Exhibit 10.1

 

 

SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AND SECURITY AGREEMENT

 

SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AND SECURITY AGREEMENT (this
“Agreement”), dated as of July 11, 2014, among CRUMBS BAKE SHOP, INC., a
Delaware corporation and a debtor and debtor in possession in a case pending
under Chapter 11 of the Bankruptcy Code (the “Company”), and each of the
Company’s subsidiaries listed on the signature page, each a debtor and debtor in
possession in a case pending under Chapter 11 of the Bankruptcy Code (each a
“Subsidiary” and together with the Company, the “Borrower”), and LEMONIS FISCHER
ACQUISITION COMPANY, LLC, a Delaware limited liability company, as lender
(together with its successors and assigns, the “Lender”).

 

PRELIMINARY STATEMENTS

 

1. On July 11, 2014 (the “Filing Date”), Borrower filed voluntary petitions with
the Bankruptcy Court initiating the Case and have continued in the possession of
its assets and in the management of its business pursuant to Sections 1107 and
1108 of the Bankruptcy Code.

 

2. Borrower has requested that the Lender provide post-petition loans and
advances consisting of a term loan facility to Borrower in an aggregate
principal amount not to exceed the Commitment (as defined herein).

 

3. The proceeds of the Loan will be used (i) to pay post-Filing Date related
fees and expenses associated with negotiation, execution and delivery of this
Agreement and the other Loan Documents, (ii) for working capital and other
general corporate purposes of the Borrower not materially inconsistent with the
aggregate disbursement contemplated in the Budget and to the extent not
prohibited hereunder, (iii) to pay fees and expenses of the Borrower’s advisors,
and (iv) to make any other payments permitted to be made in the Order or in the
First Day Orders or by the Bankruptcy Court to the extent not prohibited by this
Agreement or otherwise consented by the Lender.

 

4. To provide security for the repayment of all obligations of the Borrower
hereunder and under the other Loan Documents, the Borrower will provide to the
Lender the following (all as more fully described herein):

 

(a) pursuant to Section 364 (c)(1) of the Bankruptcy Code and the Order, as
applicable, a Superpriority Claim in the Case having priority over any
administrative claims of any entity, including, without limitation, any claims
specified in or ordered pursuant to Sections 105, 326, 330, 331, 503(b), 506(c),
507, 726, 1113, 1114 or any other provisions of the Bankruptcy Code, subject
only to the Carve-Out (as defined herein),

 

(b) pursuant to Section 364(c)(2) of the Bankruptcy Code and the Order, as
applicable, a perfected first priority Lien on all unencumbered property and
assets of the Borrower of any kind (other than Avoidance Actions and the
proceeds therefrom), subject only to the Carve-Out, and

 

(c) pursuant to Section 364(c)(3) of the Bankruptcy Code, a perfected Lien on
the property of the Borrower as more fully described herein subject to (i) Liens
for taxes and assessments not yet due and payable, (ii) the Senior Liens (as
defined herein); (iii) mechanic’s, materialmen’s, warehousemen’s or similar
Liens that arise by operation of law; (iv) that certain equipment lien held by
LCA Bank Corporation pursuant to a UCC-1 Financing Statement filed with the
Delaware Secretary of State on January 6, 2011 at filing #2011-0055288 (the
Liens described in clauses (i) through this clause (iv), being “Permitted
Liens”), and (v) the Carve-Out.

 

 

 

The parties hereto hereby agree as follows:

 

SECTION 1. DEFINITIONS

 

1.1 Defined Terms. As used in this Agreement (including the recitals hereof),
the terms listed in this Section1.1 shall have the respective meanings set forth
in this Section 1.1.

 

“Affiliate”: as defined in Section 101(2) of the Bankruptcy Code.

 

“Agreement”: as defined in the preamble hereto.

 

“Applicable Rate”: seven percent (7%) per annum.

 

“Asset Purchase Agreement”: the Asset Purchase Agreement, dated as of July 11,
2014, between Lender and Borrower relating to the sale by Borrower and the
purchase by Lender of the Assets of the Borrower and the transactions
contemplated thereby.

 

“Assets”: the assets of the Borrower to be purchased by Lender pursuant to the
Asset Purchase Agreement.

 

“Assignee”: as defined in Section 8.7.

 

“Audited Financial Statements”: the audited consolidated balance sheet of the
Company and its consolidated Subsidiaries for the fiscal year ended December 31,
2013, and the related consolidated statements of income or operations,
shareholders’ equity and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto.

 

“Avoidance Actions”: claims and causes of action arising under sections 502(d),
544, 545, 547, 548, 550 or 551 of the Bankruptcy Code.

 

“Bankruptcy Code”: Title 11 of the United States Code entitled “Bankruptcy”, as
now and hereafter in effect, or any successor statute.

 

“Bankruptcy Court”: the United States Bankruptcy Court for the District of New
Jersey.

 

“Borrower”: as defined in the preamble hereto.

 

“Budget”: in the form attached hereto as Exhibit A.

 

“Business”: the business currently carried on by the Borrower.

 

“Business Day”: a day other than a Saturday, Sunday or other day on which
commercial banks in Oklahoma City, Oklahoma are authorized or required by law to
close.

 

“Capital Lease Obligations”: as to any Person, the obligations of such Person to
pay rent or other amounts under any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP and, for the purposes of this
Agreement, the amount of such obligations at any time shall be the capitalized
amount thereof at such time determined in accordance with GAAP.

 

 

 

 

 

“Capital Stock”: any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.

 

“Carve-Out”: as defined in Section 2.7(a).

 

“Carve-Out Trigger Notice”: as defined in Section 2.7(a).

 

“Case”: the bankruptcy case of each Borrower currently pending under Chapter 11
of the Bankruptcy Code in the Bankruptcy Court.

 

“Cash Collateral”: “cash collateral” as such term is defined in Section 363(a)
of the Bankruptcy Code, or any successor provision.

 

“Code”: the Internal Revenue Code of 1986, as amended from time to time.

 

“Collateral”: all of Borrower’s Equipment, Inventory, Accounts, Chattel Paper,
General Intangibles, Goods, Documents, Fixtures, Deposit Accounts, Instruments,
Investment Property, Letter of Credit Rights, Software, Commercial Tort Claims,
money, Intellectual Property, Incidental Rights, including, without limitation,
the Borrower’s equity interest in each Subsidiary, in each case, whether owned
now or acquired after the date of this Agreement, and including all proceeds
thereof, all substitutions therefor, and all books and records related thereto;
provided, however, the term “Collateral” shall not include the Southeastern CD.

 

“Commitment”: the obligation of the Lender to make the Loan to the Borrower in
an aggregate principal amount up to $1,133,000.00.

 

“Commitment Period”: the period from and including the day after the date of
this Agreement to September 8, 2014.

 

“Commonly Controlled Entity”: an entity, whether or not incorporated, that is
under common control with the Borrower within the meaning of Section 4001 of
ERISA or is part of a group that includes the Borrower and that is treated as a
single employer under Section 414 of the Code.

 

“Contractual Obligation”: as to any Person, any provision of any security issued
by such Person or of any agreement, instrument or other undertaking to which
such Person is a party or by which it or any of its property is bound.

 

“Copyrights”: all rights under applicable law associated with works of
authorship, including but not limited to copyrights, moral rights, mask-works,
and computer software (excluding commercially available software).

 

“Debtor Relief Laws”: the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

 

 

 

 

 

“Default”: any of the events specified in Section 7, whether or not any
requirement for the giving of notice, the lapse of time, or both, would
constitute an Event of Default.

 

“Disposition” or “Dispose”: (a) the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction) of any property by
the Borrower (or the granting of any option or other right to do any of the
foregoing), including any sale, assignment, transfer or other disposal, with or
without recourse, of any Capital Stock owned by the Borrower, or any notes or
accounts receivable or any rights and claims associated therewith and (b) the
issuance of Capital Stock by any Subsidiary of the Borrower to any Person other
than the Borrower.

 

“Dollars” and “$”: dollars in lawful currency of the United States.

 

“Environmental Laws”: any and all foreign, Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.

 

“ERISA”: the Employee Retirement Income Security Act of 1974, as amended from
time to time.

 

“Event of Default”: any of the events specified in Section 7.

 

“Facility”: the Commitment and the Loans made thereunder.

 

“Filing Date” as defined in the recitals hereto.

 

“Final Order”: an order of the Bankruptcy Court in the Case in substantially the
form attached hereto as Exhibit C authorizing and approving this Agreement and
the other Loan Documents under Section 364(c) of the Bankruptcy Code entered at
or after a final hearing and on a final basis, which order shall be in
substantially the same form as the Interim Order except that it will be
characterized as a final order, eliminating references to “interim” approval.

 

“First Advance Closing Date”: the first Business Day after the date on which an
Interim Order is entered by the Bankruptcy Court.

 

“First Day Orders”: as defined in Section 4.1(d).

 

“GAAP”: generally accepted accounting principles in the United States as in
effect from time to time.

 

“Governmental Approval”: any consent, authorization, approval, order, license,
franchise, permit, certificate, accreditation, registration, filing or notice,
of, issued by, from or to, or other act by or in respect of, any Governmental
Authority.

 

“Governmental Authority”: any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative functions of or pertaining to government,
any securities exchange and any self-regulatory organization (including the
National Association of Insurance Commissioners).

 

 

 

 

 

“Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation, including a reimbursement, counterindemnity or similar obligation,
of the guaranteeing person that guarantees or in effect guarantees, any
Indebtedness, leases, dividends or other obligations (the “primary obligations”)
of any other third Person (the “primary obligor”) in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (i) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (ii) the maximum amount for which such guaranteeing
person may be liable pursuant to the terms of the instrument embodying such
Guarantee Obligation, unless such primary obligation and the maximum amount for
which such guaranteeing person may be liable are not stated or determinable, in
which case the amount of such Guarantee Obligation shall be such guaranteeing
person’s maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.

 

“Incidental Rights” (a) all books and records relating to the Equipment,
contracts, contract rights, licenses, sublicenses, computer tapes, catalogues,
advertisements, source codes, computer programs, computer cards and computer
disks, Accounts, Inventory and any of the other items or types of Collateral;
(b) all indemnities, guaranties or warranties relating to the ownership,
construction, rental, operation, maintenance, use or repair of the Equipment or
other items or types of Collateral, (c) all telephone numbers assigned to
Borrower, (d) all governmental filings, permits, approvals or licenses relating
to the ownership, use or operating of the Equipment and Inventory; and (e)
contract files, right-of-way files and engineering files relating primarily
thereto.

 

“Indebtedness”: of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person’s
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (g) the liquidation value of all
redeemable preferred Capital Stock of such Person, (h) all Guarantee Obligations
of such Person in respect of obligations of the kind referred to in clauses (a)
through (g) above, and (i) all obligations of the kind referred to in clauses
(a) through (h) above secured by (or for which the holder of such obligation has
an existing right, contingent or otherwise, to be secured by) any Lien on
property (including accounts and contract rights) owned by such Person, whether
or not such Person has assumed or become liable for the payment of such
obligation. The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness expressly provide that such Person is
not liable therefor.

 

 

 

 

 

“Interest Payment Date”: (a) the last Business Day of each calendar month while
any Loan is outstanding and the Maturity Date, and (b) the date of any repayment
or prepayment of any Loan.

 

“Interim Order”: an order of the Bankruptcy Court in the Case in substantially
the form attached hereto as Exhibit C authorizing and approving this Agreement
and the other Loan Documents under Section 364(c) of the Bankruptcy Code entered
at or after an interim hearing and on an interim basis.

 

“Investment”: as to any Person, any direct or indirect acquisition or investment
by such Person, whether by means of (a) the purchase or other acquisition of
Capital Stock or debt of another Person, (b) a loan, advance or capital
contribution to, Guarantee Obligation or assumption of debt of, or purchase or
other acquisition of any other debt or equity participation or interest in,
another Person, including any partnership or joint venture interest in such
other Person and any arrangement pursuant to which the investor incurs debt of
the type referred to in clause (h) of the definition of “Indebtedness” set forth
in this Section 1.1 in respect of such Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit of, or all of a substantial part
of the business being conducted by, such Person. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.

 

“Intellectual Property”: the Copyrights, Know-How, Patents, and Trademarks.

 

“Know-How”: all technical and business knowledge, proprietary information, data,
processes, techniques, methods of manufacturing, methods of operation, drawings,
designs, blueprints, databases, draft patent applications, invention
disclosures, research and development projects, operating manuals, manufacturing
and quality control procedures, non-commercial software, trade secrets, plans,
accumulated experience, plant and tool design, installation instructions and raw
material specifications, formulations, techniques, drawings, unpatented
inventions (including inventions conceived prior to the date hereof but not
documented as of the date hereof), advertising procedures, sales promotion
literature, customer lists, and price lists, in each case to the extent
protectable under applicable law.

 

“Lender” as defined in the preamble hereto.

 

“Lien”: any mortgage, deed of trust, pledge, hypothecation, collateral
assignment, deposit arrangement, encumbrance, lien (statutory or other), charge
or other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any conditional sale or other title retention agreement and any
capital lease having substantially the same economic effect as any of the
foregoing).

 

“Loan”: an extension of credit by the Lender to the Borrower pursuant to Section
2.1.

 

“Loan Documents”: this Agreement, the Security Documents, the Note and any
amendment, waiver, supplement or other modification to any of the foregoing.

 

“Loan Notice”: a notice of a borrowing substantially in the form of Exhibit B.

 

 

 

 

 

“Material Adverse Effect”: means any event, change, condition, state of facts,
occurrence or circumstance (regardless of whether such event, change, condition,
state of facts, occurrence or circumstance constitutes a breach of any
representation, warranty or covenant of Borrowers hereunder) which has had or
would reasonably be expected to have, individually or when considered together
with any other events, changes, conditions, states of facts, occurrences or
circumstances, (a) a material adverse effect on or a material adverse change in
or to the assets, liabilities, results of operations, profits, or condition
(financial or otherwise) of the Business, considered as a whole, (b) a material
adverse change on or a material adverse change in or to the ability of Borrower
to consummate the transactions contemplated by this Agreement or perform its
obligations under this Agreement or (c) the effect of preventing or materially
delaying the consummation of the transactions contemplated by this Agreement,
but in each case shall not include the effects of events, changes, effects,
conditions, state or facts, occurrences and circumstances relating to (i) any
change in the United States or foreign economies or financial markets in
general; (ii) any change that generally affects the businesses in which Borrower
generally competes; (iii) any change arising in connection with earthquakes,
hostilities, acts of war, sabotage or terrorism or military actions or any
escalation or material worsening of any such hostilities, acts of war, sabotage
or terrorism or military actions existing or underway as of the date hereof; (D)
any change in applicable laws or accounting rules, in each case only to the
extent occurring after the date of this Agreement; (iv) any actions taken or
proposed to be taken by Lender or any of its Affiliates without the consent of
the Borrower; (v) any effect resulting from the public announcement of this
Agreement; and (vi) any effect resulting from the filing of the Bankruptcy Case,
the events that typically result from the commencement of cases under Chapter 11
of the Bankruptcy Code, and Borrower’s inability to pay certain obligations as a
result of the filing of the Bankruptcy Case; provided, however, that with
respect to clauses (i), (ii), (iii) and (iv), such effects have not had, or are
not reasonably likely to have, individually or in the aggregate, a
disproportionate adverse effect on the Business, taken as a whole, as compared
to other companies operating in the industries in which Business operates (in
which case the incremental disproportionate effect or effects shall be taken
into account in determining whether there has been a Material Adverse Effect).

 

“Maturity Date”: the earlier of (a) the Scheduled Maturity Date, (b) the date of
the closing of the sale of Assets to Lender pursuant to the Asset Purchase
Agreement or to a Person other than the Lender pursuant to a higher and better
offer, and (c) the date on which the Loan becomes due and payable pursuant to
Section 7.

 

“Multiemployer Plan”: a Plan that is a multiemployer plan as defined in Section
4001(a)(3) of ERISA.

 

“Note”: that certain Promissory Note dated of even date herewith by Borrower and
made payable to the order of Lender in the amount of the Commitment, as it may
be amended, supplemented or otherwise modified from time to time.

 

“Obligations”: the unpaid principal of and interest on (including interest
accruing after the maturity of the Loan) the Loan, and all other obligations and
liabilities of the Borrower to the Lender, whether direct or indirect, absolute
or contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, this Agreement, the Senior
Loan and Security Agreement, any other Loan Document or any other document made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses, or otherwise.

 

“Order”: from the date on which the Interim Order is entered until the date on
which the Final Order is entered, the Interim Order, and, after entry of the
Final Order, the Final Order.

 

“Ordinary Course of Business” or “in the Ordinary Course”: the conduct of the
Business in substantially the same manner as the Business was operated on the
date of this Agreement, including operations in conformance with the Borrower’s
practices and procedures as of such date.

 

“Other Taxes”: any and all present or future stamp or documentary taxes or any
other excise taxes, charges or similar levies arising from any payment made
hereunder or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any other Loan Document.

 

 

 

 

 

“Patents”: all domestic and foreign letters design and utility patent and patent
applications (including without limitation all provisional, design, divisional,
renewal, re-exam, reissue, substitute, continuation, continuations-in-part and
convention applications, all other patent applications or utility model
applications or issued patents or utility models claiming priority therefrom or
otherwise related thereto, and any and all letters patent and utility models,
reissues, reexaminations, and extensions of letters patent and utility models
granted thereon, and every priority right that is or may be predicted upon or
arise from therefrom or based thereon) (including, without limitation, patents
and patent applications in the United States Patent and Trademark Office, or in
any similar office or agency of the United States or any other country or any
political subdivision thereof).

 

“PBGC”: the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).

 

“Permitted Liens”: as defined in the recitals hereto.

 

“Person”: an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.

 

“Plan”: at a particular time, any employee benefit plan that is covered by ERISA
and in respect of which the Borrower or a Commonly Controlled Entity is (or, if
such plan were terminated at such time, would under Section 4069 of ERISA be
deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Professionals”: as defined in Section 2.7(a).

 

“Professional Expense Cap”: as defined in Section 2.7(a).

 

“Properties”: the facilities and properties owned, leased or operated by the
Borrower.

 

“Quarterly Financial Statements”: means the unaudited consolidated financial
statements of the Company and its consolidated Subsidiaries for the fiscal
quarter ended March 31, 2014.

 

“Reorganization”: with respect to any Multiemployer Plan, the condition that
such plan is in reorganization within the meaning of Section 4241 of ERISA.

 

“Reportable Event”: any of the events set forth in Section 4043(c) of ERISA,
other than those events as to which the thirty day notice period is waived under
subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043.

 

“Requirement of Law”: as to any Person, the Bylaws and Certificate of
Incorporation or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.

 

“Responsible Officer”: means the chief executive officer, president, chief
financial officer, treasurer or assistant treasurer of the Borrower or any of
the other individuals designated in writing to the Lender by an existing
Responsible Officer of the Borrower as an authorized signatory of any
certificate or other document to be delivered hereunder.

 

 

 

 

 

“SEC”: the Securities and Exchange Commission, any successor thereto and any
analogous Governmental Authority.

 

“Scheduled Maturity Date”: September 8, 2014.

 

“Securities Act”: the Securities Act of 1933, as amended from time to time and
any successor statute.

 

“Security Documents”: the collective reference to the Senior Loan and Security
Agreement, the Order, and all other security documents hereafter delivered to
the Lender granting a Lien on any property of any Person to secure the
Obligations.

 

“Senior Lender”: Fischer Enterprises, L.L.C., an Oklahoma limited liability
company.

 

“Senior Liens”: the Liens granted by Borrower in connection with the Senior Loan
and Security Agreement.

 

“Senior Loan and Security Agreement”: that certain Senior Loan and Security
Agreement, dated January 20, 2014, by and among the Company, Crumbs Holdings LLC
and the Senior Lender, as amended by that certain First Amendment to Senior
Secured Loan and Security Agreement dated July 10, 2014, by and among the
Company, Crumbs Holdings LLC, and the Lender (the “First Amendment”).

 

“Southeastern CD”: that certain Certificate of Deposit in the amount of
$465,398.44 securing the obligations of Crumbs Holdings LLC under the Commercial
Loan Agreement, between Southeastern Bank and Crumbs Holdings LLC dated May 5,
2011, as amended from time to time.

 

“Single Employer Plan”: any Plan that is covered by Title IV of ERISA, but that
is not a Multiemployer Plan.

 

“Subsequent Advance” and “Subsequent Advances”: as defined in Section 2.1.

 

“Subsequent Advance Amount”: as defined in Section 2.2(b).

 

“Subsequent Advance Closing Date”: the first Business Day after the date on
which a Final Order is entered by the Bankruptcy Court and the Company delivers
to Lender a Loan Notice.

 

“Subsequent Advance Date”: as defined in Section 2.2(b).

 

“Subsidiary”: as to any Person, a corporation, partnership, limited liability
company or other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more intermediaries,
or both, by such Person. Unless otherwise qualified, all references to a
“Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Borrower.

 

“Superpriority Claim”: a claim under Section 364(c)(1) of the Bankruptcy Code
against Borrower in the Case which is an administrative expense claim having
priority over any or all administrative expenses, including, without limitation,
administrative expenses of the kind specified in Sections 503(b), 506(c) or
507(b) of the Bankruptcy Code.

 

 

 

 

 

“Trademarks”: all domestic and foreign trademarks, service marks, collective
marks, certification marks, trade names, business names, dba's, internet domain
names, trade dress, trade styles, designs, logos and other source or business
identifiers and all general intangibles of like nature, now or hereafter owned,
adopted, acquired or used by any Grantor (including, without limitation, all
domestic and foreign trademarks, service marks, collective marks, certification
marks, trade names, business names, dba's, internet domain names, trade dress,
trade styles, designs, logos and other source or business identifiers), all
applications, registrations and recordings thereof (including, without
limitation, applications, registrations and recordings in the United States
Patent and Trademark Office or in any similar office or agency of the United
States, any state thereof or any other country or any political subdivision
thereof), and all reissues, extensions or renewals thereof, together with all
goodwill of the business symbolized by such marks or associated therewith.

 

“Uniform Commercial Code” or “UCC”: the Uniform Commercial Code (or any similar
or equivalent legislation) as in effect from time to time in any applicable
jurisdiction.

 

“United States”: the United States of America.

 

“UST”: the United States Trustee appointed to serve in the Case.

 

1.2Other Definitional Provisions.

 

(a) Unless otherwise specified therein, all terms defined in this Agreement
shall have the meanings set forth herein when such terms are used in the other
Loan Documents or any certificate or other document made or delivered pursuant
hereto or thereto.

 

(b) As used herein and in the other Loan Documents, and any certificate or other
document made or delivered pursuant hereto or thereto, (i) the words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”, (ii) the word “incur” shall be construed to mean incur, create,
issue, assume, become liable in respect of or suffer to exist (and the words
“incurred” and “incurrence” shall have correlative meanings), (iii) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, Capital Stock, securities, revenues, accounts, leasehold
interests and contract rights and (iv) references to agreements or other
Contractual Obligations shall, unless otherwise specified, be deemed to refer to
such agreements or Contractual Obligations as amended, supplemented, restated or
otherwise modified from time to time.

 

(c) The words “hereof”, “herein” and “hereunder” and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.

 

(d) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

 

(e) The following capitalized terms shall have the meanings set forth in the
UCC: Equipment, Inventory, Accounts, Chattel Paper, General Intangibles, Goods,
Documents, Fixtures, Deposit Accounts, Instruments, Investment Property, Letter
of Credit Rights, and Commercial Tort Claims.

 

 

 

SECTION 2. AMOUNT AND TERMS OF COMMITMENT

 

2.1 Commitment. Subject to the satisfaction of the conditions set forth in
Section 4.1 and provided that the Commitment Period has not expired, the Lender
agrees to make the Loan through two or more advances of Dollars to the Borrower:
(a) the first (the “First Advance”), on the First Advance Closing Date, in the
original principal amount of $200,000.00, and (b) the subsequent (the
“Subsequent Advances,” and each a “Subsequent Advance”) in the amount stated in
any Loan Notice up to the then unfunded balance of the Commitment on the
applicable Subsequent Advance Closing Date.

 

2.2 Procedure for Borrowing.

 

(a) First Advance. The Lender shall advance the First Advance Amount to the
Borrower on the First Advance Date not later than 3:00 p.m. (Oklahoma City time)
on the First Advance Closing Date by wire transfer of Dollars to the Borrower. A
Loan Notice shall not be required to be provided to Lender in connection with
the First Advance.

 

(b) Subsequent Advances. Borrower may request Subsequent Advances of the
remaining portion of the Commitment in accordance with this Section 2.2(b).
Lender shall make such Subsequent Advances if the following conditions are met:
(i) the Subsequent Advance is consistent with each category of expenditure set
forth in the Budget, and (ii) the Final Order has been entered. Borrower may
request a Subsequent Advance by delivering to Lender a fully executed Loan
Notice on the date Borrower desires any Subsequent Advance to be made (the
“Subsequent Advance Date”) specifying the amount of the Subsequent Advance (not
to exceed the remaining portion of the Commitment) (the “Subsequent Advance
Amount”). The Lender shall advance the Subsequent Advance Amount to the Borrower
if the conditions in this Section 2.2(b) are satisfied on the Subsequent Advance
Date for such request not later than 3:00 p.m. (Oklahoma City time) on the
Subsequent Advance Date by wire transfer of Dollars to the Borrower.

 

2.3 Repayment of the Loan. The Loan shall mature on the Maturity Date and shall
be indefeasibly repaid in full in immediately available funds on the Maturity
Date; provided, however, that if the Maturity Date arises as a result of (a) the
closing of the sale of the Assets to Lender pursuant to the Asset Purchase
Agreement, the Loan shall be deemed repaid through closing of such Asset sale
pursuant to the Asset Purchase Agreement between Borrower and Lender, or (b) the
closing of the sale of the Assets to a Person other than the Lender pursuant to
a higher and better offer, the Loan shall be repaid in cash to Lender at the
closing of such Asset sale. Unless otherwise provided under this Agreement, all
payments (including prepayments) to be made by the Borrower hereunder, whether
on account of principal, interest, fees or otherwise, shall be made without
setoff or counterclaim and shall be made prior to 12:00 Noon, Oklahoma City
time, on the due date thereof to the Lender at the office of the Lender
specified in Section 8.2 (or such other office as may be specified from time to
time by the Lender by written notice to the Borrower), in Dollars and in
immediately available funds. If any payment hereunder becomes due and payable on
a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. In the case of any extension of any payment of
principal pursuant to the preceding sentence, interest thereon shall be payable
at the then Applicable Rate during such extension.

 

 

 

2.4 Optional Prepayments. The Borrower may at any time and from time to time
prepay the Loan, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Lender no later than 10:00 A.M., Oklahoma
City time, one Business Day prior thereto, which notice shall specify the date
and amount of prepayment. If any such notice is given, the amount specified in
such notice shall be due and payable on the date specified therein, together
with accrued interest to such date on the amount prepaid. Partial prepayments of
the Loan shall be in an aggregate principal amount of $25,000 or a whole
multiple thereof.

 

2.5 Interest Rates and Payment Dates. Each Loan shall bear interest at a rate
per annum equal to the Applicable Rate. All computations of fees and interest
shall be made on the basis of a 360- day year and actual days elapsed.

 

(a) (i) On or prior to the Maturity Date, if any Default or Event of Default
shall occur, the Loan (whether or not overdue) shall bear interest at a rate per
annum equal to the rate that would otherwise be applicable thereto pursuant to
the foregoing provisions of this Section plus 2%, (ii) after the Maturity Date,
the Loan shall bear interest at a rate per annum equal to the rate then
applicable to the Loan under the Facility plus 2%, and (iii) if all or a portion
of any interest payable on any Loan or any other amount payable hereunder shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum equal to
the rate then applicable to the Loan under the Facility plus 2%, in each case,
with respect to clauses (i), (ii) and (iii) above, from the date of such Event
of Default or non-payment, as the case may be, until the Event of Default is
cured or waived in writing in accordance with this Agreement, or such amount is
indefeasibly paid in full in immediately available funds (as well after as
before judgment).

 

(b) Interest shall be payable in arrears on each Interest Payment Date,
provided, that interest accruing pursuant to paragraph (a) of this Section shall
be payable from time to time on demand.

 

2.6 Pro Rata Treatment and Payments. Amounts prepaid on account of the Loan may
not be reborrowed.

 

2.7 Priority and Liens.

 

(a) Superpriority Claims and Liens. Borrower hereby covenants, represents and
warrants that, upon entry of the Order, the Obligations of Borrower under the
Loan Documents:

 

(i) pursuant to Section 364(c)(1) of the Bankruptcy Code, shall at all times
constitute an allowed Superpriority Claim;

 

(ii) pursuant to Section 364(c)(2) of the Bankruptcy Code, shall at all times be
secured by a perfected first priority Lien on all tangible and intangible
property of Borrower that is not subject to the Permitted Liens (other than
Avoidance Actions and the proceeds therefrom); and

 

(iii) pursuant to Section 364(c)(3) of the Bankruptcy Code, shall be secured by
a perfected Lien upon all tangible and intangible property of Borrower that is
subject to Permitted Liens, junior to such Permitted Liens, and

 

 

 

(iv) the Superpriority Claim and the Liens provided in clauses (i) through (iii)
shall be subject only to the Permitted Liens and the Carve-Out (as defined
below); provided, that, except as otherwise provided in the Order, no portion of
the Carve-Out shall be utilized for the payment of professional fees and
disbursements incurred in connection with any challenge to the amount, extent,
priority, validity, perfection or enforcement of the indebtedness of Borrower
owing to the Lender, agents or indemnified parties under this Agreement. The
Lender may deliver notice to the Borrower (and its counsel), and the UST that an
Event of Default has occurred and is continuing and the Lender desires to
trigger wind-down of the Carve-Out as provided herein (a “Carve-Out Trigger
Notice”). “Carve-Out” means the (a) unpaid fees of the Clerk of the Bankruptcy
Court and the UST pursuant to 28 U.S.C. § 1930(a), (b) unpaid and allowed
Budgeted fees and expenses of professional persons, retained by the Borrower
pursuant to Section 327 of the Bankruptcy Code with the approval of the
Bankruptcy Court (collectively, the “Professionals”), in each case, incurred on
and prior to delivery of a Carve-Out Trigger Notice and (c) unpaid and allowed
fees and expenses of Professionals incurred subsequent to delivery of a
Carve-Out Trigger Notice, in an aggregate amount not to exceed the budgeted
amount for any such Professional (the “Professional Expense Cap”). For the
avoidance of doubt, the Professional Expense Cap shall only apply after the
delivery of a Carve-Out Trigger Notice. The Professional Expense Cap shall be
reduced, dollar for dollar, by the amount of any fees, costs and expenses
incurred and paid to Professionals subsequent to delivery of a Carve-Out Trigger
Notice. The Lender agrees that Borrower shall be permitted to pay compensation
and reimbursement of expenses allowed and payable under 11 U.S.C. § 330 and 11
U.S.C. § 331, as the same may be due and payable, and the same shall not reduce
the Carve-Out prior to the delivery of a Carve-Out Trigger Notice. The foregoing
shall not be construed as consent to the allowance of any fees and expenses
referred to above and shall not affect the right of the Lender to object to the
allowance and payment of such amounts.

 

(b) Real Property. Subject in all respects to the terms of the Order, the
priorities set forth in Section 2.6(a) above and to the Carve-Out, Borrower
grants to the Lender a security interest in, and mortgage on, all of the right,
title and interest of Borrower in all real property owned by Borrower (including
leasehold interests), together in each case with all of the right, title and
interest of Borrower in and to all buildings, improvements, and fixtures related
thereto, all general intangibles relating thereto and all proceeds thereof.
Borrower shall acknowledge that, pursuant to the Order, the Liens in favor of
the Lender of such real property shall be perfected without the recordation of
any instruments of mortgage or assignment. Borrower agrees that upon the
reasonable request of the Lender, Borrower shall promptly enter into separate
mortgages on owned real property in recordable form with respect to such
properties on terms reasonably satisfactory to the Lender.

 

2.8 Notes. Upon request of the Lender, the Borrower shall execute and deliver a
Note to the Lender in the amount of the Loan held by the Lender.

 

2.9 Security. Upon entry of the Order, as security for the prompt payment and
performance of all Obligations of Borrower, Borrower hereby grants, in
accordance with and subject to the provisions hereof and the Order, to the
Lender a first priority lien and security interest in all of its right, title
and interest in and to all of its Collateral, subject to the Permitted Liens and
pari passu with the Senior Liens.

 

SECTION 3. REPRESENTATIONS AND WARRANTIES

 

To induce the Lender to enter into this Agreement and to make the Loan the
Borrower hereby represents and warrants to the Lender that:

 

3.1 Existence; Compliance with Law. The Borrower (a) is duly organized, and
validly existing under the laws of the jurisdiction of its organization, (b)
subject to the entry of the Order, has the power and authority, and the legal
right, to own and operate its property, to lease the property it operates as
lessee and to conduct its business in a manner in which its business is now
being conducted, and (c) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

 

 

3.2 Power; Authorization; Enforceable Obligations. Subject to the entry of the
Order, the Borrower has the power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and to obtain
extensions of credit hereunder. The Borrower has taken all necessary
organizational action to authorize the execution, delivery and performance of
the Loan Documents to which it is a party and to authorize the extensions of
credit on the terms and conditions of this Agreement. Other than Bankruptcy
Court approval, no Governmental Approval or consent or authorization of, filing
with, notice to or other act by or in respect of, any other Person is required
in connection with the extensions of credit hereunder or with the execution,
delivery, performance, validity or enforceability of this Agreement or any of
the Loan Documents. Each Loan Document has been duly executed and delivered on
behalf of the Borrower. This Agreement constitutes, and each other Loan Document
upon execution and upon entry of the Order, will constitute, a legal, valid and
binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).

 

3.3 No Legal Bar. Subject to the entry of the Order, (a) the execution, delivery
and performance of this Agreement and the other Loan Documents, the borrowings
hereunder and the use of the proceeds thereof will not violate any Requirement
of Law or any Contractual Obligation of the Borrower, except for violations, the
enforcement of which are stayed by the filing of the Case, and will not result
in, or require, the creation or imposition of any Lien on any of their
respective properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Security Documents),
and (b) to Borrower’s knowledge, no Requirement of Law or Contractual Obligation
applicable to the Borrower could reasonably be expected to have a Material
Adverse Effect.

 

3.4 [Intentionally omitted].

 

3.5 Accuracy of Information, etc. No statement or information contained in this
Agreement, any other Loan Document or any other document, certificate or
statement furnished by or on behalf of the Borrower to the Lender for use in
connection with the transactions contemplated by this Agreement or the other
Loan Documents, contained as of the date such statement, information, document
or certificate was so furnished, any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements contained
herein or therein not misleading. There is no fact known to the Borrower that
could reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents or in any other
documents, certificates and statements furnished to the Lender for use in
connection with the transactions contemplated hereby and by the other Loan
Documents.

 

3.6 Financial Statements; Budget.

 

(a) The Audited Financial Statements (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; (ii) fairly present in all material respects the
financial condition of the Borrower and its Subsidiaries as of the date thereof
and their results of operations for the period covered thereby in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; and (iii) show all material indebtedness and
other liabilities, direct or contingent, of the Borrower and its Subsidiaries as
of the date thereof, including liabilities for taxes, material commitments and
Indebtedness, to the extent required by GAAP to be shown therein.

 

(b) The Quarterly Financial Statements, and the related consolidated statements
of income or operations, shareholders’ equity and cash flows for such fiscal
quarter, (i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein, and (ii) fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby, subject, in the case of
clauses (i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments.

 

 

 

(c) [intentionally omitted].

 

(d) The information provided to Lender by Borrower in connection with the
development of the Budget was true and correct in all material respects and
provided to Borrower in good faith.

 

3.7 Ownership Of Property; Liens; Investments.

 

(a) Borrower does not own any interest in any real property.

 

(b) The property of the Borrower is not subject to any Liens, other than Liens
permitted by Section 6.1.

 

3.8 Secured Superpriority Obligations. On and after the First Advance Closing
Date and the entry of the Order, the Order and the Loan Documents are sufficient
to provide the Superpriority Claims and Liens described in, and with the
priority provided in, Section 2.7 of this Agreement and the Order. The Order is
in full force and effect and has not been vacated, reversed, modified, amended,
rescinded or stayed without the prior written consent of the Lender.

 

SECTION 4. CONDITIONS PRECEDENT

 

4.1 Conditions to Loan. The agreement of the Lender to extend the Loan requested
to be made by it is subject to the satisfaction, prior to or concurrently with
the making of such extension of credit on the First Advance Closing Date, of the
following conditions precedent:

 

(a) The Lender shall have received each of the following each dated on or prior
to the First Advance Closing Date (or, in the case of certificates of
governmental officials, a recent date before the First Advance Closing Date)
each in form and substance satisfactory to the Lender and in such number of
copies as may be requested by the Lender:

 

(i) duly executed counterparts of this Agreement,

 

(ii) such duly executed certificates of resolutions or consents, incumbency
certificates and/or other duly executed certificates of Responsible Officers of
the Borrower as the Lender may reasonably require evidencing the identity,
authority and capacity of each Responsible Officer thereof authorized to act as
a Responsible Officer in connection with this Agreement and the other Loan
Documents;

(iii) such documents and duly executed certifications as the Lender may
reasonably require to evidence that the Borrower is duly organized or formed,
and that the Borrower is validly existing in the jurisdiction where it is
formed;

 

(iv) a certificate signed by a Responsible Officer of the Borrower certifying as
of the First Advance Closing Date, since the date on which the Borrower
commenced the Case, there has been no change, event, circumstance or development
that, individually or in the aggregate, has had or would reasonably be expected
to have a Material Adverse Effect; and

 

(v) a Loan Notice.

 

 

 

(b) All governmental authorizations and all third party consents and approvals
necessary in connection with the transactions contemplated hereby shall have
been obtained (without the imposition of any conditions that are not reasonably
acceptable to the Lender) and shall remain in effect; and no law or regulation
shall be applicable in the reasonable judgment of the Lender that restrains,
prevents or imposes materially adverse conditions upon the transactions
contemplated hereby.

 

(c) The Order shall have been entered by the Bankruptcy Court, shall be in full
force and effect and shall not have been amended, modified, stayed or reversed
without the prior written consent of the Lender.

 

(d) All of the “first day orders” and related orders submitted on or about the
date of the commencement of the Case shall be in form and substance reasonably
satisfactory to the Lender and the Borrower and, as entered, shall not deviate
from the form thereof approved by the Lender in any material respect which is
adverse to the interests of the Lender (such orders hereinafter being referred
to as “First Day Orders”; it being understood and agreed that notwithstanding
anything herein to the contrary, the relief sought in all such First Day Orders
approved by the Lender shall be permitted herein and the consent of the Lender
to such relief therein shall be deemed to have been obtained).

 

(e) Each of the representations and warranties made by the Borrower in or
pursuant to the Loan Documents shall be true and correct in all material
respects on and as of such date as if made on and as of such date.

 

(f) No Default or Event of Default shall have occurred and be continuing on such
date or after giving effect to the extensions of credit requested to be made on
such date.

 

SECTION 5. AFFIRMATIVE COVENANTS

 

The Borrower hereby agrees that, so long as the Commitment remains in effect or
any Loan or Obligations or other amounts are owing to the Lender hereunder or
under the other Loan Documents, the Borrower shall:

 

5.1 Further Assurances. At any time or from time to time upon the reasonable
request of the Lender, at the expense of the Borrower, promptly execute,
acknowledge and deliver such additional instruments, certificates or documents,
and do all such other acts and things as the Lender may reasonably request for
purposes of implementing or effectuating the provisions of this Agreement and
the other Loan Documents, of providing for payment of the Obligations in
accordance with the terms of this Agreement, the Note and the other Loan
Documents, or of more fully perfecting or renewing the rights of the Lender with
respect to the Collateral (or with respect to any additions thereto or
replacements or proceeds or products thereof or with respect to any other
property or Assets hereafter acquired by the Borrower which may be deemed to be
part of the Collateral) pursuant hereto or thereto. Upon the exercise by the
Lender of any power, right, privilege or remedy pursuant to this Agreement or
the other Loan Documents which requires any consent, approval, recording,
qualification or authorization of any Governmental Authority, the Borrower shall
execute and deliver, or will cause the execution and delivery of, all
applications, certifications, instruments and other documents and papers that
the Lender may be required to obtain from the Borrower for such governmental
consent, approval, recording, qualification or authorization (to the extent the
Borrower is permitted by applicable law to do so). The Borrower shall fully
preserve or cause to be fully preserved the Liens granted by the Security
Documents.

 

5.2 Use Of Proceeds. Borrower shall use the proceeds of the Loan substantially
in accordance with the terms of the Budget, this Agreement and the Order;
provided, that any disbursements scheduled for a particular day may be disbursed
one week prior or one week subsequent to such date. Nothing in this Section 5.2
shall require the Borrower to loan more than the Commitment.

 

 

 

5.3 Budgets; Financial Information; Default Notices. Deliver to the Lender, in
form satisfactory to the Lender:

 

(a) Weekly reports in a form reasonably satisfactory to Borrower not later than
Thursday of each week, detailing the weekly Budget and containing actual versus
budgeted comparison for each prior week’s operations;

 

(b) as soon as practicable after request of the Lender, such consolidated
balance sheets of the Borrower and its Subsidiaries, related consolidated
statements of income or operations, shareholders’ equity, and cash flows, cash
balance reports or any other financial reports as reasonably requested by the
Lender; and

 

(c) as soon as practicable (and in any event within five (5) Business Days)
provide written notice to the Lender of the occurrence of any Default or Event
of Default, describing the nature of such Default or Event of Default and any
remedial actions being taken with respect thereto.

 

SECTION 6. NEGATIVE COVENANTS

 

The Borrower hereby agrees that, so long as the Commitment remains in effect or
any Loan or other Obligations or other amounts are owing to the Lender hereunder
or under any other Loan Document, the Borrower shall not directly or indirectly,
without the waiver or consent of Lender:

 

6.1 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, or sign
or file or suffer to exist under the Uniform Commercial Code of any jurisdiction
a financing statement that names the Borrower as debtor, or sign or suffer to
exist any security agreement authorizing any secured party thereunder to file
such financing statement, or assign any accounts or other right to receive
income, other than the following:

 

(a) Liens pursuant to any Loan Document and the Order;

(b) the Senior Liens; and

(c) Permitted Liens.

 

6.2 Indebtedness. Create, incur, assume or suffer to exist any Indebtedness,
except:

 

(a) Indebtedness under the Loan Documents; and

 

(b) Indebtedness outstanding on the date hereof and listed on Schedule 6.2.

 

6.3 Investments. Make or hold any Investments, except:

 

(a) Investments held by the Borrower in the form of cash or cash equivalents;

 

(b) Investments consisting of extensions of credit in the nature of accounts
receivable or notes receivable arising from the grant of trade credit in the
ordinary course of business, and Investments received in satisfaction or partial
satisfaction thereof from financially troubled account debtors to the extent
reasonably necessary in order to prevent or limit loss; and

 

 

 

(c) Investments existing on the date hereof.

 

6.4 Fundamental Changes. Except pursuant to the Asset Purchase Agreement, merge,
dissolve, liquidate, consolidate with or into another Person, or Dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to or in favor of
any Person.

 

6.5 Dispositions. Make any Disposition or enter into any agreement to make any
Disposition, except:

 

(a) Dispositions of obsolete or worn out property or property no longer used or
useful in the business of the Borrower, whether now or hereafter owned or
leased, in the ordinary course of business of such Person;

 

(b) Dispositions of inventory in the ordinary course of business;

 

(c) Dispositions of equipment, software or real property to the extent that (i)
such property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;

 

(d) the sale, lease, sub-lease, license, sub-license or consignment of personal
property of the Borrower in the ordinary course of business and leases or
subleases of real property permitted by clause (a) for which rentals are paid on
a periodic basis over the term thereof;

 

(e) the settlement or write-off of accounts receivable or sale of overdue
accounts receivable for collection in the ordinary course of business consistent
with past practice;

 

(f) sale, exchange or other disposition of cash and cash equivalents in the
ordinary course of business; provided, however, that any Disposition pursuant to
Section 6.5(a) through (f) shall be for fair market value; and

 

(g) the marketing for sale and the sale of the Assets of the Borrower in
accordance with the Asset Purchase Agreement and the transactions contemplated
thereby, or to a Person other than the Lender who is the higher and better
bidder, including but not limited to auction procedures.

 

6.6 [Intentionally omitted].

 

6.7 Transactions With Affiliates. Enter into any transaction of any kind with
any Affiliate of the Borrower, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
the Borrower as would be obtainable by the Borrower at the time in a comparable
arm’s length transaction with a Person other than an Affiliate; provided, that
the foregoing restriction shall not apply to transactions, arrangements, fees
reimbursements and indemnities specifically and expressly permitted between or
among such parties under this Agreement.

 

6.8 Partnerships, Etc. Become a general partner in any general or limited
partnership or joint venture.

 

 

 

6.9 Speculative Transactions. Engage in any transaction involving any interest
rate protection agreement, foreign currency exchange agreement, commodity price
protection agreement or other interest or currency exchange rate or commodity
price hedging arrangement (including caps and collars with respect to interest
rates, currency exchange rates or commodity prices) or futures contracts for
speculative purposes or any similar speculative transactions, which are, in any
case, inconsistent with prior practice and not otherwise made in the ordinary
course of business.

 

6.10 Formation Of Subsidiaries. Organize or invest in any new Subsidiary.

 

SECTION 7. EVENTS OF DEFAULT

 

7.1 Events of Default. If any of the following events shall occur and be
continuing:

 

(a) the Borrower shall fail to pay any principal of any Loan when due in
accordance with the terms hereof; or the Borrower shall fail to pay any interest
on any Loan or any other amount payable hereunder or under any other Loan
Document, within two days after any such interest or other amount becomes due in
accordance with the terms hereof; or

 

(b) any representation or warranty made or deemed made by the Borrower herein or
in any other Loan Document or that is contained in any certificate, document or
financial or other statement furnished by it at any time under or in connection
with this Agreement or any such other Loan Document shall prove to have been
inaccurate in any material respect on or as of the date made or deemed made,
unless waived by Lender pursuant to the First Amendment, or as otherwise waived
in writing by the Lender; or

 

(c) the Borrower fails to perform or observe any term, covenant or agreement
contained in any of Sections 2.7, 2.9, 5, or 6; or

 

(d) the Borrower shall default in the observance or performance of any provision
contained in this Agreement or the Notes (other than as provided in paragraphs
(a) through (c) of this Section), and such default shall continue unremedied for
a period of ten (10) days after notice to the Borrower from the Lender; or

 

(e) termination of the Asset Purchase Agreement; or

 

(f) [intentionally omitted]; or

 

(g) any of the Security Documents shall cease, for any reason, to be in full
force and effect, or the Borrower or any Affiliate of the Borrower shall so
assert, or any Lien created by any of the Security Documents shall cease to be
enforceable and of the same effect and priority purported to be created thereby;
or

 

(h) an order (which has not been stayed) with respect to the Case shall be
entered by the Bankruptcy Court appointing, or the Borrower shall file an
application for an order with respect to the Case seeking the appointment of,
(i) a trustee under Section 1104 of the Bankruptcy Code, or (ii) an examiner
with enlarged powers relating to the operation of the business (powers beyond
those set forth in Section 1106(a)(3) and (4) of the Bankruptcy Code) under
Section 1106(b) of the Bankruptcy Code; or

 

(i) an order with respect to the Case shall be entered by the Bankruptcy Court
converting the Case to a Chapter 7 case or the Borrower shall file a motion or
not oppose a motion seeking such relief, unless such motion is consented to by
the Lender; or

 

 

 

(j) the Bankruptcy Court shall enter an order or orders granting relief from the
automatic stay applicable under Section 362 of the Bankruptcy Code to the holder
or holders of any security interest to permit foreclosure (or the granting of a
deed in lieu of foreclosure or the like) on any Collateral of the Borrower which
has a value in excess of $50,000 in the aggregate or permits any third party to
commence or continue any litigation against the Borrower involving a potential
liability not covered by insurance in excess of $50,000 in the aggregate; or

 

(k) an order with respect to the Case shall be entered by the Bankruptcy Court
without the express prior written consent of the Lender (i) to revoke, reverse,
stay, modify, supplement or amend the Order, (ii) to permit any administrative
expense or any claim (now existing or hereafter arising, of any kind or nature
whatsoever) to have administrative priority as to the Borrower equal or superior
to the priority of the Lender in respect of the Obligations, except for allowed
administrative expenses to the extent set forth in the Order, or (iii) to grant
or permit the grant of a Lien on the Collateral other than a Permitted Lien or
any Lien in favor of the Lender; or

 

(l) the Borrower shall make any payment of principal or interest or otherwise on
account of any prepetition Indebtedness or trade payable (excluding payments
effected by a setoff of obligations as permitted by Section 553 of the
Bankruptcy Code without the express prior written consent of the Lender and the
approval of the Bankruptcy Court; or

 

(m) the Borrower shall file a motion in the Case (i) to use Cash Collateral of
the Lender under Section 363(c) of the Bankruptcy Code without the express prior
written consent of the Lender (it being understood and agreed that the Lender
consents to the proposed use of Cash Collateral on the terms and conditions set
forth in the form of Order attached hereto), (ii) to recover from any portions
of the Collateral any costs or expenses of preserving or disposing of such
Collateral under Section 506(c) of the Bankruptcy Code, to cut off rights in the
Collateral under Section 552(b) of the Bankruptcy Code, or (iii) to take any
other action or actions materially adverse to the Lender or its rights and
remedies hereunder or under any of the other Loan Documents or the Lender’s
interest (as lender under the Loan Documents) in any of the Collateral; or

 

(n) an order shall be entered by the Bankruptcy Court dismissing the Case which
does not contain a provision for termination of the Commitment, and payment in
full in cash of all Obligations of the Borrower hereunder and under the other
Loan Documents upon entry thereof; or

 

(o) by not later than the first Business Day after an order is entered by the
Bankruptcy Court approving the sale of any of the assets of Borrower to a Person
other than Lender (an “Alternative Transaction Order”), Borrower shall fail to
indefeasibly pay in full to Lender all outstanding principal, interest, fees,
costs and other obligations of Borrower under this Agreement; or

 

then, (i) in the case of an event of default under any of Sections 7.1(b)
through 7.1(n) hereof, Lender may, by five (5) Business Days’ prior written
notice to the Borrower (with a copy to counsel for the Borrower, the UST and the
Bankruptcy Court), declare the Loan (with accrued interest thereon) and all
other amounts owing under this Agreement and the other Loan Documents to be due
and payable forthwith, whereupon the same shall immediately become due and
payable in full, and (ii) in the case of an event of default under Section
7.1(a) or (o) hereof, the Loan (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents, shall
immediately become due and payable in full without need for notice or demand.
Without limiting the foregoing, immediately upon the earlier of entry of an
Alternative Transaction Order or any termination of the Asset Purchase
Agreement, the Commitment shall terminate.

 

 

 

Except as expressly provided above in this Section, presentment, demand, protest
and all other notices of any kind are hereby expressly waived by the Borrower.
In the event and to the extent that the provisions of this Section 7.1 conflict
with what is set forth in the Order, the Order shall govern. Notwithstanding the
foregoing, any Event of Default under clause (l) above may be cured through the
return to the Borrower, within five days following notice from the Lender of
such Event of Default, of all sums paid which constitute or caused an Event of
Default under clause (l) above. Upon the return of all such sums, the Borrower
shall provide notice thereof to the Lender, along with such other evidence the
Lender may reasonably require to confirm that such payment has been made to the
Borrower, and upon delivery of such items such Event of Default shall then be
cured and cease to be in effect or continuing.

 

7.2 Application of Proceeds. If an Event of Default shall have occurred and be
continuing, the Lender may at any time apply (a) all payments received by the
Lender under the Loan Documents, whether from the Borrower or otherwise and (b)
all or any part of proceeds constituting Collateral, in payment of the
Obligations in the following order:

 

(a) first, to the payment of all costs and expenses of such sale, collection or
other realization, all other expenses, liabilities and advances made or incurred
by the Lender in connection therewith, and all amounts for which the Lender is
entitled to compensation, reimbursement and indemnification under any Loan
Document and all advances made by the Lender thereunder for the account of the
Borrower, and to the payment of all costs and expenses paid or incurred by the
Lender in connection with the Loan Documents, all in accordance with Section 8.5
and the other terms of this Agreement and the Loan Documents;

 

(b) second, thereafter, to the payment of all other Obligations; and

 

(c) third, thereafter, to the payment to or upon the order of the Borrower or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.

 

SECTION 8. MISCELLANEOUS

 

8.1 Amendments and Waivers. No amendment, supplement, modification or waiver of
any of the provisions of this Agreement or any other Loan Document shall be
deemed to be made unless the same shall be in writing signed on behalf of the
Borrower and the Lender and each waiver, if any, shall be a waiver only with
respect to the specific instance involved and shall in no way impair the rights
of the parties making such waiver or the obligations of the other parties to
such party in any other respect or at any other time. Any such waiver and any
such amendment, supplement or modification shall be binding upon the Borrower,
the Lender and all future holders of the Loan. In the case of any waiver, each
of the Borrower and the Lender shall be restored to their former position and
rights hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.

 

8.2 Notices. All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by facsimile), and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered, or three Business Days after being deposited in the mail,
postage prepaid, or, in the case of facsimile notice, when received, addressed
as follows, or to such other address as may be hereafter notified by the
respective parties hereto:

 

 

 

  Borrower: c/o Crumbs Bake Shop, Inc.     110 West 40th Street     New York,
New York 10018 Attention: Edward M. Slezak Telephone: 646-278-6088    
Electronic Mail: eslezak@crumbs.com         With copies to: Cole, Schotz,
Meisel, Forman & Leonard, P.A.     Court Plaza North     25 Main Street    
Hackensack, New Jersey 07601     Telephone: 201-489-3000     Electronic Mail:
msirota@coleschotz.com         Lender: Lemonis Fischer Acquisition Company    
701 Cedar Lake Blvd.     Oklahoma City, Oklahoma 73114     Attention: Mark A.
Fischer     Telephone: 405-478-8870     Electronic Mail:
markf@chaparralenergy.com         With copies to:             McAfee & Taft A
Professional Corporation     Two Leadership Square, 10th Floor     211 N.
Robinson     Oklahoma City, Oklahoma 73102     Attention:  Louis Price    
Telephone: (405) 552-2253     Electronic Mail:  louis.price@mcafeetaft.com

 

provided, that any notice, request or demand to or upon the Lender shall not be
effective until received. Notices and other communications to the Lender
hereunder may be delivered or furnished by electronic communications pursuant to
procedures approved by the Lender.

 

8.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Lender, any right, remedy, power or privilege
hereunder or under the other Loan Documents shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

 

8.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loan and other extensions of credit hereunder.

 

 

 

8.5 Payment of Expenses. If the Assets are sold to a purchaser other than the
Lender or an order of the Bankruptcy Court is entered approving such a sale to a
purchaser other than Lender, on the Maturity Date the Borrower shall reimburse
the Lender for its reasonable documented costs, fees (including reasonable
attorneys’ fees), charges, and expenses incurred in connection with the Loan
whether incurred pre-petition or post-petition. Notwithstanding anything to the
contrary contained herein, in the event that the Assets are sold to the Lender,
the Borrower shall have no obligation to reimburse the Lender for its reasonable
documented costs, fees (including reasonable attorneys’ fees), charges, and
expenses incurred in connection with the Loan. The Borrower further agrees (a)
in the event it is necessary for Lender to file a motion or adversary proceeding
to seek the enforcement or preservation of any rights under this Agreement, the
other Loan Documents and any such other documents, Borrower will pay or
reimburse the Lender for all its documented costs and expenses incurred in
connection with such motion or adversary proceeding, including the reasonable
fees and disbursements of counsel to the Lender and (b) to pay, indemnify, and
hold the Lender, and the officers, directors, trustees, employees, agents,
advisors and Affiliates of the Lender and its officers, directors, employees,
affiliates, agents and controlling persons (each, an “Indemnitee”) harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the enforcement of this Agreement, the
other Loan Documents and any such other documents (regardless of whether any
Indemnitee is a party hereto and regardless of whether any such matter is
initiated by a third party, the Borrower or any other Person), including any of
the foregoing relating to the use of proceeds of the and the reasonable fees and
expenses of legal counsel in connection with claims, actions or proceedings by
any Indemnitee against the Borrower under any Loan Document (all the foregoing
in this clause (b), collectively, the “Indemnified Liabilities”), provided, that
the Borrower shall have no obligation hereunder to any Indemnitee with respect
to Indemnified Liabilities to the extent such Indemnified Liabilities are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of such
Indemnitee. All amounts due under this Section 8.5 shall be payable not later
than 10 days after written demand therefor. Statements payable by the Borrower
pursuant to this Section 8.5 shall be submitted to the address of the Borrower
set forth in Section 8.2, or to such other Person or address as may be hereafter
designated by the Borrower in a written notice to the Lender. The agreements in
this Section 8.5 shall survive repayment of the Loan and all other amounts
payable hereunder.

 

8.6 Payments Set Aside. To the extent that any payment by or on behalf of the
Borrower is made to the Lender, or the Lender exercises its right of setoff, and
such payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then to
the extent of such recovery, the obligation or part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such setoff had not occurred.

 

8.7 Successors and Assigns; Assignments. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that (i) the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
(x) without the prior written consent of the Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void) or (y) to any Person that is not a “United States person” as defined in
Section 7701(a)(30) of the Code and (ii) the Lender may assign to one or more
assignees (each, an “Assignee”) all or a portion of its rights and obligations
under this Agreement with notice to the Borrower. The Borrower shall maintain a
register containing the name and address of each Lender and Assignee under this
Agreement and its interest in the Loans and the amounts of the Obligations of
the Borrower owing to such Person.

 

8.8 Conflicts Between this Agreement and the Order. To the extent any term or
provision of this Agreement conflicts or is inconsistent with any term of the
Order, the terms of the Order shall control and govern.

 

 

 

8.9 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Lender.

 

8.10 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

8.11 Integration. This Agreement and the other Loan Documents represent the
entire agreement of the Borrower and the Lender with respect to the subject
matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Lender relative to the subject matter
hereof not expressly set forth or referred to herein or in the other Loan
Documents.

 

8.12 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF DELAWARE, AND TO THE EXTENT APPLICABLE,
THE BANKRUPTCY CODE.

 

8.13 Submission To Jurisdiction; Waivers.

 

(a) SUBMISSION TO JURISDICTION. EACH OFTHE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE BANKRUPTCY COURT,
OR IN THE EVENT THAT THE BANKRUPTCY COURT DOES NOT HAVE JURISDICTION OVER ANY
MATTER OR IF IT HAS JURISDICTION BUT DOES NOT EXERCISE SUCH JURISDICTION FOR ANY
REASON, THEN TO THE NONEXCLUSIVE JURISDICTION OF ANY DELAWARE STATE COURT OR
FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN DELAWARE, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS A
PARTY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN THE
BANKRUPTCY COURT, ANY SUCH DELAWARE STATE COURT OR, TO THE FULLEST EXTENT
PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT
A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT THE
LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS IN THE COURTS OF ANY JURISDICTION.

 

(b) WAIVER OF VENUE. THE BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS TO WHICH IT IS A PARTY INTHE BANKRUPTCY COURT. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.

 

 

 

(c) SERVICE OF PROCESS. THE BORROWER IRREVOCABLY CONSENTS TO SERVICE OF PROCESS
IN THE MANNER PROVIDED FOR NOTICES IN SECTION 8.2. NOTHING IN THIS AGREEMENT
WILL AFFECT THE RIGHT OF THE LENDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY APPLICABLE LAW.

 

8.14 Acknowledgements. The Borrower hereby acknowledges that:

 

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents;

 

(b) the Lender does not have a fiduciary relationship with or duty to the
Borrower arising out of or in connection with this Agreement or any of the other
Loan Documents, and the relationship between the Lender, on one hand, and the
Borrower, on the other hand, in connection herewith or therewith is solely that
of debtor and creditor; and

 

(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Borrower and the Lender.

 

8.15 Releases of Liens. At such time as the Loan and the other Obligations under
the Loan Documents shall have been indefeasibly paid in full in immediately
available funds and the Commitment has been terminated, the Collateral shall be
released from the Liens created by the Security Documents, and the Security
Documents and all obligations (other than those expressly stated to survive such
termination) of the Lender and the Borrower under the Security Documents shall
terminate, all without delivery of any instrument or performance of any act by
any Person.

 

8.16 WAIVERS OF JURY TRIAL. EACH OF THE PARTIES HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

8.17 Regulatory. The Borrower will, and will cause each of its Subsidiaries to,
provide, to the extent commercially reasonable or required by any Requirement of
Law, such information and take such actions as are reasonably requested by the
Lender to assist the Lender in maintaining compliance with applicable law.

 

8.18 Release. In consideration of the covenants and agreements contained herein,
the Borrower hereby waives and releases Lender and all of Lender’s officers,
directors, members, managers, and Affiliates from any and all claims and
defenses, known or unknown, with respect to events, actions or omissions
occurring on or prior to the Effective Date of this Agreement.

 

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Superpriority
Debtor-in-Possession Credit and Security Agreement to be duly executed and
delivered by their proper and duly authorized officers as of the day and year
first above written.

 

   BORROWER:       CRUMBS BAKE SHOP, INC.   a Delaware corporation       By: /s/
Edward M. Slezak   Name: Edward M. Slezak   Title: CEO and General Counsel      

 

 

  LENDER:       LEMONIS FISCHER ACQUISITION COMPANY, LLC   a Delaware limited
liability company       By: /s/ S. Scott Fischer   Name: S. Scott Fischer  
Title: Manager      

 

 

 

 

 

  SUBSIDIARIES:       CRUMBS HOLDINGS LLC           By: /s/ Edward M. Slezak  
Name: Edward M. Slezak   Title: CEO and General Counsel                        
 

CRUMBS 42ND STREET II, LLC

CRUMBS BROAD STREET, LLC

CRUMBS BROADWAY LLC

CRUMBS FEDERAL STREET, LLC

CRUMBS GARMENT CENTER LLC

CRUMBS GRAND CENTRAL LLC

CRUMBS GREENVALE LLC

CRUMBS GREENWICH, LLC

CRUMBS HOBOKEN, LLC

CRUMBS II, LLC

CRUMBS LARCHMONT, LLC

CRUMBS LEXINGTON LLC

CRUMBS PARK AVENUE LLC

CRUMBS RETAIL BAKE SHOPS, LLC

CRUMBS STAMFORD, LLC

CRUMBS THIRD AVENUE LLC

CRUMBS TIMES SQUARE LLC

CRUMBS UNION SQUARE LLC

CRUMBS UNION STATION LLC

CRUMBS WEST MADISON, LLC

CRUMBS WOODBURY LLC

 

 

  By: CRUMBS HOLDINGS LLC,   its Sole Member       By: /s/ Edward M. Slezak  
Name: Edward M. Slezak   Title: CEO and General Counsel      

 

 

 

 

 

EXHIBIT A

 

Budget

 

   1   2   3   4   5   6   7   8   9         2014   2014   2014   2014   2014  
2014   2014   2014   2014         Week of:   Week of:   Week of:   Week of:  
Week of:   Week of:   Week of:   Week of:   Week of:         7/6-7/12  
7/13-7/19   7/20-7/26   7/27-8/2   8/3-8/9   8/10-8/16   8/17-8/23   8/24-8/30  
8/31-9/6   Total  BEGINNING CASH   75,850    75,850    140,226    78,431  
 70,220    112,666    78,090    32,632    65,556       INFLOWS                
                                  DIP borrowings/(re-pay)   -    100,000  
 100,000    300,000    100,000    -    133,000    50,000    350,000  
 1,133,000  Sales   -    -    -    -    -    -    -    -    -       Sales taxes
collected   -    -    -    -    -    -    -    -    -       Deposit in transit 
 -    24,304                                          Security deposit - credit
card   -    32,500    -    -    -    -    -    -    -       Licensing revenue 
 -    -    -    60,000    -    -    -    -    -       TOTAL INFLOWS   -  
 156,804    100,000    360,000    100,000    -    133,000    50,000    350,000  
 1,249,804                                                      OUTFLOWS      
                                            Recurring expenses                
                                  Bakery costs   -    -    -    -    -    -  
 -    -    -       Payroll                                                  
Store staff   -    -    -    -    -    -    -    -    -    -  Corporate staff 
 -    30,000    42,015    9,796    40,273    9,796    34,178    9,796  
 26,994    202,848  Potential PTO payments             100,000                 
                   FSA/HRA Expenses                  -                   -  
      -  Rent continuing stores                  314,993                      
 232,499    547,493  Rent corporate                  20,142                 
      20,142    40,284  Store operating costs   -    3,139    3,139    3,139  
 3,139    3,139    3,139    3,139    3,139    25,112  Corporate operating costs 
 -    4,141    4,141    4,141    4,141    4,141    4,141    4,141    4,141  
 33,129  Other expenses                                                   Filing
related expenses                                                   Utility
deposits        40,000                                       40,000  Paymentech
holdback   -                                            -  DIP Lender fees   -  
                -                   -    -  DIP interest                  -  
                     -    -  Sales expenses                                    
              Merchant Account Fees                  10,000                 
      -    10,000  Bank Fees        12,470                   5,000            
      17,470  Advertising                                                -  Girl
Scout royalties        -                   -              -    -  Insurance 
                                                 Liability             12,500  
           12,500                   25,000  Other                               
                -  D&O                                                -  Workers
comp                  6,000                        -    6,000  Medical   -  
                10,000                        10,000  Professional Fees      
                                            Cole Schotz   -                 
           75,000              75,000  Gordon Feinblatt        -            
                          -  Rothstein Kass                                    
           -  Glass Ratner   -                                            - 
WTAS        -                                       -  Claims & noticing agent 
 -                             30,000              30,000  Committee
Professionals                                           75,000    75,000  US
Trustee                                           20,000    20,000  Filing Fees 
 -                                            -  Taxes                          
                        Income taxes                                         
         Franchise taxes                                                   Sales
Tax        2,678    -    -              32,000    -         34,678  Other
expenses                                                   MasterCard   -       
 -         -         -         -       Fixed assets                          
                        Titan             -                                    
Claims Settle & Wind-down                                           -      
TOTAL OUTFLOWS   -    92,428    161,795    368,212    57,553    34,576  
 178,458    17,076    381,915    1,292,013                                  
                   ENDING CASH   75,850    140,226    78,431    70,220  
 112,666    78,090    32,632    65,556    33,641                             
                             DIP Summary                                    
              Beginning Balance   0    -    100,000    200,000    500,000  
 600,000    600,000    733,000    783,000       Add: Borrowings   -    100,000  
 100,000    300,000    100,000    -    133,000    50,000    350,000       Less:
Re-Payments   -    -    -    -    -    -    -    -    -       Ending Balance 
 -    100,000    200,000    500,000    600,000    600,000    733,000  
 783,000    1,133,000      

 

 

 

  

EXHIBIT B

 

Loan Notice

 

[                    ], 2014

 

 

Lemonis Fischer Acquisition Company, LLC

 

______________________________

______________________________

Attn:__________________________

 

Ladies and Gentlemen:

 

The undersigned, Crumbs Bake Shop, Inc., a Delaware corporation, both a debtor
and debtor in possession in a case pending under Chapter 11 of the Bankruptcy
Code on behalf of itself and each of its Subsidiaries (collectively, the
“Borrower”) that are a party to that certain Superpriority Debtor-in-Possession
Credit and Security Agreement dated as of [__________, 2014] (the “Credit
Agreement) by and among Borrower and Lemonis Fischer Acquisition Company, LLC
(the “Lender”), hereby gives you notice, irrevocably, pursuant to Section 2.2 of
the Credit Agreement, that the undersigned hereby requests a borrowing under the
Credit Agreement, and in that connection sets forth below the information
relating to such borrowing of the Loan (the “Credit Event”) as required by
Section 2.2 of the Credit Agreement. Capitalized terms not defined herein shall
have the same meaning given to such terms in the Credit Agreement

 

1.The Business Day of the Credit Event is: [__], 2014.

2.Loan: $__________

3.The proceeds of the Loan are to be disbursed to the following account:

 

Bank: [__]

ABA: [__]

Account No.: [__]

 

The Borrower hereby certifies that:

 

(A)              each of the representations and warranties made by the Borrower
in or pursuant to the Loan Documents are true and correct in all material
respects on and as of the date hereof as if made on and as of the date hereof;

 

(B)              no Default or Event of Default has occurred and is continuing
on the date hereof or after giving effect to the Credit Event requested to be
made on the date specified above; and

 

(C)              Borrower has complied with Budget within the guidelines set
forth in Section 5.2 of the Credit Agreement.

 

 

Very truly yours,

 

Crumbs Bake Shop, Inc.

 

By:_________________________

Name:

Title:

 

 

 

EXHIBIT C

 

Order

 

UNITED STATES BANKRUPTCY COURT

DISTRICT OF NEW JERSEY

 

Caption in Compliance with D.N.J. LBR 9004-2(c)

COLE, SCHOTZ, MEISEL,

FORMAN & LEONARD, P.A.

A Professional Corporation

Court Plaza North

25 Main Street

P.O. Box 800

Hackensack, NJ 07602-0800

Michael D. Sirota

David M. Bass

Felice R. Yudkin

(201) 489-3000

(201) 489-1536 Facsimile

Proposed Attorneys for Debtors-In-Possession

 

In re:

 

CRUMBS BAKE SHOP, INC., et al.,1

 

Debtors-in-Possession.

 

Case No. 14-24287 (MBK)

Judge: Michael B. Kaplan

 

Chapter 11

(Jointly Administration Pending)

 

INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN POST-PETITION FINANCING;
(II) AUTHORIZING THE DEBTORS’ USE OF CASH COLLATERAL; AND (III) GRANTING OTHER
RELIEF

 

The relief set forth on the following pages, numbered two (2) through eleven
(11), is hereby ORDERED.

 

DATED: 7/16/14   /s/ Michael B. Kaplan       Honorable Michael B. Kaplan      
United States Bankruptcy Judge

 

 

1 The Debtors in these Chapter 11 cases, along with the last four digits of each
Debtor’s tax identification number are: Crumbs Bake Shop, Inc. (5274); Crumbs
Holdings LLC (8045); Crumbs 42nd Street II, LLC (5913); Crumbs Broad Street, LLC
(5319); Crumbs Broadway LLC (2653); Crumbs Federal Street, LLC (9870); Crumbs
Garment Center LLC (5142); Crumbs Grand Central LLC (5030); Crumbs Greenvale LLC
(6562); Crumbs Greenwich, LLC (3097); Crumbs Hoboken, LLC (5808); Crumbs II, LLC
(5633); Crumbs Larchmont, LLC (8460); Crumbs Lexington LLC (0286); Crumbs Park
Avenue LLC (5273); Crumbs Retail Bake Shops, LLC (f/k/a Crumbs Fulton Street,
LLC) (0930); Crumbs Stamford, LLC (8692); Crumbs Third Avenue LLC (6756); Crumbs
Times Square LLC (1449); Crumbs Union Square LLC (8629); Crumbs Union Station
LLC (6968); Crumbs West Madison, LLC (5017); Crumbs Woodbury LLC (2588)

 

 

 

 

(Page 2)   Debtors: CRUMBS BAKE SHOP, INC., et al. Case Nos. 14-24287 (MBK)
Caption of Order: INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN
POST-PETITION FINANCING; (II) AUTHORIZING THE DEBTORS’ USE OF CASH COLLATERAL;
AND (III) GRANTING OTHER RELIEF    

 

THIS MATTER having been opened to the Court by Crumbs Bake Shop, Inc.
(“Crumbs”), Crumbs Holdings LLC (“Holdings”), and various subsidiaries of Crumbs
and Holdings (listed on Exhibit A attached hereto and made a part hereof), as
the Debtors and the Debtors in possession (collectively, the “Debtors”), by and
through their proposed counsel, Cole, Schotz, Meisel, Forman & Leonard, P.A.,
upon the Motion for an Order (I) Authorizing the Debtors’ Use of Cash
Collateral; (II) Authorizing the Debtors to Obtain Secured Credit; (III)
Granting Adequate Protection and (IV) Granting Other Relief (the “DIP Loan
Motion”) [Docket # 10] filed on July 11, 2014, and the Court having conducted a
preliminary hearing on the DIP Loan Motion and being fully informed of the
premises;

 

THE COURT NOW FINDS THAT:

 

A.         Filing of Petition. On July 11, 2014 (the “Petition Date”), the
Debtors filed voluntary petitions for reorganization under chapter 11 of the
Bankruptcy Code (the “Petition”). Pursuant to sections 1107 and 1108 of the
Bankruptcy Code, the Debtors have retained possession of their assets and are
authorized to continue the management of their business on a limited basis
notwithstanding the recent closing of the Debtors’ retail businesses. On or
about July 7, 2014, the Debtors ceased operation of the Debtors’ retail
business, but retain ownership of and manage various assets including, without
limitation, certain licensing rights, intellectual property, business equipment,
inventory and leasehold interests. A creditors’ committee, as provided for under
section 1102 of the Bankruptcy Code (the “Committee”), has not been appointed.

 

 

 

 

(Page 3)   Debtors: CRUMBS BAKE SHOP, INC., et al. Case Nos. 14-24287 (MBK)
Caption of Order: INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN
POST-PETITION FINANCING; (II) AUTHORIZING THE DEBTORS’ USE OF CASH COLLATERAL;
AND (III) GRANTING OTHER RELIEF    

 

B.         Jurisdiction; Core Proceeding. This Court has jurisdiction to enter
this order (the “Interim DIP Loan Order”) pursuant to 28 U.S.C. §§ 157(b)(2) and
1334. Consideration of the DIP Loan Motion is a core proceeding as defined in 28
U.S.C. §§157(b)(2)(A), (D), (G), (K) and (M).

 

C.         Notice of Hearing. The Debtors have provided such notice of the
hearing and the terms of the DIP Loan Motion as is practicable under the
circumstances. Pursuant to 11 U.S.C. §§ 102 and 364, Bankruptcy Rule 4001(c) and
(d) and all applicable local rules, such notice is sufficient and appropriate
under the circumstances set forth herein and presented to the Court. The Court
finds that the notice given to the parties to whom it was given and in the form
it was given was sufficient in the circumstances to afford reasonable notice of
the material provisions of the terms hereof.

 

 

 

 

(Page 4)   Debtors: CRUMBS BAKE SHOP, INC., et al. Case Nos. 14-24287 (MBK)
Caption of Order: INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN
POST-PETITION FINANCING; (II) AUTHORIZING THE DEBTORS’ USE OF CASH COLLATERAL;
AND (III) GRANTING OTHER RELIEF    

 

D.         DIP Financing. The Debtors have requested Debtor-in-Possession
financing (the “DIP Financing”) from Lemonis Fischer Acquisition Company, LLC
(“DIP Lender”). The Debtors have requested funding in the amount of $200,000
upon entry of this Interim Order (the “Interim DIP Loan Amount”), with the
balance of the Commitment to be available upon entry of a final order from the
Bankruptcy Court. The documents constituting the DIP loan (collectively, the
“DIP Loan Agreement”) are to be executed by the parties and are attached as
Exhibit B hereto and incorporated by reference. Capitalized terms used in this
Interim DIP Loan Order and not defined herein have the meaning given in the DIP
Loan Agreement. Pursuant to the terms of the DIP Loan Agreement, DIP Lender will
be granted a super-priority administrative expense claim and a first priority
lien on the assets of the Debtors as more fully described therein, subject only
to the Carve-Out (as defined in the DIP Loan Agreement). The purpose of the DIP
Financing is to provide funds to the Debtors to maintain the critical
infrastructure of their business until a sale of the Debtors’ assets can be
consummated. The DIP Financing consists of a First Advance in the amount of the
Interim DIP Loan Amount, and then Subsequent Advances drawn in accordance with
the DIP Loan Agreement and orders of the Bankruptcy Court up to the total amount
of the stated Commitment. The interest rate to be utilized is 7%.

 

E.         Need for DIP Financing. The Debtors urgently require financing under
Section 364 of the Bankruptcy Code to fund certain expenses in connection with
its limited operations and to preserve the value of its assets, including
payments for payroll and insurance. An inability to fund such activities in the
short term could result in a long-term negative impact on the value of the
assets and business of the Debtors to the detriment of the Debtors’ creditors,
customers and employees.

 

 

 

 

(Page 5)   Debtors: CRUMBS BAKE SHOP, INC., et al. Case Nos. 14-24287 (MBK)
Caption of Order: INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN
POST-PETITION FINANCING; (II) AUTHORIZING THE DEBTORS’ USE OF CASH COLLATERAL;
AND (III) GRANTING OTHER RELIEF    

 

F.         Pre-Petition Credit Facility and Pre-Petition Liens. On January 20,
2014, the Debtors (then as the “Borrowers”) entered into a Senior Secured Loan
and Security Agreement with Fischer Enterprises, L.L.C. (“Fischer Enterprises”),
as amended by First Amendment to Senior Secured Loan and Security Agreement
dated July 10, 2014, comprised of a loan and security agreement and
corresponding note in the amount of $5,514,245.30 (the “Pre-Petition Loan
Documents”), pursuant to which Borrowers gave as security to Fischer Enterprises
first-priority perfected liens in all of the Borrowers’ property then-owned or
after-acquired property (the “Pre-Petition Liens”). On July 10, 2014, Fischer
Enterprises assigned all of its interests in and under the Pre-Petition Loan
Documents and Pre-Petition Liens to DIP Lender. Fischer Enterprises does not
object to the entry of this Interim DIP Loan Order.

 

G.         Insufficient Cash Collateral; No Other Sources of Funds. The Debtors
have inadequate working capital, and do not anticipate collecting sufficient
cash during the term of the DIP Loan Agreement to fund expenses which the
Debtors need to incur in order to maintain their limited activities or preserve
their value. All of the Debtors’ cash on hand as of the Petition Date is cash
collateral (the “Cash Collateral”) in which the DIP Lender has an existing prior
and perfected security interest pursuant to the Pre-Petition Loan Documents
assigned to DIP Lender by Fischer Enterprises. Cash Collateral shall exclude the
Cash Collateral Accounts (defined herein) only to the extent of the outstanding
obligations under the letters of credit and Commercial Credit Card described in
paragraph 2 of this Order. Any funds in the Cash Collateral Accounts in excess
of the Debtors’ outstanding obligations under the letters of credit and
Commercial Credit Card shall be Cash Collateral upon release of the excess funds
to the Debtors. DIP Lender has consented to the limited use of its Cash
Collateral, but such Cash Collateral will be insufficient to sustain the
Debtors’ operations until a sale of assets can be negotiated and consummated. As
contemplated by sections 364(a) and 364(b) of the Bankruptcy Code, the Debtors
have attempted, but are unable to obtain on any basis, either unsecured credit
or secured credit allowable under section 503(b)(1) of the Bankruptcy Code as an
administrative expense, on terms more favorable than those now offered by DIP
Lender.

 

 

 

 

(Page 6)   Debtors: CRUMBS BAKE SHOP, INC., et al. Case Nos. 14-24287 (MBK)
Caption of Order: INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN
POST-PETITION FINANCING; (II) AUTHORIZING THE DEBTORS’ USE OF CASH COLLATERAL;
AND (III) GRANTING OTHER RELIEF    

 

H.         Business Judgment and Good Faith. The terms of this Interim DIP Loan
Order, the DIP Loan Agreement and the Debtors’ proposed use of DIP Lender’s Cash
Collateral have been negotiated at arms-length with all parties represented by
experienced counsel, are fair, just and reasonable under the circumstances. They
are made for reasonably equivalent value and fair consideration, reflect the
exercise of prudent business judgment consistent with the Debtors’ fiduciary
responsibilities, and are in good faith as that term is used in section 364(e)
of the Bankruptcy Code. In making advances under this DIP Loan Order, DIP Lender
is entitled to the protections described in section 364(e) of the Bankruptcy
Code.

 

I.         Request for Immediate Entry; Good Cause Shown. The Debtors request
immediate entry of this Interim DIP Loan Order pursuant to Bankruptcy Rule
4001(b)(2) and (c)(2). The relief requested is necessary to avoid immediate and
irreparable harm to the Debtors. Good cause has been shown for the entry of this
Interim DIP Loan Order. Among other things, entry of this DIP Loan Order will
minimize further disruption of the Debtors’ business, will enable the Debtors to
preserve and maintain their assets, and is in the best interests of the Debtors,
their creditors, and their estates.

 

 

 

 

(Page 7)   Debtors: CRUMBS BAKE SHOP, INC., et al. Case Nos. 14-24287 (MBK)
Caption of Order: INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN
POST-PETITION FINANCING; (II) AUTHORIZING THE DEBTORS’ USE OF CASH COLLATERAL;
AND (III) GRANTING OTHER RELIEF    

 

THEREFORE, 1T IS HEREBY ORDERED THAT:

 

1.   Authorization to Borrow.

 

a.         The Debtors are authorized to borrow the Interim DIP Loan Amount from
DIP Lender on the basis and in the amounts set forth in the DIP Loan Agreement.
The Debtors are authorized to perform their obligations hereunder, and under the
DIP Loan Agreement, in accordance with the terms thereof. All funds advanced
pursuant to this Interim DIP Loan Order will be advanced by DIP Lender to the
Debtors as provided in the DIP Loan Agreement.

 

b.         The terms and conditions of the DIP Loan Agreement are hereby
approved in their entirety and deemed fully enforceable against the Debtors and
all other interested parties. The DIP Lender and the Debtors may amend, modify,
supplement, or waive any provision of the DIP Loan Agreement, except as to
principal amount, interest rate, and fees, without any need to apply to, or
receive further approval from, this Court. The Debtors shall provide the Office
of the United States Trustee and counsel for any Committee, whether now in
existence or hereafter appointed, advance written notice of any such amendment,
modification, supplement or waiver. Any amendment, modification, supplement or
waiver regarding principal amount, interest rate or fees shall be subject to
approval by the Court on appropriate notice.

 

 

 

 

(Page 8)   Debtors: CRUMBS BAKE SHOP, INC., et al. Case Nos. 14-24287 (MBK)
Caption of Order: INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN
POST-PETITION FINANCING; (II) AUTHORIZING THE DEBTORS’ USE OF CASH COLLATERAL;
AND (III) GRANTING OTHER RELIEF    

 

c.         The Debtors are authorized and directed to do and perform all acts,
to make, execute and deliver all instruments, agreements, and documents,
including, without limitation, the DIP Loan Agreement, and to pay all principal,
interest, fees, and other expenses, which may be required or necessary for the
Debtors to perform all of their obligations under this Interim DIP Loan Order
and the DIP Loan Agreement.

 

d.         The Debtors’ authorization to borrow under the terms of this Interim
DIP Loan Order are conditioned on the Debtors’ compliance with the budgets and
projections referenced in the DIP Loan Agreement, incorporated into the terms
thereof and attached hereto as Exhibit C (the “Budget”). The Debtors’ failure to
comply with the Budget shall constitute a default of the DIP Loan Agreement
which shall immediately entitle Lender to terminate its Commitment under the DIP
Loan Agreement and refuse to make any further advances thereunder, without the
need of further order of this Court.

 

 

 

 

(Page 9)   Debtors: CRUMBS BAKE SHOP, INC., et al. Case Nos. 14-24287 (MBK)
Caption of Order: INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN
POST-PETITION FINANCING; (II) AUTHORIZING THE DEBTORS’ USE OF CASH COLLATERAL;
AND (III) GRANTING OTHER RELIEF    

 

2.  Grant of Post-Petition Liens.      As security for the obligations now
existing or hereafter arising pursuant to the DIP Loan Agreement and this
Interim Order, the security interests and liens in the Collateral identified in
the DIP Loan Agreement, as well as those assigned pre-petition to DIP Lender by
the Debtors’ pre-petition lender, are hereby granted to the DIP Lender
(collectively the “Post-Petition Liens”). The Post-Petition Liens shall be
valid, enforceable, effective and perfected by operation of law immediately upon
entry of this Interim Order without the necessity of the execution, recordation,
or filing by the Debtors or the DIP Lender of any mortgages, security
agreements, financing statements or other agreements. Pursuant to Bankruptcy
Code §364(c)(2), the DIP Loan Agreement creates a valid, binding, continuing,
enforceable, fully-perfected first priority senior security interest in and lien
upon all presently owned or hereafter acquired property and assets of the
Debtors, of any kind or nature, whether real or personal, tangible, intangible,
wherever located, and all proceeds, products, rents and profits thereof, subject
only to the Carve-Out.2 The Post-Petition Liens and Carve-Out shall not attach
to the cash collateral account maintained at J.P. Morgan Chase Bank, N.A.
(“Chase”) (Holdings account ending 9626) to secure Crumb Newark LLC’s letter of
credit in favor of the Port Authority of New York and New Jersey and the
Debtors’ obligations under their Commercial Card Classic with J.P. Morgan Chase
(account ending 0635) and the cash collateral account maintained at Chase
(Crumbs Downtown II, LLC account ending in 4743) to secure Crumb Downtown II
LLC’s letter of credit in favor of Uniway Partners (collectively, the “Cash
Collateral Accounts”) only to the extent of the outstanding obligations under
the letters of credit and Commercial Credit Card. Any funds in the Cash
Collateral Accounts in excess of the Debtors’ outstanding obligations under the
letters of credit and Commercial Credit Card shall be subject to the
Post-Petition Liens and Carve-Out. The Cash Collateral Accounts shall be deemed
a Permitted Lien under the DIP Loan Agreement.

 

 

2 For the avoidance of doubt, any liens granted under this Interim Order,
including, without limitation, the Post-Petition Liens, shall not be direct
liens on the Debtors’ leases of real property unless such liens are permitted
pursuant to the underlying lease documents but such liens shall be fully
perfected liens on any and all proceeds of such leases (without the need for the
DIP Lender to take any further actions in connection therewith).

 

 

 

 

(Page 10)   Debtors: CRUMBS BAKE SHOP, INC., et al. Case Nos. 14-24287 (MBK)
Caption of Order: INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN
POST-PETITION FINANCING; (II) AUTHORIZING THE DEBTORS’ USE OF CASH COLLATERAL;
AND (III) GRANTING OTHER RELIEF    

 

3.  Additional Event of Default. An overdraft of the Debtors’ bank accounts at
J.P. Morgan Chase Bank, N.A. or the Debtors’ initiation of unfunded ACH
transfers shall constitute an Event of Default under the DIP Loan Agreement.

 

4.  DIP Lender’s Super-priority Claim.      Pursuant to §364(c)(1) of the
Bankruptcy Code, and subject only to the Carve-Out, all of the Debtors’
obligations arising under the DIP Loan Agreement shall constitute an allowed
claim (“Super-priority Claim”) against the Debtors, with priority over any and
all administrative expenses, diminution claims, all claims of any kind arising
under this Interim DIP Loan Order or any subsequent final order, and all other
claims against the Debtors, now existing or hereafter arising, of any kind
whatsoever, including all administrative expenses of the kind specified in §
503(b) and § 507(b) of the Bankruptcy Code, and over any and all administrative
expenses or other claims arising under sections 105, 326, 328, 330, 331, 503(b),
506(c), 507, 546(c), 726, 1113 or 1114 of the Bankruptcy Code, whether or not
such expense or claims may become secured by a judgment lien or other
non-consensual lien, levy or attachment, and which Super-priority Claim shall be
payable from and have recourse to all pre- and post-petition property of the
Debtors and all proceeds thereof, consistent with the terms of this Interim DIP
Loan Order and the DIP Loan Agreement. The Super-priority Claim shall not attach
to the Cash Collateral Accounts only to the extent of the outstanding obligation
under the letters of credit and Commercial Credit Card. Any funds in the Cash
Collateral Accounts in excess of the Debtors’ outstanding obligations under the
letters of credit and Commercial Credit Card shall be subject to the
Super-priority Claims.

 

 

 

 

(Page 11)   Debtors: CRUMBS BAKE SHOP, INC., et al. Case Nos. 14-24287 (MBK)
Caption of Order: INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN
POST-PETITION FINANCING; (II) AUTHORIZING THE DEBTORS’ USE OF CASH COLLATERAL;
AND (III) GRANTING OTHER RELIEF    

 

5.  Use of Cash Collateral.   The Debtors are authorized to use the Cash
Collateral pursuant to and in accordance with the Budget. The Debtors’
authorization to utilize Cash Collateral is expressly conditioned on its
continued compliance with the Budget. The Debtors’ failure to comply will
constitute a breach of the DIP Loan Agreement which will entitle Lenders to
immediately terminate the DIP Loan Agreement and terminate its consent to the
use of Cash Collateral, without further order of this Court.

 

6.  Automatic Stay Modification.  The automatic stay imposed under §362(a) of
the Bankruptcy Code is hereby modified to the extent necessary to effectuate all
of the terms and provisions of this Interim DIP Loan Order, including without
limitation, to permit the DIP Lender to make any filings of UCC financing
statements or other filings that DIP Lender chooses to make to further evidence
the perfection of its liens and security interests in the Debtors’ assets and to
enforce any and all remedies available to them hereunder and under the DIP Loan
Agreement; provided, however, that the automatic stay shall not be deemed
vacated.

 

 

 

 

(Page 12)   Debtors: CRUMBS BAKE SHOP, INC., et al. Case Nos. 14-24287 (MBK)
Caption of Order: INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN
POST-PETITION FINANCING; (II) AUTHORIZING THE DEBTORS’ USE OF CASH COLLATERAL;
AND (III) GRANTING OTHER RELIEF    

 

7.  Access to Leased Premises.  Notwithstanding anything to the contrary in this
Interim Order or the DIP Loan Agreement, upon the occurrence of an Event of
Default, the rights of the DIP Lender to enter onto the Debtors' leased premises
shall be limited to (i) any such rights agreed to in writing by the applicable
landlord in favor of the DIP Lender, whether before or after the Petition Date,
including, without limitation, in the governing lease agreement itself or in any
landlord waiver or similar agreement, (ii) any rights that the DIP Lender has
under applicable non-bankruptcy law, if any, or (iii) such rights as may be
granted by the Court following an expedited hearing on a separate motion with
not less than five (5) business days’ notice to the applicable landlords of the
leased premises.

 

8.  No Additional Filings Required for Perfection.

 

a.         All Post-Petition Liens granted herein and the in the DIP Loan
Agreement to or for the benefit of the DIP Lender shall, pursuant to this
Interim DIP Loan Order be, and hereby are, valid, enforceable, and perfected
effective as of the Petition Date.

 

b.         The Debtors and the DIP Lender are hereby authorized, but not
required, to file or record financing statements, mortgages, deeds of trust,
leasehold mortgages, notices of lien, assignments of the liens or similar
instruments in any jurisdiction. Such liens and security interests shall be
deemed valid, perfected, allowed, enforceable, non avoidable, and not subject to
challenge, dispute or subordination, at the time and on the date of entry of
this Interim DIP Loan Order.

 

 

 

 

(Page 13)   Debtors: CRUMBS BAKE SHOP, INC., et al. Case Nos. 14-24287 (MBK)
Caption of Order: INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN
POST-PETITION FINANCING; (II) AUTHORIZING THE DEBTORS’ USE OF CASH COLLATERAL;
AND (III) GRANTING OTHER RELIEF    

 

c.         A certified copy of this Interim DIP Loan Order may, in the
discretion of the DIP Lender, be filed with or recorded in any filing or
recoding office in addition to or in lieu of such financing statements,
mortgages, deeds of trust, leasehold mortgages, notices of lien, assignments or
similar instruments in any jurisdiction and all filing offices are hereby
authorized and directed to accept such certified copy of this Interim DIP Loan
Order for filing and recording. The DIP Lender may deliver a copy of this
Interim DIP Loan Order to any third parties having possession or control of the
Debtors’ property, the Collateral or Cash Collateral.

 

9.   Final Hearing and Objection Date. This matter is set for a Final Hearing at
10:00 a.m EST on July 31, 2014, in the United States Bankruptcy Court for the
District of New Jersey.

 

a.         This Interim DIP Loan Order shall authorize the DIP Loan to be
advanced in the Interim DIP Loan Amount. Anything in the DIP Loan Motion or the
DIP Loan Agreement to the contrary notwithstanding, additional advances under
the DIP Loan Motion and the DIP Loan Agreement shall be expressly conditioned
upon the entry of a Final Order in a form reasonably acceptable to the DIP
Lender.

 

b.         The Debtors shall promptly mail copies of this Interim DIP Loan Order
to (i) the DIP Lender, (ii) the Office of the United States Trustee; (iii) all
parties who filed requests for notices under Bankruptcy Rule 9010(b) or were
entitled to notice under Bankruptcy Rule 2002, (iv) the consolidated thirty
largest unsecured creditors and (v) the members of any Committee formed in this
case together with counsel selected by such Committee. Any objections shall be
in writing and shall be filed with the Clerk of this Court on or before July 28,
2014, at 4:00 p.m. EST (“Objection Deadline”). Any objections by any
party-in-interest shall be deemed waived unless filed and received in accordance
with the foregoing on or before the Objection Deadline.

 

 

 

 

(Page 14)   Debtors: CRUMBS BAKE SHOP, INC., et al. Case Nos. 14-24287 (MBK)
Caption of Order: INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO OBTAIN
POST-PETITION FINANCING; (II) AUTHORIZING THE DEBTORS’ USE OF CASH COLLATERAL;
AND (III) GRANTING OTHER RELIEF    

 

c.        In the event this Court modifies any of the provisions of this Interim
DIP Loan Order or the DIP Loan Agreement following such Final Hearing, such
modification shall not affect the rights and priorities of the DIP Lender
pursuant to this Interim DIP Loan Order, and this Interim Order shall remain in
full force and effect except as specifically modified pursuant to such Final
Hearing.