Nine Energy Service - Chapter 11 Plan Terms

Plan / RSA Terms

Overview

• On February 1, 2026, the Debtors entered into a Restructuring Support Agreement (the "RSA") with holders of:
  • Over 70% of Senior Secured Notes Claims
  • 100% of the Prepetition ABL Claims
• The RSA contemplates restructuring transactions pursuant to a Chapter 11 plan that provides for the Debtors' reorganization and emergence with a strengthened balance sheet and capital structure.
• The Plan represents a fair and reasonable compromise of all Claims, Interests, and Causes of Action, and was the result of extensive, arm's-length, good-faith negotiations that preserve value for the Debtors, their estates, and all stakeholders.
• Subject to the terms of the Plan and the RSA (including any consent rights set forth or incorporated therein), the Debtors reserve the right to alter, amend, update, or modify the Plan Supplement before the Effective Date.
• The Debtors or Reorganized Debtors are authorized to enter into and effectuate the Restructuring Transactions contemplated by the Plan, the RSA, and the other Definitive Documents, and to take any actions necessary to effectuate any transaction described in, approved by, contemplated by, or necessary to effectuate the Plan.

Plan Support

• The Consenting Noteholders and the Consenting ABL Lenders have supported and committed to continue to support the Debtors' restructuring pursuant to the RSA.
• The Required Consenting Noteholders agreed to equitize their secured claims to facilitate the Debtors' reorganization efforts and negotiated for the use of their cash collateral.
• The Holders of Senior Secured Notes Claims comprise the Voting Class and voted in favor of the Plan.
• The Voting Class voted to accept the Plan by the requisite numbers and amount of Claims specified under the Bankruptcy Code, without including any acceptance by any insider.

DIP Financing

• The Holders of Prepetition ABL Claims, DIP Lenders, and DIP Agent provided the DIP Facility, which enabled the Company to:
  • Fund operations and the costs of the Restructuring Transactions during the pendency of the Chapter 11 Cases
  • Maintain necessary liquidity while funding the administration of the Chapter 11 Cases
• The Senior Secured Notes Trustee, the Prepetition ABL Agent, and the DIP Agent consented to the Debtors' use of cash collateral, providing the Debtors with necessary liquidity to maintain operations.

Exit ABL Facility

• On the Effective Date, the Reorganized Debtors shall enter into the Exit ABL Facility, pursuant to the Exit ABL Facility Documents and in all respects consistent with the RSA and the Plan.
• The Holders of Prepetition ABL Claims agreed to provide the Exit ABL Facility upon consummation of the Plan, affording the Company access to necessary go-forward liquidity.
• The financial accommodations to be extended pursuant to the Exit ABL Facility are being extended in good faith, following arm's-length negotiations, for legitimate business purposes, and are reasonable.
• The Exit ABL Facility shall not be subject to avoidance, turnover, recharacterization, adjustment, or subordination (including equitable subordination) and shall not constitute preferential transfers, fraudulent conveyances, or other voidable transfers under the Bankruptcy Code or any other applicable non-bankruptcy law.
• On the Effective Date, all Liens and security interests to be granted, carried forward, continued, amended, extended, and/or reaffirmed by the Debtors or Reorganized Debtors in accordance with the Exit ABL Facility Documents shall:
  • Be deemed automatically perfected on the Effective Date
  • Constitute continuing legal, valid, binding, automatically perfected, non-avoidable, first-priority, and enforceable Liens on, and security interests in, the applicable collateral specified in the Exit ABL Facility Documents
  • Not be subject to avoidance, recharacterization, turnover, adjustment, or subordination
• The Liens and security interests granted pursuant to the Exit ABL Facility Documents are automatically perfected as of the Effective Date, including the Liens and Security Interests in any deposit account of any Reorganized Debtor, without the necessity of entering into any lockbox or deposit account control agreement.
• On the Effective Date, the Exit ABL Facility Documents shall constitute legal, valid, binding, and authorized obligations of the Reorganized Debtors in accordance with their terms.

New Equity Interests

• On the Effective Date, Reorganized Nine Energy shall issue the New Equity Interests, which distribution or issuance shall be governed by the terms and conditions of the instruments evidencing or relating to such distribution or issuance, including the New Organizational Documents.
• The issuance of the New Equity Interests, including equity awards reserved for the Management Incentive Plan, shall be authorized without the need for any further corporate action or without any further action by the Debtors or Reorganized Debtors.
• Any Entity's acceptance of New Equity Interests shall be deemed as its agreement to the New Organizational Documents, as the same may be amended or modified from time to time following the Effective Date in accordance with their terms.
• Upon the occurrence of the Effective Date, recipients of New Equity Interests shall become bound by the New Organizational Documents regardless of whether or not such recipients actually return signature pages thereto.

Releases

• The Plan provides for releases granted by the Debtors in accordance with section 1123(b) of the Bankruptcy Code (the "Debtor Release").
  • The Debtor Release is a necessary and integral element of the Plan, and is fair, equitable, reasonable, and in the best interests of the Debtors, the Estates, and Holders of Claims and Interests.
  • Each of the Released Parties has made a substantial contribution to the Plan and to the Debtors' reorganization.
  • The Released Parties played an integral role in the formulation of the Plan, made significant contributions that are essential to the Plan's success, and expended significant time and resources analyzing and negotiating the Plan and the issues presented by the Debtors' prepetition capital structure.
  • The Debtor Release appropriately offers protection to parties who provided consideration to the Debtors and whose participation in the Debtors' restructuring process and the Chapter 11 Cases was and continues to be critical to the Debtors' successful implementation of the Restructuring Transactions and emergence.
  • The Released Parties made significant concessions and contributions to the Chapter 11 Cases, including by actively supporting the Plan and the Chapter 11 Cases.
  • The Debtor Release for the Debtors' current and former directors, officers, and managers is appropriate because the Debtors' directors, officers, and managers share an identity of interest with the Debtors, supported and made substantial contributions to the success of the Plan and the Chapter 11 Cases, and actively participated in meetings and negotiations during the Chapter 11 Cases.
  • The Debtor Release applies solely to those parties who affirmatively supported the Plan and the Debtor Release embodied therein.
  • The Independent Directors conducted an investigation that analyzed and considered all potential Claims and Causes of Action held by the Debtors and determined that the Debtor Release was appropriate and necessary under the circumstances.
• The Plan also describes certain releases granted by the Releasing Parties (the "Third-Party Release").
  • The Third-Party Release is consensual, essential to Confirmation, given in exchange for good and valuable consideration provided by the Released Parties, and represents a good faith settlement and compromise of such Claims and Causes of Action.
  • Similar to the Debtor Release, the Third-Party Release was integral to the formulation of the Plan and was critical to incentivizing parties to support the Plan, facilitated participation in the RSA and the Plan, and prevented potentially significant, time-consuming, and value-depleting litigation.
  • The Third-Party Release was a core negotiation point and an integral component of the RSA and was instrumental in developing a Plan that maximized value for the Debtors' Estates.
  • The Third-Party Release is consensual as to all relevant parties, including all Releasing Parties, and such parties were provided sufficient notice of the Chapter 11 Cases, the Plan, and the deadline to object to Confirmation.
  • Holders of Claims against or Interests in the Debtors that did not check a prominently featured and clearly labeled box on the applicable Ballot or Opt-Out Form, returned in advance of the Voting Deadline, would be deemed to have expressly, unconditionally, generally, individually, and collectively consented to the release and discharge of all Claims and Causes of Action against the Debtors and the Released Parties.
  • Any Entity shall not be a Released Party if it timely opts out of, or objects to, the Third-Party Release.
  • The release provisions of the Plan were conspicuous, emphasized with boldface type in the Plan, the Disclosure Statement, the Ballots, the Opt-Out Form, and the Combined Hearing Notice.
  • The Combined Hearing Notice was published in The New York Times on February 10, 2026, and The New York Times International Edition on February 11, 2026, and the Ballots were sent to all Holders of Claims and Interests entitled to vote on the Plan, each unambiguously stating that the Plan contains the Third-Party Release.
• Notwithstanding anything to the contrary, both the Debtor Release and Third-Party Release do not release:
  • Any post-Effective Date obligations of any party or Entity under the Plan, the Confirmation Order, any Restructuring Transaction, or any document, instrument, or agreement executed to implement the Plan or any Claim or obligation arising under the Plan
  • Any Released Party from any claim or Cause of Action arising from an act or omission that is determined by a Final Order to have constituted actual fraud, willful misconduct, or gross negligence
• Additionally, the Debtor Release does not release any Causes of Action identified in the Schedule of Retained Causes of Action.

Exculpation

• The exculpation provision is essential to the Plan and appropriately tailored to protect the Debtors and the Exculpated Parties from inappropriate litigation.
• The exculpation, including the carve-out for actual fraud, willful misconduct, and/or gross negligence, is consistent with section 1125(e) of the Bankruptcy Code.
• No Exculpated Party shall have or incur liability or obligation for, and each Exculpated Party is hereby released and exculpated from, any Cause of Action for any Claim arising from the Petition Date through the Effective Date related to any act or omission in connection with, relating to, or arising out of:
  • The Chapter 11 Cases, the formulation, preparation, dissemination, negotiation, filing, or termination of the RSA and related prepetition transactions
  • The DIP Facility, the DIP Documents, the Definitive Documents, the New Equity Interests, the Exit ABL Facility, the Exit ABL Facility Documents, the Management Incentive Plan
  • The Disclosure Statement, the Plan, the Plan Supplement, the Restructuring Transactions
  • The filing of the Chapter 11 Cases, the pursuit of Confirmation, the pursuit of consummation of the Restructuring Transactions, the administration and implementation of the Plan, including the issuance or distribution of Securities pursuant to the Plan, or the distribution of property under the Plan
• The exculpation does not apply to Claims related to any act or omission that is determined in a Final Order by a court of competent jurisdiction to have constituted actual fraud, willful misconduct, or gross negligence.
• The Exculpated Parties shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and responsibilities pursuant to the Plan.

Injunction

• The injunction provision is necessary to implement, preserve, and enforce the Debtors' discharge, the Debtor Release, the Third-Party Release, and exculpation provision.
• No Person or Entity may commence or pursue a Claim or Cause of Action of any kind against the Exculpated Parties that relates to or is reasonably likely to relate to any act or omission in connection with, relating to, or arising out of a Claim or Cause of Action subject to the terms of the Plan, without the Bankruptcy Court:
  • First determining, after notice and a hearing, that such Claim or Cause of Action represents a colorable Claim not subject to exculpation under the Plan, and
  • Specifically authorizing such Person or Entity to bring such Claim or Cause of Action against any such Exculpated Party
• All Entities who have held, hold, or may hold Claims, Interests, or Causes of Action that have been extinguished, released, discharged, or are subject to exculpation, are permanently enjoined from and after the Effective Date from:
  • Commencing or continuing in any manner any action, suit, or other proceeding of any kind on account of or in connection with or with respect to any such released Claims, Interests, or Causes of Action
  • Enforcing, attaching, collecting, or recovering by any manner or means any judgment, award, decree, or order against such Entities
  • Creating, perfecting, or enforcing any Lien or encumbrance of any kind against such Entities or their property
  • Asserting any right of setoff, subrogation, or recoupment of any kind against any obligation due from such Entities
• All Holders of Claims and Interests and their respective current and former employees, agents, officers, directors, managers, principals, and direct and indirect Affiliates shall be enjoined from taking any actions to interfere with the implementation or Consummation of the Plan.

Management Incentive Plan

• The Plan authorizes the Management Incentive Plan.
• The issuance of the New Equity Interests, including equity awards reserved for the Management Incentive Plan, shall be authorized without the need for any further corporate action or without any further action by the Debtors or Reorganized Debtors.

New Organizational Documents

• On or immediately prior to the Effective Date, the New Organizational Documents shall be automatically adopted or amended by the Reorganized Debtors as may be necessary to effectuate the transactions contemplated by the Plan.
• The New Organizational Documents will comply with section 1123(a)(6) of the Bankruptcy Code and will prohibit the issuance of non-voting securities to the extent required by section 1123(a)(6) of the Bankruptcy Code.
• The New Organizational Documents will, among other things:
  • Authorize the issuance of the New Equity Interests
  • Prohibit the issuance of non-voting Equity Securities to the extent required under section 1123(a)(6) of the Bankruptcy Code
• After the Effective Date, the Reorganized Debtors may amend and restate their respective New Organizational Documents as permitted by the laws of its jurisdiction of incorporation or formation and in accordance with the terms thereof.
• Upon the occurrence of the Effective Date, recipients of New Equity Interests shall be deemed bound by the terms of the New Organizational Documents regardless of whether or not they have actually returned signature pages thereto.
• The Exit ABL Facility Documents and the New Organizational Documents are essential elements of the Plan, are necessary for Confirmation and Consummation of the Plan, and are critical to the overall success and feasibility of the Plan.
• The Debtors have exercised sound business judgment in deciding to pursue and enter into the Exit ABL Facility Documents and the New Organizational Documents and have provided adequate notice thereof.

New Board

• The Plan provides for the appointment of the New Board and the other Governing Bodies, the initial members of which:
  • Will be designated and appointed in accordance with the terms set forth in the New Organizational Documents
  • Were disclosed in the Plan Supplement to the extent known
• As of the Effective Date, the term of the current members of the board of directors or other Governing Body of each of the Debtors shall expire, such current directors shall be deemed to have resigned, and all of the directors for the initial term of the New Board and the other Governing Bodies shall be appointed in accordance with the New Organizational Documents.
• Each such member and officer of the Reorganized Debtors shall serve from and after the Effective Date pursuant to the terms of the New Organizational Documents and other constituent documents of the Reorganized Debtors.

D&O Liability Insurance

• The Plan provides for the assumption of the D&O Liability Insurance Policies.

Restructuring Expenses

• The provision governing payment of Restructuring Expenses and Senior Secured Notes Trustee Fees and Expenses is approved in its entirety.

Securities Law Exemptions

• Pursuant to section 1145 of the Bankruptcy Code, or, to the extent that section 1145 of the Bankruptcy Code is either not permitted or not applicable, section 4(a)(2) of the Securities Act, Regulation D promulgated thereunder, Regulation S under the Securities Act, and/or other available exemptions from registration, the offering, issuance, and distribution of the New Equity Interests as contemplated in the Plan and/or the offering, issuance, and distribution of Other Securities, if any, shall be exempt from the registration requirements of section 5 of the Securities Act and any other applicable U.S. federal, state, or local laws requiring registration prior to the offering, issuance, distribution, or sale of Securities.
• The offering of such New Equity Interests and/or Other Securities prior to the Petition Date shall be exempt from the registration requirements of the Securities Act in reliance upon section 4(a)(2) of the Securities Act, Regulation D promulgated thereunder, and/or in reliance on Regulation S under the Securities Act.
• The shares of New Equity Interests and the Other Securities, if any, to be issued under the Plan on account of Allowed Claims in accordance with, and pursuant to, section 1145 of the Bankruptcy Code will be freely transferable under the Securities Act by the recipients thereof, subject to:
  • The provisions of section 1145(b)(1) of the Bankruptcy Code relating to the definition of an underwriter in section 1145(b) of the Bankruptcy Code, and compliance with applicable securities laws and any rules and regulations of the United States Securities and Exchange Commission or state or local securities laws, if any, applicable at the time of any future transfer of such Securities or instruments
  • Any restrictions on the transferability of such New Equity Interests and/or Other Securities in the New Organizational Documents

Tax Exemptions

• To the fullest extent permitted by section 1146(a) of the Bankruptcy Code, all transfers contemplated by the Plan shall not be subject to any document recording tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, transfer tax, sales tax, mortgage recording tax, Uniform Commercial Code filing or recording fee, regulatory filing or recording fee, or other similar tax or governmental assessment.
• The appropriate state or local governmental officials or agents shall forego the collection of any such tax or governmental assessment and accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax, recordation fee, or governmental assessment.