Case KJC Doc 603 Filed 08/25/16 Page 1 of 54 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE. x : : : : : : : : x

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1 Case KJC Doc 603 Filed 08/25/16 Page 1 of 54 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: RYCKMAN CREEK RESOURCES, LLC, et al., Debtors x : : : : : : : : x Chapter 11 Case No (KJC) Jointly Administered NOTICE OF FILING OF PLAN SUPPLEMENT WITH RESPECT TO THE SECOND AMENDED JOINT CHAPTER 11 PLAN OF REORGANIZATION OF RYCKMAN CREEK RESOURCES, LLC AND ITS AFFILIATED DEBTORS AND DEBTORS IN POSSESSION PLEASE TAKE NOTICE THAT on August 25, 2016, the debtors and debtors in possession in the above-captioned cases (the Debtors ) filed the Plan Supplement to the Second Amended Joint Chapter 11 Plan Of Reorganization Of Ryckman Creek Resources, LLC And Its Affiliated Debtors And Debtors In Possession (the Plan Supplement ), a copy of which is attached hereto as Exhibit 1. The documents contained in the Plan Supplement are integral to and part of the Second Amended Joint Chapter 11 Plan Of Reorganization Of Ryckman Creek Resources, LLC And Its Affiliated Debtors And Debtors In Possession [Docket No. 548] (as may be amended from time to time, the Plan ) 2 and, if the Plan is confirmed, shall be approved. A status hearing to set the hearing to consider confirmation of the Plan currently is scheduled to begin on September 21, 2016 at 1:30 p.m. (prevailing Eastern Time). PLEASE TAKE FURTHER NOTICE that the Plan Supplement includes the following documents, as may be modified, amended, or supplemented from time to time: Exhibit A Administrative Claim Request Form Exhibit B Exit Facility Term Sheet Exhibit C Equity Term Sheet for Reorganized Ryckman and Holdings Exhibit D Members of Reorganized Holdings Board of Managers 1 2 The Debtors and, where applicable, the last four digits of their respective taxpayer identification numbers, are as follows: Ryckman Creek Resources, LLC (4180), Ryckman Creek Resources Holding Company LLC, Peregrine Rocky Mountains LLC, and Peregrine Midstream Partners LLC (3363). The address of the Debtors corporate headquarters is 3 Riverway, Suite 1100, Houston, TX Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Plan.

2 Case KJC Doc 603 Filed 08/25/16 Page 2 of 54 Exhibit E Anticipated Post-Effective Date Structure of the Reorganized Debtors Exhibit F Creditor Trust Agreement Exhibit G Identity of Creditor Trustee Exhibit H Non-Exclusive List of Retained Claims and Causes of Action Exhibit I Schedule of Assumed Contracts and Unexpired Leases PLEASE TAKE FURTHER NOTICE that the Debtors reserve the right, subject to the terms and conditions set forth in the Plan, to alter, amend, modify, or supplement any document in the Plan Supplement; provided, if any document in the Plan Supplement is altered, amended, modified, or supplemented in any material respect prior to the hearing to confirm the Plan, the Debtors will file a blackline of such document with the Bankruptcy Court. PLEASE TAKE FURTHER NOTICE that the Plan, Plan Supplement, and Disclosure Statement can be obtained free of charge by accessing the Debtors case information website at or upon reasonable written request from the Voting Agent, Kurtzman Carson Consultants, LLC by: (a) ing RyckmanInfo@kccllc.com or (b) calling the Debtors restructuring hotline at (877) , within the U.S. or Canada, or (424) , outside of the U.S. or Canada. Dated: Wilmington, Delaware August 25, 2016 SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP /s/ Sarah E. Pierce Sarah E. Pierce (I.D. No. 4648) One Rodney Square P.O. Box 636 Wilmington, Delaware Telephone: (302) Fax: (302) and - George N. Panagakis Jessica S. Kumar Tabitha J. Atkin 155 N. Wacker Dr. Chicago, Illinois Telephone: (312) Fax: (312) Counsel for Debtors and Debtors in Possession 2

3 Case KJC Doc 603 Filed 08/25/16 Page 3 of 54 EXHIBIT 1 Plan Supplement

4 Case KJC Doc 603 Filed 08/25/16 Page 4 of 54 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: RYCKMAN CREEK RESOURCES, LLC, et al., Debtors x : : : : : : : : x Chapter 11 Case No (KJC) Jointly Administered PLAN SUPPLEMENT TO SECOND AMENDED JOINT CHAPTER 11 PLAN OF REORGANIZATION OF RYCKMAN CREEK RESOURCES, LLC AND ITS AFFILIATED DEBTORS AND DEBTORS IN POSSESSION SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP George N. Panagakis Jessica S. Kumar 155 N. Wacker Dr. Suite 2700 Chicago, Illinois Telephone: (312) Fax: (312) Sarah E. Pierce (I.D. No. 4648) One Rodney Square P.O. Box 636 Wilmington, Delaware Telephone: (302) Fax: (302) Counsel for Debtors and Debtors in Possession Dated: Wilmington, Delaware August 25, The Debtors and, where applicable, the last four digits of their respective taxpayer identification numbers, are as follows: Ryckman Creek Resources, LLC (4180), Ryckman Creek Resources Holding Company LLC, Peregrine Rocky Mountains LLC, and Peregrine Midstream Partners LLC (3363). The address of the Debtors corporate headquarters is 3 Riverway, Suite 1100, Houston, TX

5 Case KJC Doc 603 Filed 08/25/16 Page 5 of 54 Exhibit Title TABLE OF EXHIBITS A B C D E F G H I Administrative Claim Request Form Exit Facility Term Sheet Equity Term Sheet for Reorganized Ryckman and Holdings Members of Reorganized Holdings Board of Managers Anticipated Post-Effective Date Structure of the Reorganized Debtors Creditor Trust Agreement Identity of Creditor Trustee Non-Exclusive List of Retained Claims and Causes of Action Schedule of Assumed Contracts and Unexpired Leases THE DEBTORS RESERVE THE RIGHT TO ALTER, AMEND, MODIFY, OR SUPPLEMENT THIS PLAN SUPPLEMENT AT ANY TIME PRIOR TO THE HEARING ON CONFIRMATION OF THE PLAN IN ACCORDANCE WITH THE PLAN

6 Case KJC Doc 603 Filed 08/25/16 Page 6 of 54 EXHIBIT A Administrative Claim Request Form

7 USE ONLY FOR ADMINISTRATIVE EXPENSE CLAIMS THAT AROSE ON OR AFTER FEBRUARY 2, UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE Debtor against which claim is asserted: (check one) Ryckman Creek Resources, LLC (Case No ) Ryckman Creek Resources Holding Company LLC (Case No ) Peregrine Rocky Mountains LLC (Case No ) Peregrine Midstream Partners LLC (Case No ) NOTE: This Administrative Expense Claim Request form is to be used solely in connection with a request for payment of an administrative expense arising after commencement of these cases pursuant to 11 U.S.C Name of Creditor (the person or other entity to whom the debtor owes money or property): Name and address where notices should be sent: Case KJC Doc 603 Filed 08/25/16 Page 7 of 54 Telephone number: ADMINISTRATIVE EXPENSE PROOF OF CLAIM FORM Administrative Expense Claim Request THIS SPACE IS FOR COURT USE ONLY. Check this box to indicate that this claim amends a previously filed claim. Court Claim Number: (If known) Filed on: Name and address where payment should be sent (if different from above): Telephone number: Check this box if you are aware that anyone else has filed a proof of claim relating to your administrative claim. Attach copy of statement giving particulars. IMPORTANT: Please list the name and address of any property related to your claim (if applicable). Property Name: Property Address: 1. Basis for Claim: (See instruction #2 on reverse side.) 2. Last four digits of any number by which creditor identifies debtor: 3. TOTAL AMOUNT OF ADMINISTRATIVE EXPENSE CLAIM: Check this box if claim includes interest or other charges in addition to the principal amount of the claim. Attach itemized statement of all interest or additional charges. 4. BRIEF DESCRIPTION OF CLAIM (attach any additional information): $ (Total) 5. Credits: The amount of all payments on this claim has been credited for the purpose of making this administrative expense proof of claim. 6. Supporting Documents: Attached are redacted copies of any documents that support the administrative expense claim, such as promissory notes, purchase orders, invoices, itemized statements of running accounts, contracts, judgments, mortgages, security agreements, or, in the case of a claim based on an open-end or revolving consumer credit agreement, a statement providing the information required by FRBP 3001(c)(3)(A). DO NOT SEND ORIGINAL DOCUMENTS. ATTACHED DOCUMENTS MAY BE DESTROYED AFTER SCANNING. If the documents are not available, please explain: THIS SPACE IS FOR COURT USE ONLY. DATE-STAMPED COPY: To receive an acknowledgment of the filing of your administrative expense proof of claim, enclose a stamped, self-addressed envelope and copy of this administrative expense proof of claim, or you may view your claim information by visiting the website of the Claims Agent ( Date: IF SENT BY MAIL, HAND DELIVERY, OR OVERNIGHT COURIER, SEND TO: Ryckman Creek Resources Claims Processing Center c/o KCC 2335 Alaska Avenue El Segundo, CA Please see intructions on back of Administrative Expense Proof of Claim Signature: the person filing this administrative expense claim must sign it. Sign and print name and title, if any, of the creditor or other person authorized to file this administrative expense claim and state address and telephone number if different from the notice address above. Penalty for presenting fraudulent claim: Fine of up to $500,000 or imprisonment for up to 5 years, or both. 18 U.S.C. 152 and 3571.

8 Case KJC Doc 603 Filed 08/25/16 Page 8 of 54 INSTRUCTIONS FOR ADMINISTRATIVE EXPENSE PROOF OF CLAIM FORM The instructions and definitions below are general explanations of the law. In certain circumstances, there may be exceptions to these general rules. ITEMS TO BE COMPLETED IN ADMINISTRATIVE EXPENSE PROOF OF CLAIM FORM Court, Name of Debtor, and Case Number: Fill in the federal judicial district where the bankruptcy case was filed (for example, District of Delaware), the bankruptcy Debtor s name, and the bankruptcy case number. If the creditor received a notice of the case from the bankruptcy court, all of this information is located at the top of the notice. Creditor s Name and Address: Fill in the name of the person or entity asserting a claim and the name and address of the person who should receive notices issued during the bankruptcy case. A separate space is provided for the payment address if it differs from the notice address. The creditor has a continuing obligation to keep the court informed of its current address. See Federal Rule of Bankruptcy Procedure (FRBP) 2002(g). 1. Basis for Claim: State the type of debt for which the administrative expense proof of claim is being filed. Examples include goods sold, money loaned, services performed, personal injury/wrongful death, car loan, mortgage note, and credit card. 2. Last Four Digits of Any Number by Which Creditor Identifies Debtor: State only the last four digits of the Debtor s account or other number used by the creditor to identify the Debtor. 3. Total Amount of Administrative Expense Claim: Fill in the applicable amounts of the entire administrative expense proof of claim. If interest or other charges in addition to the principal amount of the administrative expense proof of claim are included, check the appropriate place on the form and attach an itemization of interest and charges. 4. Brief Description of Claim Describe the Administrative Expense Claim including, but not limited to, the actual and necessary costs and expenses of operating one or more of the Debtors' estates or any actual and necessary costs and expenses of operating one or more of the Debtors' businesses. 5. Credits: An authorized signature on this administrative expense proof of claim serves as an acknowledgement that when calculating the amount of the administrative expense proof of claim, the creditor gave the Debtor credit for any payments received toward the debt. 6. Supporting Documents: Attach redacted copies of any documents that show the debt exists and a lien secures the debt. You may also attach a summary in addition to the documents themselves. FRBP 3001(c) and (d). If the claim is based on delivering health care goods or services, limit disclosing confidential health care information. Do not send original documents, as attachments may be destroyed after scanning. 7. Date and Signature: The individual completing this administrative expense proof of claim must sign and date it. FRBP If the claim is filed electronically, FRBP 5005(a)(2) authorizes courts to establish local rules specifying what constitutes a signature. If you sign this form, you declare under penalty of perjury that the information provided is true and correct to the best of your knowledge, information, and reasonable belief. Your signature is also a certification that the claim meets the requirements of FRBP 9011(b). Whether the claim is filed electronically or in person, if your name is on the signature line, you are responsible for the declaration. Print the name and title, if any, of the creditor or other person authorized to file this claim. State the filer s address and telephone number if it differs from the address given on the top of the form for purposes of receiving notices. If the claim is filed by an authorized agent, provide both the name of the individual filing the claim and the name of the agent. If the authorized agent is a servicer, identify the corporate servicer as the company. Criminal penalties apply for making a false statement on a proof of claim. Name of Debtor and Case Number: A complete list of Debtors with corresponding case numbers is listed above. You MUST fill in the specific Debtor against which your claim is being asserted and the case number of the Debtor s bankruptcy case. If you are asserting claims against more than one Debtor, you MUST file a separate administrative expense proof of claim for each Debtor. Creditor A creditor is the person, corporation, or other entity owed a debt by the Debtor on the date of the bankruptcy filing. Administrative Expense Claim Any right to payment constituting a cost or expense of administration of any of the Reorganized Cases allowed under sections 503(b) and 507(a)(1) of the Bankruptcy Code, including, without limitation, any actual and necessary costs and expenses of operating one or more of the Debtors' Estates, any actual and necessary costs and expenses of operating one or more of the Debtors' businesses, and any fees or charges assessed against one or more of the Debtors' Estates, any actual and necessary costs and expenses of operating one or more of the Debtors' businesses, and any fees or charges assessed against one or more of the Estates of the Debtors under section 1930 of chapter 123 of title 28 of the United States Code. DEFINITIONS Administrative Expense Creditor An Administrative Expense Creditor is any person, corporation, or other entity to whom the Debtor owes a debt for an administrative expense. Administrative Expense Proof of Claim A form telling the Bankruptcy Court how much the Debtor owes a creditor for administrative expenses. Submitting Administrative Expense Proof of Claim Submit a signed original claim request with any attachments via United States mail, overnight courier service or hand delivery to: Ryckman Creek Resources Claims Processing Center c/o KCC 2335 Alaska Avenue El Segundo, CA Submission by facsimile or other electronic means will not be accepted. INFORMATION Acknowledgement of Filing a Claim To receive acknowledgment of your filing, enclose a stamped self-addressed envelope and a copy of this administrative expense proof of claim or you may view your claim information by visiting the website of the Claims Agent ( Offers to Purchase a Claim Certain entities are in the business of purchasing claims for an amount less than the face value of the claims. One or more of these entities may contact the creditor and offer to purchase the claim. Some of the written communications from these entities may easily be confused with official court documentation or communications from the Debtors. These entities do not represent the bankruptcy court or the Debtors. The creditor has no obligation to sell its claim. However, if the creditor decides to sell its claim, any transfer of such claim is subject to FRBP 3001(e), any applicable provisions of the Bankruptcy Code (11 U.S.C. 101 et seq.), and any applicable orders of the bankruptcy court.

9 Case KJC Doc 603 Filed 08/25/16 Page 9 of 54 EXHIBIT B Exit Facility Term Sheet The Debtors reserve the right to alter, amend, modify, or supplement this exhibit in accordance with the Plan.

10 Case KJC Doc 603 Filed 08/25/16 Page 10 of 54 NOTE: This exhibit is a discussion draft that is intended to set forth certain proposed terms and conditions of the Exit Facility to be furnished on the Plan s Effective Date. The terms, conditions, and limitations set forth in this exhibit are subject to ongoing negotiation between the Debtors, Agent, and Lenders, and all such parties reserve the right to further amend, modify, or supplement this exhibit at any time prior to the Plan s Effective Date. Reorganized Ryckman Creek Resources, LLC Terms and Conditions Proposed Exit Facility SUBJECT TO FURTHER REVISION NOT A COMMITMENT TO LEND The terms outlined below in this Terms and Conditions (this Exit Term Sheet ) are the terms and conditions for a senior secured, first priority exit facility (hereinafter referred to as the Proposed Facility ) to be made available to the Borrower (as defined below). Capitalized terms used but not defined herein shall have the meanings assigned to them in the Second Amended Joint Chapter 11 Plan of Reorganization of Ryckman Creek Resources, LLC and its Affiliated Debtors and Debtors in Possession (the Plan ). Borrower: Guarantors: Ryckman Creek Resources, LLC (the Borrower ) Holdings ( Guarantor and together with Borrower the Loan Parties ) 1 Amount and Type of Facility: A senior revolving credit facility of $[ ]. 2 L/C Sublimit: $2,500, Agent: Lenders: Borrowing Availability: ING CAPITAL LLC ( Agent ). Agent, RB International Finance (USA) LLC and Skandinaviska Enskilda Banken AB. (collectively, Lenders ) Eligibility criteria will be determined by Agent on the basis of its due diligence review, including the results of its examination of Borrower s collateral, books and records. Standards of eligibility would be specified in the loan documentation; provided that in any event the Borrower will be entitled to borrow an amount on the closing date sufficient to refinance in full the DIP Credit Agreement. Fees: At closing of the Proposed Facility, Borrower shall pay to Agent the DIP Fee (as defined in the DIP Credit Agreement) which shall be fully earned and non-refundable as of such date. Additionally, Borrower agrees to pay to Agent a financing fee (the Financing Fee ) equal to two percent (2%) of the aggregate principal amount of the commitments under the 1 NTD: References to the Loan Parties shall be to the Loan Parties as reorganized pursuant to the Plan. 2 NTD: To reflect outstanding balance under DIP Credit Agreement plus capitalized interest plus an additional TBD amount.

11 Case KJC Doc 603 Filed 08/25/16 Page 11 of 54 Proposed Facility which shall be fully earned and nonrefundable as of the close of the Proposed Facility. Agent will defer payment of the Financing Fee until such time as Borrower has sufficient funds, as determined by Agent in its sole discretion, to make such payment. Borrower shall pay to Agent, on the last business day of each quarter, an unused line fee (the Unused Line Fee ) at rate equal to 0.5% per annum on the amount by which the commitments under the Proposed Facility exceed the average daily unpaid balance of the sum of advances under the Proposed Facility plus the sum of all outstanding letters of credit for such calendar quarter. At the time any such payment is due, if Liquidity (as defined below), after making any cash interest payment then due, exceeds $[5,000,000], then such amount shall be applied in cash to pay the Unused Line Fee with the remaining portion of the Unused Line Fee being capitalized and added to the principal amount of the Proposed Facility. Termination Date: Three (3) years from the Effective Date of the Plan (the Termination Date ). Non-Default Interest Rate: A per annum rate equal to LIBOR plus 5.0%. Default Interest Rate: Loan Payments: Effective immediately upon the occurrence of an Event of Default unless waived in writing by Agent in its sole discretion, interest on the outstanding loans under the Proposed Facility shall accrue at a rate that is 2% per annum in excess of the Non- Default Interest Rate. All unpaid principal, interest, fees, costs and expenses on the Proposed Facility shall be due and payable in full on the Termination Date, whether at maturity, upon acceleration or otherwise. A cash payment equal to the amount by which Liquidity exceeds $[5,000,000] shall be applied to each monthly interest payment when due. Any portion of an interest payment that is not paid in cash when due shall be capitalized and added to the principal amount of the Proposed Facility. Liquidity shall mean the sum of (a) the Borrower s cash and cash equivalents plus (b) the amount by which the aggregate principal amount of the commitments under the Proposed Facility exceeds the sum of the total advances and letters of credit then outstanding thereunder. On the Effective Date of the Plan, in full and final satisfaction, settlement, release, and discharge of and in exchange for each 2

12 Case KJC Doc 603 Filed 08/25/16 Page 12 of 54 and every DIP Facility Claim, the DIP Facility Claims shall convert into the Exit Facility pursuant to the terms of the Exit Facility Credit Agreement. Conversion: Use Of Proceeds: Cash Management Collections and Remittances: On the Effective Date of the Plan, all Series A Junior Notes issued in respect of Initial Tranche A Completion Loan Claims to Lenders under the Proposed Facility shall automatically be converted into Series A-2 Senior Notes in an amount, with respect to each Proposed Facility Lender, equal to the principal amount of lending commitments for the Proposed Facility attributed to such Lender. The Proposed Facility would be used by Borrower to repay all outstanding indebtedness under the DIP Credit Agreement, pay transaction fees and expenses, and to finance ongoing working capital needs. Borrower shall use a cash management system that is the same as or substantially similar to its cash management system in place at the Effective Date or a system otherwise reasonably satisfactory to Agent. Any material changes from such cash management system must be acceptable to Agent in its sole discretion. For the purpose of crediting the Borrower s loan account and calculating interest, all items of payment shall be deemed applied by Agent one (1) Business Day following the Business Day of Agent s receipt thereof. Collateral Security: Expenses: Conditions Precedent: All obligations under the Proposed Facility shall be secured by first priority liens on all of Loan Parties existing and future assets, subject to customary exceptions and limitations (the Collateral ). Borrower shall pay or reimburse Agent and Lenders for all reasonable costs and expenses of counsel (including, without limitation, local counsel) and financial advisors for Agent and Lenders relating to the Proposed Facility and the administration and interpretation of, and the enforcement of remedies thereunder. These costs and expenses shall include but not be limited to, all due-diligence, including but not limited to environmental due-diligence, duplication or printing costs, consultation, travel, and attendance at court hearings, regardless of whether the Proposed Facility is consummated. Agent shall have the right to charge the Proposed Facility for any such fees and costs. Failure to pay such fees and expenses within five Business Days of delivery of the applicable invoice shall be an Event of Default under the Proposed Facility. The execution of definitive documentation for the Proposed 3

13 Case KJC Doc 603 Filed 08/25/16 Page 13 of 54 Facility would be subject to fulfillment of certain conditions precedent, to Agent's satisfaction, including, without limitation, the following: 1. The execution and delivery, in form and substance acceptable to Agent and its counsel, of agreements, documents, instruments, financing statements, consents, landlord waivers, documents indicating compliance with all applicable federal and state environmental laws and regulations, evidences of corporate authority, opinions of counsel, and such other documents to confirm and effectuate the Proposed Facility and liens on the Collateral, as may be required by Agent and its counsel. 2. Consummation of the reorganization and emergence from bankruptcy on terms acceptable to Agent, including (a) satisfactory legal documentation (including, without limitation, (x) entry of the Plan confirmation order and (y) satisfaction of all conditions precedent to the Plan), (b) Agent's satisfaction with Loan Parties corporate, capital and ownership structures after giving effect to the reorganization and emergence and (c) receipt by Borrower of all government, shareholder and third party consents deemed necessary or appropriate by Agent. 3. No action, suit, investigation, litigation or proceeding pending or threatened in any court or before any arbitrator or governmental instrumentality that in Agent's judgment (a) could reasonably be expected to have a material adverse effect on Borrower's business, assets, properties, liabilities, operations, condition or prospects, or could impair Borrower's ability to perform satisfactorily under the Proposed Facility; or (b) could reasonably be expected to materially and adversely affect the Proposed Facility or the transactions contemplated thereby. 4. Receipt by Agent, in form and substance satisfactory to it, of security documents evidencing its first priority lien in all assets of Loan Parties, including, as appropriate, security agreements, pledge agreements, guarantees, account control agreements, mortgages and other similar instruments. 5. Receipt by Agent, in form and substance satisfactory to it, of (a) a pro forma balance sheet of Borrower dated as of the date of closing and giving effect to the reorganization, which balance sheet shall reflect no material changes from the most recent pro forma balance sheet of Borrower previously delivered to Agent subject to fresh start accounting adjustments as required to be made under ASC 852 Reorganizations, (b) financial projections of Borrower, 4

14 Case KJC Doc 603 Filed 08/25/16 Page 14 of 54 giving effect to the reorganization, evidencing Borrower's ability to comply with any financial covenants set forth in the loan documentation, and (c) interim financial statements for Borrower as of a date not more than 45 days prior to the closing date. 6. Receipt of (x) a Disbursement Agreement which will govern the disbursement of proceeds among holders of Prepetition Credit Agreement New Notes and (y) an Agreement Among Lenders which shall govern the priority of payments among the holders of the Prepetition Credit Agreement New Notes. 7. Receipt by Agent of certificates of insurance with respect to Loan Parties property and liability insurance, together with a loss payable and/or additional insured endorsement, as applicable, naming Agent, all in form and substance satisfactory to Agent. 8. Satisfactory evidence that Borrower has received all governmental and third party consents and approvals as may be appropriate in connection with the Proposed Facility and the transactions contemplated thereby. 9. No material environmental liabilities shall exist. 10. The NRU Project (as defined in the DIP Credit Agreement) shall have been successfully completed. 11. Agent's receipt of and satisfaction with flood plain searches, acknowledged Notice to Borrower and flood insurance (if appropriate) for all real estate subject to a lien in favor of Agent. 12. Agent's and each Lender s receipt of internal credit approval of the Proposed Facility. Representations, Warranties Affirmative and Negative Covenants: Remedies: Customary Representations, Warranties and Covenants consistent with a loan facility of this nature subject to exceptions, baskets, thresholds and qualifications to be agreed upon; provided that such Representations, Warranties and Covenants will be substantially similar to those contained in the DIP Credit Agreement, but with such changes as are appropriate to reflect that the Proposed Facility is an exit facility and not a DIP facility. Upon the Termination Date, Agent s remedies, shall include, without limitation, the right to payment of all amounts due under the Proposed Facility, the right to realize on all Collateral, the right to institute judicial proceedings, the right to file actions for specific enforcement, the right to foreclose on and sell Collateral, 5

15 Case KJC Doc 603 Filed 08/25/16 Page 15 of 54 any and all rights under the Uniform Commercial Code and the right to exercise any other legal or equitable remedy available under applicable law. Events of Default: Customary events of default for a loan facility of this nature, with market standard notice and cure rights; provided that such Events of Default will be substantially similar to those contained in the DIP Credit Agreement, but with such changes as are appropriate to reflect that the Proposed Facility is an exit facility and not a DIP facility. Governing Law: No Commitment to Enter Into Proposed Facility All documentation in connection with the Proposed Facility shall be governed by the laws of the state of New York. This term sheet is submitted for discussion purposes only and describes the general basis upon which Agent and the Lenders are prepared to continue their efforts. This term sheet is intended as an outline only of certain of the material terms of the Proposed Facility and does not purport to summarize all of the terms and conditions that may be determined by Agent to be appropriate for the facility. The actual terms and conditions upon which Lenders may extend credit to Borrower or otherwise make the Proposed Facility are subject to change. This term sheet does not constitute an offer, agreement or commitment to lend. 6

16 Case KJC Doc 603 Filed 08/25/16 Page 16 of 54 EXHIBIT C Equity Term Sheet for Reorganized Ryckman and Reorganized Holdings The Debtors reserve the right to alter, amend, modify, or supplement this exhibit in accordance with the Plan.

17 Case KJC Doc 603 Filed 08/25/16 Page 17 of 54 NOTE: This exhibit is a discussion draft that is intended to set forth certain proposed terms and conditions of certain equity interests in the Reorganized Debtors to be issued in connection with the Plan. The terms, conditions, and limitations set forth in this exhibit are subject to ongoing negotiation, and this exhibit may be further amended, modified, or supplemented at any time prior to the Plan s Effective Date. DRAFT - SUBJECT TO FURTHER REVISION REORGANIZED PEREGRINE MIDSTREAM LLC SUMMARY TERM SHEET Capitalized terms used herein, but not otherwise defined, shall have the meaning set forth in the Second Amended Joint Chapter 11 Plan Reorganization of Ryckman Creek Resources, LLC and its Affiliated Debtors and Debtors in Possession, dated August 5, 2016 (as may be further amended, modified, or supplemented from time to time, the Plan ). HoldCo: OpCo: Closing Date: Capitalization: Reorganized Holdings shall hold 100% of the Membership Interests in OpCo. Reorganized Ryckman shall hold and operate the assets of the Debtors received pursuant to the Confirmation Order. HoldCo and OpCo shall be referred to together as the Companies ) The Effective Date of the Plan Pursuant to the terms of its Operating Agreement (the Operating Agreement ), HoldCo shall issue the following Series and Classes of Units: Preferred Units: Series A-1 Preferred Units Series A-2 Preferred Units Series A-3 Preferred Units Series B Preferred Units (referred to as Class B Preferred Units in the Plan). Common Units: Class A Common Units Class B Common Units The Units will be allocated in accordance with the Plan. Preferred Units: Series A Preferred Units HoldCo shall have three separate classes of Series A Preferred Units consisting of Series A-1 Preferred Units, Series A-2 Preferred Units and Series A-3 Preferred Units. The Series A- HK

18 Case KJC Doc 603 Filed 08/25/16 Page 18 of 54 1 Preferred Units shall have a first priority liquidation preference on all Distributions (defined below) made in respect of other Series A Preferred Units and the Common Units, but not the Series B Preferred Units which are pari passu as described in further detail below, in an amount equal to $[35,000,000] 1, which will accrue a quarterly dividend preference return of 12% per annum (collectively, the Series A-1 Liquidation Preference Amount ). The Series A-2 Preferred Units shall have a second priority liquidation preference on all Distributions made in respect of Series A-3 Preferred Units and the Common Units, but not the Series B Preferred Units which are pari passu as described in further detail below, in an amount equal to $56,600,000 (the Series A-2 Liquidation Preference Amount ). The Series A-3 Preferred Units shall have a third priority liquidation preference on all Distributions made to the Members in an amount equal to $[ ] 2 (the Series A-3 Liquidation Preference Amount, and together with the Series A-1 Liquidation Preference Amount and the Series A-2 Liquidation Preference Amount, the Series A Liquidation Preference Amount ). For purposes of clarity, the Series A-1 Preferred Units shall be senior in liquidation preference to both the Series A-2 Preferred Units and the Series A-3 Preferred Units, and the Series A-2 Preferred Units shall be senior in liquidation preference to the Series A-3 Preferred Units. Series B Preferred Units HoldCo shall have one class of Series B Preferred Units which shall rank pari passu in liquidation preference with the Series A Preferred Units on all Distributions made to the Preferred Members. The Series B Preferred Units that are issued for the Tranche B Converted Interest (defined below) shall have a liquidation preference equal to $[ ] 3 (the Tranche B Liquidation Preference Amount ) 4. The Series B Preferred Units that are issued on account of interest accruing after implementation of the Plan on the Hybrid New Notes shall have a liquidation preference of $1.00 for each $1.00 of Hybrid New Note interest as of the date of determination (the Hybrid New Note Liquidation Preference Amount, and together with the Tranche B Liquidation Preference Amount, the Series B Liquidation Preference Amount, and together with the Series A Liquidation Preference Amount, the Preferred Liquidation Preference Amount ). For purposes of clarity, the Series B Liquidation Preference Amount shall be paid, on a pro rata basis to the holders of Series B Preferred Units concurrently with the payment of the Series A Liquidation Preference 1 Note to Draft: This dollar amount will reflect the outstanding balance under the DIP Credit Agreement, plus capitalized interest plus an additional TBD amount. This dollar amounts in this section to be updated. 2 Note to Draft: This dollar amount will be equal to the Term Loan obligations (including the Term Loan Upfront Fee, the Term Loan Expenses, and accrued unpaid interest through the Effective Date) after deducting the liquidation preference amounts of the Series A-1 Preferred Units and Series A-2 Preferred Units. 3 Note to Draft: This dollar amount will be equal to the Initial Tranche B Converted Interest. 4 Note to Draft: 50% of these Series B Preferred Units (referred to as the Class 5-A Preferred Units in the Plan) shall be issued to the Creditor Trust on behalf of Holders of Allowed Class 5-A Claims. 2

19 Case KJC Doc 603 Filed 08/25/16 Page 19 of 54 Amount to the holders of Series A-1 Preferred Units, the holders of Series A-2 Preferred Units and the holders of Series A-3 Preferred Units, as applicable, so that the Series B Liquidation Preference Amount shall be fully paid at the same time that the Series A-3 Liquidation Preference Amount is fully paid. For purposes of this Term Sheet (i) Distributions shall mean all proceeds paid to the Members of HoldCo from a Liquidation Event (defined below) and any distributions of Available Cash (defined below) made to the Members of HoldCo, (ii) Liquidation Event shall mean any (a) liquidation, dissolution or winding up of HoldCo or OpCo, either individually or collectively; (b) sale, consolidation, merger or other business combination of HoldCo or OpCo, either individually or collectively; (c) any sale, assignment or transfer, whether pursuant to a single transaction or a series of related transactions or plan, of securities of HoldCo or OpCo in which the members holding the right to vote with respect to such matters generally immediately prior to such sale, assignment or transfer or series thereof cease to hold a majority of HoldCo or OpCo s voting power, as applicable, after such sale, assignment or transfer or series thereof; (d) other transaction or series of transactions which results in the members of either HoldCo or OpCo holding the right to vote with respect to matters generally immediately prior to such transaction or series of transactions ceasing to hold a majority of the voting power of the surviving entity after such transaction or series of transactions; (e) sale or liquidation of all or substantially all of HoldCo or OpCo assets, either individually or collectively; or (f) any similar transaction; (iii) Available Cash shall mean the net income of HoldCo less the portion thereof used to (A) pay or establish reserves for HoldCo expenses, debt payments, capital improvements, replacements and contingencies and (B) pay any amounts payable in respect of the Class 5-A Value Sharing Rights, all as determined by the Board of Managers; (iv) and Tranche B Converted Interest shall mean all accrued unpaid interest arising on account of the Initial Tranche B Completion Loans through the Effective Date of the Plan, including any interest that was paid in kind prior to the Effective Date of the Plan. Common Units: HoldCo shall have two separate classes of Common Units consisting of Class A Common Units and Class B Common Units. The number of Class A Common Units shall be equal to the number of issued and outstanding Series A Preferred Units and the number of Class B Common Units shall be equal to the number of issued and outstanding Series B Preferred Units. After the Preferred Liquidation Preference Amount as been paid in full to the holders of Series A Preferred Units and Series B Preferred Units as provided above, all remaining Distributions shall be paid to the holders of Class A Common Units and Class B Common Units on a 70/30 basis, respectively. 3

20 Case KJC Doc 603 Filed 08/25/16 Page 20 of 54 Distribution Waterfall: Any Distributions to the Members shall be made when and as determined by the Board of Managers and shall be paid as follows: First, Distributions shall be paid Pro Rata (defined below) to the holders of Series A-1 Preferred Units and the holders of Series B Preferred Units until the holders of Series A-1 Preferred Units shall have received the Series A-1 Liquidation Preference Amount in full. Second, Distributions shall be paid Pro Rata to the holders of Series A-2 Preferred Units and the holders of Series B Preferred Units until the holders of Series A-2 Preferred Units shall have received the Series A-2 Liquidation Preference Amount in full. Third, Distributions shall be paid Pro Rata to the holders of Series A-3 Preferred Units and the holders of Series B Preferred Units until the holders of Series A-3 Preferred Units shall have received the Series A-3 Liquidation Preference Amount in full and holders of Series B Preferred Units shall have received the Series B Liquidation Preference Amount in full. Fourth, the balance of any Distributions shall be paid 70% to the holders of Class A Common Units and 30% to the holders of Class B Common Units, with such amounts to be divided within each such class on a per Unit basis Once all of the Preferred Units have received their respective Preferred Liquidation Preference Amount, the Preferred Units shall no longer represent membership interests in HoldCo and shall have no further rights to distributions or voting rights. For purposes of the Distribution Waterfall, Pro Rata means as of any date, with respect to (i) Distributions made to holders of Series A Preferred Units, a fraction, the numerator of which equals the Series A Liquidation Preference Amount as of such date, and the denominator of which equals the aggregate Preferred Liquidation Preference Amount as of such date, and (ii) Distributions made to holders of Series B Preferred Units, a fraction, the numerator of which equals the Series B Liquidation Preference Amount as of such date, and the denominator of which equals the aggregate Preferred Liquidation Preference Amount as of such date. The Operating Agreement of HoldCo shall require that any buyer of substantially all of the equity or assets of HoldCo pay the purchase price thereof to the Members in accordance with the provisions of the Distribution Waterfall. 4

21 Case KJC Doc 603 Filed 08/25/16 Page 21 of 54 Board of Managers: HoldCo s Operating Agreement will provide for the establishment of a Board of Managers (the Board ). The Board will have the authority to manage the business and affairs of the Companies, including the power to appoint officers of the Companies. The initial Board will consist of up to five individuals elected by the holders of a majority of the Controlling Class as defined below ( Controlling Class Approval ). The initial Board members shall be appointed as of the Closing Date. Vacancies in the Board shall be appointed by the remainder of the Board in consultation with the Controlling Class, if there remain three or more members of the Board, or by Controlling Class approval if there remain fewer than three members. Board meetings will be held at least once per quarter and Board members may participate in person or telephonically. Unless otherwise stated in the Operating Agreement, a majority of the members of the Board shall constitute a quorum and the act of a majority of the Board when a quorum is present shall be the act of the Board. The Companies shall reimburse each Board member for all reasonable travel expenses related to attending Board meetings. The Companies will fully indemnify all members of the Board and officers to the maximum extent permitted and will carry Directors and Officers liability insurance. OpCo shall be managed by HoldCo as its sole member manager. All material business decisions requiring Board approval shall be made at the HoldCo level. Controlling Class shall mean the Members holding Preferred Units voting together as a single class, with each Member having one vote for each dollar of Preferred Liquidation Preference Amount then owed to such Member, until the Preferred Liquidation Preference Amount has been paid in full, at which time it shall mean the Members holding Common Units voting together as a single class, with each Unit having one vote. Expenditures: Tax Allocations and Distributions: After the Closing Date, management will prepare an operating budget and business plan for the Companies initial twenty four (24) months that is acceptable to the Board. Additionally, all future corporate expenditures not noted on the approved operating budget in excess of [$ ] shall be subject to the approval of the Board. HoldCo shall maintain a capital account for each Member (a Capital Account ) in accordance with IRS rules and regulations. Each Member s Capital Account shall be increased or decreased depending upon such Member s pro rata share of profits and losses from the operations of the Companies. The allocation shall be based upon the amounts most closely representing the Distributions which would have been payable to the Members if a hypothetical liquidation had occurred as of such 5

22 Case KJC Doc 603 Filed 08/25/16 Page 22 of 54 measurement date. In the event Members are allocated taxable income in a period and subject to compliance with the Companies debt, applicable law and the amount of Available Cash, HoldCo shall make a tax Distribution (a Tax Distribution ) to such Members in the amount of the amount of allocated income times the highest federal income tax rate applicable to any Member. Any such Tax Distribution shall be treated as an advance on any other amounts ultimately to be distributed to such Member pursuant to the Distribution Waterfall. Right of First Refusal; Consent: In the event that any Member(s) of HoldCo at any time shall propose to sell its or their Units to a third party other than a Permitted Transferee, the Members of the Controlling Class shall have a Right of First Refusal to purchase such Units on the same terms and conditions as being offered to such third party buyer. Additionally, no Member shall be allowed to transfer any of its Units to a Competitor of the Companies without Controlling Class Approval. Permitted Transferee shall include any affiliate of the Member. Competitor shall include any other participant in the natural gas industry, as further defined in the Operating Agreement. Preemptive Rights: Additional Capital Contributions: Right of Sale: Each Member of the then Controlling Class will have the right, but not the obligation, to purchase its pro-rata share of any future [debt, convertible debt or] equity offerings interests with such pro-rata share determined based on fully diluted Unit ownership in such Controlling Class. In the event that the Companies need additional capital that cannot be obtained through existing or new debt (subject to the restrictions contained in the existing debt), the Board may call for additional capital contributions. All Members holding Units in the Controlling Class shall have the right, but not the obligation, to contribute any such additional capital on a pro rata basis, with right of oversubscription. Such additional capital may be entitled to a priority return over all existing classes and series of Units, and a right to Distributions prior to any other Distributions in the Distribution Waterfall, and include any other terms and conditions as reasonably determined by the Board. If either (i) the holders of a majority of the Units in the Controlling Class at any time after the Closing, or (ii) the holders of a majority of the Series A-1 Preferred Units any time after 24 months after the Closing, desire to liquidate or sell the Companies and receive a bona-fide offer to purchase the Companies (or their assets), the applicable group (the Triggering Class ) shall deliver notice (a Offer Notice ) of such desire to all other Members (the Other Members ). The Sale Notice shall 6

23 Case KJC Doc 603 Filed 08/25/16 Page 23 of 54 contain the material terms and conditions of the offer to purchase the Companies (or their assets) received by the Triggering Class. The Other Members would then have 30 days from the date of the Offer Notice to notify the Triggering Class that they intend to purchase the Companies on the same terms and conditions as set forth in the Offer Notice (an Election Notice ). If the Other Members elect to purchase the Companies or their assets, as applicable, on the terms set forth in the Offer Notice pursuant to a timely Election Notice, the closing of such transaction shall occur and the purchase consideration shall be fully funded to the Triggering Class (including amounts payable to the Triggering Class with respect to both debt and equity held by the Triggering Class) within 60 days from the date of the Election Notice. In the event the Other Members fail to deliver a timely Election Notice or fail to close and fully fund the purchase consideration within the 60 day period, then the Triggering Class shall be free to consummate such sale as described in the Offer Notice, and the rights of the Other Members under this provision shall expire and be of no further force or effect. Any of the above deadlines may be shortened or lengthened unilaterally by, and in the sole discretion of, the Triggering Class. Financial Information: Protective Provisions: The Companies will provide the Members with ongoing financial information, including monthly financial statements, quarterly reports, liquidity forecasts, annual audited financial statements, an annual operating plan/budget, including a comparison of actual to budget, and any material updates to the business plan. Controlling Class Approval shall be required for any action which: (i) adversely alters or affects the rights, preferences or privileges of any class or series of Units; (ii) increases or decreases the authorized number of any class or series of Units; (iii) authorizes or creates (by reclassification or otherwise) any new class or series of Units; (iv) results in any Liquidation Event (as defined above); (v) increases or decreases the authorized size of the Board (as set forth above); (vi) results in the redemption or repurchase of any shares of Units junior in liquidation preference to those of the Controlling Class (other than pursuant to equity incentive agreements, if any, with employees giving HoldCo the right to repurchase shares upon the termination of services); (vii) results in the payment or declaration of any Distribution on any Units other than in accordance with the Distribution Waterfall; (viii) involves a change in OpCo s principal line(s) of business; (ix) relates to or would result in the incurrence by the Companies of indebtedness for borrowed money 7