (1558); and Chisholm Oil and Gas

Management II, LLC (8174). The Debtors’ mailing address is 1 West Third Street, Suite 1700, Tulsa, OK 74103.

Case 20-11593-BLS Doc 101 Filed 07/03/20 of 12

2

26732146.1

2. The Debtors’ chapter 11 cases are being jointly administered for procedural

purposes only pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure

(the “Bankruptcy Rules”) and Rule 1015-1 of the Local Rules of Bankruptcy Practice and

Procedure of the United States Bankruptcy Court for the District of Delaware (the “Local Rules”).

3. Additional information regarding the Debtors’ business and capital

structure and the circumstances leading to the commencement of these chapter 11 cases is set forth

in the Declaration of Matthew J. Henry in Support of Debtors’ Chapter 11 Petitions and First Day

Relief, dated June 18, 2020 [Docket No. 15] (the “Henry First Day Declaration”).2

Jurisdiction

4. The Court has jurisdiction to consider this matter pursuant to

28 U.S.C. §§ 157 and 1334 and the Amended Standing Order of Reference entered by the United

States District Court for the District of Delaware, dated February 29, 2012. This is a core

proceeding pursuant to 28 U.S.C. § 157(b). Venue is proper before the Court pursuant to

28 U.S.C. §§ 1408 and 1409.

5. Pursuant to Local Rule 9013-1(f), the Debtors consent to the entry of a final

order by the Court in connection with this Application to the extent that it is later determined that

the Court, absent consent of the parties, cannot enter final orders or judgments consistent with

Article III of the United States Constitution.

Relief Requested

6. By this Application, pursuant to sections 327(a) and 328 of the Bankruptcy

Code, Bankruptcy Rules 2014(a) and 2016, and Local Rules 2014-1 and 2016-2, the Debtors

request authority to retain and employ Alvarez & Marsal North America, LLC (together with

2 Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Henry First Day

Declaration or the Engagement Letter (as defined below), as applicable.


3

26732146.1

employees of its affiliates all of which are wholly-owned by its parent company and employees,

its wholly owned subsidiaries, and independent contractors, collectively, “A&M”), as financial

advisor to the Debtors, pursuant to the terms of that certain engagement letter effective as of March

2, 2020 (as may be amended, modified, or supplemented from time to time, the “Engagement

Letter”), a copy of which is annexed hereto as Exhibit A, nunc pro tunc to the Petition Date.

7. In support of this Application, the Debtors submit the declaration of

Matthew J. Henry, a Managing Director at A&M, which is annexed hereto as Exhibit B,

(the “Henry Declaration”).

8. A proposed form of order granting the relief requested herein is annexed

hereto as Exhibit C (the “Proposed Order”).

A&M’s Qualifications

9. In consideration of the size and complexity of their business, as well as the

exigencies of the circumstances, the Debtors have determined that the services of an experienced

financial advisor is necessary and will substantially enhance the Debtors’ efforts to maximize the

value of their chapter 11 estates. A&M is well qualified to provide these services in light of their

extensive knowledge and expertise with respect to chapter 11 proceedings and the Debtors.

10. A&M and its senior professionals have extensive experience and expertise

in providing interim management, crisis management, turnaround consulting, operational due

diligence, creditor advisory services, and financial and operational restructuring advice. A&M’s

debtor advisory services have included a wide range of activities targeted at stabilizing and

improving a company’s financial position, including developing or validating forecasts, business

plans, and related assessments of a business’s strategic position; monitoring and managing cash,

cash flow, and supplier relationships; assessing and recommending cost reduction strategies; and

designing and negotiating financial restructuring packages. Similar engagements for whom A&M


4

26732146.1

has provided services include In re Chesapeake Energy Corporation, Case No. 20-33233 (DRJ)

(Bankr. S.D. Tex. June 28, 2020); In re Extraction Oil & Gas, Inc., Case No. 20-11548 (CSS)

(Bankr. D. Del. June 14, 2020); In re Templar Energy LLC, Case No. 20-11441 (BLS) (Bankr. D.

Del. June 1, 2020); In re Whiting Petroleum Corporation, Case No. 20-32021 (DRJ) (Bankr. S.D.

Tex. April 1, 2020); In re Arsenal Energy Holdings LLC, Case No. 19-10226 (BLS) (Bankr. D.

Del. March 22, 2019); In re Sanchez Energy Corporation, Case No. 19-34508 (MI) (Bankr. S.D.

Tex. August 11, 2019); In re Legacy Reserves Inc., Case No. 19-33395 (MI) (Bankr. S.D. Tex.

June 18, 2019); In re White Star Petroleum Holdings, LLC, Case No. 19-12521 (JDL) (Bankr.

W.D. Okla. May 28, 2019); In re Jones Energy, Inc., Case No. 19-32112 (DRJ) (Bankr. S.D. Tex.

May 6, 2019); In re Southcross Energy Partners, L.P., Case No. 19-10702 (MFW) (Bankr. D. Del.

April 1, 2019); In re Parker Drilling Company, Case No. 18-36958 (MI) (Bankr. S.D. Tex. Jan.

15, 2019); In re EXCO Resources, Inc., Case No. 18-30155 (MI) (Bankr. S.D. Tex. Jan. 15, 2018);

In re Expro Holdings US, Inc., Case No. 17-60179 (DRJ) (Bankr. S. D. Tex. Dec. 18, 2017); In re

Seadrill Ltd., No. 17-60079 (DJR) (Bankr. S.D. Tex. Sept. 12, 2017); In re Key Energy Services,

Inc., Case No. 16- 12306 (BLS) (Bankr. D. Del. Oct. 24, 2016); In re Halcón Resources

Corporation, Case No. 16- 11724 (BLS) (Bankr. D. Del. July 28, 2016); In re SandRidge Energy,

Inc., Case No. 16-32488 (DRJ) (Bankr. S.D. Tex. June 23, 2016); In re Penn Virginia Corp., Case

No. 16-32395 (LSS) (Bankr. E.D. Va. May 12, 2016); In re Southcross Holdings, LP, Case No.

16-20111 (MI) (Bankr S.D. Tex. May 6, 2016); In re Swift Energy Co., Case No. 15-12670 (MFW)

(Bankr. D. Del. Dec. 31, 2015); In re Magnum Hunter Resources Corp., Case No. 15-12533 (KG)

(Bankr. D. Del. Dec. 2, 2015); In re Samson Res. Corp., Case No. 15-11934 (CSS) (Bankr. D. Del.

Sept. 16, 2015); In re Haggen Holdings, LLC, Case No. 15-11874 (KG) (Bankr. D. Del. Sept 8,

2015); In re Hercules Offshore, Inc., Case No. 15-11685 (CSS) (Bankr. D. Del. Aug. 13, 2015).


5

26732146.1

Prepetition Services

11. In addition, A&M is familiar with the Debtors’ business, financial affairs,

and capital structure. Since A&M’s initial engagement on March 2, 2020, the A&M personnel

providing services to the Debtors (the “A&M Professionals”) have worked closely with the

Debtors’ management and other professionals in assisting with a myriad of issues related to the

Debtors’ restructuring and these chapter 11 cases. Specifically, A&M’s Professionals have

advised the Debtors’ senior management, its members, and their Board of Directors on all aspects

of the Debtors’ restructuring efforts, including assisting the Debtors with preparing cash flow

forecasts, evaluating the Debtors’ prior office lease and alternative options, assisting with liquidity

and vendor management, analyzing and evaluating strategic alternatives and potential alternative

restructuring transactions, working with the Debtors’ other advisors to develop restructuring

proposals, advising the Debtors regarding recommended restructuring strategies and working with

the Debtors and their other advisors to prepare for these chapter 11 cases. A&M was also actively

involved in the Debtors’ negotiations regarding the terms of that certain Restructuring Support

Agreement, dated June 15, 2020, entered into between the Debtors, certain lenders under the RBL

Credit Agreement, Chisholm Oil and Gas, LLC, and Gastar Holdco LLC. The Debtors believe

that A&M has developed significant and relevant expertise with regard to the Debtors, their

business, and the unique circumstances of this case.

12. Accordingly, A&M is well qualified and uniquely situated to effectively

and efficiently perform the services required by the Debtors in these chapter 11 cases. The Debtors

submit that the retention of A&M on the terms and conditions set forth herein, and as further

described in the Engagement Letter, is necessary and appropriate, is in the best interest of the

Debtors’ estates, creditors, and all other parties in interest, and should be granted.


6

26732146.1

Services to Be Provided

13. As set forth more fully in the Engagement Letter and the Henry Declaration,

A&M will provide consulting and financial advisory services to the Debtors and assist the Debtors

in their reorganization efforts. A&M’s activities have included and will include the provision of

the following services: 3

a. assisting in the evaluation of the Debtors’ current business plan and cash

flow forecast;

b. assisting in the evaluation of the Debtors’ current office lease and

alternative options;

c. assisting in the review, development, and management of a 13-week cash

flow forecast;

d. assisting with liquidity and vendor management;

e. assisting in financing issues, including assistance in preparation of reports

and liaison with creditors;

f. reporting to the Debtors’ members and their Board of Directors as desired

or directed by the Responsible Officers (as defined in the Engagement

Letter);

g. assistance to the Debtors in the preparation of financial-related disclosures

required by the Court, including the Debtors’ Schedules of Assets and

Liabilities, Statements of Financial Affairs, and Monthly Operating

Reports;

h. assistance with the identification of executory contracts and leases and

performance of cost/benefit evaluations with respect to the assumption or

rejection of each;

i. analysis of creditor claims, including assistance with development of

databases, as necessary, to track such claims;

j. assistance in the preparation of information and analysis necessary for the

confirmation of a plan of reorganization in these chapter 11 cases, including

information contained in the disclosure statement;

3 The listed services are a summary of the services A&M may provide to the Debtors. In the event of any inconsistency

between the Engagement Letter and this summary, the Engagement Letter shall govern in all respects.


7

26732146.1

k. assistance in the evaluation and analysis of avoidance actions, including

fraudulent conveyances and preferential transfers; and

l. other activities as are approved by the Responsible Officers or the Board of

Directors and agreed to by A&M.

No Duplication of Services

14. The services that A&M will provide to the Debtors are necessary to enable

the Debtors to maximize the value of their estates. A&M has used and will use reasonable efforts

to coordinate with the Debtors and the other retained professionals to avoid the unnecessary

duplication of services in these chapter 11 cases.

Professional Compensation

15. A&M’s decision to accept this engagement to advise and assist the Debtors

is conditioned upon its ability to be retained in accordance with the terms of the Engagement Letter

and to be compensated for its services and reimbursed for expenses it incurs, also in accordance

with the terms thereof.

16. Subject to approval by the Court, and in accordance with the terms of the

Engagement Letter, the Debtors will pay A&M for services provided by the A&M Professionals

at their customary hourly billing rates, which will be subject to the following ranges (collectively,

the “Fee Structure”):4

4 The Debtors have been informed that such rates and ranges shall be subject to adjustment annually at such time as

A&M adjusts its rates generally. A&M will provide notice of all increased rates before any such increases are applied

to work done for the Debtors pursuant to the Engagement Letter.

Restructuring

Managing Directors $900-1,150

Directors $700-875

Analysts/Associates $400-675

Case Management

Managing Directors $850-1,000

Directors $675-825

Analysts/Associates $400-625


8

26732146.1

17. In addition, as set forth in the Engagement Letter, the Debtors will

reimburse A&M for reasonable and documented out-of-pocket expenses incurred in connection

with this assignment, such as travel (but excluding increased expenses of first class travel),

lodging, duplicating, messenger, and telephone charges (the “Expense Structure” and, together

with the Fee Structure, the “Fee and Expense Structure”).5

18. The Debtors understand that during the pendency of these chapter 11 cases,

A&M intends to apply to the Court for allowance of compensation for professional services

rendered and reimbursement of expenses for its financial advisory services in accordance with the

applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, the

guidelines established by the United States Trustee for the District of Delaware (the “U.S. Trustee

Guidelines”), and any other applicable procedures and orders of the Court.

19. Upon execution of the Engagement Letter, A&M received $250,000 from

the Debtors as a retainer to be credited against any amounts due at the termination of A&M’s

engagement. In addition, in the 90 days immediately preceding the Petition Date, A&M received

payments totaling $2,138,158 the aggregate for services performed for the Debtors. A&M applied

these funds to amounts due for services rendered and expenses incurred prior to the Petition Date.

A&M also received expense reimbursement payments of $14,000. Other than as set forth herein,

A&M did not receive any payments from the Debtors during the 90 days preceding the Petition

Date. As of the Petition Date, none of the Debtors owe A&M for any fees or expenses incurred

prior to the Petition Date.

5 The terms of the Fee and Expense Structure outlined herein is a summary of the Fee and Expense Structure provided

in the Engagement Letter and, in the event of any inconsistency between the terms of the Engagement Letter and this

summary, the Engagement Letter shall govern in all respects.


9

26732146.1

Indemnification Provisions

20. As a material part of the consideration for which A&M has agreed to

provide the services described herein, the Debtors have agreed to the indemnification provisions

annexed to the Engagement Letter and incorporated therein by reference (the “Indemnification

Provisions”).6 The Indemnifications Provisions provide that the Debtors will, among other things,

indemnify and hold harmless each of A&M, its affiliates, and their respective shareholders,

members, managers, controlled persons, and employees (each, an “Indemnified Party” and,

collectively, the “Indemnified Parties”) against any and all documented losses, claims, damages,

liabilities, penalties, obligations, and expenses, based upon or arising out of (directly or indirectly)

the Indemnified Party’s performance or nonperformance of their obligations under the

Engagement Letter.

21. The terms and conditions of the Engagement Letter, including the Fee and

Expense Structure and the Indemnification Provisions, were negotiated by the Debtors and A&M

at arm’s-length and in good faith. The Debtors respectfully submit that the Fee and Expense

Structure and the Indemnification Provisions reflected in the Engagement Letter are customary

and, viewed in conjunction with the other terms of A&M’s proposed retention, are reasonable

terms of consideration for financial advisors such as A&M for engagements both out of court and

in chapter 11, and are in the best interests of the Debtors, their estates and creditors in light of the

fact that the Debtors require A&M’s services to successfully reorganize.

A&M’s Disinterestedness

22. As set forth in the Henry Declaration, A&M has represented to the Debtors

that, except as provided therein, A&M (i) has no connection with the Debtors, their creditors,

6 This Application provides a summary of the Indemnification Provisions. In the event of any inconsistency between

the Engagement Letter and this summary, the Engagement Letter will govern in all respects.


10

26732146.1

other parties in interest, or the attorneys or accountants of any of the foregoing, or U.S. Trustee or

any person employed by the U.S. Trustee, (ii) does not hold any interest adverse to the Debtors’

estates, and (iii) is a “disinterested person” as defined by section 101(14) of the Bankruptcy Code.

23. In addition, the Debtors have been informed, as set forth in the Henry

Declaration, that if A&M discovers any new relevant facts or relationships bearing on the matters

described herein during the period of A&M’s retention, A&M will use reasonable efforts to

promptly file a supplemental declaration, as required by Bankruptcy Rule 2014(a).

Relief Requested Should be Granted

24. The Debtors submit that the retention of A&M under the terms described

herein is appropriate under sections 327(a), 328, and 1107(b) of the Bankruptcy Code. Section

327(a) of the Bankruptcy Code empowers the trustee, with the Court’s approval, to employ

professionals “that do not hold or represent an interest adverse to the estate, and that are

disinterested persons, to represent or assist the trustee in carrying out the trustee’s duties under this

title.” 11 U.S.C. § 327(a). Section 101(14) of the Bankruptcy Code defines a “disinterested

person” as a person that:

a. is not a creditor, an equity security holder, or an insider;

b. is not and was not, within 2 years before the date of the filing of the petition,

a director, officer, or employee of the debtor; and

c. does not have an interest materially adverse to the interest of the estate or

of any class of creditors or equity security holders, by reason of any direct

or indirect relationship to, connection with, or interest in, the debtor, or for

any other reason.

11 U.S.C. § 101(14).

25. Further, section 1107(b) of the Bankruptcy Code provides that “a person is

not disqualified for employment under section 327 of this title by a debtor in possession solely

because of such person’s employment by or representation of the debtor before the commencement


11

26732146.1

of the case.” 11 U.S.C. § 1107(b). A&M’s prepetition relationship with the Debtors is therefore

not an impediment to A&M’s retention as Debtors’ postpetition financial advisor.

26. Section 328(a) of the Bankruptcy Code authorizes the employment of a

professional person “on any reasonable terms and conditions of employment, including on a

retainer.” 11 U.S.C. § 328(a). The Debtors submit that the terms and conditions of A&M’s

retention as described herein, including the proposed Fee and Expense Structure and

Indemnification Provisions, as modified by the Proposed Order, are reasonable and are consistent

with terms and conditions typical for engagements of this size and character. Since the Debtors

will require substantial assistance with the reorganization process, it is reasonable for the Debtors

to seek to employ and retain A&M to serve as their financial advisor on the terms and conditions

set forth herein and in the Engagement Letter.

27. Based on the foregoing, the Debtors submit that the relief requested herein

is appropriate.

Notice

28. Notice of this Application will be provided to (i) the Office of the United

States Trustee for the District of Delaware; (ii) the holders of the 30 largest unsecured claims

against the Debtors on a consolidated basis; (iii) counsel to the RBL Agent; (iv) counsel to the

RBL Collateral Agent; (v) counsel to the Term Loan Agent; (vi) counsel to the Consenting

Sponsors; and (viii) any party that has requested notice pursuant to Bankruptcy Rule 2002. The

Debtors respectfully submit that no further notice is required.


12

26732146.1

WHEREFORE the Debtors respectfully request entry of the Proposed Order

granting the relief requested herein and such other and further relief as the Court may deem just

and appropriate.

Dated: July 3, 2020

CHISHOLM OIL & GAS OPERATING,

LLC (on behalf of itself and each of its affiliated

Debtors)

/s/ Michael Rigg

Name: Michael Rigg

Title: Chief Financial Officer


26730384.1

IN THE UNITED STATES BANKRUPTCY COURT


------------------------------------------------------------ x

In re : Chapter 11

:


LLC, et al., :

Debtors.1 :

:

:

(Jointly Administered)

Objection Deadline: July 17, 2020 at 4:00 p.m. (ET)

------------------------------------------------------------ x Hearing Date: August 4, 2020 at 10:00 a.m. (ET)

NOTICE OF APPLICATION

TO: (I) THE OFFICE OF THE UNITED STATES TRUSTEE FOR THE DISTRICT OF

DELAWARE; (II) THE HOLDERS OF THE 30 LARGEST UNSECURED CLAIMS

AGAINST THE DEBTORS ON A CONSOLIDATED BASIS; (III) COUNSEL TO THE

RBL AGENT; (IV) COUNSEL TO THE RBL COLLATERAL AGENT; (V) COUNSEL

TO THE TERM LOAN AGENT; (VI) COUNSEL TO THE CONSENTING SPONSORS;

AND (VIII) ANY PARTY THAT HAS REQUESTED NOTICE PURSUANT TO

BANKRUPTCY RULE 2002

PLEASE TAKE NOTICE that Chisholm Oil and Gas Operating, LLC and its debtor

affiliates, as debtors and debtors in possession (collectively, the “Debtors”) have filed the attached

Application of Debtors Pursuant to 11 U.S.C. §§ 327(a) and 328 and Fed. R. Bankr. P. 2014(a)

and 2016 for Authority to Retain and Employ Alvarez & Marsal North America, LLC as Financial

Advisor Nunc Pro Tunc to Petition Date (the “Application”).

PLEASE TAKE FURTHER NOTICE that any objections to the Application must be

filed on or before July 17, 2020 at 4:00 p.m. (ET) (the “Objection Deadline”) with the United

States Bankruptcy Court for the District of Delaware, 824 North Market Street, 3rd Floor,

Wilmington, Delaware 19801. At the same time, you must serve a copy of the objection upon the

undersigned proposed counsel to the Debtors so as to be received on or before the Objection

Deadline.

PLEASE TAKE FURTHER NOTICE THAT A HEARING TO CONSIDER THE

APPLICATION WILL BE HELD ON AUGUST 4, 2020 AT 10:00 A.M. (ET) BEFORE THE

HONORABLE BRENDAN L. SHANNON AT THE UNITED STATES BANKRUPTCY

COURT FOR THE DISTRICT OF DELAWARE, 824 NORTH MARKET STREET, 6TH

FLOOR, COURTROOM NO. 1, WILMINGTON, DELAWARE 19801.

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

number, as applicable, are Chisholm Oil and Gas Operating II, LLC (8730); Chisholm Oil and Gas Operating, LLC



Case 20-11593-BLS Doc 101-1 Filed 07/03/20 Page 1 of 2

2

26730384.1

PLEASE TAKE FURTHER NOTICE THAT, IF YOU FAIL TO RESPOND IN

ACCORDANCE WITH THIS NOTICE, THE COURT MAY GRANT THE RELIEF

REQUESTED IN THE APPLICATION WITHOUT FURTHER NOTICE OR A

HEARING.

Dated: July 3, 2020

Wilmington, Delaware

/s/ S. Alexander Faris

YOUNG CONAWAY STARGATT & TAYLOR, LLP

M. Blake Cleary (No. 3614)

Jaime Luton Chapman (No. 4936)

S. Alexander Faris (No. 6278)

Rodney Square

1000 North King Street

Wilmington, Delaware 19801

Telephone: (302) 571-6600

Facsimile: (302) 571-1253

Emails: [email protected]

[email protected]

[email protected]

-and-

WEIL, GOTSHAL & MANGES LLP

Matthew S. Barr (admitted pro hac vice)

Kelly DiBlasi (admitted pro hac vice)

Lauren Tauro (admitted pro hac vice)

767 Fifth Avenue

New York, New York 10153

Telephone: (212) 310-8000

Facsimile: (212) 310-8007

Proposed Attorneys for Debtors

and Debtors in Possession


26732146.1

Exhibit A

Engagement Letter


April 6, 2020 Mr. Michael Rigg Co-President & Chief Financial Officer Chisholm Oil & Gas Operating LLC 6100 S Yale Ave Tulsa, OK 74136 Dear Mr. Rigg: This letter confirms and sets forth the terms and conditions of the engagement between Alvarez & Marsal North America, LLC (“A&M”) and Chisholm Oil & Gas Operating LLC and its subsidiaries (jointly and severally, the “Company”), including the scope of the services to be performed and the basis of compensation for those services. Upon execution of this letter by each of the parties below and receipt of the retainer described below, this letter will constitute an agreement between the Company and A&M (the “Agreement”). The Agreement shall be effective as of March 2, 2020. 1. Description of Services

(a) A&M shall provide consulting and financial advisory services to the Company at the direction of the Company’s Co-President & Chief Financial Officer and independent directors (the “Responsible Officers”) in connection with the Company’s efforts in seeking to improve its financial and operating performance and assist the Company in its reorganization efforts. A&M shall report directly to the Responsible Officers. It is anticipated that A&M’s activities shall include the following:

(i) assistance in the evaluation of the Company’s current business plan and cash flow

forecast;

(ii) assistance in the evaluation of the Company’s current office lease and alternative options;

(iii) assistance in the review, development, and management of a 13-week cash flow forecast;

(iv) assistance with liquidity and vendor management;

(v) assistance in financing issues, including assistance in preparation of reports and liaison

with creditors;

(vi) reporting to the Company’s Board of Directors (the “Board”) as desired or directed by the Responsible Officers; and

(vii) other activities as are approved by the Responsible Officers or the Board and agreed to by A&M.

In rendering its services to the Company, A&M will report directly to the Responsible Officers and will make recommendations to and consult with the Responsible Officers and other senior officers as the Board or Responsible Officers direct.


Chisholm Oil & Gas Operating LLC April 6, 2020

-2-

(b) In connection with the services to be provided under this Agreement, from time to time, A&M may utilize the services of employees of its affiliates, and subsidiaries. Such affiliates are wholly owned by A&M’s parent company and employees.

A&M personnel providing services to the Company may also work with other A&M clients in conjunction with unrelated matters.

2. Information Provided by the Company and Forward Looking Statements

The Company shall use commercially reasonable efforts to: (i) provide A&M with reasonable access to management and other representatives of the Company; and (ii) furnish all data, material, and other reasonable information concerning the business, assets, liabilities, operations, cash flows, properties, financial condition and prospects of the Company that A&M may reasonably request from time to time in connection with the services to be provided to the Company. Without further independent verification, A&M shall rely on the accuracy and completeness of all publicly available information and information that is furnished by or on behalf of the Company and otherwise reviewed by A&M in connection with the services performed for the Company. The Company acknowledges and agrees that A&M is not responsible for the accuracy or completeness of such information and shall not be responsible for any inaccuracies or omissions with respect to such information. A&M is under no obligation to update data submitted to it or to review any other areas unless specifically requested by the Company, Board, or the Responsible Officers to do so.

You understand that the services to be rendered by A&M may include the preparation of projections and other forward-looking statements, and numerous factors can affect the actual results of the Company’s operations, which may materially and adversely differ from those projections. In addition, A&M will be relying on information provided by the Company in the preparation of those projections and other forward-looking statements. Without limiting the foregoing: (i) A&M acknowledges that forecasts, projections, and other forward looking information are inherently uncertain and subject to numerous variables and assumptions, many of which are outside of the control of the Company or any of its representatives; and (ii) none of the Company nor any of its affiliates or representatives makes any representation, warranty, or guarantee with respect to such forecasts or projections or any other information provided to A&M.

3. Limitation of Duties

A&M makes no representation or guarantee that among other things (i) an appropriate restructuring proposal or strategic alternative can be formulated for the Company; (ii) any restructuring proposal or strategic alternative presented to the Company’s management, the Board, or Responsible Officers will be more successful than all other possible restructuring proposals or strategic alternatives; (iii) restructuring is the best course of action for the Company; or (iv) if formulated, that any proposed restructuring plan or strategic alternative will be accepted by any of the Company’s creditors, shareholders or members, as applicable, or other constituents. Further, A&M does not assume any responsibility for the Company’s decision to pursue, or not pursue any business strategy, or to effect, or not to effect any transaction. A&M shall be responsible for assistance with the implementation only of the restructuring proposal or strategic alternative approved by the Board or Responsible Officers and only to the extent and in the manner authorized by and directed by the Board or Responsible Officers and agreed to by A&M.

Depending on future developments the spread of the Coronavirus has the potential to affect the services provided under this Agreement. Travel, work place and mobility restrictions (to include measures reasonably mandated by A&M with respect to its employees and personnel) may restrict travel to the Company and other work sites as well as limit access to facilities, infrastructure, information and personnel of A&M, the Company or others. Such circumstances may adversely affect the timetable or content of A&M's deliverables and completion of the scope of services included in this Agreement. A&M will discuss with the Company if A&M believes that the



-3-

services may be impacted in this way. The Company accepts and acknowledges that A&M employees and personnel may attend at the Company’s locations or physically interact with the Company’s employees and personnel in connection with the services, unless A&M or the Company decide that this should not be the case.

4. Compensation

(a) A&M will receive fees for its services based on the following hourly rates: Restructuring: Managing Directors $900–1,150 Directors $700–875 Analysts/Associates $400–675 Case Management: Managing Directors $850–1,000 Directors $675–825 Analysts/Consultants $400–625 A&M will use commercially reasonable efforts to assign work to the lowest hourly rate employee that can competently handle the work product. Such rates shall be subject to adjustment annually at such time as A&M adjusts its rates generally. A&M will provide notice of all increased rates before any such increases are applied to work done for the Company pursuant to this Agreement.

(b) In addition, A&M will be reimbursed for its reasonable and documented out-of-pocket expenses

incurred in connection with this assignment, such as travel (but excluding increased expenses of first class travel), lodging, duplicating, messenger and telephone charges. All fees and expenses will be billed on a monthly basis or, at A&M’s discretion, more frequently. Invoices are payable by the Company upon receipt. Without limiting the indemnification provisions contained in this Agreement, any individual expense reimbursable by the Company under this section may not exceed $2,000 without the Company’s written consent, by e-mail or otherwise (not to be unreasonably withheld), with the exception of reasonable airfare expenses.

(c) The Company shall promptly remit to A&M a retainer in the amount of $250,000, which shall be

credited against any amounts due at the termination of this engagement and returned upon the satisfaction of all obligations under this Agreement. Notwithstanding anything to the contrary, A&M and the Company acknowledge and agree that A&M’s first invoice provided under this Agreement shall include a discount in favor of the Company in an amount equal to $50,000.

5. Term

(a) This Agreement will apply from the commencement of the services referred to in Section 1 and may be terminated with immediate effect by either party without cause by written notice to the other party.

(b) A&M normally does not withdraw from an engagement unless the Company misrepresents or fails to disclose material facts, fails to pay fees or expenses, or makes it unethical or unreasonably difficult for A&M to continue performance of the engagement, or other just cause exists.

(c) On termination of the Agreement, any fees and expenses due to A&M shall be remitted promptly (including fees and expenses that accrued prior to but are invoiced subsequent to such termination).

(d) The provisions of this Agreement that give the parties rights or obligations beyond its termination

shall survive and continue to bind the parties.

(e) Upon reasonable request, A&M agrees to provide on a weekly basis (i) an estimate of total fees accrued to date and (ii) an estimate and related scope of planned work for the following week.



-4-

6. Relationship of the Parties

The parties intend that an independent contractor relationship will be created by this Agreement. Neither A&M nor any of its personnel or agents is to be considered an employee or agent of the Company. The parties acknowledge and agree that the personnel and agents of A&M are not entitled to any of the benefits that the Company provides for the Company employees. The Company also acknowledges and agrees that A&M’s engagement shall not constitute an audit, review or compilation, or any other type of financial statement reporting engagement that is subject to the rules of the AICPA, SEC or other state or national professional or regulatory body.

7. Attorney Work Product

To the extent that A&M’s work will be done at the direction of the Company’s counsel, Weil, Gotshal & Manges LLP (“Weil”) in order to assist Weil in rendering legal advice, the parties understand that the work performed by A&M as part of this engagement, including any reports it may prepare, is privileged and confidential and is deemed to constitute attorney work product which A&M will not disclose to any other third party (other than Weil and the Company) except at the direction of Weil or otherwise in accordance with the terms of this Agreement. The parties understand that any documents prepared or obtained by A&M that are prepared or obtained solely for the use and benefit of Weil in connection with its representation of the Company are subject to Weil and the Company’s right to request that they be delivered into their possession at any time they are still in A&M’s possession.

8. No Third Party Beneficiary

The Company acknowledges that all advice (written or oral) provided by A&M to the Company in connection with this engagement is intended solely for the benefit and use of the Company (limited to its Board and management) in considering the matters to which this engagement relates. The Company agrees that no such advice shall be used for any other purpose or reproduced, disseminated, quoted or referred to at any time in any manner or for any purpose other than accomplishing the tasks referred to in this Agreement without A&M’s prior approval (which shall not be unreasonably withheld), except as required or requested by law, regulation, or administrative process, including an audit or examination by a regulator, bank examiner, or self-regulatory organization.

9. Conflicts

A&M is not currently aware of any relationship that would create a conflict of interest with the Company or those parties-in-interest of which you have made us aware. We note, however, that A&M is the financial advisor to White Star Petroleum Holdings, LLC and certain of its affiliates (together “White Star”) as debtors in possession under chapter 11 of the United States Bankruptcy Code. It is our understanding that the Company and White Star each operate wells in which the other is a joint interest participant and therefore there are payables and receivables between White Star and the Company. We also understand that the amounts at stake between the parties are relatively immaterial to both. In any event, in an abundance of caution, the Company and A&M agree that A&M will recuse itself from advising the Company on matters directly relating to White Star, including advising on any amounts owed to or from White Star. Additionally, A&M provides portfolio valuation services to certain of Chisholm’s second lien creditors for financial reporting purposes and prior portfolio valuation exercises have previously included Chisholm. Because A&M and its affiliates and subsidiaries comprise a consulting firm (the “Firm”) that serves clients on a global basis in numerous cases, both in and out of court, it is possible that the Firm may have rendered or will render services to or have business associations with other entities or people which had or have or may have relationships with the Company, including creditors of the Company. The Firm will not be prevented or restricted by virtue of providing the services under this Agreement from providing services to other entities or individuals, including entities or individuals whose interests may be in competition or conflict with the Company’s interests. Notwithstanding the foregoing, the Firm (i) will not, during the term of this Agreement, provide services materially adverse to the Company, (ii) will make appropriate arrangements to ensure that the



-5-

confidentiality of information is maintained, and (iii) will ensure that the Company’s confidential information obtained through this engagement is not used in representing other entities or individuals.

10. Confidentiality/ Non-solicitation

A&M shall keep as confidential all non-public information received from the Company in conjunction with this engagement, except: (i) as requested by the Company or its legal counsel; (ii) as required by legal proceedings (with A&M having provided the Company with advance notice of such) or (iii) as reasonably required in the performance of this engagement and not otherwise in contravention of any express instruction given by the Company or its legal counsel. All obligations as to non-disclosure shall cease as to any part of such information to the extent that such information is or becomes public other than as a result of a breach of this provision. The Company, on behalf of itself and its subsidiaries, agrees that, until two (2) years subsequent to the termination of this engagement, it will not (i) solicit, recruit, hire or otherwise engage any employee of A&M or any of its affiliates who worked on this engagement while employed by A&M or its affiliates (“Solicited Person”) or (ii) refer any Solicited Person for employment or other engagement by any Company affiliate or otherwise assist any such Company affiliate in its efforts to employ or otherwise engage such Solicited Person. Should the Company or any of its subsidiaries extend an offer of employment to or otherwise engage any Solicited Person and should such offer be accepted, A&M shall be entitled to a fee from the Company equal to the Solicited Person’s hourly client billing rate at the time of the offer multiplied by 4,000 hours for a Managing Director, 3,000 hours for a Senior Director, and 2,000 hours for any other A&M employee. The Company acknowledges and agrees that this fee fairly represents the loss that A&M will suffer if the Company breaches this provision. The fee shall be payable at the time of the Solicited Person’s acceptance of employment or engagement.

11. Indemnification and Limitations on Liability

The attached indemnification and limitation on liability agreement is incorporated in this Agreement by reference and shall be executed upon the acceptance of this Agreement. Termination of this engagement shall not affect these indemnification and limitation on liability provisions, which shall remain in full force and effect.

12. Joint and Several Liability

Each entity within the definition of Company (a “Company Entity”) hereby acknowledges and agrees that they are each jointly and severally liable to A&M and its affiliates for all of the Company’s representations, warranties, covenants, liabilities and obligations set forth in the Agreement. Any beneficiary of this agreement may seek to enforce any of its rights and remedies hereunder against any or all Company Entities in any order at any time in its sole discretion.

13. Miscellaneous

This Agreement (together with the attached indemnity provisions), including, without limitation, the construction and interpretation of this Agreement and all claims, controversies and disputes arising under or relating thereto, shall be governed and construed in accordance with the laws of the State of New York, without regard to principles of conflict of law that would defer to the laws of another jurisdiction. The Company and A&M agree to waive trial by jury in any action, proceeding or counterclaim brought by or on behalf of the parties with respect to any matter relating to or arising out of the engagement or the performance or non-performance of A&M under the Agreement. To the extent permitted by applicable law, the Company and A&M agree: that (i) any Federal Court sitting within the Southern District of New York or (ii) in the event the Company commences cases under chapter 11 of the Bankruptcy Code, the United States Bankruptcy Court for the applicable district, shall have exclusive jurisdiction over any litigation arising out of this Agreement; to submit to the personal jurisdiction of (i) the Courts of the United States District Court for the Southern District of New York or (ii) in the event the Company commences cases under chapter 11 of the Bankruptcy Code, the United States Bankruptcy Court for the applicable district; and to waive any and all personal rights under the law of any jurisdiction to object on



-6-

any basis (including, without limitation, inconvenience of forum) to jurisdiction or venue within (i) the State of New York or (ii) in the event the Company commences cases under chapter 11 of the Bankruptcy Code, the United States Bankruptcy Court for the applicable district for any litigation arising in connection with this Agreement.

This Agreement shall be binding upon A&M and the Company, their respective heirs, successors, and assignees, and any heir, successor, or assignee of a substantial portion of A&M’s or the Company’s respective businesses and/or assets, including any chapter 11 trustee. This Agreement incorporates the entire understanding of the parties with respect to the subject matter of this Agreement and may not be amended or modified except in writing executed by the Company and A&M. All references to “$” or “dollars” contained in this Agreement shall be references to U.S. dollars. No failure or delay by either party in exercising any right, power or remedy under this Agreement or pursuant to this Agreement, or any failure to give notice of any breach of or to require compliance with any term of this Agreement, shall operate as a waiver of this Agreement. The Company agrees that A&M may aggregate information provided by or on behalf of the Company during this engagement with information provided by or on behalf of others and use and disclose that information in de-identified form as part of research and advice, including, without limitation, benchmarking services. Notwithstanding anything to the contrary, A&M may reference or list the Company’s name and/or logo and/or a general description of the services in A&M’s marketing materials, including, without limitation, on A&M’s website so long as A&M obtains the Company’s prior written consent or the Company or its representatives have made a public announcement regarding A&M’s engagement.

A&M acknowledges and agrees that the Company has the sole and absolute discretion to engage or refuse to engage in discussions regarding a transaction associated with the services contemplated under this Agreement (a “Transaction”), to accept or reject a Transaction, and to consummate or refuse to consummate a Transaction. A&M further acknowledges and agrees that it shall have no authority to bind the Company or to take any binding action on behalf of the Company unless expressly authorized to do so by the Company.

If the foregoing is acceptable to you, kindly sign the enclosed copy to acknowledge your agreement with its terms.

Very truly yours,

Alvarez & Marsal North America, LLC

By:

Accepted and agreed:

Chisholm Oil & Gas Operating LLC, on behalf of itself and its subsidiaries

By: _____________________ Mr. Michael Rigg Co-President & Chief Financial Officer

Managing Director



-7-

INDEMNIFICATION AND LIMITATION ON LIABILITY AGREEMENT This indemnification and limitation on liability agreement is made part of an agreement, dated April 6, 2020 (which together with any renewals, modifications or extensions thereof, is referred to as the “Agreement”) by and between Alvarez & Marsal North America, LLC (“A&M”) and Chisholm Oil & Gas Operating LLC on behalf of itself and its subsidiaries (jointly and severally, the “Company”), for services to be rendered to the Company by A&M. A. The Company agrees to indemnify and hold harmless each of A&M, its affiliates and their respective shareholders, members, managers, controlled persons, and employees (each, an “Indemnified Party” and collectively, the “Indemnified Parties”) against any and all documented losses, claims, damages, liabilities, penalties, obligations and expenses, including the costs for one outside counsel or other required experts per jurisdiction in investigating, preparing, or defending any action or claim, whether or not in connection with litigation in which any Indemnified Party is a party, or enforcing the Agreement (including these indemnity provisions), as and when incurred, caused by, relating to, based upon or arising out of (directly or indirectly) the Indemnified Parties’ acceptance of or the performance or nonperformance of their obligations under the Agreement. Notwithstanding the foregoing, no Indemnified Party shall be entitled to indemnity for any loss, claim, damage, liability or expense to the extent it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted from such Indemnified Party’s bad faith, fraud, gross negligence or willful misconduct (any of the foregoing being an “Excluded Claim”). The Company also agrees that (a) no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with the engagement of A&M, except to the extent that any such liability for losses, claims, damages, liabilities, or reasonable and documented expenses are found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted from such Indemnified Party’s bad faith, fraud, gross negligence, or willful misconduct and (b) in no event will any Indemnified Party have any liability to the Company for special, consequential, incidental or exemplary damages or loss (nor any lost profits, savings or business opportunity). For the avoidance of doubt clause (b) does not exclude responsibility for any obligations an Indemnified Party may have with respect to third party damages. The term “fraud” for purposes of the Agreement means actual fraud as construed under the laws of the State of New York. The Company further agrees that it will not, without the prior consent of an Indemnified Party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which such Indemnified Party seeks indemnification under the Agreement (whether or not such Indemnified Party is an actual party to such claim, action, suit or proceedings) unless such settlement, compromise or consent includes an unconditional release of such Indemnified Party. No Indemnified Party shall settle or compromise or consent to the entry of any judgment in, or otherwise seek to terminate any pending or threatened claim in respect of which indemnification or contribution has been sought under the Agreement and in which the Company is a party unless the Company has given its prior written consent. B. These indemnification provisions shall be in addition to any liability which the Company may otherwise have to the Indemnified Parties. In the event that, at any time whether before or after termination of the engagement or the Agreement, as a result of or in connection with the Agreement or A&M’s and its personnel’s role under the Agreement, A&M or any Indemnified Party is required to produce any of its personnel (including former employees) for examination, deposition or other written, recorded or oral presentation, or A&M or any of its personnel (including former employees) or any other Indemnified Party is required to produce or otherwise review, compile, submit, duplicate, search for, organize or report on any material within such Indemnified Party’s possession or control pursuant to a subpoena or other legal (including administrative) process, the Company will reimburse the Indemnified Party for its reasonable and documented out of pocket expenses upon presentation of reasonably detailed invoices specifying such expenses, including the reasonable and documented fees and expenses of its counsel , and will compensate the Indemnified Party for the time expended by its personnel based on such personnel’s then current hourly rate. C. If any action, proceeding or investigation is commenced to which any Indemnified Party proposes to demand indemnification under the Agreement, such Indemnified Party will notify the Company in writing with reasonable promptness. Notwithstanding the foregoing, any failure by such Indemnified Party to notify the Company will not relieve the Company from its obligations under the Agreement, except to the extent that such failure shall have actually prejudiced the defense of such action. The Company shall, to the extent the Indemnified Party is determined to be entitled to indemnification under the Agreement, promptly pay the documented expenses



-8-

of one outside counsel and required experts per jurisdiction and other costs reasonably incurred by any Indemnified Party in defending, participating in, or settling any action, proceeding or investigation initiated by a third party in which such Indemnified Party is a party or is threatened to be made a party or otherwise is participating in by reason of the engagement under the Agreement, upon submission of invoices for such expenses, whether in advance of the final disposition of such action, proceeding, or investigation or otherwise. Each Indemnified Party undertakes, and the Company accepts its undertaking, to repay any and all such amounts so advanced if it shall ultimately be determined that such Indemnified Party is not entitled to be indemnified for such expenses pursuant to the Agreement. In any such action, proceeding or investigation in which an Indemnified Party is a party, the Company may, in lieu of advancing the expenses of separate counsel for such Indemnified Party, provide such Indemnified Party with legal representation by the same counsel who represents the Company, provided such counsel is reasonably satisfactory to such Indemnified Party, at no cost to such Indemnified Party. Notwithstanding the foregoing, if such counsel or counsel to the Indemnified Party shall determine that due to the existence of actual or potential conflicts of interest between such Indemnified Party and the Company such counsel is unable to represent both the Indemnified Party and the Company, then the Indemnified Party shall be entitled to use separate counsel of its own choice and the Company shall promptly advance its reasonable and documented expenses of such separate counsel upon submission of invoices in accordance with and subject to the other provisions of the Agreement. Nothing in the Agreement shall prevent an Indemnified Party from using separate counsel of its own choice at its own expense. The Company will, to the extent the Indemnified Party is determined to be entitled to indemnification under the Agreement, be liable for any settlement of any third party claim against an Indemnified Party made with the Company’s written consent, which consent shall not be unreasonably withheld. D. In order to provide for just and equitable contribution if a claim for indemnification pursuant to these indemnification provisions is made but it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) that such indemnification may not be enforced in such case, even though the express provisions of the Agreement provide for indemnification, then the relative fault of the Company, on the one hand, and the Indemnified Parties, on the other hand, in connection with the statements, acts or omissions which resulted in the losses, claims, damages, liabilities and costs giving rise to the indemnification claim and other relevant equitable considerations shall be considered. Except with respect to an Excluded Claim, in no event will the Indemnified Parties’ aggregate contribution for all losses, claims, damages, liabilities and expenses with respect to which contribution is available under the Agreement exceed the amount of fees actually received by the Indemnified Parties pursuant to the Agreement. For the avoidance of doubt, contribution for Excluded Claims shall be based solely on the relative fault of the parties. E. In the event the Company and A&M jointly seek judicial approval for the assumption of the Agreement or authorization to enter into a new engagement agreement pursuant to either of which A&M would continue to be engaged by the Company, the Company shall promptly pay any reasonable and documented expenses reasonably incurred by the Indemnified Parties, including attorneys’ fees and expenses, in connection with any motion, action or claim made either in support of or in opposition to any such retention or authorization, whether in advance of or following any judicial disposition of such motion, action or claim, promptly upon submission of invoices therefor and regardless of whether such retention or authorization is approved by any court. The Company will also promptly pay the Indemnified Parties for any reasonable and documented expenses reasonably incurred by them, including attorneys’ fees and expenses, in seeking payment of all amounts owed it under the Agreement (or pursuant to the terms of any new engagement agreement mutually agreed by the Company and A&M) that are not successfully disputed by the Company, whether through submission of a fee application or in any other manner, without offset, recoupment or counterclaim, whether as a secured claim, an administrative expense claim, an unsecured claim, a prepetition claim or a postpetition claim. F. Neither termination of the Agreement nor termination of A&M’s engagement nor the filing of a petition under Chapter 7 or 11 of the United States Bankruptcy Code (nor the conversion of an existing case to one under a different chapter) shall affect these indemnification provisions, which shall hereafter remain operative and in full force and effect.



-9-

G. The rights provided in the Agreement shall not be deemed exclusive of any other rights to which theIndemnified Parties may be entitled under the certificate of formation or limited liability company agreement ofthe Company, any other agreements, any vote of the equityholders or disinterested directors of the Company, anyapplicable law or otherwise.

Chisholm Oil & Gas LLC, on behalf of itself and its subsidiaries

By: Mr. Michael Rigg Co-President & Chief Financial Officer

Alvarez & Marsal North America, LLC

Managing Director

)uj)� __


26732146.1

Exhibit B

Henry Declaration


26732146.1



------------------------------------------------------------ x

In re : Chapter 11

:


LLC, et al., :


------------------------------------------------------------ x

DECLARATION OF MATTHEW J. HENRY IN SUPPORT OF

APPLICATION OF DEBTORS PURSUANT TO 11 U.S.C. §§ 327(a)

AND 328 AND FED. R. BANKR. P. 2014(a) AND 2016 FOR AUTHORITY TO

RETAIN AND EMPLOY ALVAREZ & MARSAL NORTH AMERICA, LLC

AS FINANCIAL ADVISOR NUNC PRO TUNC TO PETITION DATE

I, Matthew J. Henry, pursuant to 28 U.S.C. § 1746, hereby declare that the

following is true and correct to the best of my knowledge, information and belief:

2. I am a Managing Director with Alvarez & Marsal North America, LLC

(together with employees of its affiliates (all of which are wholly-owned by its parent company

and employees), its wholly owned subsidiaries, and independent contractors, “A&M”), the

proposed financial advisor to Chisholm Oil and Gas Operating, LLC and its affiliates, as debtors

and debtors in possession in the above captioned chapter 11 cases (collectively, the “Debtors). I

am authorized to execute this declaration on behalf of A&M.

3. I submit this declaration on behalf of A&M (the “Declaration”) in support

of the Application of Debtors for Authority to Retain and Employ Alvarez & Marsal North

America, LLC as Financial Advisor Nunc Pro Tunc to Petition Date (the “Application”) on the

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, as applicable, are Chisholm Oil and Gas Operating II, LLC (8730); Chisholm Oil and Gas Operating, LLC




2

26732146.1

terms and conditions set forth in the Application and the Engagement Letter annexed as Exhibit A

to the Application.2

4. I submit this Declaration in compliance with sections 327, 328, and 1107(a)

of the Bankruptcy Code and to provide the disclosure required under Bankruptcy Rules 2014(a),

2016, and 5002 and Local Rule 2014-1. Except as otherwise stated in this Declaration, I have

personal knowledge of or have relied upon the knowledge of others employed by A&M with

respect to the matters set forth herein.3 If called to testify, I could and would testify competently

to the facts set forth herein.

Services to be Provided

5. The terms and conditions of the Engagement Letter were negotiated in good

faith and reflect the Debtors’ and A&M’s mutual agreement as to the services to be performed in

this engagement. Under the Engagement Letter, in consideration for the compensation

contemplated therefrom, A&M has provided and agreed to continue to provide the financial

advisory services set forth in the Engagement Letter, which are accurately summarized in the

Application.

No Duplication of Services

6. A&M has used and will use reasonable efforts to coordinate with the

Debtors and other retained professionals to avoid the unnecessary duplication of services in these

chapter 11 cases.

2 Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to such terms in the

Application or the Engagement Letter, as applicable.

3 Certain of the disclosures herein relate to matters within the personal knowledge of other professionals at A&M and

are based on information provided by them.


3

26732146.1

Professional Compensation

7. A&M’s decision to accept this engagement to advise and assist the Debtors

is conditioned upon its ability to be retained in accordance with the terms of the Engagement

Letter, including the Indemnification Provisions provided therein, as modified by the Proposed

Order, and to be compensated for its services and reimbursed for expenses it incurs in accordance

with the terms of the Fee and Expense Structure, as set forth in the Engagement Letter and as

described in the Application.

8. Subject to Court approval and in accordance with the applicable provisions

of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and any other applicable

procedures and orders of the Court, A&M will seek from the Debtors payment for compensation

on an hourly basis and reimbursement of actual and necessary expenses incurred by A&M under

the Fee and Expense Structure. A&M’s Fee and Expense Structure, including its customary hourly

rates as charged in bankruptcy and non-bankruptcy matters of this type by the professionals

assigned to this engagement, is outlined in the Application. These hourly rates are adjusted

annually.

9. To the best of my knowledge, (i) no commitments have been made or

received by A&M with respect to compensation or payment in connection with these chapter 11

cases other than in accordance with applicable provisions of the Bankruptcy Code and the

Bankruptcy Rules and (ii) A&M has no agreement with any other entity to share with such entity

any compensation received by A&M in connection with these chapter 11 cases.

10. During the 90 days immediately preceding the Petition Date, A&M received

payments totaling $2,138,158 in the aggregate for services performed for the Debtors. A&M also

received expense reimbursement payments of $14,000. Other than as set forth herein, A&M did

not receive any payments from the Debtors during the 90 days preceding the Petition Date. As of


4

26732146.1

the Petition Date, none of the Debtors owe A&M for any fees or expenses incurred prior to the

Petition Date.

11. The Fee and Expense Structure and the Indemnification Provisions were

negotiated by A&M and the Debtors at arm’s-length and in good faith.

A&M’s Disinterestedness

12. A&M together with its professional service provider affiliates (the “Firm”)

utilize certain procedures (“Firm Procedures”) to determine the Firm’s relationships, if any, to

parties that may have a connection to a client debtor. In implementing the Firm Procedures, the

following actions were taken to identify parties that may have connections to the Debtors, and the

Firm’s relationship with such parties:

a. A&M requested and obtained from the Debtors a list of interested parties

and significant creditors (the “Potential Parties in Interest”).4 The

categories of Potential Parties in Interest which A&M reviewed is annexed

hereto as Schedule 1.

b. A&M then compared the names of each of the Potential Parties in Interest

to the names in its master electronic database of the Firm’s current and

recent clients (the “Client Database”). The Client Database generally

includes the name of each client of the Firm, the name of each party who is

or was known to be adverse to the client of the Firm in connection with the

matter in which the Firm is representing such client, the name of each party

that has, or had, a substantial role with regard to the subject matter of the

Firm’s retention, and the names of the Firm professionals who are, or were,

primarily responsible for matters for such clients.

c. An email was issued to all Firm professionals requesting disclosure of

information regarding: (i) any known personal connections between the

4 The list of Potential Parties in Interest is expected to be updated during these cases. A&M continues to review the

relationships it may have with potentially interested parties and to determine whether any relationships other than

those set forth herein exist. As may be necessary, A&M will supplement this Declaration if it becomes aware of a

relationship that may adversely affect A&M’s retention in these cases or discovers additional parties in interest through

the filing of statements of financial affairs or statements under Bankruptcy Rule 2019. A&M will update this

disclosure if it is advised of any trading of claims against or interests in the Debtors that may relate to A&M’s retention

or otherwise requires such disclosure. It is also noted that in the course of our review it came to A&M’s attention that A&M personnel hold de minimis investments, representing not more than 0.01% of the equity interests in the related

entity, in various parties in interest, including but not limited to Chesapeake Operating Inc., Schlumberger

Technology, and Verizon Wireless.


5

26732146.1

respondent and/or the Firm on the one hand, and certain significant Potential

Parties in Interest or the Debtors, on the other hand,5 (ii) any known

connections or representation by the respondent and/or the Firm of any of

those Potential Parties in Interest in matters relating to the Debtors, and

(iii) any other conflict or reason why A&M may be unable to represent the

Debtors.

d. Known connections between the Firm and the Potential Parties in Interest

were compiled for purposes of preparing this Declaration. Such Potential

Parties in Interest are listed in Schedule 2 annexed hereto.

13. As a result of the Firm Procedures, I have thus far ascertained that, except

as may be set forth herein, upon information and belief, if retained, A&M:

a. is not a creditor of the Debtors (including by reason of unpaid fees for

prepetition services) or an equity security holder of the Debtors;

b. is not, and has not been, within 2 years before the date of the filing of the

petition, a director, officer, or employee of the Debtors; and

c. does not have an interest materially adverse to the interests of the Debtors’

estates, or of any class of creditors or equity security holders, by reason of

any direct or indirect relationship to, connection with, or interest in, the

Debtors, or for any other reason.

14. As can be expected with respect to any international professional services

firm such as A&M, the Firm provides services to some clients with interests in the chapter 11

cases. To the best of my knowledge, except as indicated below, the Firm’s services for such clients

do not relate to the chapter 11 cases.

15. In addition to the relationships disclosed on Schedule 2, I note the

following:

a. Wells Fargo Bank, National Association (“WFBNA”), together with certain

of its affiliates (collectively, “Wells Fargo”), is a Potential Party in Interest.

5 In reviewing its records and the relationships of its professionals, A&M did not seek information as to whether any

A&M professional or member of his/her immediate family: (a) indirectly owns, through a public mutual fund or

through partnerships in which certain A&M professionals have invested but as to which such professionals have no

control over or knowledge of investment decisions, securities of the Debtors or any other party in interest; or (b) has engaged in any ordinary course consumer transaction with any party in interest. If any such relationship does exist, I

do not believe it would impact A&M’s disinterestedness or otherwise give rise to a finding that A&M holds or

represents an interest adverse to the Debtors’ estates.


6

26732146.1

Under a credit facility (the “Credit Facility”) to A&M’s parent company

Alvarez & Marsal Holdings, LLC (“A&M Holdings”): WFBNA is

administrative agent, swingline lender and issuing lender, and Wells Fargo

Securities, LLC is a joint lead arranger and joint book runner. In addition,

TD Bank, also a Potential Party in Interest, is a participating lender. In

addition to the receipt of interest in its capacity as a lender under the Credit

Facility, Wells Fargo has received certain customary and negotiated fees

and reimbursement of expenses in connection with its role under the Credit

Facility.

b. Alvarez & Marsal Inc. (“A&M Inc.”), an entity controlled by Bryan Marsal

and Antonio Alvarez II, is the majority owner of A&M Holdings. A&M

Holdings is the sole owner of A&M. Messer’s Marsal and Alvarez

comprise the Board of Managers of A&M Holdings and two of the three

members of the Board of Managers of A&M. Messer’s Marsal and Alvarez,

together with A&M Inc., indirectly control a significant interest in the

general partner of A&M Capital which consists of various private equity

funds (the “A&M Capital Funds”). Also, certain A&M employees have

invested in limited partnership interests in the A&M Capital Funds and,

indirectly, their general partners, and, from time to time, A&M and/or its

professional service provider affiliates provide services to A&M Capital.

The investments of the A&M Capital Funds are private equity investments

in companies that, except a set forth herein, are unrelated to the Debtors and

these chapter 11 cases. As set forth on Schedule B, Kirkland & Ellis LLP

(“K&E”) currently represents A&M and/or its affiliates in matters

unrelated to the Debtors and these chapter 11 cases. In addition to K&E’s

representation of certain A&M affiliates (including A&M Inc., A&M

Capital, and the A&M Capital Funds) certain partners or other persons or

entities associated with K&E (collectively, “K&E Persons”) have invested

in the A&M Capital Funds. Each K&E Person that has invested in the A&M

Capital Funds holds less than one percent of the A&M Capital Funds.

c. A&M’s affiliate, Alvarez & Marsal Valuation Services, LLC (“A&MVS”),

provides portfolio valuation services to JP Morgan Chase & Co. and/or

certain of its affiliates (“JPM”). In connection with JPM’s credit agreement

with certain investment advisors, A&M has previously provided portfolio

valuation exercises related to such affiliated funds’ interests in the

Debtors. A&MVS has not performed any such portfolio valuation exercises

relating to the Debtors since 2019. Although A&MVS may continue to

provide portfolio valuation services to JPM, it will not during the pendency

of these chapter 11 cases provide any such valuation services relating the

Debtors.

d. A&M made certain professionals available to provide financial advisory

services to White Star Petroleum Holdings, LLC and certain of its affiliates

(together, “White Star”) in connection with their chapter 11 cases. White

Star is a Potential Party in Interest. White Star and the Debtors jointly


7

26732146.1

operated certain wells during the White Star chapter 11 cases. White Star

has emerged from chapter 11 and A&M is currently providing certain post-

effective date services to the White Star Plan Administrator (the “White

Star Services”), which include the transition of certain ongoing matters

related to White Star’s restructuring and the production of documents

responsive to litigation. The White Star Services are not related to the

Debtors.

e. A&M has made certain personnel available to provide financial advisory

services to Whiting Petroleum Corporation and its debtor affiliates

(“Whiting”) in connection with Whiting’s chapter 11 cases, and Whiting is

a creditor of the Debtors and Potential Party in Interest in these chapter 11

cases. In the event a dispute arises between the Debtors and Whiting, A&M

personnel will recuse themselves from such dispute.

f. A&M has made certain personnel available to provide financial advisory

services to Chesapeake Energy Corporation and its debtor affiliates

(“Chesapeake”) in connection with Chesapeake’s chapter 11 cases.

Chesapeake is a vendor of the Debtors and a Potential Party in Interest in

these chapter 11 cases. In the event a dispute arises between the Debtors

and Chesapeake, A&M personnel will recuse themselves from such dispute.

16. Further, as part of its diverse practice, the Firm appears in numerous cases

and proceedings, and participates in transactions that involve many different professionals,

including attorneys, accountants, and financial consultants, who represent claimants and parties-

in-interest in the Debtors’ chapter 11 cases. Further, the Firm has performed in the past, and may

perform in the future, advisory consulting services for various attorneys and law firms, and has

been represented by several attorneys and law firms, some of whom may be involved in these

proceedings. Based on our current knowledge of the professionals involved, and to the best of my

knowledge, none of these relationships create interests materially adverse to the Debtors in matters

upon which A&M is to be employed. To the best of my knowledge, no employee of the Firm is a

relative of, or has been connected with the U.S. Trustee or its employees; however, I note that

Holly Dice, who currently serves as an auditor for the U.S. Trustee, is a former A&M employee.

17. Accordingly, to the best of my knowledge, A&M is a “disinterested person”

as that term is defined in section 101(14) of the Bankruptcy Code, in that A&M (i) is not a creditor,


8

26732146.1

equity security holder, or insider of the Debtors, (ii) was not, within two years before the date of

filing of the Debtors’ chapter 11 petitions, a director, officer, or employee of the Debtors, and

(iii) does not have an interest materially adverse to the interest of the Debtors’ estates or of any

class of creditors or equity security holders.

18. If A&M discovers additional information that requires disclosure, A&M

will promptly file a supplemental disclosure with the Court as required by Bankruptcy Rule 2014,

A&M reserves the right to supplement this Declaration in the event that A&M discovers any facts

bearing on matters described in this Declaration regarding A&M’s employment by the Debtors.

Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that, to the best of

my knowledge and after reasonable inquiry, the foregoing is true and correct.

Dated: July 3, 2020

/s/ Matthew J. Henry

Matthew J. Henry

Managing Director

ALVAREZ & MARSAL NORTH

AMERICA, LLC


26732146.1

Schedule 1

Retention Checklist

Debtors

Debtors’ Trade Names and Aliases (up to 8 years) (a/k/a, f/k/a, d/b/a)

Bank Accounts

Bankruptcy Judges and Staff

Contract Counterparties

Counterparties to Joint Operating Contracts with the Debtors/Other Joint Venture

Partners

Current Officers and Directors

Debtors Professionals (law firms, accountants, and other professionals)

Former Officers and Directors

Insurance Providers

Landlords and Lease Counterparties

Lenders

Litigation Counterparties/Litigation Pending Lawsuits – includes threatened litigation

Material Royalties in Suspense (greater than $100,000)

Material Suppliers and Vendors (greater than $1 million spend in the last 6 months)

Non-Debtor Affiliates

Non-Debtors Professionals (law firms, accountants, and other professionals)

Ordinary Course Professionals

Other Secured Parties (Letters of Credit/ Issuers of Letters of Credit)

Parties to Material Royalty Contracts with the Debtors (over $1 million in annual

distributions)

Parties to Material Contracts with the Debtors (over $1 million in value remaining)

Regulatory/Government (Federal, State, and Local)/ Permitting Authorities

Significant Competitors

Significant Customers

Significant Shareholders (more than 5% of equity)

Taxing Authorities

Top Unsecured Creditors

UCC Search Results

United States Trustee and Staff

Utility Providers

Vendors/Suppliers


26732146.1

Schedule 2

Relationships with Potential Parties-in-Interest

Current and Former Clients of A&M and/or its Affiliates 1

ADP Payroll Processing

Allamon Tool Company Inc

Apollo Global Management, Inc.

Ares Management LLC

Baker Hughes Bus Support Svcs

Bracewell LLP

C&J Spec-Rent Services, Inc

Cargill, Incorporated

Chaparral Energy, Inc.

Chesapeake Operating Inc

Citibank N.A.

Citizen Energy

Cogent Communications, Inc.

Complete Energy Services Inc

Continental Resources, Inc.

Crescent 4HC Investors LLC

Deloitte Tax LLP

Devon Energy Corporation

EIG Management Company, LLC

Enervest Operating, Inc.

EOG

Evercore Group L.L.C.

FTI Consulting, Inc.

Goldman Sachs Lending Partners LLC

Grant Thornton LLP

Great American Insurance Company

Great Plains Oilfield Rental LLC

GSO Capital Partners LP

GSO/Blackstone Debt Funds Management, LLC

Halliburton Energy Services In[c]

Key Energy Services, LLC

Linklaters LLP

M & M Supply Co.

Macquarie Capital Funding LLC

Marathon Oil Corporation

Markel Insurance Company

1 A&M and/ or an affiliate is currently providing or has previously provided certain consulting or interim management

services to these parties or their affiliates (or, with respect to those parties that are investment funds or trusts, to their

portfolio or asset managers or their affiliates) in wholly unrelated matters.


2

26732146.1

Metropolitan Life Insurance Company

Morgan Stanley Capital Service LLC

National Oilwell DHT, LP

Newfield Exploration Mid-Conti Inc

Newpark Drilling Fluids, LLC

NextEra Energy Marketing, LLC

Premier Pipe LLC

QBE Insurance Corporation

QES Pressure Control LLC

QES Pressure Pumping LLC

RBC / RBC Capital Markets

Samson Resources

Schlumberger Technology

Select Energy Services, LLC

SK Innovation

Sun Coast Resources Inc

TD Securities

TETRA Technologies, Inc.

USA Compression Partners, LLC

Verizon Wireless

Vine Oil & Gas (Blackstone Portfolio Company)

Vintage Petroleum

Weatherford US, LP

Weil, Gotshal & Manges LLP

Wells Fargo

Wesco Insurance Company

Whiting Oil and Gas Corp

Significant Equity Holders of Current and Former A&M Clients2


Apollo Global Management, Inc.

Ares Management LLC

Baker Hughes Bus Support Svcs


Citibank N.A.

Crescent 4HC Investors LLC

EIG Management Company, LLC


FS Energy and Power Fund

FS Investment Corporation II

2 These parties or their affiliates (or, with respect to those parties that are investment funds or trusts, their portfolio or

asset managers or other funds or trusts managed by such managers) are significant equity holders of clients or former

clients of A&M or its affiliates in wholly unrelated matters.


3

26732146.1




Halliburton Energy Services In[c]


Marathon Oil Corporation

Markel Insurance Company



National Oilwell DHT, LP

QBE Insurance Corporation


Schlumberger Technology

TD Securities

Transier, William

Verizon Wireless

Wells Fargo

Professionals & Advisors3

Bracewell LLP

Citibank N.A.

CT Corporation System

Deloitte Tax LLP


FTI Consulting, Inc.


Grant Thornton LLP


Hall & Estill

Houlihan Lokey

Kirkland & Ellis LLP

Linklaters LLP



Omni Agent Solutions

Paul, Weiss, Rifkind, Wharton & Garrison LLP


Reed Smith

Spilman Thomas & Battle, PLLC

Steptoe & Johnson PLLC

3 These professionals have represented clients in matters where A&M was also an advisor (or provided interim

management services) to the same client. In certain cases, these professionals may have engaged A&M on behalf of

such client.


4

26732146.1

Vinson & Elkins LLP


Wells Fargo

Wilmington Trust, National Association

Young Conway Stargatt & Taylor, LLP

Significant Joint Venture Partners4

Ares Management LLC


Chesapeake Operating Inc

Citibank N.A.







Wells Fargo

Board Members5

Strong, Geoffrey

Walton, Nate

Government and Regulatory6

IRS

Oklahoma Tax Commission

A&M Vendors7


Bracewell LLP

Citibank N.A.

Cogent Communications, Inc

Deloitte Tax LLP



Grant Thornton LLP

4 These parties or their affiliates are significant joint venture partners of other clients or former clients of A&M or its

affiliates in wholly unrelated matters.

5 These parties or their affiliates are board members of other clients or former clients of A&M or its affiliates in wholly

unrelated matters.

6 A&M and/or an affiliate is currently providing or has provided certain consulting or interim management services

to these government entities or regulatory agencies in wholly unrelated matters.

7 These parties or their affiliates provide or have provided products, goods and/or services (including but not limited

to legal representation) to A&M and/or its affiliates.


5

26732146.1


Hall & Estill

Houlihan Lokey

Kirkland & Ellis LLP


Paul, Weiss, Rifkind, Wharton & Garrison LLP

Reed Smith

Steptoe & Johnson PLLC

Verizon Wireless

Vinson & Elkins LLP


Wells Fargo

Wilmington Trust, National Association


26732146.1

Exhibit C

Proposed Order


26732146.1



------------------------------------------------------------ x

In re : Chapter 11

:


LLC, et al., :


------------------------------------------------------------ x Re: Docket No. ____

ORDER PURSUANT TO 11 U.S.C. §§ 327(a) AND 328 AND

FED. R. BANKR. P. 2014(a) AND 2016 FOR AUTHORITY TO RETAIN AND

EMPLOY ALVAREZ & MARSAL NORTH AMERICA, LLC AS

FINANCIAL ADVISOR NUNC PRO TUNC TO PETITION DATE

Upon the application, dated July 3, 2020 (the “Application”)2 of Chisholm Oil and

Gas Operating, LLC and its debtor affiliates, as debtors and debtors in possession in the above-

captioned chapter 11 cases (collectively, the “Debtors”), for entry of an order pursuant to sections

327(a) and 328 of the Bankruptcy Code, Bankruptcy Rules 2014(a) and 2016, and Local Rules

2014-1 and 2016-1 authorizing the Debtors to retain and employ A&M as financial advisor for the

Debtors, in accordance with the terms and conditions set forth in the Engagement Letter nunc pro

tunc to the Petition Date, all as more fully set forth in the Application; and upon the Henry

Declaration; and this Court having jurisdiction to consider the Application and the relief requested

therein pursuant to 28 U.S.C. §§ 157 and 1334, and the Amended Standing Order of Reference

entered by the United States District Court for the District of Delaware, dated February 29, 2012;

and consideration of the Application and the requested relief being a core proceeding pursuant to

28 U.S.C. § 157(b); and venue being proper before this Court pursuant to 28 U.S.C. §§ 1408 and

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

number, as applicable, are Chisholm Oil and Gas Operating II, LLC (8730); Chisholm Oil and Gas Operating, LLC



2 Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms

in the Application.


2

26732146.1

1409; and due and proper notice of the Application having been provided; and such notice having

been adequate and appropriate under the circumstances, and it appearing that no other or further

notice need be provided; and this Court having reviewed the Application, and all objections, if

any, to the Application having been withdrawn, resolved, or overruled; and this Court having

determined that the legal and factual bases set forth in the Application establish just cause for the

relief granted herein; and it appearing that the relief requested in the Application is in the best

interests of the Debtors, their estates, creditors, and all parties in interest; and upon all of the

proceedings had before this Court and after due deliberation and sufficient cause appearing

therefor,

IT IS HEREBY ORDERED THAT:

1. The Application is granted as set forth herein.

2. The Debtors are authorized, pursuant to sections 327(a) and 328(a) of the

Bankruptcy Code, Bankruptcy Rules 2014(a) and 2016, and Local Rules

2014-1 and 2016-2, to employ and retain A&M as their financial advisor, on the terms and

conditions set forth in the Engagement Letter, as modified by this Order, nunc pro tunc to the

Petition Date, subject to the procedures set forth in the Bankruptcy Code, the Bankruptcy Rules,

the Local Rules, and any other applicable orders of this Court.

3. The terms of the Engagement Letter, including without limitation, the Fee

and Expense Structure and the Indemnification Provisions provided therein, as modified by this

Order, are reasonable terms and conditions of employment and are hereby approved.

4. A&M shall file interim or final fee applications for the allowance of

compensation for services rendered and reimbursement of expenses in accordance with applicable

provisions of the Bankruptcy Code, the Bankruptcy Rules, applicable U.S. Trustee Guidelines, the


3

26732146.1

Local Rules, and any other applicable procedures and orders of this Court regarding submission

and approval of fee applications.

5. The Debtors shall be bound by the Indemnification Provisions and will

indemnify and hold harmless the Indemnified Parties, pursuant to the Engagement Letter, subject

during the pendency of these chapter 11 cases to the following modifications during the pendency

of these chapter 11 cases:

a. Indemnified Parties shall not be entitled to indemnification, contribution, or

reimbursement of expenses pursuant to the Engagement Letter unless such

indemnification, contribution, or reimbursement of expenses are approved

by this Court;

b. notwithstanding any provision of the Engagement Letter to the contrary, the

Debtors shall have no obligation to indemnify or provide contribution or

reimbursement of expenses to any Indemnified Party for any claim or

expense that is either (i) judicially determined (the determination having

become final) to have arisen from the Indemnified Party’s gross negligence,

willful misconduct, bad faith, self-dealing, or breach of fiduciary duty (if

any), (ii) for a contractual dispute in which the Debtors allege the breach of

the Indemnified Party’s contractual obligations, unless this Court

determines that indemnification or reimbursement of expenses would be

permissible pursuant to In re United Artists Theatre Co., et al., 315 F.3d 217

(3d Cir. 2003), or (iii) settled prior to a judicial determination as to A&M’s

gross negligence, willful misconduct, breach of fiduciary duty, or bad faith

or self-dealing, but determined by this Court, after notice and a hearing, to be

a claim or expense for which the Indemnified Party should not receive

indemnity, contribution or reimbursement under the terms of the

Engagement Letter, as modified by this Order; and

c. if, before the earlier of (i) the entry of an order confirming a chapter 11 plan

in these chapter 11 cases (that order having become a final order no longer

subject to appeal) and (ii) the entry of an order closing these chapter 11

cases, any Indemnified Party believes that it is entitled to the payment of

any amounts by the Debtors on account of the Debtors’ indemnification,

contribution, and/or reimbursement obligations under the Engagement

Letter, as modified by this Order, including without limitation the

advancement of defense costs, such Indemnified Party must file an

application therefor in this Court, and the Debtors may not pay any such

amounts to such Indemnified Party before the entry of an order by this Court

approving any such payment. This subparagraph is intended only to specify

the period of time during which this Court shall have jurisdiction over any

request by any Indemnified Party for indemnification, contribution or


4

26732146.1

reimbursement and is not a provision limiting the duration of the Debtors’

obligation to indemnify.

6. To the extent that there may be any inconsistency between the terms of the

Application, the Engagement Letter, and this Order, the terms of this Order shall govern.

7. Notice of the Application is adequate under Bankruptcy Rule 6004(a).

8. The Debtors are authorized to take all actions necessary or appropriate to

effectuate the relief granted in this Order.

9. This Court shall retain jurisdiction to hear and determine all matters

arising from or related to the implementation, interpretation, or enforcement of this Order.


application of debtors pursuant to 11 u.s.c. §§ 327(a) … · 3 26732146.1 employees of its...

Documents