Exhibit 10.1

 

Execution Version

 

 

 

SENIOR SECURED SUPER-PRIORITY TERM LOAN DEBTOR-IN-POSSESSION LOAN AGREEMENT

 

dated as of

 

May 22, 2020

 

among

 

AKORN, INC.,
a Debtor and a Debtor-in-Possession under Chapter 11 of the Bankruptcy Code

 

The Other Loan Parties Party Hereto,
each as a Debtor and Debtor-in-Possession under Chapter 11 of the Bankruptcy
Code

 

The Lenders Party Hereto,

 

and

 

WILMINGTON SAVINGS FUND SOCIETY, FSB,
as Administrative Agent

 

 

 

 

 

 

 

 

  Table of Contents             Page       Article I Definitions 2      
Section 1.01 Defined Terms 2 Section 1.02 Classification of Loans and Borrowings
33 Section 1.03 Terms Generally 33 Section 1.04 Accounting Terms; GAAP 33      
Article II The Credits 34       Section 2.01 Commitments 34 Section 2.02 Loans
and Borrowings 34 Section 2.03 Procedure for Borrowings 34 Section 2.04
[Reserved 35 Section 2.05 [Reserved 35 Section 2.06 [Reserved 35 Section 2.07
[Reserved 35 Section 2.08 Conversion and Continuation Options 35 Section 2.09
[Reserved] 37 Section 2.10 Repayment of Loans; Evidence of Debt 37 Section 2.11
Prepayment of Loans 37 Section 2.12 Fees 38 Section 2.13 Interest 38
Section 2.14 Alternate Rate of Interest 39 Section 2.15 Increased Costs 40
Section 2.16 Break Funding Payments 41 Section 2.17 Withholding of Taxes;
Gross-Up 41 Section 2.18 Payments Generally; Allocation of Proceeds; Sharing of
Set-offs 46 Section 2.19 Mitigation Obligations; Replacement of Lenders 49
Section 2.20 Defaulting Lenders 50 Section 2.21 Returned Payments 50
Section 2.22 Super Priority Nature of Obligations and Administrative Agent’s
Liens; Payment of Obligations 51       Article III Representations and
Warranties 51       Section 3.01 Organization; Powers 51 Section 3.02
Authorization; Enforceability 51 Section 3.03 Governmental Approvals; No
Conflicts 51 Section 3.04 Financial Condition; No Material Adverse Change 52
Section 3.05 Properties 52 Section 3.06 Litigation and Environmental Matters 52
Section 3.07 Compliance with Laws and Agreements; No Default 53 Section 3.08
Investment Company Status 53 Section 3.09 Taxes 53 Section 3.10 ERISA 53
Section 3.11 Disclosure 54 Section 3.12 No EEA Financial Institution 54
Section 3.13 Insurance 54 Section 3.14 Capitalization and Subsidiaries 54
Section 3.15 Security Interest in Collateral 54 Section 3.16 Employment Matters
55 Section 3.17 Federal Reserve Regulations 55 Section 3.18 Use of Proceeds 55
Section 3.19 Anti-Corruption Laws and Sanctions 55 Section 3.20 Reorganization
Matters 56

 

 i 

 

 

  TABLE OF CONTENTS (continued)             Page       Article IV Conditions OF
EFFECTIVENESS, LENDING AND WITHDRAWALS 56       Section 4.01 Closing Date
Effectiveness 56 Section 4.02 Conditions Precedent to each Withdrawal 59      
Article V Affirmative Covenants 60       Section 5.01 Financial Statements;
Other Information 61 Section 5.02 Notices of Material Events 63 Section 5.03
Existence; Conduct of Business 64 Section 5.04 Payment of Obligations 65
Section 5.05 Maintenance of Properties 65 Section 5.06 Books and Records;
Inspection Rights 65 Section 5.07 Compliance with Laws and Material Contractual
Obligations 66 Section 5.08 Use of Proceeds 66 Section 5.09 Insurance 66
Section 5.10 Maintenance of Ratings 66 Section 5.11 Additional Collateral;
Further Assurances 66 Section 5.12 Post-Closing Obligations 67 Section 5.13
Approved Budget 68 Section 5.14 Cash Flow Forecast 70 Section 5.15 Monthly Calls
and Status Update Calls 70 Section 5.16 Required Milestones 71 Section 5.17
Specified Lender Advisors 72 Section 5.18 Additional Bankruptcy Matters 73
Section 5.19 Debtor-in-Possession Obligations 73 Section 5.20 Liquidation of
WorldAkorn Pharma Mauritius 73       Article VI Negative Covenants 74      
Section 6.01 Indebtedness 74 Section 6.02 Liens 75 Section 6.03 Fundamental
Changes 76 Section 6.04 Investments, Loans, Advances, Guarantees and
Acquisitions 76 Section 6.05 Asset Sales 77 Section 6.06 Sale and Leaseback
Transactions 78 Section 6.07 Swap Agreements 78 Section 6.08 Restricted
Payments; Pre-Petition Indebtedness 78 Section 6.09 Transactions with Affiliates
79 Section 6.10 Restrictive Agreements 79 Section 6.11 Amendment of
Organizational Documents 80 Section 6.12 Minimum Actual Liquidity 80
Section 6.13 Orders 80 Section 6.14 Reclamation Claims 80 Section 6.15
Insolvency Proceeding Claims 80 Section 6.16 Bankruptcy Actions 80

 

 ii 

 

 

  TABLE OF CONTENTS (continued)             Page       Article VII Events of
Default 81       Section 7.01 Events of Default 81 Section 7.02 Remedies Upon an
Event of Default 87 Section 7.03 License; Access; Cooperation 87      
Article VIII The Agents 88       Section 8.01 Appointment 88 Section 8.02 Rights
as a Lender 89 Section 8.03 Duties and Obligations 89 Section 8.04 Reliance 89
Section 8.05 Actions through Sub-Agents 90 Section 8.06 Resignation 90
Section 8.07 Non-Reliance 91 Section 8.08 [Reserved] 91 Section 8.09 Not
Partners or Co-Venturers; Administrative Agent as Representative of the Secured
Parties 91 Section 8.10 Lender Action 92 Section 8.11 Collateral Documents and
Loan Guaranties 92 Section 8.12 Administrative Agent May File Bankruptcy
Disclosure and Proofs of Claim 94

 

 iii 

 

 

  TABLE OF CONTENTS (continued)             Page       Article IX Miscellaneous
95       Section 9.01 Notices 95 Section 9.02 Waivers; Amendments 96
Section 9.03 Expenses; Indemnity; Damage Waiver 98 Section 9.04 Successors and
Assigns 101 Section 9.05 Survival 105 Section 9.06 Counterparts; Integration;
Effectiveness; Electronic Execution 106 Section 9.07 Severability 106
Section 9.08 Right of Setoff 106 Section 9.09 Governing Law; Jurisdiction;
Waiver of Jury Trial; Consent to Service of Process 107 Section 9.10 [Reserved]
107 Section 9.11 Headings 108 Section 9.12 Confidentiality 108 Section 9.13
Several Obligations; Nonreliance; Violation of Law 109 Section 9.14 USA PATRIOT
Act 109 Section 9.15 Disclosure 109 Section 9.16 Appointment for Perfection 109
Section 9.17 Interest Rate Limitation 109 Section 9.18 No Advisory or Fiduciary
Responsibility 110 Section 9.19 Authorization to Distribute Certain Materials to
Public-Siders 110 Section 9.20 [Reserved] 110 Section 9.21 Acknowledgement and
Consent to Bail-In of EEA Financial Institutions 110       Article X Loan
Guaranty 111       Section 10.01 Guaranty 111 Section 10.02 Guaranty of Payment
112 Section 10.03 No Discharge or Diminishment of Loan Guaranty 112
Section 10.04 Defenses Waived 112 Section 10.05 Rights of Subrogation 113
Section 10.06 Reinstatement; Stay of Acceleration 113 Section 10.07 Information
113 Section 10.08 [Reserved] 113 Section 10.09 Taxes 114 Section 10.10 Maximum
Liability 114 Section 10.11 Contribution 114 Section 10.12 Liability Cumulative
115

 

 iv 

 

 

  TABLE OF CONTENTS (continued)             Page         SCHEDULES:        
Commitment Schedule   Schedule 3.05 Properties   Schedule 3.06 Disclosed Matters
  Schedule 3.13 Insurance   Schedule 3.14 Capitalization and Subsidiaries  
Schedule 6.01 Existing Indebtedness   Schedule 6.02 Existing Liens   Schedule
6.04 Existing Investments           EXHIBITS:         Exhibit A Form of
Assignment and Assumption   Exhibit B Form of Withdrawal Notice   Exhibit C
Approved Budget   Exhibit D Form of Compliance Certificate   Exhibit E Joinder
Agreement   Exhibit F-1 U.S. Tax Certificate (For Foreign Lenders that are not
Partnerships for U.S. Federal Income Tax Purposes)   Exhibit F-2 U.S. Tax
Certificate (For Foreign Participants that are not Partnerships for U.S. Federal
Income Tax Purposes)   Exhibit F-3 U.S. Tax Certificate (For Foreign
Participants that are Partnerships for U.S. Federal Income Tax Purposes)  
Exhibit F-4 U.S. Tax Certificate (For Foreign that are Partnerships for
U.S. Federal Income Tax Purposes)  

 

*Certain schedules to this exhibit have been omitted pursuant to Item 601(a)(5)
of Regulation S-K. Akorn, Inc. agrees to furnish a supplemental copy of any
omitted schedules to the Securities and Exchange Commission upon request.

 

 v 

 

 

SENIOR SECURED SUPER-PRIORITY TERM LOAN DEBTOR-IN-POSSESSION LOAN AGREEMENT
dated as of May 22, 2020 (as it may be amended, supplemented or otherwise
modified from time to time, this “Agreement”) among AKORN, INC., as the
Borrower, a debtor and a debtor-in-possession, the other Loan Parties party
hereto, each as a debtor and a debtor-in-possession, the Lenders party hereto,
and WILMINGTON SAVINGS FUND SOCIETY, FSB, as Administrative Agent.

 

RECITALS

 

WHEREAS, on May 21, 2020 (the “Petition Date”), the Borrower and certain Loan
Guarantors (together with any of their Subsidiaries and Affiliates that are or
become debtors under the Chapter 11 Cases, collectively, the “Debtors”, and each
individually, a “Debtor”) commenced Chapter 11 Case Nos. 20-11177 through
20-11188, as administratively consolidated at Chapter 11 Case No. 20-11177
(collectively, the “Chapter 11 Cases” and each individually, a “Chapter 11
Case”) in the United States Bankruptcy Court for the District of Delaware. The
Debtors continue to operate their businesses and manage their properties as
debtors and debtors-in-possession pursuant to Sections 1107(a) and 1108 of the
Bankruptcy Code;

 

WHEREAS, the Borrower has requested, and, upon the terms set forth in this
Agreement, the Lenders have agreed to make available to the Borrower, a senior
secured term loan credit facility of up to of up to $30,000,000 (the “DIP
Facility”), subject to the conditions set forth herein, pursuant to the DIP
Order, to fund the costs and expenses relating to the Chapter 11 Cases, the
general corporate purposes and working capital requirements of the Borrower
during the pendency of the Chapter 11 Cases pursuant to and in accordance with
the Approved Budget;

 

WHEREAS, subject to the terms hereof and the DIP Order, the Borrower and the
Loan Guarantors have agreed to secure all of their Obligations under the Loan
Documents by granting to the Administrative Agent, for the benefit of the
Administrative Agent and the other Secured Parties, a security interest in and
lien upon substantially all of their existing and after-acquired property;

 

WHEREAS, the Borrower and the Loan Guarantors’ business is a mutual and
collective enterprise and the Borrower and the Loan Guarantors believe that the
loans and other financial accommodations to the Borrower under this Agreement
will enhance the aggregate borrowing powers of the Borrower and facilitate the
administration of the Chapter 11 Cases and their loan relationship with the
Administrative Agent and the Lenders, all to the mutual advantage of the
Borrower and the Loan Guarantors;

 

WHEREAS, the Borrower and each Loan Guarantor acknowledges that it will receive
substantial direct and indirect benefits by reason of the making of loans and
other financial accommodations to the Borrower as provided in the Agreement;

 

WHEREAS, the Administrative Agent’s and the Lenders’ willingness to extend
financial accommodations to the Borrower, and to administer the Borrower’s and
the Loan Guarantors’ collateral security therefor, on a combined basis as more
fully set forth in this Agreement and the other Loan Documents, is done solely
as an accommodation to the Borrower and the Loan Guarantors and at the
Borrower’s and the Loan Guarantors’ request and in furtherance of the Borrower’s
and the Loan Guarantors’ mutual and collective enterprise; and

 

 

 

 

WHEREAS, all capitalized terms used in this Agreement, including in these
Recitals, shall have the meanings ascribed to them in Section 1.01, and, for
purposes of this Agreement and the other Loan Documents, the rules of
construction set forth in Section 1.03 shall govern. All Schedules, Exhibits,
Annexes, and other attachments hereto, or expressly identified in this
Agreement, are incorporated by reference, and taken together with this
Agreement, shall constitute a single agreement. These Recitals shall be
construed as part of this Agreement.

 

NOW, THEREFORE, the parties hereto agree as follows:

 

Article I

 

Definitions

 

Section 1.01     Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:

 

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, bear interest at a rate determined
by reference to the Alternate Base Rate.

 

“Account” has the meaning assigned to such term in the Security Agreement.

 

“Account Debtor” means any Person obligated on an Account.

 

“Actual Cash Receipts” means with respect to any period, as the context
requires, (x) the amount of actual receipts during such period of the Loan
Parties (excluding any borrowings under this Agreement) under the heading “Total
Receipts” in the Approved Budget and/or (y) the sum, for such period, of all
such receipts for all such line items which comprise “Total Receipts” (as set
forth in the Approved Budget), on a cumulative basis, in each case, as
determined by reference to the Approved Budget as then in effect.

 

“Actual Operating Disbursement Amounts” means with respect to any period, as the
context requires, (x) the amount of actual operating disbursements made by the
Loan Parties during such period that correspond to each line item (on a line
item by line item basis) under the headings “Operating Disbursements” in the
Approved Budget and/or (y) the sum, for such period, of all such disbursements
for all such line items which comprise “Total Operating Disbursements” (as set
forth in the Approved Budget), on a cumulative basis (consistent with the
Variance Testing Period), in each case, as determined by reference to the
Approved Budget as then in effect, which amounts do not include Actual
Restructuring Related Amounts.

 

“Actual Liquidity” means as of any date of determination, as the context
requires, for the Loan Parties, the actual amounts of US Bank Cash and the
amount of any outstanding Withdrawal Notice (which, except in connection with
any calculation of minimum Actual Liquidity pursuant to Section 6.12 shall
include any amounts deposited in the Loan Proceeds Account).

 

 2 

 

 

“Actual Restructuring Related Amounts” means with respect to any period, (a) the
amount of financing, restructuring and professional fees during such period
(including as reimbursement to any Secured Parties or the Specified Lender
Advisors), (b) interest, fees and other amounts paid in respect of the Loans and
(c) adequate protection payments in respect of loans issued under the
Pre-Petition Term Loan Agreement (including interest, fees and other amounts).

 

“Ad Hoc Group of Lenders” means those certain Lenders represented by the
Specified Lender Advisors (as specified by the Specified Lender Advisors).

 

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period or for any ABR Borrowing, an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for
such Interest Period multiplied by (b) the Statutory Reserve Rate.

 

“Administrative Agent” means Wilmington Savings Fund Society, FSB, in its
capacity as administrative agent for the Lenders hereunder and as collateral
agent for the Secured Parties.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.

 

“Advisors” means legal counsel (including local, regulatory, foreign and
in-house counsel), auditors, accountants, consultants, appraisers, engineers or
other advisors.

 

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

 

“Agents” means (i) the Administrative Agent and (ii) the Escrow Agent.

 

“Agent Advisors” means (x) Wilmer Cutler Pickering Hale and Dorr LLP, as legal
counsel, (y) Young Conaway Stargatt & Taylor, LLP, as local bankruptcy counsel,
and (z) in connection with the enforcement or protection of its rights in
connection with this Agreement and the other Loan Documents or in connection
with the Loans made hereunder, one counsel in each relevant jurisdiction, in
each case retained by the Agents.

 

“Aggregate Credit Exposure” means, at any time, the aggregate Credit Exposure of
all of the Lenders.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus ½ of 1%, (c) the Eurodollar Rate for a one month
Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1% (without any rounding) and (d) 2.0%
per annum. Any change in the Alternate Base Rate due to a change in the Prime
Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be
effective from and including the effective date of such change in the Prime
Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.
If the Alternate Base Rate is being used as an alternate rate of interest
pursuant to Section 2.14 hereof, then the Alternate Base Rate shall be the
greater of clauses (a), (b) and (d) above and shall be determined without
reference to clause (c) above.

 3 

 

 

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Borrower or its Subsidiaries from time to time
concerning or relating to bribery or corruption.

 

“Applicable Percentage” means, as to any Lender, the percentage which such
Lender’s Commitment then constitutes of the aggregate Commitments (or, at any
time after the Closing Date, the percentage which the aggregate principal amount
of such Lender’s Loans then outstanding constitutes of the aggregate principal
amount of the Loans then outstanding); provided that, in accordance with
Section 2.20, so long as any Lender shall be a Defaulting Lender, such
Defaulting Lender’s Commitment shall be disregarded in the foregoing
calculations.

 

“Applicable Rate” means, (i) 8.50% per annum for any ABR Loan, and (ii) 9.50%
per annum for any Eurodollar Loan.

 

“Approved Budget” means the then most current budget prepared by the Borrower
and approved by the Required Lenders in accordance with Section 5.13. As of the
Closing Date, the Approved Budget is attached hereto as Exhibit C.

 

“Approved Budget Variance Report” means a report provided by the Borrower to the
Administrative Agent and the Lenders (a) showing, in each case, on a line item
by line item and cumulative basis, the Actual Cash Receipts, the Actual
Operating Disbursement Amounts, actual US Bank Cash and Actual Restructuring
Related Amounts as of the last day of the Prior Week, and the Variance Testing
Period then most recently ended, noting therein (i) all variances, on a line
item by line item basis and a cumulative basis, from the Budgeted Cash Receipts,
the Budgeted Operating Disbursement Amounts, the Budgeted Liquidity and the
Budgeted Restructuring Related Amounts for such period as set forth in the
Approved Budget as in effect for such period and (ii) containing an indication
as to whether each material variance is temporary or permanent, (iii) certifying
compliance or non-compliance with such maximum permitted variances set forth
therein for such Variance Testing Period, and (iv) including explanations for
all material variances and violations, if any, of such covenant and if any such
violation exists, setting forth the actions which the Borrower has taken or
intends to take with respect thereto and (b) which such reports shall be
certified by a Responsible Officer of the Borrower and shall be in a form, and
shall contain supporting information, satisfactory to the Required Lenders in
their sole discretion (which satisfaction may be communicated via an email from
either of the Specified Lender Advisors).

 

“Approved Fund” has the meaning assigned to such term in Section 9.04.

 

“Asset Purchase Agreement” means that certain Asset Purchase Agreement, dated as
of May 20, 2020, by and among Akorn Holdings Topco LLC, as Purchaser (as defined
therein), the Borrower and the other Sellers as defined and named therein, as
may be amended, restated, supplemented or otherwise modified from time to time
in accordance with the terms thereof.

 4 

 

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 9.04), and accepted by the Administrative Agent, in the form of
Exhibit A or any other form approved by the Required Lenders (which approval may
be communicated via an email from either of the Specified Lender Advisors) and
the Administrative Agent.

 

“Attorney Costs” means all reasonable and documented fees, expenses and
disbursements of any law firm or other external legal counsel.

 

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

 

“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

 

“Bankruptcy Court” means the United States Bankruptcy Court for the District of
Delaware, or such other court having jurisdiction over the Chapter 11 Cases.

 

“Bankruptcy Event” means, with respect to any Person, when such Person becomes
the subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee, administrator, custodian, assignee for the benefit of
creditors or similar Person charged with the reorganization or liquidation of
its business, appointed for it, or, in the good faith determination of the
Administrative Agent, has taken any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any such proceeding or appointment,
provided that a Bankruptcy Event shall not result solely by virtue of any
ownership interest, or the acquisition of any ownership interest, in such Person
by a Governmental Authority or instrumentality thereof, unless such ownership
interest results in or provides such Person with immunity from the jurisdiction
of courts within the U.S. or from the enforcement of judgments or writs of
attachment on its assets or permits such Person (or such Governmental Authority
or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or
agreements made by such Person.

 

“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure, as the same
may be amended from time to time be in effect and applicable to the Chapter 11
Cases.

 

“Beneficial Owner” means, with respect to any U.S. Federal withholding Tax, the
beneficial owner, for U.S. Federal income tax purposes, to whom such Tax
relates.

 

“Board” means the Board of Governors of the Federal Reserve System of the U.S.

 

“Borrower” means Akorn, Inc., a Louisiana corporation.

 

“Borrowing” means Loans of the same Type, made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect.

 

 5 

 

 

“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03.

 

“Budgeted Cash Receipts” means with respect to any period, as the context
requires, (x) the amount that corresponds to the applicable line item under the
heading “Total Receipts” in the Approved Budget and/or (y) the sum, for such
period, of all the amounts for all such line items which comprise “Total
Receipts” (as set forth in the Approved Budget), on a cumulative basis
(consistent with the Variance Testing Period), in each case, as determined by
reference to the Approved Budget as then in effect.

 

“Budgeted Liquidity” means as of any date of determination, as the context
requires, for the Loan Parties, the amounts set forth as of such date of US Bank
Cash in the Approved Budget, as determined by reference to the Approved Budget
as then in effect (which, except in connection with any calculation of minimum
Actual Liquidity pursuant to Section 6.12, shall include any amounts deposited
in the Loan Proceeds Account).

 

“Budgeted Operating Disbursement Amounts” means with respect to any period, as
the context requires, (x) the amount that corresponds to the applicable line
item under the heading “Total Operating Disbursements” in the Approved Budget
and/or (y) the sum, for such period, of all such line items which comprise
“Total Operating Disbursements” (as set forth in the Approved Budget), on a
cumulative basis (consistent with the Variance Testing Period), in each case, as
determined by reference to the Approved Budget as then in effect, which amounts
do not include Budgeted Restructuring Related Amounts.

 

“Budgeted Restructuring Related Amounts” means with respect to any period,
(a) the amount of financing, restructuring and professional fees during such
period (including as reimbursement to any Secured Parties or the Specified
Lender Advisors), (b) interest paid, fees and other amounts in respect of the
Loans and (c) adequate protection payments in respect of loans issued under the
Pre-Petition Term Loan Agreement (including interest, fees and other amounts).

 

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term “Business Day” shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

 

“Business Plan” means the business plan delivered to the Specified Lender
Advisors on January 7, 2020.

 

“Capital Lease Obligations” of any Person means 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 the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

 

“Carve-Out” has the meaning assigned to such term in the DIP Order.

 

“Carve-Out Trigger Notice” has the meaning assigned to such term in the DIP
Order.

 

 6 

 

 

“Cash Management Order” means the order of the Bankruptcy Court entered in the
Chapter 11 Cases after the “first day” hearing, together with all extensions,
modifications and amendments thereto, in form and substance satisfactory to the
Required Lenders (which satisfaction may be communicated via an email from
either of the Specified Lender Advisors), which among other matters authorizes
the Debtors to maintain their existing cash management and treasury arrangements
(as set forth in the Pre-Petition Term Loan Agreement) or such other
arrangements as shall be acceptable to the Required Lenders in all material
respects (which acceptance may be communicated via an email from either of the
Specified Lender Advisors).

 

“Cash Receipts Cumulative Testing Period” means each cumulative period, with
respect to Actual Cash Receipts and Budgeted Cash Receipts, commencing on the
Permitted Variance Commencement Date and ending on the last day of the most
recently ended Prior Week ending after the First Testing Period; provided that
in the event that a Permitted Variance Reset occurs, the Cash Receipts
Cumulative Testing Period shall mean each cumulative period commencing on the
Reset Permitted Variance Commencement Date and ending on the last day of the
most recently ended Prior Week ending after the Reset First Testing Period.

 

“Change in Control” means

 

(a)            any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), but
excluding any employee benefit plan of such person or group or its respective
subsidiaries, and any Person acting in its capacity as trustee, agent or other
fiduciary or administrator of any such plan), is or becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
for purposes of this clause such person or group shall be deemed to have
“beneficial ownership” of all securities that such person or group has the right
to acquire, whether such right is exercisable immediately or only after the
passage of time (such right, an “option right”)), directly or indirectly, of
Equity Interests of the Borrower representing more than 35.0% of the voting
power of the total outstanding Equity Interests of the Borrower (and taking into
account all such securities that such person or group has the right to acquire
(whether pursuant to an option right or otherwise));

 

(b)            during any period of twelve (12) consecutive months, a majority
of the members of the Board of Directors of the Borrower cease to be composed of
individuals (i) who were members of that Board of Directors at the commencement
of such period, (ii) whose election or nomination to that Board of Directors was
approved by individuals referred to in preceding clause (i) constituting at the
time of such election or nomination at least a majority of that Board of
Directors or (iii) whose election or nomination to that Board of Directors was
approved by individuals referred to in preceding clauses (i) and
(ii) constituting at the time of such election or nomination at least a majority
of that Board of Directors; or

 

(c)            any Person or two or more Persons acting in concert shall have
acquired by contract or otherwise, or shall have entered into a contract (other
than the Asset Purchase Agreement or in the event that a Qualified Bidder (as
defined in the RSA) other than the Stalking Horse Bidder (as defined in the RSA)
is the Successful Bidder (as defined in the RSA), the purchase agreement for the
Successful Bidder) that, upon consummation thereof, will result in its or their
acquisition of the power to exercise, directly or indirectly, a controlling
influence over the management or policies of the Borrower, or control over the
equity securities of the Borrower entitled to vote for members of the Board of
Directors of the Borrower on a fully-diluted basis (and taking into account all
such securities that such Person or Persons have the right to acquire (whether
pursuant to an option right or otherwise)) representing 35.0% or more of the
combined voting power of such securities.

 

 7 

 

 

Notwithstanding the foregoing, the commencement of the Chapter 11 Cases shall
not constitute a “Change of Control” hereunder.

 

“Change in Law” means the occurrence after the Closing Date or, with respect to
any Lender, such later date on which such Lender becomes a party to this
Agreement) of any of the following: (a) the adoption or taking effect of any
law, rule, regulation or treaty, (b) any change in any law, rule, regulation or
treaty or in the administration, interpretation or application thereof by any
Governmental Authority or (c) compliance by any Lender (or, for purposes of
Section 2.15(b), by any lending office of such Lender or by such Lender’s
holding company, if any) with any request, guideline, requirement or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the Closing Date; provided that, notwithstanding anything herein to
the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act
and all requests, rules, guidelines, requirements or directives thereunder or
issued in connection therewith or in the implementation thereof, and (y) all
requests, rules, guidelines, requirements or directives promulgated by the Bank
for International Settlements, the Basel Committee on Banking Supervision (or
any successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a “Change in Law”, regardless of the date enacted, adopted, issued or
implemented.

 

“Chapter 11 Cases” shall have the meaning assigned to such term in the Recitals.

 

“Chapter 11 Plan” means a chapter 11 plan of liquidation or reorganization in
the Chapter 11 Cases in form and substance satisfactory to the Administrative
Agent and the Required Lenders in all respects and consented to by the
Administrative Agent and the Required Lenders, confirmed by an order (in form
and substance satisfactory to the Administrative Agent and the Required Lenders)
of the Bankruptcy Court under the Chapter 11 Cases (which consent or
satisfaction in each case of the Required Lenders may be communicated via an
email from either of the Specified Lender Advisors), containing, among other
things, (i) a release in favor of the Administrative Agent and the Lenders and
their respective affiliates, and (ii) provisions with respect to the settlement
or discharge of all claims and other debts and liabilities, as such plan of
liquidation or reorganization may be modified, altered, amended or otherwise
changed or supplemented with the prior written consent of the Administrative
Agent and the Required Lenders (which consent of the Required Lenders may be
communicated via an email from either of the Specified Lender Advisors).

 

“Chapter 11 Plan Disclosure Statement” means a disclosure statement describing
the Chapter 11 Plan.

 

“Charges” has the meaning assigned to such term in Section 9.17.

 

 8 

 

 

“Closing Date” means the date on which the conditions specified in Section 4.01
are satisfied (or waived in accordance with Section 9.02).

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Collateral” means (i) any and all property owned, leased or operated by a
Person covered by the Collateral Documents and any and all other property of any
Loan Party, now existing or hereafter acquired, that may at any time be, become
or be intended to be, subject to a security interest or Lien in favor of the
Administrative Agent, on behalf of itself and the Lenders and other Secured
Parties, to secure the Secured Obligations and (ii) the “DIP Collateral”
referred to in the DIP Order, it being understood that “Collateral” shall
include all such “DIP Collateral”; provided that Collateral shall in no event
include Excluded Assets.

 

“Collateral Documents” means, collectively, the DIP Order, the Security
Agreement, any Mortgages and any other agreements, instruments and documents
executed in connection with this Agreement that are intended to create, perfect
or evidence Liens to secure the Secured Obligations, including, without
limitation, all other security agreements, pledge agreements, mortgages, deeds
of trust, loan agreements, notes, guarantees, subordination agreements, pledges,
powers of attorney, consents, assignments, contracts, fee letters, notices,
leases, financing statements and all other written matter whether theretofore,
now or hereafter executed by the Borrower or any of the Subsidiaries and
delivered to the Administrative Agent.

 

“Commitment” means (a) as to any Lender, the aggregate commitment of such Lender
to make Loans as set forth in the Commitment Schedule or in the most recent
Assignment and Assumption executed by such Lender, as applicable, and (b) as to
all Lenders, the aggregate commitment of all Lenders to make Loans, which
aggregate commitment shall be thirty million dollars ($30,000,000) on the
Closing Date. After advancing the Loans, each reference to a Lender’s Commitment
shall refer to such Lender’s Applicable Percentage of the Loans.

 

“Commitment Schedule” means the Schedule attached hereto identified as such.

 

“Committee” means an official committee of unsecured creditors appointed in any
of the Chapter 11 Cases by the U.S. Trustee.

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

 

“Communications” has the meaning assigned to such term in Section 9.01(d).

 

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

 

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

 

 9 

 

 

“Credit Exposure” means, as to any Lender at any time, (a) until the Closing
Date, the aggregate amount of such Lender’s Commitments at such time, and
(b) thereafter, an amount equal to the outstanding principal amount of such
Lender’s Loans at such time.

 

“Credit Party” means any Agent or any Lender.

 

“Debtor” shall have the meaning assigned to such term in the introductory
paragraph of this Agreement.

 

“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.

 

“Defaulting Lender” means any Lender that (a) has failed, within two Business
Days of the date required to be funded or paid, to (i) fund any portion of its
Loans, or (ii) pay over to any Credit Party any other amount required to be paid
by it hereunder, unless, in the case of clause (i) above, such Lender notifies
the Administrative Agent in writing that such failure is the result of such
Lender’s good faith determination that a condition precedent to funding
(specifically identified and including the particular Default, if any) has not
been satisfied, (b) has notified the Borrower or any Credit Party in writing, or
has made a public statement, to the effect that it does not intend or expect to
comply with any of its funding obligations under this Agreement (unless such
writing or public statement indicates that such position is based on such
Lender’s good faith determination that a condition precedent (specifically
identified and including the particular Default, if any) to funding a Loan under
this Agreement cannot be satisfied) or generally under other agreements in which
it commits to extend credit, (c) has failed, within three Business Days after
request by a Credit Party, acting in good faith, to provide a certification in
writing from an authorized officer of such Lender that it will comply with its
obligations (and is financially able to meet such obligations) to fund
prospective Loans under this Agreement, provided that such Lender shall cease to
be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s
receipt of such certification in form and substance reasonably satisfactory to
it and the Administrative Agent (acting at the direction of the Required
Lenders, which direction may be communicated via an email from either of the
Specified Lender Advisors), (d) has become the subject of a Bankruptcy Event or
(e) has become the subject of any Bail-In Action; provided that a Lender shall
not be a Defaulting Lender solely by virtue of the ownership or acquisition of
any equity interest in that Lender or any direct or indirect parent company
thereof by a Governmental Authority so long as such ownership interest does not
result in or provide such Lender with immunity from the jurisdiction of courts
within the United States of America or from the enforcement of judgments or
writs of attachment on its assets or permit such Lender (or such Governmental
Authority) to reject, repudiate, disavow or disaffirm any contracts or
agreements made with such Lender. Any determination by the Administrative Agent
that a Lender is a Defaulting Lender under any one or more of clauses
(a) through (e) above shall be conclusive and binding absent manifest error, and
such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.20)
upon delivery of written notice of such determination to the Borrower and each
Lender.

 

“DIP Collateral” shall have the meaning assigned to such term in the DIP Order.

 

“DIP Facility” shall have the meaning assigned to such term in the recitals.

 

 10 

 

 

“DIP Order” means the Interim Order, unless the Final Order shall have been
entered, in which case it means the Final Order.

 

“Disclosed Matters” means the actions, suits, proceedings and environmental
matters disclosed in Schedule 3.06.

 

“Disqualified Equity Interest” means, with respect to any Person, any Equity
Interest in such Person that by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable, either mandatorily or
at the option of the holder thereof), or upon the happening of any event or
condition:

 

(a)            matures or is mandatorily redeemable (other than solely for
Equity Interests in such Person that do not constitute Disqualified Equity
Interests and cash in lieu of fractional shares of such Equity Interests),
whether pursuant to a sinking fund obligation or otherwise;

 

(b)            is convertible or exchangeable at the option of the holder
thereof for Indebtedness or Equity Interests (other than solely for Equity
Interests in such Person that do not constitute Disqualified Equity Interests
and cash in lieu of fractional shares of such Equity Interests); or

 

(c)            is or may be redeemable (other than solely for Equity Interests
in such Person that do not constitute Disqualified Equity Interests and cash in
lieu of fractional shares of such Equity Interests) or is or may be required to
be repurchased by such Person or any of its Affiliates, in whole or in part, at
the option of the holder thereof;

 

in each case, on or prior to the date that occurs 91 days after the Latest
Maturity Date.

 

“Document” has the meaning assigned to such term in the Security Agreement.

 

“dollars” or “$” refers to lawful money of the U.S.

 

“Domestic Subsidiary” means a Subsidiary organized under the laws of a
jurisdiction located in the U.S.

 

“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

 

“EEA Member Country” means any of the member states of the European
Union, Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

 

 11 

 

 

“Electronic Signature” means an electronic sound, symbol, or process attached
to, or associated with, a contract or other record and adopted by a Person with
the intent to sign, authenticate or accept such contract or record.

 

“Electronic System” means any electronic system, including e-mail,
e-fax, Intralinks®, ClearPar® and any other Internet or extranet-based site,
whether such electronic system is owned, operated or hosted by the
Administrative Agent and any of its respective Related Parties or any other
Person, providing for access to data protected by passcodes or other security
system.

 

“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, Release or threatened Release of any Hazardous Material or to health
and safety matters.

 

“Environmental Liability” means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) any violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) any exposure to any Hazardous
Materials, (d) the Release or threatened Release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.

 

“Equipment” has the meaning assigned to such term in the Security Agreement.

 

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any of the
foregoing.

 

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

 

“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder, with respect to a Plan (other than
an event for which the 30 day notice period is waived); (b) the failure to
satisfy the “minimum funding standard” (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (c) the filing pursuant to
Section 412(c) of the Code or Section 302(c) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by the Borrower or any of its ERISA Affiliates of any liability under
Title IV of ERISA with respect to the termination of any Plan; (e) the receipt
by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of
any notice relating to an intention to terminate any Plan or Plans or to appoint
a trustee to administer any Plan; (f) the incurrence by the Borrower or any of
its ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition upon the Borrower or
any of its ERISA Affiliates of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent, within the meaning of
Title IV of ERISA.

 

 12 

 

 

“Escrow Agent” means the Escrow Agent under the Escrow Agreement, which shall
initially be Wilmington Savings Fund Society, FSB, in its capacity as Escrow
Agent.

 

“Escrow Agreement” means an Escrow Agreement dated as of the Closing Date (as
amended, restated, supplemented or otherwise modified from time to time) among
the Borrower, the Escrow Agent and the Administrative Agent for and on behalf of
the Lenders relating to the Loan Proceeds Account.

 

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, bear interest at a rate
determined by reference to the Adjusted LIBO Rate.

 

“Eurodollar Floor” has the meaning assigned to such term in the definition of
“Eurodollar Rate”.

 

“Eurodollar Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the higher of (i) 1.00% per annum (the “Eurodollar
Floor”) and (ii) the Adjusted LIBO Rate.

 

“Event of Default” has the meaning assigned to such term in Article VII.

 

“Excluded Assets” means, after giving effect to the DIP Order, (a) governmental
licenses or state or local franchises, charters and authorizations to the extent
a security interest thereon is prohibited or restricted by applicable law,
(b) pledges and security interests prohibited or restricted by applicable law
(with no requirement to obtain the consent of any Governmental Authority or
third party, including, without limitation, no requirement to comply with the
Federal Assignment of Claims Act or any similar statute), (c) non-residential
leases of real property, unless the applicable lease expressly permits the
granting of liens on such lease, (d) any assets to the extent a security
interest in such assets could result in material adverse tax consequences or
material adverse regulatory consequences, in each case, as reasonably determined
by the Borrower with the consent of the Administrative Agent (acting at the
direction of the Required Lenders (which direction may be communicated via an
email from either of the Specified Lender Advisors)), and (e) any intent-to-use
trademark application prior to the filing of a “Statement of Use” or “Amendment
to Allege Use” with respect thereto.

 

“Excluded Subsidiary” means (a) any Subsidiary to the extent a Guarantee
hereunder by such Subsidiary is prohibited or restricted by applicable law
(including any requirement to obtain Governmental Authority or regulatory
authority, approval, license or authorization) on the Closing Date, and (b) any
Foreign Subsidiary.

 

 13 

 

 

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient: (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes; (b) in the case of a Lender, U.S. Federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (i) such Lender acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by the
Borrower under Section 2.19(b)) or (ii) such Lender changes its lending office,
except in each case to the extent that, pursuant to Section 2.17, amounts with
respect to such Taxes were payable either to such Lender’s assignor immediately
before such Lender acquired the applicable interest in a Loan or Commitment or
to such Lender immediately before it changed its lending office; (c) Taxes
attributable to such Recipient’s failure or inability to comply with
Section 2.17(f); and (d) any U.S. Federal withholding Taxes imposed under FATCA.

 

“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code, as of the
date of this Credit Agreement (or any amended or successor version that is
substantively comparable and not materially more onerous to comply with) and any
current or future regulations or official interpretations thereof, any
agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue
Code and any fiscal or regulatory legislation, rules or practices adopted
pursuant to any intergovernmental agreement, treaty or convention among
Governmental Authorities entered into in connection with the implementation of
the foregoing.

 

“FDA” means the United States Food and Drug Administration.

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.

 

“Fee Letters” means, collectively, (i) that certain Premium Letter dated as of
the Closing Date among the Borrower and Credit Suisse Loan Funding LLC,
(ii) that certain Administrative Agent Fee Letter dated as of the Closing Date
between the Borrower and Administrative Agent, and (iii) that certain Escrow
Agent Fee Letter dated as of the Closing Date between the Borrower and the
Escrow Agent.

 

“Fifth Testing Period” means (a) in respect of Actual Operating Disbursements
Amounts and Budgeted Operating Disbursement Amounts, the cumulative period
commencing on the Permitted Variance Commencement Date (which for the avoidance
of doubt is Monday, May 25, 2020) and ending on the last day of the sixth full
fiscal week after the Petition Date (which for the avoidance of doubt is Friday,
July 3, 2020), and (b) in respect of Actual Cash Receipts and Budgeted Cash
Receipts, the cumulative period commencing on the Permitted Variance
Commencement Date (which for the avoidance of doubt is Monday, May 25, 2020) and
ending on the last day of the eighth full fiscal week after the Petition Date
(which for the avoidance of doubt is Friday, July 17, 2020).

 

 14 

 

 

“Final Hearing Date” means the date on which the Final Order is entered by the
Bankruptcy Court.

 

“Final Order” means an order entered by the Bankruptcy Court approving the DIP
Facility on a final basis under the Bankruptcy Code, which order shall be in
form and substance satisfactory to the Administrative Agent and the Required
Lenders in their sole and absolute discretion (as such order may be amended,
modified or extended in a manner satisfactory to the Administrative Agent and
the Required Lenders) (which satisfaction of the Required Lenders in each case
may be communicated via an email from either of the Specified Lender Advisors),
which order has not been reversed or stayed or is otherwise subject to a timely
filed motion for a stay, rehearing, reconsideration, appeal or any other review
without the consent of the Administrative Agent and the Required Lenders (which
consent of the Required Lenders may be communicated via an email from either of
the Specified Lender Advisors).

 

“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.

 

“First Testing Period” means (a) in respect of Actual Operating Disbursements
Amounts and Budgeted Operating Disbursement Amounts, the cumulative period
commencing on the applicable Permitted Variance Commencement Date (which for the
avoidance of doubt is Monday, May 25, 2020) and ending on the last day of the
second full fiscal week after the Petition Date (which for the avoidance of
doubt is Friday, June 5, 2020), and (b) in respect of Actual Cash Receipts and
Budgeted Cash Receipts, the cumulative period commencing on the applicable
Permitted Variance Commencement Date (which for the avoidance of doubt is Monday
May 25, 2020) and ending on the last day of the fourth full fiscal week after
the Petition Date (which for the avoidance of doubt is Friday, June 19, 2020).

 

“Flow of Funds Statement” means a flow of funds statement relating to payments
to be made and credited by all of the parties on the Closing Date (including
wire instructions therefor) as prepared by the Borrower and its financial
advisor in consultation with (and approved by) the Administrative Agent and the
Specified Lender Advisors.

 

“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender, with
respect to such Borrower, that is not a U.S. Person, and (b) if the Borrower is
not a U.S. Person, a Lender, with respect to such Borrower, that is resident or
organized under the laws of a jurisdiction other than that in which the Borrower
is resident for tax purposes.

 

“Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary.

 

“Fourth Testing Period” means (a) in respect of Actual Operating Disbursements
Amounts and Budgeted Operating Disbursement Amounts, the cumulative period
commencing on the Permitted Variance Commencement Date (which for the avoidance
of doubt is Monday, May 25, 2020) and ending on the last day of the fifth full
fiscal week after the Petition Date (which for the avoidance of doubt is Friday,
June 26, 2020), and (b) in respect of Actual Cash Receipts and Budgeted Cash
Receipts, the cumulative period commencing on the Permitted Variance
Commencement Date (which for the avoidance of doubt is Monday, May 25, 2020) and
ending on the last day of the seventh full fiscal week after the Petition Date
(which for the avoidance of doubt is Friday, July 10, 2020).

 

 15 

 

 

“Full Payment” means, with respect to any Obligations, the full and complete
cash payment thereof, including any interest, fees and other charges accruing
during the Chapter 11 Cases. No Loans shall be deemed to have been paid in full
until all Commitments related to such Loans have expired or been terminated.

 

“Funding Date” means the First Funding Date and the Second Funding Date, as
applicable.

 

“GAAP” means generally accepted accounting principles in the U.S.

 

“Governmental Authority” means the government of the U.S., any other nation or
any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

 

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

 

“Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“IFRS” means the body of pronouncements issued by the International Accounting
Standards Board (IASB), including International Financial Reporting Standards
and interpretations approved by the IASB, International Accounting Standards and
Standing Interpretations Committee interpretations approved by the predecessor
International Accounting Standards Committee and adapted for use in the European
Union.

 

 16 

 

 

“Impacted Interest Period” has the meaning assigned to such term in the
definition of “LIBO Rate”.

 

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others,
(h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty, (j) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances, (k) obligations
under any liquidated earn-out, (l) any other Off-Balance Sheet Liability,
(m) obligations, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Swap
Agreements, and (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any Swap Agreement transaction, and (n) all
Disqualified Equity Interests. 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 provide that such Person is
not liable therefor.

 

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by, or on account of any obligation of any Loan
Party under any Loan Document and (b) to the extent not otherwise described in
subsection (a), Other Taxes.

 

“Indemnitee” has the meaning assigned to such term in Section 9.03(b).

 

“Information” has the meaning assigned to such term in Section 9.12.

 

“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.08.

 

“Interest Payment Date” means (a) with respect to any ABR Loan, the last
Business Day of each month, the date of any prepayment due to acceleration
pursuant to Article VII, and the Maturity Date, and (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part (and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months’ duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months’ duration
after the first day of such Interest Period), the date of any prepayment due to
acceleration pursuant to Article VII, and the Maturity Date.

 

 17 

 

 

“Interest Period” means, with respect to any Eurodollar Borrowing, the period
commencing on the date of such Eurodollar Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months (or, with the consent of each relevant affected Lender, twelve
months) thereafter, as the Borrower may elect; provided, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (ii) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

 

“Interim Order” means an order entered by the Bankruptcy Court approving the DIP
Facility on an interim basis under the Bankruptcy Code, which order shall be in
form and substance satisfactory to the Administrative Agent and the Required
Lenders in their sole and absolute discretion (as such order may be amended,
modified or extended in a manner satisfactory to the Administrative Agent and
the Required Lenders) (which satisfaction of the Required Lenders may be
communicated via an email from either of the Specified Lender Advisors), which
order is not subject to a stay, injunction or other limitation not approved by
the Administrative Agent and the Required Lenders (which satisfaction of the
Required Lenders may be communicated via an email from either of the Specified
Lender Advisors).

 

“Interpolated Rate” means, at any time, for any Interest Period, the rate per
annum (rounded upward to four decimal places) determined by the Administrative
Agent (which determination shall be conclusive and binding absent manifest
error) to be equal to the rate that results from interpolating on a linear basis
between: (a) the LIBO Screen Rate for the longest period (for which the LIBO
Screen Rate is available) that is shorter than the Impacted Interest Period and
(b) the LIBO Screen Rate for the shortest period (for which the LIBO Screen Rate
is available) that exceeds the Impacted Interest Period, in each case, at such
time. When determining the rate for a period which is less than the shortest
period for which the LIBO Screen Rate is available, the LIBO Screen Rate for
purposes of paragraph (a) above shall be deemed to be the overnight screen rate
where “overnight screen rate” means the overnight rate determined by the
Administrative Agent from such service as the Administrative Agent may select.

 

“Inventory” has the meaning assigned to such term in the Security Agreement.

 

“IRS” means the United States Internal Revenue Service.

 

“Joinder Agreement” means a Joinder Agreement in substantially the form of
Exhibit E and/or such other joinder form acceptable to the Administrative Agent
and the Required Lenders in their sole discretion (which acceptance of the
Required Lenders may be communicated via an email from either of the Specified
Lender Advisors).

 

 18 

 

 

“Lender Advisors” means (x) the Specified Lender Advisors, and (y) any other
financial advisor, auditor, attorney, accountant, appraiser, auditor, business
valuation expert, environmental engineer or consultant, turnaround consultant,
and other consultants, professionals and experts retained by the Ad Hoc Group of
Lenders and/or the Required Lenders.

 

“Lenders” means the Persons listed on the Commitment Schedule and any other
Person that shall have become a Lender hereunder pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a Lender hereunder
pursuant to an Assignment and Assumption.

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any applicable
Interest Period, the London interbank offered rate administered by ICE Benchmark
Administration (or any other Person that takes over the administration of such
rate for Dollars) for a period equal in length to such Interest Period as
displayed on page LIBOR01 or LIBOR02 of the Reuters screen or, in the event such
rate does not appear on a Reuters page or screen, on any successor or substitute
page on such screen that displays such rate, or on the appropriate page of such
other information service that publishes such rate as shall be selected by the
Administrative Agent from time to time in its reasonable discretion (the “LIBO
Screen Rate”) at approximately 11:00 a.m., London time, two (2) Business Days
prior to the commencement of such Interest Period; provided that, if the LIBO
Screen Rate shall not be available at such time for a period equal in length to
such Interest Period (an “Impacted Interest Period”), then the LIBO Rate shall
be the Interpolated Rate at such time, subject to Section 2.14 in the event that
the Administrative Agent shall conclude that it shall not be possible to
determine such Interpolated Rate. Notwithstanding the above, to the extent that
“LIBO Rate” or “Adjusted LIBO Rate” is used in connection with an ABR Borrowing,
such rate shall be determined as modified by the definition of Alternate Base
Rate.

 

“LIBO Screen Rate” has the meaning assigned to such term in the definition of
“LIBO Rate”.

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.

 

“Loan Documents” means, collectively, this Agreement, any promissory notes
issued pursuant to this Agreement, the Collateral Documents, the Loan Guaranty,
the Fee Letters, the Specified Advisors Fee Letters, the Approved Budget, the
Escrow Agreement and all other agreements, instruments, documents and
certificates identified in Sections 4.01 and 4.02 executed and delivered to, or
in favor of, the Agents or any Lender and including all other pledges, powers of
attorney, consents, assignments, contracts, notices, and all other written
matter whether heretofore, now or hereafter executed by or on behalf of any Loan
Party, or any employee of any Loan Party, and delivered to an Agent or any
Lender in connection with this Agreement or the transactions contemplated
hereby. Any reference in this Agreement or any other Loan Document to a Loan
Document shall include all appendices, exhibits or schedules thereto, and all
amendments, restatements, supplements or other modifications thereto, and shall
refer to this Agreement or such Loan Document as the same may be in effect at
any and all times such reference becomes operative.

 

 19 

 

 

“Loan Guarantor” means the Borrower’s Domestic Subsidiaries other than Excluded
Subsidiaries.

 

“Loan Guaranty” means Article X of this Agreement.

 

“Loan Parties” means, collectively, the Borrower, the Loan Guarantors and any
other Person who becomes a party to this Agreement pursuant to a Joinder
Agreement and their successors and assigns.

 

“Loan Proceeds Account” means an escrow account with the Escrow Agent into which
the proceeds of the Loans shall be deposited and retained subject to withdrawal
thereof by the Borrower pursuant to a Withdrawal Notice for use in accordance
with the terms hereof and of the Approved Budget or return thereof to the
Lenders upon the occurrence of the Maturity Date for any reason whatsoever.

 

“Loans” means the loans and advances made by the Lenders pursuant to this
Agreement.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, prospects or condition, financial or otherwise, of the
Borrower and its Subsidiaries taken as a whole (excluding (i) any matters
publicly disclosed in writing or disclosed to the Administrative Agent and the
Lenders in writing prior to the filing of the Chapter 11 Cases, (ii) any matters
disclosed in the schedules hereto, (iii) any matters disclosed in any first day
pleadings or declarations and (iv) the filing of the Chapter 11 Cases, the
events and conditions related and/or leading up thereto and the effects thereof
and any action required to be taken under the Loan Documents or under the DIP
Order), (b) the ability of any Loan Party to perform any of its obligations
under the Loan Documents to which it is a party, (c) the Collateral or the
Administrative Agent’s Liens (on behalf of itself and other Secured Parties) on
the Collateral or the priority of such Liens, or (d) the rights of or benefits
available to the Agents or the Lenders under any of the Loan Documents.

 

“Maturity Date” means the earliest of (a) the date that is six months after the
Petition Date, (b) the date on which the Obligations become due and payable
pursuant to this Agreement, whether by acceleration or otherwise, (c) the
effective date of a Chapter 11 Plan for the Debtors, (d) the date of
consummation of a sale of all or substantially all of the Debtors’ assets under
Section 363 of the Bankruptcy Code, including the Sale Transaction, (e) the
first business day on which the Interim Order expires by its terms or is
terminated, unless the Final Order has been entered and become effective prior
thereto, (f) conversion of any of the Chapter 11 Cases to a case under Chapter 7
of the Bankruptcy Code or any Loan Party shall file a motion or other pleading
seeking the conversion of the Chapter 11 Cases to Chapter 7 of the Bankruptcy
Code unless otherwise consented to in writing by the Required Lenders (which
consent may be communicated via an email from either of the Specified Lender
Advisors), (g) dismissal of any of the Chapter 11 Cases, unless otherwise
consented to in writing by the Required Lenders (which consent may be
communicated via an email from either of the Specified Lender Advisors), and
(h) the Final Order is vacated, terminated, rescinded, revoked, declared null
and void or otherwise ceases to be in full force and effect (unless consented to
by the Required Lenders) (which consent may be communicated via an email from
either of the Specified Lender Advisors).

 

 20 

 

 

“Maximum Liability” has the meaning assigned to such term in Section 10.10.

 

“Maximum Rate” has the meaning assigned to such term in Section 9.17.

 

“Maximum Withdrawal Amount” means (i) from the Closing Date until the Final
Hearing Date, $10,000,000, and (ii) thereafter, all remaining amounts held in
the Escrow Account.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Mortgage” means each mortgage, deed of trust or other agreement which conveys
or evidences a Lien in favor of the Administrative Agent, for the benefit of the
Administrative Agent and the Secured Parties, on real property of a Loan Party,
including any amendment, restatement, modification or supplement thereto.

 

“Mortgage Instruments” means such title reports, ALTA title insurance policies
(with endorsements), evidence of zoning compliance, property insurance, flood
certifications and flood insurance (and, if applicable FEMA form
acknowledgements of insurance), opinions of counsel, ALTA surveys, appraisals,
environmental assessments and reports, mortgage tax affidavits and declarations
and other similar information and related certifications as are requested by,
and in form and substance reasonably acceptable to, the Required Lenders from
time to time (which acceptance may be communicated via an email from either of
the Specified Lender Advisors).

 

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

 

“Net Proceeds” means, with respect to any event, (a) the cash proceeds received
in respect of such event including (i) any cash received in respect of any
non-cash proceeds (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or purchase
price adjustment receivable or otherwise, but excluding any interest payments),
but only as and when received, (ii) in the case of a casualty, insurance
proceeds and (iii) in the case of a condemnation or similar event, condemnation
awards and similar payments, minus (b) the sum of (i) all reasonable fees and
out-of-pocket expenses paid to third parties (other than Affiliates) in
connection with such event, (ii) in the case of a sale, transfer or other
disposition of an asset (including pursuant to a sale and leaseback transaction
or a casualty or a condemnation or similar proceeding), the amount of all
payments required to be made as a result of such event to repay Indebtedness
(other than under or pursuant to the Pre-Petition Loan Documents or any other
Indebtedness outstanding as of the Petition Date (unless senior to the
Indebtedness under the Pre-Petition Loan Documents) secured by such asset or
otherwise subject to mandatory prepayment as a result of such event and
(iii) the amount of all taxes paid (or reasonably estimated to be payable) and
the amount of any reserves established to fund contingent liabilities reasonably
estimated to be payable, in each case during the year that such event occurred
or the next succeeding year and that are directly attributable to such event (as
determined reasonably and in good faith by a Financial Officer).

 

 21 

 

 

“Non-Consenting Lender” has the meaning assigned to such term in
Section 9.02(d).

 

“Non-Paying Guarantor” has the meaning assigned to such term in Section 10.11.

 

“Non-U.S. Lender” means a Lender that is not a U.S. Person.

 

“Obligated Party” has the meaning assigned to such term in Section 10.02.

 

“Obligations” means all unpaid principal of and accrued and unpaid interest on
the Loans, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations and indebtedness (including interest and fees
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding), obligations and liabilities of any of the Borrower and its
Subsidiaries to any of the Lenders, the Agents or any indemnified party,
individually or collectively, existing on the Closing Date or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred under this
Agreement or any of the other Loan Documents or in respect of any of the Loans
made or reimbursement or other obligations incurred or other instruments at any
time evidencing any thereof.

 

“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (b) any indebtedness, liability or obligation under any so-called
“synthetic lease” transaction entered into by such Person, or (c) any
indebtedness, liability or obligation arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheets of
such Person (other than operating leases).

 

“Operating Disbursements Cumulative Testing Period” means each cumulative
period, with respect to Actual Operating Disbursement Amounts and Budgeted
Operating Disbursement Amounts, commencing on the Permitted Variance
Commencement Date and ending on the last day of the most recently ended Prior
Week ending after the Fifth Testing Period; provided that in the event that a
Permitted Variance Reset occurs, the Operating Disbursements Cumulative Testing
Period shall mean each cumulative period commencing on the Reset Permitted
Variance Commencement Date and ending on the last day of the most recently ended
Prior Week ending after the Reset Fifth Testing Period.

 

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Taxes (other than a connection arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to, or enforced, any
Loan Document, or sold or assigned an interest in any Loan or any Loan
Document).

 

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 2.19).

 

 22 

 

 

“Parent” means, with respect to any Lender, any Person as to which such Lender
is, directly or indirectly, a subsidiary.

 

“Participant” has the meaning assigned to such term in Section 9.04(c).

 

“Participant Register” has the meaning assigned to such term in Section 9.04(c).

 

“Paying Guarantor” has the meaning assigned to such term in Section 10.11.

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

 

“Permitted Encumbrances” means:

 

(a)            Liens imposed by law for Taxes that are (1) not yet due, (2) are
being contested in compliance with Section 5.04, or (3) the nonpayment of which
is permitted or required under the Bankruptcy Code;

 

(b)            carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s
and other like Liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than thirty (30) days or
are being contested in compliance with clauses (a)-(c) of Section 5.04;

 

(c)            pledges and deposits made in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance and other social
security laws or regulations;

 

(d)            deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;

 

(e)            judgment Liens in respect of judgments that do not constitute an
Event of Default under Section 7.01(k);

 

(f)            easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrower or any Subsidiary; and

 

(g)            non-exclusive licenses of intellectual property granted in the
ordinary course of business.

 

provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness, except with respect to clause (e) above.

 

 23 

 

 

“Permitted Exit ABL Credit Agreement” means a customary asset-backed revolving
credit agreement, the terms and conditions of which are satisfactory to the
Required Lenders (which satisfaction may be communicated via an email from
either of the Specified Lender Advisors).

 

“Permitted Investments” means:

 

(a)            direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the U.S. (or by any agency
thereof to the extent such obligations are backed by the full faith and credit
of the U.S.), in each case maturing within one year from the date of acquisition
thereof;

 

(b)            marketable direct obligations issued by any state of the U.S. or
any political subdivision of any such state or any public instrumentality
thereof, in each case maturing within one year after the date of acquisition
thereof and having, at the time of the acquisition thereof, a rating of at least
A-1 from S&P or at least P-1 from Moody’s;

 

(c)            investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody’s;

 

(d)            investments in certificates of deposit, banker’s acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the U.S. or any State thereof which has a combined capital and surplus
and undivided profits of not less than $500,000,000;

 

(e)            fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and entered into
with a financial institution satisfying the criteria described in clause
(c) above; and

 

(f)            money market funds that (i) comply with the criteria set forth in
Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of
1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio
assets of at least $5,000,000,000.

 

“Permitted Variance” means,

 

(a)            in respect of Actual Operating Disbursement Amounts, commencing
with the applicable Permitted Variance Commencement Date (which, for the
avoidance of doubt, is Monday, May 25, 2020, for each Variance Testing Period:

 

(i)            20.0% for the First Testing Period (and if applicable, the Reset
First Testing Period),

 

(ii)           17.5% for the Second Testing Period (and if applicable, the Reset
Second Testing Period),

 

 24 

 

 

(iii)          15.0% for the Third Testing Period (and if applicable, the Reset
Third Testing Period),

 

(iv)          12.5% for the Fourth Testing Period (and if applicable, the Reset
Fourth Testing Period),

 

(v)           10.0% for the Fifth Testing Period (and if applicable, the Reset
Fifth Testing Period), and

 

(vi)          7.5% for each Operating Disbursements Cumulative Testing Period
ending thereafter, and

 

(b)            in respect of Actual Cash Receipts, commencing with the
applicable Permitted Variance Commencement Date (which, for the avoidance of
doubt, is Monday, May 25, 2020), for all Variance Testing Periods:

 

(i)            25.0% for the First Testing Period (and if applicable, the Reset
First Testing Period), and

 

(ii)           22.5% for each Cash Receipts Cumulative Testing Period ending
thereafter, and

 

(c)            in respect of minimum Actual Liquidity for purposes of
determining compliance with Section 6.12, the greater of 25.0% and $7,500,000.

 

“Permitted Variance Commencement Date” means with respect to Actual Operating
Disbursement Amounts and Actual Cash Receipts, the first full calendar week
following the Petition Date (which, for the avoidance of doubt, is Monday,
May 25, 2020) or the date of approval of the new Approved Budget, as applicable.

 

“Permitted Variance Reset” means any approval by the Required Lenders in their
sole and absolute discretion (which approval may be communicated via an email
from either of the Specified Lender Advisors) of a new budget prepared by the
Borrower which budget replaces the then-existing Approved Budget in its entirety
(instead of merely updating, modifying or supplementing the then-existing budget
in accordance with the terms of Section 5.13).

 

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

 

“Petition Date” means May 17, 2020.

 

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

 25 

 

 

“Prepayment Event” means:

 

(a)            any sale, transfer or other disposition (including as a result of
casualty or condemnation or pursuant to a Sale and Leaseback Transaction) of any
property or asset of the Borrower or any Subsidiary, other than dispositions
described in clauses (a), (b), (c), (d), or (h) of Section 6.05; or

 

(b)            the incurrence by the Borrower or any Subsidiary of any
Indebtedness, other than Indebtedness permitted hereunder.

 

“Pre-Petition” means the time period ending immediately prior to the filing of
the Chapter 11 Cases.

 

“Pre-Petition Agent” means Wilmington Savings Fund Society, FSB (as successor to
JPMorgan Chase Bank, N.A.), in its capacity as the administrative agent and
collateral agent under the Pre-Petition Term Loan Agreement.

 

“Pre-Petition Collateral” means the “Collateral” as defined in the Pre-Petition
Term Loan Agreement.

 

“Pre-Petition Lenders” means the lenders party to the Pre-Petition Term Loan
Agreement.

 

“Pre-Petition Loan Documents” means the “Loan Documents” as defined in the
Pre-Petition Term Loan Agreement.

 

“Pre-Petition Obligations” means the “Obligations” as defined in the
Pre-Petition Term Loan Agreement.

 

“Pre-Petition Term Loan Agreement” means the Loan Agreement, dated as of
April 17, 2014, among the Borrower, the Loan Parties party thereto, Wilmington
Savings Fund Society, FSB (as successor to JPMorgan Chase Bank, N.A.), as the
administrative agent and collateral agent thereunder, and the lenders party
thereto (as amended, amended and restated, supplemented or otherwise modified
from time to time through the Petition Date).

 

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by Chase as its prime rate in effect at its principal offices in New
York City. Each change in the Prime Rate shall be effective from and including
the date such change is publicly announced as being effective.

 

“Prior Week” means for any week, the immediately preceding calendar week
(Saturday through Friday) ending on the Friday of such week.

 

“Projections” has the meaning assigned to such term in Section 5.01(e).

 

“Public-Sider” means any representative of a Lender that does not want to
receive material non-public information within the meaning of federal and state
securities laws.

 

 26 

 

 

“Qualified Equity Interests” means any Equity Interests of the Borrower that are
not Disqualified Equity Interests.

 

“Rating Agency” means (i) Moody’s, (ii) S&P and (iii) any “nationally recognized
statistical rating organization” within the meaning of
Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Borrower or any
direct or indirect parent of the Borrower as a replacement agency for Moody’s or
S&P, as the case may be.

 

“Recipient” means (a) the Agents or (b) any Lender, or either of the foregoing
or any combination thereof (as the context requires).

 

“Register” has the meaning assigned to such term in Section 9.04.

 

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.

 

“Release” means any releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, migrating, disposing or
dumping of any substance into the environment.

 

“Remedies Notice Period” shall have the meaning assigned to such term in the DIP
Order.

 

“Report” means reports prepared by the Administrative Agent or another Person
showing the results of appraisals, field examinations or audits pertaining to
the assets of the Loan Parties from information furnished by or on behalf of the
Borrower, after the Administrative Agent has exercised its rights of inspection
pursuant to this Agreement, which Reports may be distributed to the Lenders by
the Administrative Agent.

 

“Required Lenders” means, at any time, Lenders (other than Defaulting Lenders)
having Credit Exposures and unused Commitments representing more than 50.0% of
the Aggregate Credit Exposures and unused Commitments at such time.

 

“Required Milestones” means the “Milestones” set forth in Section 5.16, and any
“Milestones”, “Required Milestones” or such similar term or requirements, under
and as defined in the RSA or the DIP Order, as applicable.

 

“Requirement of Law” means, with respect to any Person, (a) the charter,
articles or certificate of organization or incorporation and bylaws or other
organizational or governing documents of such Person and (b) any statute, law
(including common law), treaty, rule, regulation, code, ordinance, order,
decree, writ, judgment, injunction or determination of any arbitrator or court
or other Governmental Authority (including Environmental Laws), 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.

 

“Reset Permitted Variance Commencement Date” means (i) with respect to Actual
Operating Disbursement Amounts, the second full calendar week following the
Permitted Variance Reset, and (ii) with respect to Actual Cash Receipts, the
fourth full calendar week following the Permitted Variance Reset.

 

 27 

 

 

“Reset Fifth Testing Period” means (a) in respect of Actual Operating
Disbursements Amounts and Budgeted Operating Disbursement Amounts, the
cumulative period commencing on the applicable Reset Permitted Variance
Commencement Date and ending on the last day of the sixth full fiscal week after
the Permitted Variance Reset, and (b) in respect of Actual Cash Receipts and
Budgeted Cash Receipts, the cumulative period commencing on the applicable Reset
Permitted Variance Commencement Date and ending on the last day of the eighth
full fiscal week after the Permitted Variance Reset.

 

“Reset First Testing Period” means (a) in respect of Actual Operating
Disbursements Amounts and Budgeted Operating Disbursement Amounts, the
cumulative period commencing on the applicable Reset Permitted Variance
Commencement Date and ending on the last day of the second full fiscal week
after the Permitted Variance Reset, and (b) in respect of Actual Cash Receipts
and Budgeted Cash Receipts, the cumulative period commencing on the applicable
Reset Permitted Variance Commencement Date and ending on the last day of the
fourth full fiscal week after the Permitted Variance Reset.

 

“Reset Fourth Testing Period” means (a) in respect of Actual Operating
Disbursements Amounts and Budgeted Operating Disbursement Amounts, the
cumulative period commencing on the Permitted Variance Reset and ending on the
last day of the fifth full fiscal week after the Permitted Variance Reset, and
(b) in respect of Actual Cash Receipts and Budgeted Cash Receipts, the
cumulative period commencing on the applicable Reset Permitted Variance
Commencement Date and ending on the last day of the seventh full fiscal week
after the Permitted Variance Reset.

 

“Reset Second Testing Period” means (a) in respect of Actual Operating
Disbursements Amounts and Budgeted Operating Disbursement Amounts, the
cumulative period commencing on the applicable Reset Permitted Variance
Commencement Date and ending on the last day of the third full fiscal week after
the Permitted Variance Reset, and (b) in respect of Actual Cash Receipts and
Budgeted Cash Receipts, the cumulative period commencing on the applicable Reset
Permitted Variance Commencement Date and ending on the last day of the fifth
full fiscal week after the Permitted Variance Reset.

 

“Reset Third Testing Period” means (a) in respect of Actual Operating
Disbursements Amounts and Budgeted Operating Disbursement Amounts, the
cumulative period commencing on the applicable Reset Permitted Variance
Commencement Date and ending on the last day of the fourth full fiscal week
after the Permitted Variance Reset, and (b) in respect of Actual Cash Receipts
and Budgeted Cash Receipts, the cumulative period commencing on the applicable
Reset Permitted Variance Commencement Date and ending on the last day of the
sixth full fiscal week after the Permitted Variance Reset.

 

“Responsible Officer” of any person means any executive officer or Financial
Officer of such person and any other officer or similar official thereof
responsible for the administration of the obligations of such person in respect
of this Agreement, or any other duly authorized employee or signatory of such
person.

 

 28 

 

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Borrower or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interests in the Borrower or such Subsidiary or any option,
warrant or other right to acquire any such Equity Interests in the Borrower or
such Subsidiary.

 

“RSA” means the Restructuring Support Agreement, dated as of May 20, 2020.

 

“RSA Termination Event” means an event described under Section 13 of the RSA
which with the passage of time or the taking of action thereunder would result
in the termination of the RSA.

 

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business.

 

“Sale Process” means the marketing and sale process of all or substantially all
of the Borrower’s consolidated assets, free and clear of liabilities (subject to
customary exceptions).

 

“Sale Transaction” means the transaction to effectuate the sale of all or
substantially all of the Borrower’s consolidated assets, free and clear of
liabilities (subject to customary exceptions) pursuant to the Chapter 11 Cases
which transaction shall be consistent in all material respects with the
requirements of the RSA.

 

“Sanctioned Country” means, at any time, a country or territory which is the
subject or target of any Sanctions.

 

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury, the U.S. Department of
State, or by the United Nations Security Council, the European Union or any EU
member state, (b) any Person operating, organized or resident in a Sanctioned
Country or (c) any Person controlled by any such Person.

 

“Sanctions” means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the U.S. government, including
those administered by the Office of Foreign Assets Control of the
U.S. Department of the Treasury or the U.S. Department of State, or (b) the
United Nations Security Council, the European Union or Her Majesty’s Treasury of
the United Kingdom.

 

“SEC” means the Securities and Exchange Commission of the U.S.

 

“Second Testing Period” means (a) in respect of Actual Operating Disbursements
Amounts and Budgeted Operating Disbursement Amounts, the cumulative period
commencing on the applicable Permitted Variance Commencement Date (which for the
avoidance of doubt is Monday, May 25, 2020) and ending on the last day of the
third full fiscal week after the Petition Date (which for the avoidance of doubt
is Friday, June 12, 2020), and (b) in respect of Actual Cash Receipts and
Budgeted Cash Receipts, the cumulative period commencing on the Permitted
Variance Commencement Date (which for the avoidance of doubt is Monday, May 25,
2020) and ending on the last day of the fifth full fiscal week after the
Petition Date (which for the avoidance of doubt is Friday, June 26, 2020).

 

 29 

 

 

“Secured Obligations” means all Obligations owing to one or more Lenders or
their respective Affiliates.

 

“Secured Parties” means (a) the Agents, (b) the Lenders, (c) the beneficiaries
of each indemnification obligation undertaken by any Loan Party under any Loan
Document, and (d) the successors and assigns of each of the foregoing.

 

“Security Agreement” means that certain Debtor-in-Possession Pledge and Security
Agreement (including any and all supplements thereto), dated as of the Closing
Date, among the Loan Parties and the Administrative Agent, for the benefit of
the Administrative Agent and the other Secured Parties, and any other pledge or
security agreement entered into, after the Closing Date by any other Loan Party
(as required by this Agreement or any other Loan Document) or any other Person
for the benefit of the Administrative Agent and the other Secured Parties, as
the same may be amended, restated, supplemented or otherwise modified from time
to time.

 

“Specified Lender Advisors” means (x) Gibson, Dunn & Crutcher LLP, as legal
counsel, and (y) Greenhill & Co., LLC, as financial advisor.

 

“Specified Lender Advisors Fee Letters” means (a) with respect to Gibson, Dunn &
Crutcher LLP, the Fee and Expense Reimbursement Agreement dated November 15,
2019, and (b) with respect to Greenhill & Co, LLC, that certain engagement
letter dated January 29, 2019.

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentage (including any
marginal, special, emergency or supplemental reserves) established by the Board
to which the Administrative Agent is subject with respect to the Adjusted LIBO
Rate, for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D of the Board. Eurodollar
Loans shall be deemed to constitute eurocurrency funding and to be subject to
such reserve requirements without benefit of or credit for proration, exemptions
or offsets that may be available from time to time to any Lender under such
Regulation D of the Board or any comparable regulation. The Statutory Reserve
Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.

 

“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.

 

 30 

 

 

“Subsidiary” means any direct or indirect subsidiary of the Borrower or a Loan
Party, as applicable.

 

“Successor Case” means with respect to the Chapter 11 Cases, any subsequent
proceedings under Chapter 7 of the Bankruptcy Code.

 

“Swap Agreement” means any agreement with respect to any swap, forward, spot,
future, credit default or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees,
independent contractors, or consultants of the Borrower or the Subsidiaries
shall be a Swap Agreement.

 

“Swap Obligation” means, with respect to any Loan Guarantor, any obligation to
pay or perform under any agreement, contract or transaction that constitutes a
“swap” within the meaning of section 1a(47) of the Commodity Exchange Act or any
rules or regulations promulgated thereunder.

 

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

 

“Third Testing Period” means (a) in respect of Actual Operating Disbursements
Amounts and Budgeted Operating Disbursement Amounts, the cumulative period
commencing on the applicable Permitted Variance Commencement Date (which for the
avoidance of doubt is Monday, May 25, 2020) and ending on the last day of the
fourth full fiscal week after the Petition Date (which for the avoidance of
doubt is Friday, June 19, 2020), and (b) in respect of Actual Cash Receipts and
Budgeted Cash Receipts, the cumulative period commencing on the applicable
Permitted Variance Commencement Date (which for the avoidance of doubt is
Monday, May 25, 2020) and ending on the last day of the sixth full fiscal week
after the Petition Date (which for the avoidance of doubt is Friday, July 3,
2020).

 

“Transactions” means the execution, delivery and performance by the Borrower of
this Agreement and the other Loan Documents, the borrowing of Loans and other
credit extensions and the use of the proceeds thereof.

 

“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Eurodollar Rate or the Alternate Base Rate.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the
State of New York or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.

 

 31 

 

 

“Unliquidated Obligations” means, at any time, any Secured Obligations (or
portion thereof) that are contingent in nature or unliquidated at such time,
including any Secured Obligation that is: (i) any obligation (including any
guarantee) that is contingent in nature at such time; or (ii) an obligation to
provide collateral to secure the foregoing type of obligations.

 

“U.S.” means the United States of America.

 

“U.S. Person” means a “United States person” within the meaning of
Section 7701(a)(30) of the Code.

 

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 2.17(f)(ii)(B)(3).

 

“US Bank Cash” means unrestricted cash of the Borrower and the Loan Guarantors
deposited in commercial banks located in the United States.

 

“USA PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

 

“Variance Testing Period” means, as applicable, each of (i) with respect to
Actual Operating Disbursement Amounts and Budgeted Operating Disbursement
Amounts, the First Testing Period, Second Testing Period, Third Testing Period,
Fourth Testing Period and Fifth Testing Period and, thereafter, each Operating
Disbursements Cumulative Testing Period and (ii) with respect to Actual Cash
Receipts and Budgeted Cash Receipts, the First Testing Period and, thereafter,
each Cash Receipts Cumulative Testing Period. For the avoidance of doubt, upon
the approval of a new Approved Budget, the Variance Testing Periods will reset
to the First Testing Period.

 

“Withdrawal” means a withdrawal from the Loan Proceeds Account made in
accordance with Section 4.02.

 

“Withdrawal Date” means the date of the making of any Withdrawal.

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

 

“Withdrawal Notice” means a notice substantially in the form attached hereto as
Exhibit B to be delivered by the Borrower to the Escrow Agent and the
Administrative Agent from time to time to request a Withdrawal from the Loan
Proceeds Account.

 

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

 

 32 

 

 

Section 1.02     Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Type (e.g., a “Eurodollar
Loan”). Borrowings also may be classified and referred to by Type (e.g., a
“Eurodollar Borrowing”).

 

Section 1.03     Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “law”
shall be construed as referring to all statutes, rules, regulations, codes and
other laws (including official rulings and interpretations thereunder having the
force of law or with which affected Persons customarily comply) and all
judgments, orders and decrees of all Governmental Authorities. The word “will”
shall be construed to have the same meaning and effect as the word “shall”.
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
restated, supplemented or otherwise modified (subject to any restrictions on
such amendments, restatements, supplements or modifications set forth herein),
(b) any definition of or reference to any statute, rule or regulation shall be
construed as referring thereto as from time to time amended, supplemented or
otherwise modified (including by succession of comparable successor laws),
(c) any reference herein to any Person shall be construed to include such
Person’s successors and assigns (subject to any restrictions on assignments set
forth herein) and, in the case of any Governmental Authority, any other
Governmental Authority that shall have succeeded to any or all functions
thereof, (d) the words “herein”, “hereof” and “hereunder”, and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (e) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement, (f) any reference in
any definition to the phrase “at any time” or “for any period” shall refer to
the same time or period for all calculations or determinations within such
definition, and (g) 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, securities, accounts and contract rights.

 

Section 1.04     Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if after
the Closing Date there occurs any change in GAAP or in the application thereof
on the operation of any provision hereof and the Borrower notifies the
Administrative Agent that the Borrower requests an amendment to any provision
hereof to eliminate the effect of such change in GAAP or in the application
thereof (or if the Administrative Agent notifies the Borrower that the Required
Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such migration or
change shall have become effective until such notice shall have been withdrawn
or such provision amended in accordance herewith. Notwithstanding any other
provision contained herein, all terms of an accounting or financial nature used
herein shall be construed, and all computations of amounts and ratios referred
to herein shall be made (i) without giving effect to any election under
Financial Accounting Standards Board Accounting Standards Codification 825-10-25
(or any other Accounting Standards Codification or Financial Accounting Standard
having a similar result or effect) to value any Indebtedness or other
liabilities of any Loan Party, the Borrower or any Subsidiary at “fair value”,
as defined therein and (ii) without giving effect to any treatment of
Indebtedness in respect of convertible debt instruments under Financial
Accounting Standards Board Accounting Standards Codification 470-20 (or any
other Accounting Standards Codification or Financial Accounting Standard having
a similar result or effect) to value any such Indebtedness in a reduced or
bifurcated manner as described therein, and such Indebtedness shall at all times
be valued at the full stated principal amount thereof.

 

 33 

 

 

Article II

 

The Credits

 

Section 2.01     Commitments.

 

(a)            Subject to the terms and conditions set forth herein and in the
DIP Order, each Lender with a Commitment severally (and not jointly) agrees to
make a Loan in dollars to the Borrower in an amount equal to such Lender’s
Commitment in a single borrowing, within three (3) Business Days of the date of
the entry of the Interim Order (but in accordance with the terms of the DIP
Order) (such date, the “Funding Date”). Each Lender’s Commitment shall
automatically be reduced by the amount of Loans funded in respect thereof on the
Funding Date; provided that, notwithstanding anything herein to the contrary,
all such Commitments shall terminate automatically and be reduced to zero on
June 3, 2020 to the extent that the Funding Date has not occurred on or prior to
such date (or such later date as agreed to by the Borrower and the Required
Lenders (which agreement of the Required Lenders may be communicated via an
email from either of the Specified Lender Advisors)).

 

(b)            Amounts borrowed or exchanged under Section 2.01(a) and repaid or
prepaid may not be reborrowed. All Loans and all other Obligations owed under
the Loan Documents or with respect to the Loans shall be paid in full not later
than the Maturity Date.

 

Section 2.02     Loans and Borrowings. The Loans may from time to time be
Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.03 and 2.08. The failure of
any Lender to make any Loan required to be made by it shall not relieve any
other Lender of its obligations hereunder; provided that the Commitments of the
Lenders are several and no Lender shall be responsible for any other Lender’s
failure to make Loans as required.

 

Section 2.03     Procedure for Borrowings.

 

(a)            The Borrower shall give the Administrative Agent irrevocable
notice delivered electronically in .pdf or other electronic imaging format
acceptable to the Administrative Agent pursuant to a Borrowing Request signed by
the Borrower, not later than 11:00 a.m., New York City time, five (5) Business
Days before the Funding Date, requesting that the Lenders make the Loans on the
Funding Date and specifying the amount to be borrowed (and, if the Loans shall
initially be Eurodollar Loans, specifying the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”). Each Lender shall make the Loans to be made by it
hereunder on the Funding Date by wire transfer of immediately available funds by
2:00 p.m., New York City time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. Upon
receipt of all requested funds, the Administrative Agent will promptly (i) in
accordance with the Flow of Funds Statement, (I) remit to the Borrower from such
amounts, all fees and expenses of the Agent Advisors and the Specified Lender
Advisors (which the Borrower shall immediately remit by wire transfer such
amounts to such counsel and advisors in accordance with the Flow of Funds
Statement) and (II) deduct and apply all fees payable to the Administrative
Agent on the Funding Date for its own account and for the account of the Escrow
Agent, (ii) in accordance with the Flow of Funds Statement and the Approved
Budget, and subject to Section 4.01, remit to the Borrower from such amounts an
amount to be agreed upon between the Borrower and the Required Lenders as the
initial withdrawal amount (which agreement of the Required Lenders may be
communicated via an email from either of the Specified Lender Advisors agreeing
to such amount or the final draft of the Flow of Funds Statement), and
(iii) remit the remaining amounts by promptly crediting such amount, in like
funds, to the Loan Proceeds Account. The Loans shall be deemed made by the
Lenders when so remitted and applied and so deposited to such account. The full
amount of all Loans made on each Funding Date will begin to accrue interest on
such Funding Date.

 

 34 

 

 

(b)            For the avoidance of doubt, the Agents shall have no Commitments
(to make Loans) in its capacity as the Agent and the Agent’s requirement to
forward the Loan proceeds received from the Lenders in accordance with the
provisions hereof shall be limited to the funds that it receives from the
Lenders (to fund such Loans).

 

Section 2.04     [Reserved].

 

Section 2.05     [Reserved].

 

Section 2.06     [Reserved].

 

Section 2.07     [Reserved].

 

Section 2.08      Conversion and Continuation Options. (a) The Loans initially
shall be of the Type specified in the Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower may elect to convert each Borrowing
to a different Type or to continue such Borrowing. The Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing.

 

(b)            To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by (x) 11:00 a.m.,
New York City time, on the Business Day preceding the proposed conversion date
for any request to convert Eurodollar Loans to ABR Loans; provided that any such
conversion of Eurodollar Loans may only be made on the last day of an Interest
Period with respect thereto, or (y) 11:00 a.m., New York City time, on the third
Business Day preceding the proposed conversion date for any request to convert
ABR Loans to Eurodollar Loans. Each such telephonic Interest Election Request
shall be irrevocable and shall be confirmed promptly by facsimile or electronic
delivery in .pdf or other electronic imaging format acceptable to the
Administrative Agent of a written Interest Election Request in a form approved
by the Administrative Agent and signed by the Borrower.

 

 35 

 

 

(c)            Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:

 

(i)            the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to clauses (iii) and
(iv) below shall be specified for each resulting Borrowing);

 

(ii)            the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;

 

(iii)           whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and

 

(iv)           if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such election,
which shall be a period contemplated by the definition of the term “Interest
Period”.

 

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration.

 

(d)            Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender’s portion of each resulting Borrowing.

 

(e)            If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be continued as
a Eurodollar Borrowing of one-month’s duration. Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing (i) no outstanding
Borrowing may be converted to or continued as a Eurodollar Borrowing and
(ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto.

 

(f)            Notwithstanding anything to the contrary in this Agreement, all
Borrowings, conversions and continuations of Eurodollar Loans and all selections
of Interest Periods shall be in such amounts and be made pursuant to such
elections so that, (a) after giving effect thereto, the aggregate principal
amount of the Eurodollar Loans comprising each Eurodollar Borrowing shall be
equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof and
(b) no more than ten (10) Eurodollar Borrowings shall be outstanding at any one
time.

 

 36 

 

 

Section 2.09     [Reserved].

 

Section 2.10     Repayment of Loans; Evidence of Debt. (a) The Borrower shall
repay to the Administrative Agent for the ratable account of the Lenders on the
Maturity Date for the Loans, the aggregate principal amount of all Loans
outstanding on such date.

 

(b)            Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the Indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.

 

(c)            The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender’s share thereof.

 

(d)            The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.

 

(e)            Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Required Lenders (which approval may be communicated via an
email from either of the Specified Lender Advisors). Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).

 

Section 2.11     Prepayment of Loans. (a) The Borrower shall have the right at
any time and from time to time to prepay any Borrowing in whole or in part,
subject to (1) prior notice in accordance with paragraph (f) of this Section and
(2) if applicable, payment of any break funding expenses under Section 2.16.

 

(b)            [Reserved].

 

(c)            (i) Subject in all respects to the DIP Order, in the event and on
each occasion that any Net Proceeds are received by or on behalf of the Borrower
or any of its Subsidiaries in respect of any Prepayment Event, the Borrower
shall, immediately after such Net Proceeds are received by it or such
Subsidiary, unless approved by the Required Lenders (which approval may be
communicated via an email from either of the Specified Lender Advisors), prepay
the Obligations as set forth in Section 2.18(b) or (c), as applicable, in an
aggregate amount equal to 100% of such Net Proceeds (in excess of an aggregate
amount of $100,000 for all such Prepayment Events under clause (a) and clause
(b)) in the case of any prepayment described in clause (a) and clause (b), as
applicable, of the definition thereof. No prepayment pursuant to this clause
(c) shall be required in respect of the sale or disposition of any Foreign
Subsidiary’s assets to the extent such prepayment would result in material
adverse tax consequences (as reasonably determined by the Borrower in
consultation with the Administrative Agent) or would be prohibited or restricted
by applicable law.

 

 37 

 

 

(ii)            On each occasion that the Borrower must make a prepayment of the
Loans pursuant to this Section 2.11, the Borrower shall, within one (1) Business
Day after the date of realization or receipt of such Net Proceeds, notify the
Administrative Agent in writing of any such mandatory prepayment, specifying the
date of prepayment and providing a reasonably detailed calculation of the amount
of such prepayment.

 

(d)            [Reserved].

 

(e)            [Reserved].

 

(f)            The Borrower shall notify the Administrative Agent by telephone
(confirmed by facsimile or electronic communication as provided in Section 9.01)
of any prepayment hereunder not later than 11:00 a.m., New York City time,
(A) in the case of prepayment of a Eurodollar Borrowing, three (3) Business Days
before the date of prepayment, or (B) in the case of prepayment of an ABR
Borrowing, one (1) Business Day before the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid. Promptly following
receipt of any such notice relating to a Borrowing, the Administrative Agent
shall advise the Lenders of the contents thereof. If any such notice is given,
the amount specified in such notice shall be due and payable on the date
specified therein, together with (except in the case of Loans that are ABR
Loans) accrued interest to such date on the amount prepaid. Partial prepayments
of Loans shall be in an aggregate principal amount of $1,000,000 or a whole
multiple thereof. Prepayments shall be accompanied by (i) accrued interest to
the extent required by Section 2.13 and (ii) break funding payments pursuant to
Section 2.16.

 

Section 2.12     Fees. (a) The Borrower agrees to pay the fees and other amounts
due under the terms of the Fee Letters, in accordance with the applicable terms
thereof.

 

(b)            All fees payable under the Fee Letters shall be paid to the
Persons due such amounts thereunder on the dates due thereunder, in immediately
available funds. Fees paid shall not be refundable under any circumstances.

 

Section 2.13     Interest. (a) The Loans comprising each ABR Borrowing shall
bear interest at the Alternate Base Rate plus the Applicable Rate.

 

(b)            The Loans comprising each Eurodollar Borrowing shall bear
interest at the Eurodollar Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.

 

 38 

 

 

(c)            Notwithstanding the foregoing, unless otherwise elected by the
Required Lenders (which election not to impose the default interest rate set
forth in this Section 2.13(c) may be communicated via an email from either of
the Specified Lender Advisors), upon the occurrence and during the continuation
of an Event of Default, Loans and all other Obligations due hereunder shall bear
interest, after as well as before judgment, at a rate per annum equal to 2% plus
the rate otherwise applicable thereto.

 

(d)            Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Commitments;
provided that (i) interest accrued pursuant to paragraph (c) of this
Section shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan, accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such repayment or prepayment and
(iii) in the event of any conversion of any Eurodollar Loan prior to the end of
the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.

 

(e)            All interest hereunder shall be computed on the basis of a year
of 360 days, except that interest computed by reference to the Alternate Base
Rate based on the Prime Rate shall be computed on the basis of a year of 365
days (or 366 days in a leap year), and in each case shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day). The applicable Alternate Base Rate, Eurodollar Rate, Adjusted LIBO Rate or
LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.

 

Section 2.14     Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

 

(a)            the Administrative Agent determines (which determination shall be
conclusive and binding absent manifest error) that adequate and reasonable means
do not exist for ascertaining (including, without limitation, by means of an
Interpolated Rate) the Eurodollar Rate, Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period; or

 

(b)            the Administrative Agent is advised by the Required Lenders that
the Eurodollar Rate, Adjusted LIBO Rate or the LIBO Rate, as applicable, for the
applicable Interest Period will not adequately and fairly reflect the cost to
such Lenders (or Lender) of making or maintaining their Loans included in such
Borrowing for such Interest Period; then the Administrative Agent shall give
notice thereof to the Borrower and the Lenders by electronic communication as
provided in Section 9.01 as promptly as practicable thereafter and, until the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and any such Eurodollar Borrowing shall be repaid on the last day of the then
current Interest Period applicable thereto, and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing.

 

 39 

 

 

Section 2.15     Increased Costs. (a) If any Change in Law shall:

 

(i)            impose, modify or deem applicable any reserve, special deposit,
liquidity or similar requirement (including any compulsory loan requirement,
insurance charge or other assessment) against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate);

 

(ii)            impose on any Lender or the London interbank market any other
condition, cost or expense (other than Taxes) affecting this Agreement or Loans
made by such Lender; or

 

(iii)            subject any Recipient to any Taxes (other than (A) Indemnified
Taxes, (B) Taxes described in clauses (b) through (d) of the definition of
Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal,
letters of credit, commitments, or other obligations, or its deposits, reserves,
other liabilities or capital attributable thereto;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender or such other Recipient of making, continuing, converting into or
maintaining any Loan (or of maintaining its obligation to make any such Loan) or
to reduce the amount of any sum received or receivable by such Lender or such
other Recipient hereunder (whether of principal, interest or otherwise), then
the Borrower will pay to such Lender or such other Recipient, as the case may
be, such additional amount or amounts as will compensate such Lender or such
other Recipient, as the case may be, for such additional costs incurred or
reduction suffered.

 

(b)            If any Lender determines that any Change in Law regarding capital
or liquidity requirements has or would have the effect of reducing the rate of
return on such Lender’s capital or on the capital of such Lender’s holding
company, if any, as a consequence of this Agreement or the Loans made by such
Lender, to a level below that which such Lender or such Lender’s holding company
could have achieved but for such Change in Law (taking into consideration such
Lender’s policies and the policies of such Lender’s holding company with respect
to capital adequacy and liquidity), then from time to time the Borrower will pay
to such Lender, as the case may be, such additional amount or amounts as will
compensate such Lender or such Lender’s holding company for any such reduction
suffered.

 

(c)            A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within ten (10) days
after receipt thereof.

 

(d)            Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s right to
demand such compensation; provided that the Borrower shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than 270 days prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender’s intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the 270-day period referred to above shall be
extended to include the period of retroactive effect thereof.

 

 40 

 

 

Section 2.16     Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default or as a
result of any prepayment pursuant to Section 2.11), (b) the conversion of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar
Loan on the date specified in any notice delivered pursuant hereto (regardless
of whether such notice may be revoked under Section 2.11(f) and is revoked in
accordance therewith), or (d) the assignment of any Eurodollar Loan other than
on the last day of the Interest Period applicable thereto as a result of a
request by the Borrower pursuant to Section 2.19 or 9.02(d), then, in any such
event, the Borrower shall compensate each Lender for the actual loss, cost and
expense attributable to such event (other than lost profits). In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such
Eurodollar Loan had such event not occurred, at the Eurodollar Rate that would
have been applicable to such Eurodollar Loan, for the period from the date of
such event to the last day of the then current Interest Period therefor (or, in
the case of a failure to borrow, convert or continue, for the period that would
have been the Interest Period for such Eurodollar Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the London interbank market. A certificate of any Lender setting forth
any amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within ten (10) days after receipt thereof.

 

Section 2.17     Withholding of Taxes; Gross-Up. (a) Payments Free of Taxes. Any
and all payments by or on account of any obligation of any Loan Party under any
Loan Document shall be made without deduction or withholding for any Taxes,
except as required by applicable law. If any applicable law (as determined in
the good faith discretion of an applicable withholding agent) requires the
deduction or withholding of any Tax from any such payment by a withholding
agent, then the applicable withholding agent shall be entitled to make such
deduction or withholding and shall timely pay the full amount deducted or
withheld to the relevant Governmental Authority in accordance with applicable
law and, if such Tax is an Indemnified Tax, then the sum payable by the
applicable Loan Party shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section 2.17) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

 

(b)            Payment of Other Taxes by the Borrower. The Loan Parties shall
timely pay to the relevant Governmental Authority in accordance with applicable
law, or at the option of the Administrative Agent timely reimburse it for, Other
Taxes.

 

 41 

 

 

 

(c)            Evidence of Payments. As soon as practicable after any payment of
Taxes by any Loan Party to a Governmental Authority pursuant to this
Section 2.17, such Loan Party shall deliver to the Administrative Agent and the
Lenders the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, a copy of the return reporting
such payment or other evidence of such payment reasonably satisfactory to the
Administrative Agent (acting at the direction of the Required Lenders (which
direction may be communicated via an email from either of the Specified Lender
Advisors)).

 

(d)            Indemnification by the Loan Parties. The Loan Parties shall
jointly and severally indemnify each Recipient, within ten (10) days after
demand therefor, for the full amount of any Indemnified Taxes (including
Indemnified Taxes imposed or asserted on or attributable to amounts payable
under this Section) payable or paid by such Recipient or required to be withheld
or deducted from a payment to such Recipient and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to any
Loan Party by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

 

(e)            Indemnification by the Lenders. Each Lender shall severally
indemnify the Administrative Agent, within ten (10) days after demand therefor,
for (i) any Indemnified Taxes attributable to such Lender (but only to the
extent that any Loan Party has not already indemnified the Administrative Agent
for such Indemnified Taxes and without limiting the obligation of the Loan
Parties to do so), (ii) any Taxes attributable to such Lender’s failure to
comply with the provisions of Section 9.04(c) relating to the maintenance of a
Participant Register and (iii) any Excluded Taxes attributable to such Lender,
in each case, that are payable or paid by the Administrative Agent in connection
with any Loan Document, and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to any Lender by the Administrative Agent
shall be conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to such Lender from any other source against any amount due
to the Administrative Agent under this paragraph (e).

 

(f)            Status of Lenders. (i) Any Lender that is entitled to an
exemption from or reduction of withholding Tax with respect to payments made
under any Loan Document shall deliver to the Borrower and the Administrative
Agent, at the time or times reasonably requested by the Borrower or the
Administrative Agent, such properly completed and executed documentation
reasonably requested by the Borrower or the Administrative Agent as will permit
such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if reasonably requested by the Borrower or
the Administrative Agent, shall deliver such other documentation prescribed by
applicable law or reasonably requested by the Borrower or the Administrative
Agent as will enable the Borrower or the Administrative Agent to determine
whether or not such Lender is subject to backup withholding or information
reporting requirements. Notwithstanding anything to the contrary in the
preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in
Section 2.17(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in
the Lender’s reasonable judgment such completion, execution or submission would
subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender.

 

 42 

 

 

(ii)           Without limiting the generality of the foregoing, in the event
that the Borrower is a U.S. Person,

 

(A)            any Lender that is a U.S. Person shall deliver to the Borrower
and the Administrative Agent on or prior to the date on which such Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Administrative Agent), executed copies
of IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup
withholding tax;

 

(B)            any Foreign Lender shall, to the extent it is legally entitled to
do so, deliver to the Borrower and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), whichever of the following is applicable:

 

(1)            in the case of a Foreign Lender claiming the benefits of an
income tax treaty to which the United States is a party (x) with respect to
payments of interest under any Loan Document, executed copies of IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. Federal withholding Tax
pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Loan Document, IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. Federal withholding Tax
pursuant to the “business profits” or “other income” article of such tax treaty;

 

(2)            in the case of a Foreign Lender claiming that its extension of
credit will generate U.S. effectively connected income, executed copies of IRS
Form W-8ECI;

 

(3)            in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code, (x) a
certificate substantially in the form of Exhibit F-1 to the effect that such
Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the
Code, a “10 percent shareholder” of the Borrower within the meaning of
Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) executed copies of IRS Form W-8BEN; or

 

 43 

 

 

(4)            to the extent a Foreign Lender is not the beneficial owner,
executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS
Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of
Exhibit F-2 or Exhibit F-3, IRS Form W-9, and/or other certification documents
from each Beneficial Owner, as applicable; provided that if the Foreign Lender
is a partnership and one or more direct or indirect partners of such Foreign
Lender are claiming the portfolio interest exemption, such Foreign Lender may
provide a U.S. Tax Compliance Certificate substantially in the form of
Exhibit F-4 on behalf of each such direct and indirect partner;

 

(C)            any Foreign Lender shall, to the extent it is legally entitled to
do so, deliver to the Borrower and the Administrative Agent (in such number of
copies as shall be requested by the recipient) on or prior to the date on which
such Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), executed copies of any other form prescribed by applicable law as a
basis for claiming exemption from or a reduction in U.S. Federal withholding
Tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrower or the Administrative Agent
to determine the withholding or deduction required to be made; and

 

(D)            if a payment made to a Lender under any Loan Document would be
subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Lender shall deliver to the Borrower and the Administrative Agent at the time or
times prescribed by law and at such time or times reasonably requested by the
Borrower or the Administrative Agent such documentation prescribed by applicable
law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA and to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount to deduct and withhold from such payment. Solely for purposes of this
clause (D), “FATCA” shall include any amendments made to FATCA after the date of
this Agreement.

 

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Administrative
Agent in writing of its legal inability to do so.

 

 44 

 

 

(iii)            On or before the date the Administrative Agent (or any
successor thereto) becomes a party to this Agreement, such Administrative Agent
shall provide to the Borrowers two duly-signed properly completed copies of  the
documentation prescribed in clause (A) or (B) below, as applicable (together
with any required attachments): (A) IRS Form W-9 or any successor thereto, or
(B)(x) IRS Form W-8ECI, or any successor thereto with respect to payments, if
any, received by the Administrative Agent for its own account, and (y) with
respect to payments received on account of any Lender, executed copies of IRS
Form W-8IMY (or any successor form) certifying that the Administrative Agent is
either (a) a “qualified intermediary” or (b) a “U.S. branch” and that payment it
receives for others are not effectively connected with the conduct of a trade or
business in the United States, in each case certifying that the Administrative
Agent is assuming primary withholding responsibility under Chapters 3 and 4 of
the Code and primary Form 1099 reporting and backup withholding responsibility
for payments it receives for the accounts of others, with the effect that the
Borrowers can make payments to the Administrative Agent without deduction or
withholding of any Taxes imposed by the United States. At any time thereafter,
the Administrative Agent shall update documentation previously provided
(including, if applicable, any successor forms thereto) when any documentation
previously delivered has expired or become obsolete or invalid or otherwise upon
the reasonable request of the Borrowers, or shall promptly notify the Borrowers
in writing of its legal inability to do so.

 

(g)            Treatment of Certain Refunds. If any party determines, in its
sole discretion exercised in good faith, that it has received a refund of any
Taxes as to which it has been indemnified pursuant to this Section 2.17
(including by the payment of additional amounts pursuant to this Section 2.17),
it shall pay to the indemnifying party an amount equal to such refund (but only
to the extent of indemnity payments made under this Section 2.17 with respect to
the Taxes giving rise to such refund), net of all out-of-pocket expenses
(including Taxes) of such indemnified party and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund). Such indemnifying party, upon the request of such indemnified party,
shall repay to such indemnified party the amount paid over pursuant to this
paragraph (g) (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) in the event that such indemnified party is
required to repay such refund to such Governmental Authority. Notwithstanding
anything to the contrary in this paragraph (g), in no event will the indemnified
party be required to pay any amount to an indemnifying party pursuant to this
paragraph (g) the payment of which would place the indemnified party in a less
favorable net after-Tax position than the indemnified party would have been in
if the Tax subject to indemnification and giving rise to such refund had not
been deducted, withheld or otherwise imposed and the indemnification payments or
additional amounts giving rise to such refund had never been paid. This
paragraph (g) shall not be construed to require any indemnified party to make
available its Tax returns (or any other information relating to its Taxes that
it deems confidential) to the indemnifying party or any other Person.

 

 45 

 

 

(h)            Survival. Each party’s obligations under this Section 2.17 shall
survive the resignation or replacement of the Administrative Agent or any
assignment of rights by, or the replacement of, a Lender, the termination of the
Commitments and the repayment, satisfaction or discharge of all obligations
under any Loan Document.

 

(i)            Defined Terms. For purposes of this Section 2.17, the term
“applicable law” includes FATCA.

 

Section 2.18           Payments Generally; Allocation of Proceeds; Sharing of
Set-offs. (a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest or fees, or of amounts payable under
Section 2.15, 2.16 or 2.17, or otherwise) prior to 3:00 p.m., New York City
time, on the date when due, in immediately available funds, without set off or
counterclaim. Any amounts received after such time on any date shall be deemed
to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices at 500 Delaware Avenue, Wilmington, Delaware
19801, except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall
be made directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments hereunder shall be made in dollars.

 

(b)            Pre-Default Allocation of Payments. At all times when
Section 2.18(c) does not apply and except as otherwise expressly provided
herein, monies to be applied to the Obligations and the Prior Lender
Obligations, whether arising from payments by the Loan Parties, realization on
Collateral, setoff, or otherwise, shall be allocated as follows (subject, in all
respects, to the Carve-Out):

 

(i)            First, to payment of that portion of the Obligations constituting
fees, indemnities, expenses and other amounts (other than principal and
interest, but including Attorney Costs and fees and expenses of Agent Advisors
payable under Section 9.03 and amounts payable under Section 2.15, 2.16 or 2.17)
payable to the Agents in their capacity as such, until paid in full;

 

(ii)           Second, to payment of that portion of the Obligations
constituting fees, indemnities and other amounts (other than principal and
interest) payable to the Lenders (including Attorney Costs and fees and expenses
of Lender Advisors payable under Section 9.03 and amounts payable under
Section 2.15, 2.16 or 2.17), ratably among them in proportion to the amounts
described in this clause Second payable to them, until paid in full;

 

(iii)          Third, to pay interest and principal due in respect of all Loans,
until paid in full;

 

 46 

 

 

(iv)          Fourth, subject to the proviso in clause (iii) above, to the
payment of all other Obligations of the Loan Parties that are due and payable to
the Agents and the other Secured Parties (other than any Defaulting Lenders) on
such date, ratably based upon the respective aggregate amounts of all such
Obligations owing to the Agents and the other Secured Parties (other than any
Defaulting Lenders) on such date, until paid in full;

 

(v)           Fifth, subject to the proviso in clause (iii) above, ratably to
pay any Obligations that are that are due and payable to Defaulting Lenders,
until paid in full;

 

(vi)          Sixth, to the payment of the Prior Lender Obligations in
accordance with the Pre-Petition First Lien Credit Agreement; and

 

(vii)         Last, the balance, if any, to the Borrower or as otherwise
required by Law.

 

Amounts shall be applied to each category of Obligations set forth above until
Full Payment thereof and then to the next category. If amounts are insufficient
to satisfy a category, they shall be applied on a pro rata basis among the
Obligations in the category.

 

(c)            Post-Default Allocation of Payments. Notwithstanding anything
herein to the contrary, after the occurrence and during the continuation of an
Event of Default, the Required Lenders may elect, in lieu of the allocation of
payments set forth in Section 2.18(a), that monies to be applied to the
Obligations, whether arising from payments by the Loan Parties, realization on
Collateral, setoff or otherwise, shall, to the extent elected by the Required
Lenders (in writing to the Administrative Agent), be allocated as follows
(subject, in all respects, to the Carve-Out):

 

(i)            First, to payment of that portion of the Obligations constituting
fees, indemnities, expenses and other amounts (other than principal and
interest, but including Attorney Costs and fees and expenses of Agent Advisors
payable under Section 9.03 and amounts payable under Section 2.15, 2.16 or 2.17)
payable to the Agents in their capacity as such, until paid in full;

 

(ii)           Second, to payment of that portion of the Obligations
constituting fees, indemnities and other amounts (other than principal and
interest) payable to the Lenders (including Attorney Costs and fees and expenses
of Lender Advisors payable under Section 9.03 and amounts payable under
Section 2.15, 2.16 or 2.17), ratably among them in proportion to the amounts
described in this clause Second payable to them, until paid in full;

 

(iii)          Third, to pay interest and principal due in respect of all Loans,
until paid in full;

 

(iv)          Fourth, subject to the proviso in clause (iii) above, to the
payment of all other Obligations of the Loan Parties that are due and payable to
the Agents and the other Secured Parties (other than any Defaulting Lenders) on
such date, ratably based upon the respective aggregate amounts of all such
Obligations owing to the Agents and the other Secured Parties (other than any
Defaulting Lenders) on such date, until paid in full;

 

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(v)           Fifth, subject to the proviso in clause (iii) above, ratably to
pay any Obligations that are that are due and payable to Defaulting Lenders,
until paid in full;

 

(vi)          Sixth, subject to the proviso in clause (iii) above, to pay any
other Obligations until paid in full;

 

(vii)         Seventh, to the payment of the Prior Lender Obligations in
accordance with the Pre-Petition First Lien Credit Agreement; and

 

(viii)        Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.

 

Amounts shall be applied to each category of Obligations set forth above until
Full Payment thereof and then to the next category. If amounts are insufficient
to satisfy a category, they shall be applied on a pro rata basis among the
Obligations in the category. The allocations set forth in this
Section 2.18(c) are solely to determine the rights and priorities of the Agents
and Lenders as among themselves, may be changed by agreement among the Agents
and all of the Lenders without the consent of any Loan Party and are subject to
Section 2.20 (regarding Defaulting Lenders). Appropriate adjustments shall be
made with respect to payments from other Loan Parties to preserve the allocation
to Obligations otherwise set forth above in this Section 2.18(c). This
Section 2.18(c) is not for the benefit of or enforceable by any Loan Party.

 

(d)            The Borrower hereby irrevocably authorizes the Administrative
Agent to charge any deposit account of the Borrower maintained with the
Administrative Agent for each payment of principal, interest and fees as it
becomes due hereunder or any other amount due under the Loan Documents.

 

(e)            If, except as otherwise expressly provided herein (subject in all
respects to the Carve-Out), any Lender shall, by exercising any right of set off
or counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and accrued interest
thereon than the proportion received by any other similarly situated Lender,
then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Loans of other Lenders to the extent necessary
so that the benefit of all such payments shall be shared the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.

 

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(f)            Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.

 

(g)            If any Lender shall fail to make any payment required to be made
by it hereunder, then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), (i) apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender’s obligations hereunder until all such unsatisfied
obligations are fully paid and/or (ii) hold any such amounts in a segregated
account as cash collateral for, and application to, any future funding
obligations of such Lender hereunder; application of amounts pursuant to (i) and
(ii) above shall be made in any order determined by the Administrative Agent in
its discretion.

 

Section 2.19           Mitigation Obligations; Replacement of Lenders.

 

(a)            If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any Indemnified Taxes or additional amounts to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.17, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17,
as the case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.

 

(b)            If any Lender requests compensation under Section 2.15, or if the
Borrower is required to pay any Indemnified Taxes or additional amounts to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.17, or if any Lender becomes a Defaulting Lender, then the Borrower
may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights (other than its existing rights to
payments pursuant to Section 2.15 or 2.17) and obligations under this Agreement
and other Loan Documents to an assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment);
provided that (i) the Borrower shall have received the prior written consent of
the Administrative Agent, which consent shall not unreasonably be withheld,
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.15 or payments required
to be made pursuant to Section 2.17, such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.

 

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Section 2.20           Defaulting Lenders. Notwithstanding any provision of this
Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the
following provisions shall apply for so long as such Lender is a Defaulting
Lender:

 

(a)            fees shall cease to accrue on the unfunded portion of the
Commitment of such Defaulting Lender pursuant to Section 2.12(a); and

 

(b)            the Commitment and Credit Exposure of such Defaulting Lender
shall not be included in determining whether the Required Lenders have taken or
may take any action hereunder (including any consent to any amendment, waiver or
other modification pursuant to Section 9.02) or under any other Loan Document;
provided, that, except as otherwise provided in Section 9.02, this clause
(b) shall not apply to the vote of a Defaulting Lender in the case of an
amendment, waiver or other modification requiring the consent of such Lender or
each Lender directly affected thereby.

 

Section 2.21           Returned Payments

 

. If after receipt of any payment which is applied to the payment of all or any
part of the Obligations (including a payment effected through exercise of a
right of setoff), the Administrative Agent or any Lender is for any reason
compelled to surrender such payment or proceeds to any Person because such
payment or application of proceeds is invalidated, declared fraudulent, set
aside, determined to be void or voidable as a preference, impermissible setoff,
or a diversion of trust funds, or for any other reason (including pursuant to
any settlement entered into by the Administrative Agent or such Lender in its
discretion), then the Obligations or part thereof intended to be satisfied shall
be revived and continued and this Agreement shall continue in full force as if
such payment or proceeds had not been received by the Administrative Agent or
such Lender. The provisions of this Section 2.21 shall be and remain effective
notwithstanding any contrary action which may have been taken by the
Administrative Agent or any Lender in reliance upon such payment or application
of proceeds. The provisions of this Section 2.21 shall survive the termination
of this Agreement.

 

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Section 2.22           Super Priority Nature of Obligations and Administrative
Agent’s Liens; Payment of Obligations.

 

(a)            The priority of the Administrative Agent’s Liens on the
Collateral, claims and other interests shall be as set forth in the DIP Order
(and, for the avoidance of doubt, are subject to the Carve-Out).

 

(b)            Upon the maturity (whether by acceleration or otherwise) of any
of the Obligations under this Agreement or any of the other Loan Documents, the
Administrative Agent and the Lenders shall be entitled to immediate payment of
such Obligations without application to or order of the Bankruptcy Court.

 

Article III

 

Representations and Warranties

 

In order to induce the Administrative Agent and Lenders to enter into this
Agreement and to furnish the Loans hereunder, each Loan Party represents and
warrants to the Administrative Agent and each Lender on the Closing Date, each
Funding Date, and each Withdrawal Date, that the following statements are true
and correct:

 

Section 3.01           Organization; Powers. Each Loan Party and each of its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business,
and is in good standing, in every jurisdiction where such qualification is
required.

 

Section 3.02           Authorization; Enforceability. Subject to the entry of
the Interim Order or Final Order, as applicable, the Transactions are within
each Loan Party’s organizational powers and have been duly authorized by all
necessary organizational actions and, if required, actions by equity holders.
This Agreement has been duly executed and delivered by each Loan Party, and each
other Loan Document to which each Loan Party is a party, when delivered
hereunder, will have been duly executed and delivered by such Loan Party.
Subject to the entry of the Interim Order or Final Order, as applicable, this
Agreement constitutes, and each other Loan Document when delivered hereunder
shall constitute, a legal, valid and binding obligation of each Loan Party,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.

 

Section 3.03           Governmental Approvals; No Conflicts. Subject to the
entry of the Interim Order or the Final Order, as applicable, the Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect and except for filings
necessary to perfect Liens created pursuant to the Loan Documents, (b) will not
violate any Requirement of Law applicable to any Loan Party or any of its
Subsidiaries, (c) will not violate or result in a default under (i) any
certificate or articles of incorporation or organization, by-laws, operating,
management or partnership agreement or other organizational documents of any
Loan Party or (ii) any indenture, material agreement or other material
instrument binding upon any Loan Party or any of its Subsidiaries or the assets
of any Loan Party or any of its Subsidiaries, or give rise to a right thereunder
to require any payment to be made by any Loan Party or any of its Subsidiaries,
and (d) will not result in the creation or imposition of any Lien on any asset
of any Loan Party or any of its Subsidiaries, except Liens created pursuant to
the Loan Documents.

 

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Section 3.04           Financial Condition; No Material Adverse Change. (a) The
Borrower has heretofore furnished to the Lenders its consolidated balance sheet
and statements of income, stockholders equity and cash flows as of and for the
fiscal years ended December 31, 2019, December 31, 2018 and December 31, 2017
reported on by BDO USA, LLP, independent registered public accounting firm. Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower and its
consolidated Subsidiaries as of such date and for such period in accordance with
GAAP or IFRS, as applicable.

 

(b)            Other than as a result of the Chapter 11 Cases, since
December 31, 2019, there has occurred no event, change or condition that has
had, or could reasonably be expected to have, a Material Adverse Effect.

 

(c)            Except as set forth in the financial statements referred to in
Section 3.04(a) and the Chapter 11 Cases, there are no liabilities of any Loan
Party of any kind, whether accrued, contingent, absolute, determined,
determinable or otherwise, which would reasonably be expected to result in a
Material Adverse Effect.

 

Section 3.05           Properties. (a) As of the Closing Date, Schedule 3.05
sets forth the address of each parcel of real property that is owned or leased
by each Loan Party. Each of such leases and subleases is valid and enforceable
in accordance with its terms and is in full force and effect, and no default by
any party to any such lease or sublease exists. Each of the Loan Parties and its
Subsidiaries has good and indefeasible title to, or valid leasehold interests
in, all of its real and personal property that is material to the businesses of
the Loan Parties, free of all Liens other than those permitted by Section 6.02.

 

(b)            (i) Each Loan Party and each of its Subsidiaries owns, or is
licensed to use, all trademarks, trade names, copyrights, patents and other
intellectual property necessary and material to its business as currently
conducted, (ii) a correct and complete list of all registered or applied for
patents, copyrights, and trademarks owned by the Loan Parties and their
respective Subsidiaries, as of the Closing Date, is set forth on Schedule 3.05,
(iii) the use thereof by each Loan Party and each of its Subsidiaries does not
infringe upon the rights of any other Person , except where such infringement
would not be material to the businesses of the Loan Parties and their
Subsidiaries, and (iv) each Loan Party’s rights thereto are not subject to any
licensing agreement or similar arrangement, except for licenses entered into in
the ordinary course of business.

 

Section 3.06           Litigation and Environmental Matters. (a) Except for the
Chapter 11 Cases, no actions, suits or proceedings by or before any arbitrator
or Governmental Authority are pending or, to the knowledge of any Loan Party,
threatened against or affecting any Loan Party or any of its Subsidiaries (i) as
to which there is a reasonable possibility of an adverse determination and that,
if adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve this Agreement or the Transactions.

 

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(b)            Except for the Disclosed Matters (i) no Loan Party or any of its
Subsidiaries has received notice of any claim with respect to any Environmental
Liability or knows of any basis for any Environmental Liability and (ii) except
with respect to any other matters that, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect, no Loan Party
or any of its Subsidiaries (A) has failed to comply with any Environmental Law
or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (B) has become subject to any
Environmental Liability, (C) has received notice of any claim with respect to
any Environmental Liability or (D) knows of any basis for any Environmental
Liability.

 

(c)            Since the Closing Date, there has been no change in the status of
the Disclosed Matters that, individually or in the aggregate, has resulted in,
or materially increased the likelihood of, a Material Adverse Effect.

 

Section 3.07           Compliance with Laws and Agreements; No Default. Subject
to the entry of the Interim Order or the Final Order, as applicable, each Loan
Party and each of its Subsidiaries is in compliance with (i) all Requirements of
Law applicable to it or its property and (ii) all indentures, agreements and
other instruments binding upon it or its property. No Default has occurred and
is continuing.

 

Section 3.08           Investment Company Status. No Loan Party or any of its
Subsidiaries is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940.

 

Section 3.09           Taxes. Each Loan Party and each of its Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which such Loan Party or such of its
Subsidiaries, as applicable, has set aside on its books adequate reserves,
(b) to the extent that the failure to do so could not be expected to result in a
Material Adverse Effect, or (c) the nonpayment of which is permitted or required
under the Bankruptcy Code.

 

Section 3.10           ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. All foreign pension schemes sponsored or
maintained by the Borrower and each of its Subsidiaries is maintained in
accordance with the requirements of applicable foreign law, except where
noncompliance could not reasonably be expected to have a Material Adverse
Effect.

 

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Section 3.11           Disclosure. The Loan Parties have disclosed to the
Lenders all agreements, instruments and corporate or other restrictions to which
any Loan Party or any of its Subsidiaries is subject, and all other matters
known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. None of the reports, financial
statements, certificates or other information furnished in writing by or on
behalf of any Loan Party to the Administrative Agent or any Lender in connection
with the negotiation of this Agreement or any other Loan Document (as modified
or supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Loan Parties represent only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time
delivered and, if such projected financial information was delivered prior to
the Closing Date, as of the Closing Date.

 

Section 3.12           No EEA Financial Institution. No Loan Party is an EEA
Financial Institution.

 

Section 3.13           Insurance. Schedule 3.13 lists each material insurance
policy maintained by or on behalf of the Loan Parties and their Subsidiaries as
of the Closing Date. As of the Closing Date, all premiums in respect of such
insurance have been paid. The Borrower maintains, and has caused each of its
Subsidiaries to maintain, with financially sound and reputable insurance
companies, insurance on all their real and personal property in such amounts,
subject to such deductibles and self-insurance retentions and covering such
properties and risks as are adequate and customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations.

 

Section 3.14           Capitalization and Subsidiaries. Schedule 3.14 sets forth
(a) a correct and complete list of the name and relationship to the Borrower of
each Subsidiary, (b) a true and complete listing of each class of each of the
Borrower’s authorized Equity Interests, all of which issued shares are validly
issued, outstanding, fully paid and non-assessable, and owned beneficially and
of record by the Persons identified on Schedule 3.14, and (c) the type of entity
of the Borrower and each Subsidiary. All of the issued and outstanding Equity
Interests owned by any Loan Party have been (to the extent such concepts are
relevant with respect to such ownership interests) duly authorized and issued
and are fully paid and non-assessable. Except as set forth on Schedule 3.14 (or,
as supplemented with the consent of the Required Lenders on or prior to the
Final Hearing Date, as confirmed by any Specified Lender Advisors (which
approval may be communicated via an email from either of the Specified Lender
Advisors)), there are no outstanding commitments or other obligations of any
Loan Party to issue, and no options, warrants or other rights of any Person to
acquire, any shares of any class of capital stock or other equity interests of
any Loan Party.

 

Section 3.15           Security Interest in Collateral. Upon execution and
delivery thereof by the parties thereto and upon the entry by the Bankruptcy
Court of the Interim Order or Final Order, as applicable, the Collateral
Documents are effective to create (to the extent described therein) in favor of
the Administrative Agent for the benefit of the Secured Parties, a legal, valid
and enforceable security interest in or liens on the Collateral described
therein and the proceeds thereof, except as to enforcement, as the same may be
limited by Bail-In Action, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and fair
dealing. Upon the entry by the Bankruptcy Court of the Interim Order or Final
Order, as applicable, and in accordance therewith, the security interests and
liens granted pursuant to the Interim Order, the Final Order and the Collateral
Documents shall automatically, and without further action, constitute a
perfected security interest in (to the extent intended to be created thereby and
required to be perfected under the Loan Documents) all right, title and interest
of each pledgor or mortgagor (as applicable) party thereto in the Collateral
described therein with respect to such pledgor or mortgagor (as applicable, and
subject to the Carve-Out). Notwithstanding any other provision of this
Agreement, capitalized terms that are used in this Section 3.15 and not defined
in this Agreement are so used as defined in the applicable Collateral Document.

 

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Section 3.16           Employment Matters. As of the Closing Date, there are no
strikes, lockouts or slowdowns against any Loan Party or any of its Subsidiaries
pending or, to the knowledge of any Loan Party, threatened. To the knowledge of
any Loan Party, the hours worked by and payments made to employees of the Loan
Parties and their Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters. All payments due from any Loan Party or any of its
Subsidiaries, or for which any claim may be made against any Loan Party or any
of its Subsidiaries, on account of wages and employee health and welfare
insurance and other benefits, have been paid or accrued as a liability on the
books of such Loan Party or Subsidiary, except in each case where nonpayment or
a lack of accrual could not reasonably be expected to have a Material Adverse
Effect.

 

Section 3.17           Federal Reserve Regulations. No part of the proceeds of
any Loan has been used or will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X.

 

Section 3.18           Use of Proceeds. The proceeds of the Loans have been used
and will be used, whether directly or indirectly as set forth in Section 5.08.

 

Section 3.19           Anti-Corruption Laws and Sanctions. The Borrower has
implemented and maintains in effect policies and procedures designed to ensure
compliance by the Borrower, its Subsidiaries and their respective directors,
officers, employees and agents with Anti-Corruption Laws and applicable
Sanctions, and the Borrower, its Subsidiaries and their respective officers and
employees and to the knowledge of the Borrower its directors and agents, are in
compliance with Anti-Corruption Laws and applicable Sanctions in all material
respects. None of (a) the Borrower, any Subsidiary or any of their respective
directors, officers or employees, or (b) to the knowledge of the Borrower, any
agent of the Borrower or any Subsidiary that will act in any capacity in
connection with or benefit from the credit facility established hereby, is a
Sanctioned Person. No Borrowing, use of proceeds or other Transaction will
violate Anti-Corruption Laws or applicable Sanctions.

 

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Section 3.20           Reorganization Matters.

 

(a)            The Chapter 11 Cases were commenced on the Petition Date in
accordance with applicable law and proper notice thereof was given for (x) the
motion seeking approval of the Interim Order and (y) the hearing for the entry
of the Interim Order and (z) the hearing for the entry of the Final Order. The
Debtors shall give, on a timely basis as specified in the Orders, all notices
required to be given to all parties specified in the Orders.

 

(b)            After entry of the Interim Order, and pursuant to and to the
extent permitted in the Interim Order and the Final Order, the Obligations will
constitute allowed administrative expense claims in the Chapter 11 Cases having
priority over all administrative expense claims and unsecured claims against
each Loan Party now existing or hereafter arising of any kind whatsoever,
including, without limitation, all administrative expense claims of the kind
specified in Sections 105, 326, 328, 330, 331, 503(b), 506(c), 507(a), 507(b),
546(c), 546(d), 726, 1113, 1114 or any other provision of the Bankruptcy Code or
otherwise, as provided under Section 364(c)(1) of the Bankruptcy Code, subject
only to the Carve-Out and the priorities set forth in the Interim Order or the
Final Order, as applicable.

 

(c)            After entry of the Interim Order (and the Final Order when
applicable) and pursuant to and to the extent provided in the Interim Order and
the Final Order, as applicable, the Obligations will be secured by a valid and
perfected first priority Lien on all of the Collateral, (i) encumbered by no
Liens other than Liens permitted by Section 6.02 and (ii) prior and superior to
any other Person or Lien, in each case, other than the Carve-Out and subject to
the priorities set forth in the Interim Order or the Final Order, as applicable.

 

(d)            The Interim Order (with respect to the period prior to the entry
of the Final Order) or the Final Order (with respect to the period on and after
the entry of the Final Order), as the case may be, is in full force and effect
and has not been reversed, stayed (whether by statutory stay or otherwise),
modified or amended without Administrative Agent and Required Lender consent
(which consent of the Required Lenders may be communicated via an email from
either of the Specified Lender Advisors).

 

(e)            Notwithstanding the provisions of Section 362 of the Bankruptcy
Code and subject to the applicable provisions of the Interim Order or the Final
Order, as the case may be, upon the Maturity Date (whether by acceleration or
otherwise), the Administrative Agent and Lenders shall be entitled to immediate
payment of such Obligations in cash and to enforce the remedies provided for
hereunder or under applicable law, without further notice, motion or application
to, hearing before, or order by the Bankruptcy Court.

 

Article IV

 

Conditions OF EFFECTIVENESS, LENDING AND WITHDRAWALS

 

Section 4.01           Closing Date Effectiveness. The effectiveness of this
Agreement and the obligations of each Lender to make any Loan hereunder on the
Closing Date is subject to the satisfaction, or waiver (by the Required Lenders
in their sole discretion and, with respect to any condition affecting the rights
and duties of the Administrative Agent, the Administrative Agent, any which
waiver by the Required Lenders, and the satisfaction of the Required Lenders
with any document described in clauses (a)-(p) below, as applicable, may be
communicated via an email from either of the Specified Lender Advisors), of the
following conditions:

 

(a)            Loan Documents. All legal matters incident to this Agreement, the
Loans hereunder and the other Loan Documents shall be satisfactory to the
Required Lenders and delivered to the Administrative Agent and the Specified
Lender Advisors and there shall have been delivered to the Administrative Agent
and the Specified Lender Advisors a properly executed counterpart of this
Agreement and each of the other Loan Documents by the applicable parties
thereto.

 

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(b)            Closing Certificates; Certified Certificate of Incorporation;
Good Standing Certificates. The Administrative Agent shall have received (i) a
certificate of each Loan Party, dated the Signing Date and executed by its
Secretary or Assistant Secretary, which shall (A) certify the resolutions of its
Board of Directors, members or other body authorizing the execution, delivery
and performance of the Loan Documents to which it is a party, (B) identify by
name and title and bear the signatures of the Financial Officers and any other
officers of such Loan Party authorized to sign the Loan Documents to which it is
a party, and (C) contain appropriate attachments, including the certificate or
articles of incorporation or organization of each Loan Party certified by the
relevant authority of the jurisdiction of organization of such Loan Party and a
true and correct copy of its by-laws or operating, management or partnership
agreement, and (ii) a good standing certificate for each Loan Party from its
jurisdiction of organization or the substantive equivalent available in the
jurisdiction of organization for each Loan Party from the appropriate
governmental officer in such jurisdiction, in each case satisfactory to the
Required Lenders.

 

(c)            Officers’ Certificate. The Administrative Agent shall have
received a customary certificate (satisfactory to the Required Lenders), dated
the Closing Date and signed by two Officers of the Borrower, one of whom shall
be a Financial Officer, confirming compliance with the conditions precedent set
forth in Section 4.01(k) and (l), it being understood that any certification
required hereby set forth in the Borrowing Request delivered on the Closing Date
shall be satisfactory to the Required Lenders.

 

(d)            Orders. (i) The Bankruptcy Court shall have entered the Interim
Order, no later than three (3) Business Days after the Petition Date, and such
order shall be in form and substance satisfactory to the Required Lenders (and
with respect to any provisions that affect the rights or duties of the
Administrative Agent, the Administrative Agent) in their sole discretion, be in
full force and effect, and shall not have been reversed, modified, amended,
stayed or vacated absent prior written consent of the Required Lenders (and with
respect to any provisions that affect the rights or duties of the Administrative
Agent, the Administrative Agent); (ii) the Administrative Agent and the Lenders
shall have received drafts of the “first day” pleadings for the Chapter 11
Cases, in each case, in form and substance reasonably satisfactory to the
Administrative Agent and the Required Lenders, not later than a reasonable time
in advance of the Petition Date for the Administrative Agent’s and Lenders’
counsel to review and analyze the same; (iii) all motions, orders (including the
“first day” orders) and other documents to be filed with or submitted to the
Bankruptcy Court on the Petition Date shall be in form and substance reasonably
satisfactory to the Administrative Agent and the Lenders; and (iv) all “first
day” orders shall have been approved and entered by the Bankruptcy Court except
as otherwise agreed by the Required Lenders.

 

(e)            Budget. The Administrative Agent and the Specified Lender
Advisors shall have received the Approved Budget.

 

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(f)            Compliance with RSA. The RSA shall be in full force and effect
and no default by any of the Loan Parties shall have occurred and be continuing
(with all applicable grace periods having expired) under the RSA.

 

(g)            [Reserved].

 

(h)            [Reserved].

 

(i)            Notice. The Administrative Agent shall have received a Borrowing
Request as required by Section 2.03(a).

 

(j)            Ratings. The Borrower shall use commercially reasonable efforts
to obtain the ratings of the Loans by at least two Rating Agencies, which shall
be Moody’s and S&P, or, with the consent of the Required Lenders in the event
that Moody’s and/or S&P are not willing to so rate the Loans, such other Rating
Agency or Rating Agencies, as applicable, in their stead as are acceptable to
the Required Lenders (which acceptance may be communicated via an email from
either of the Specified Lender Advisors).

 

(k)            No Default. On the Closing Date and immediately after giving
effect to any Loans made on the Closing Date and the application of the proceeds
thereof, no Default or Event of Default shall have occurred and be continuing on
such date.

 

(l)            Representation and Warranties. As of the Closing Date, each of
the representations and warranties relating to any Company set forth in
Article III or in any other Loan Document shall be true and correct in all
material respects on and as of the Closing Date with the same effect as though
made on and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all material
respects on and as of such earlier date); provided that any representation and
warranty that is qualified as to “materiality”, “Material Adverse Effect” or
similar language shall be true and correct (after giving effect to any
qualification therein) in all respects on and as of the Closing Date.

 

(m)            Fees. All Fees (including any fees to be paid for the account of
any Lender on the Closing Date that Borrower has previously agreed to in
writing) and other amounts due and payable on or before the Closing Date,
including, to the extent invoiced not less than one Business Day prior to the
Closing Date, reimbursement or payment of all out-of-pocket expenses (including
the premiums and fees and the legal fees and expenses of the Specified Lender
Advisors, as counsel to the Ad Hoc Group of Lenders, and the Agent Advisors, as
counsel to the Agents), and the fees and expenses of any local counsel, foreign
counsel, appraisers, consultants and other advisors, shall be paid (or will be
paid from the proceeds of the Loans), in each case to the extent required to be
reimbursed or paid by the Loan Parties hereunder or under any other Loan
Document (in each case, which may be paid with the proceeds of the Loans).

 

(n)            USA PATRIOT Act, Etc. The Administrative Agent and the Lenders
shall have received, to the extent requested by any of the Lenders at least ten
(10) days prior to the Closing Date, all documentation and other information
required by bank regulatory authorities under applicable “know your customer”
and anti-money laundering rules and regulations, including the USA PATRIOT Act,
for each Loan Party.

 

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Section 4.02           Conditions Precedent to each Withdrawal. Any Withdrawal
on or after the Closing Date is subject to the satisfaction or waiver of the
following additional conditions precedent:

 

(a)            No Default. At the time of and immediately after giving effect to
such Withdrawal and the application of the proceeds thereof, no Default or Event
of Default shall have occurred and be continuing on such date.

 

(b)            Representations and Warranties. Each of the representations and
warranties made by any Loan Party set forth in Article III or in any other Loan
Document shall be true and correct in all material respects on and as of the
Withdrawal Date with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties shall be true
and correct in all material respects on and as of such earlier date); provided
that any representation and warranty that is qualified as to “materiality”,
“Material Adverse Effect” or similar language shall be true and correct (after
giving effect to any qualification therein) in all respects on such respective
dates.

 

(c)            Bankruptcy Proceedings. (i) The DIP Order, shall not have been
vacated, stayed, reversed, modified, or amended, in whole or in any part,
without the Administrative Agent’s and the Required Lenders’ written consent and
shall otherwise be in full force and effect; (ii) no motion for reconsideration
of the Final Order shall have been timely filed by a Debtor or any of their
Subsidiaries; and (iii) no appeal of the Final Order shall have been timely
filed.

 

(d)            RSA. The RSA shall be in full force and effect and no default by
any of the Loan Parties shall have occurred and be continuing (with all
applicable grace periods having expired) under the RSA, except as otherwise
waived in accordance with the terms thereof.

 

(e)            Fees. All reasonable and documented out-of-pocket fees and
expenses required to be paid under the Loan Documents shall have been paid (or
will be paid from the proceeds of such Loans).

 

(f)            Approved Budget. The proceeds of the Loans shall be used as set
forth in the Approved Budget (subject to the Permitted Variance).

 

(g)            Withdrawal Notice. The Administrative Agent (for distribution to
the Lenders and the Specified Lender Advisors) shall have received an executed
Withdrawal Notice, executed by the Borrower requesting the proposed Withdrawal
thereunder by no later than 1:00 p.m. (New York City time) on the Thursday of
the week (excluding the week of the Closing Date) for a proposed funding of such
Withdrawal on Friday of such week.

 

(h)            Maximum Withdrawal. The maximum amount of any requested
Withdrawal shall not exceed the Maximum Withdrawal Amount.

 

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(i)            Initial Withdrawal Minimum Escrow Period. Solely with respect to
the initial withdrawal following the entry of the Interim Order, which
withdrawal may be in an amount up to $10,000,000, such withdrawal shall be
subject to all of the proceeds of the Loan (net of any fees and expenses, to the
extent applicable) having been funded into the Loan Proceeds Account and such
proceeds having been on deposit in such account for no less than seven (7) days
following the date of the entry of Interim Order.

 

Upon receipt of the Withdrawal Notice and satisfaction of the conditions set
forth in Article IV, the Administrative Agent shall promptly direct the Escrow
Agent to disburse funds by 1:00 p.m. (New York City time) on the Friday
immediately following such Withdrawal Notice.

 

Notwithstanding the foregoing, if the Required Lenders determine that the
Borrower has failed to satisfy the conditions precedent set forth in this
Section 4.02 for a Withdrawal Notice and so advise the Administrative Agent in
writing (directly or through the Specified Lender Advisors) prior to
Administrative Agent funding the Withdrawal, the Administrative Agent shall
decline to fund such Withdrawal and shall communicate the same to the Escrow
Agent.

 

On any date on which the Loans shall have been accelerated, any amounts
remaining in the Escrow Account, as the case may be, may be applied by the
Administrative Agent to reduce the Loans then outstanding, in accordance with
Section 2.18 (other than with respect to amounts to fund the Carve-Out). None of
the Loan Parties shall have (and each Loan Party hereby affirmatively waives)
any right to withdraw, claim or assert any property interest in any funds on
deposit in the Escrow Account upon the occurrence and continuance of any Default
or Event of Default (except to fund the Carve-Out).

 

The acceptance by the Borrower of the Loans or proceeds of a Withdrawal shall
conclusively be deemed to constitute a representation by the Borrower that each
of the conditions precedent set forth in Section 4.01 and Section 4.02 shall
have been satisfied in accordance with its respective terms or shall have been
irrevocably waived by the applicable relevant Person; provided, however, that
the making of any such Loan or Withdrawal (regardless of whether the lack of
satisfaction was known or unknown at the time), shall not be deemed a
modification or waiver by the Agents, any Lender or other Secured Party of the
provisions of this Article IV on such occasion or on any future occasion or
operate as a waiver of (i) the right of the Administrative Agent and Lenders to
insist upon satisfaction of all conditions precedent with respect to any
subsequent funding or issuance, (ii) any Default or Event of Default due to such
failure of conditions or otherwise or (iii) any rights of any Agent or any
Lender as a result of any such failure of the Loan Parties to comply.

 

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Article V

 

Affirmative Covenants

 

Until the Commitments shall have expired or been terminated and the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full, each Loan Party executing this Agreement covenants and agrees from and
after the Closing Date, jointly and severally with all of the other Loan
Parties, with the Lenders that:

 

Section 5.01           Financial Statements; Other Information. The Borrower
will furnish to the Administrative Agent and each Lender (or to the Specified
Lender Advisors only, as expressly specified below):

 

(a)            [reserved];

 

(b)            as soon as available, but in any event within forty-five (45)
days after the end of each fiscal quarter of each fiscal year of the Borrower,
(i) its (x) consolidated balance sheet as of the end of such fiscal quarter,
(y) related statements of operations for such fiscal quarter and the then
elapsed portion of such fiscal year, and (z) related statements of stockholders’
equity and cash flows for the then elapsed portion of such fiscal year, and
(ii) (x) a consolidated balance sheet for the Borrower and its consolidated
Subsidiaries as of the end of such fiscal quarter, (y) related statements of
operations for the Borrower and its consolidated Subsidiaries for such fiscal
quarter and the then elapsed portion of such fiscal year, and (z) related
statements of stockholders’ equity and cash flows for the Borrower and its
consolidated Subsidiaries for the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of)
the previous fiscal year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments;

 

(c)            as soon as available, but in any event not later than the
thirtieth (30th) day after the end of month, an unaudited financial summary of
the financial performance, and unaudited consolidated balance sheet and
unaudited consolidated statements of operations and comprehensive income,
stockholders’ equity and cash flows as of the end of and for such month and the
then elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or periods of (or, in
the case of the balance sheet, as of the end of) the previous fiscal year;

 

(d)            concurrently with, or on the same day as the day of, any delivery
of financial statements under clause (a) or (b) above, a certificate of a
Financial Officer of the Borrower in substantially the form of Exhibit D
(i) certifying, in the case of the financial statements delivered under clause
(b), as presenting fairly in all material respects the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes, (ii) certifying
as to whether a Default has occurred and, if a Default has occurred, specifying
the details thereof and any action taken or proposed to be taken with respect
thereto, (iii) [reserved], (iv) identifying all Material Subsidiaries, and
(v) stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to in
Section 3.04 and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;

 

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(e)            [reserved];

 

(f)            [reserved];

 

(g)           to the Specified Lender Advisors, as soon as available, but in any
event no later than thirty (30) days after the end of each month, Key
Performance Indicators (“KPI”) (which reporting shall include volume and pricing
for the top 30 products);

 

(h)           to the Specified Lender Advisors, as soon as available, but in any
event no later than thirty (30) days after the end of each month, operating
statistics broken down by facility (e.g., production levels, capacity
utilized, etc.) and plant KPIs on a monthly basis;

 

(i)            to the Specified Lender Advisors, as soon as available, but in
any event no later than thirty (30) days after the end of each month, pipeline
reporting for each product under development, which reports shall include
information with respect to (i) manufacturing facility, (ii) product category,
(iii) estimate of filing and launch dates, (iv) estimated market size,
(v) estimated competitors at launch, (vi) projected research and development
expenses, (vii) commentary on stage of development, with the Borrower to use
reasonable efforts to provide key open workstreams and estimated milestones for
FDA filing, and (viii) primary development facility, if applicable; provided
that projected revenue for products under development shall be provided with the
Business Plan; provided further that any molecules names appearing therein may
be redacted;

 

(j)            to the Specified Lender Advisors, by the tenth (10th) Business
Day of each month, monthly reports regarding pending Abbreviated New Drug
Applications (“ANDAs”), which reports shall include ANDAs submitted to the FDA
and the status of FDA approvals with respect thereto, estimated market size and
known competitor information for each such ANDA, and a good faith estimate of
the timing of the approval of each such ANDA and related competitive approvals;
provided that any molecules names appearing therein may be redacted;
provided further that such reports shall also include information with respect
to (i) manufacturing facility, (ii) product category, (iii) estimate of filing
and launch dates, and (iv) commentary on outstanding requirements for FDA
approval status; provided that projected revenue for filed ANDAs shall be
provided with the Business Plan;

 

(k)            to the Specified Lender Advisors, promptly, but in no event later
than forty-eight (48) hours after receipt, copies of any material
(i) correspondence received from the FDA, and (ii) cover letters to reports
delivered to the FDA, in each case solely with regard to any FDA Form 483 or
warning letter;

 

(l)            to the Specified Lender Advisors, promptly, but in no event later
than forty-eight (48) hours after receipt by the Borrower or the other Loan
Parties, copies of any warning letter(s), Official Action Indicated statuses, or
similar regulatory actions by Swissmedic or the Central Drugs Standard Control
Organization regarding those certain manufacturing facilities operated by the
Borrower and its Subsidiaries in Amityville, New York, Hettlingen, Switzerland,
and Paonta Sahib, Himachal Pradesh, India, and those certain research and
development centers operated by the Borrower and its Subsidiaries in Vernon
Hills, Illinois and Cranbury, New Jersey;

 

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(m)          to the Specified Lender Advisors, promptly, but in no event later
than forty-eight (48) hours after preparation or receipt, formal minutes for any
FDA meeting or call to the extent made available to, or prepared by, the
Borrower or the other Loan Parties; provided that the Borrower will be entitled
to redact confidential or privileged information contained therein;

 

(n)           to the Specified Lender Advisors, on or before the third (3rd)
Business Day of each month, monthly Quality System Corrective Action Plan update
reports;

 

(o)           to the Specified Lender Advisors, promptly, but in no event later
than forty-eight (48) hours after receipt (subject to any confidentiality
obligations therein), copies of all (A) formal process or offering materials
provided generally to participants in the Sale Process (which, for the avoidance
of doubt, shall not be required to include individual Q&A responses to diligence
requests, unless required by the following proviso), (B) written proposals, term
sheets, commitment letters, and any other similar materials received in
connection with the Sale Process, as applicable, and (C) all bidding materials
on a redacted basis, including, but not limited to marketing materials; provided
that (1) the Borrower shall share with the Specified Lender Advisors all binding
bids received in connection with the Sale Process on an un-redacted basis when,
and if, received, and (2) the Borrower shall otherwise communicate any material
developments with respect to the Sale Process to the Specified Lender Advisors,
in good faith; and

 

(p)           promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any of its Subsidiaries, or compliance with the terms of this
Agreement, as the Administrative Agent, the Specified Lender Advisors or any
Lender may reasonably request.

 

Documents required to be delivered pursuant to clauses (a) and (b) of this
Section 5.01 may be delivered electronically and if so delivered, shall be
deemed to have been delivered on the date on which such documents are (i) filed
for public availability on the SEC’s Electronic Data Gathering and Retrieval
System, (ii) posted or the Borrower provides a link thereto on
http://www.akorn.com; or (iii) posted on the Borrower’s behalf on an Internet or
intranet website, if any, to which the Administrative Agent has access (whether
a commercial, third-party website or whether sponsored by the Administrative
Agent); provided that the Borrower shall notify (which may be by telecopy or
electronic mail) the Administrative Agent of the filing of any such documents
and provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents. The Required Lenders may waive any
delivery requirements set forth in this Section 5.01 (which waiver may be
communicated via e-mail by any Specified Lender Advisor).

 

Section 5.02          Notices of Material Events. The Borrower will furnish to
the Administrative Agent (for distribution to each Lender) prompt written notice
of the following (and in any event within three (3) Business Days following the
occurrence thereof):

 

(a)           the occurrence of any Default;

 

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(b)           receipt of any notice of any governmental investigation or any
litigation or proceeding commenced or threatened against any Loan Party that
could reasonably be expected to result in a Material Adverse Effect;

 

(c)           to the extent reasonably practicable, (i) at least three
(3) calendar days (or such shorter review period as is necessary or appropriate
under the circumstances) prior to the date when the Borrower intends to file the
RSA, any documents implementing and achieving the Transactions (as defined in
the RSA) and the transactions contemplated by the Loan Documents, as applicable,
including any substantive “first day” or “second day” motions, the Asset
Purchase Agreement, or, any other the purchase agreement in connection with the
Sale Transaction, the Chapter 11 Plan and any supplement thereto, the Disclosure
Statement, any proposed order of the Bankruptcy Court approving the Chapter 11
Plan, any proposed order of the Bankruptcy Court approving the Disclosure
Statement and the related solicitation materials, any proposed Interim Order and
Final Order , in each case, with the Bankruptcy Court and (ii) at least one
(1) calendar day (or such shorter review period as necessary or appropriate)
prior to the date when the Borrower intends to file any other material pleading
with the Bankruptcy Court (but excluding retention applications, fee
applications, and any declarations in support thereof or related thereto) with
the Bankruptcy Court;

 

(d)           the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
a Material Adverse Effect; and

 

(e)           any other development that results, or could reasonably be
expected to result, in a Material Adverse Effect.

 

Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto. Information required to be
delivered pursuant to clause (b) and (d) of this Section shall be deemed to have
been delivered if such information, or one or more annual or quarterly or other
periodic reports containing such information, is (i) filed for public
availability on the SEC’s Electronic Data Gathering and Retrieval System,
(ii) posted or the Borrower provides a link thereto on http://www.akorn.com; or
(iii) posted on the Borrower’s behalf on an Internet or intranet website, if
any, to which the Administrative Agent and the Lenders have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent); provided that the Borrower shall notify (which may be by telecopy or
electronic mail) the Administrative Agent of the filing of any such documents
and provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents.

 

Section 5.03          Existence; Conduct of Business. Each Loan Party will, and
will cause each of its Subsidiaries to, (a) do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, qualifications, licenses, permits, franchises,
governmental authorizations, intellectual property rights, licenses and permits
material to the conduct of its business, and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted,
provided that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 6.03, and (b) carry on and
conduct its business in substantially the same manner and in substantially the
same fields of enterprise as it is presently conducted.

 

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Section 5.04          Payment of Obligations. Each Loan Party will, and will
cause each of its Subsidiaries to, pay or discharge all liabilities and
obligations in respect of Taxes, before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) such Loan Party or such of its
Subsidiaries has set aside on its books adequate reserves with respect thereto
in accordance with GAAP and (c) the failure to make payment pending such contest
(i) is permitted or required under the Bankruptcy Code or (ii) could not
reasonably be expected to result in a Material Adverse Effect; provided,
however, each Loan Party will, and will cause each of its Subsidiaries to, remit
withholding taxes and other payroll taxes to appropriate Governmental
Authorities as and when claimed to be due, notwithstanding the foregoing
exceptions.

 

Section 5.05          Maintenance of Properties. Each Loan Party will, and will
cause each of its Subsidiaries to, keep and maintain all property material to
the conduct of its business in good working order and condition, casualty,
condemnation and ordinary wear and tear excepted.

 

Section 5.06          Books and Records; Inspection Rights. Each Loan Party
will, and will cause each of its Subsidiaries to, (a) keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities and
(b) permit any representatives designated by the Administrative Agent, any group
of Lenders holding not less than 25.0% of the aggregate principal amount of the
Loans, or the Specified Lender Advisors upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, environmental assessment reports and Phase I or Phase II studies, and
to discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested.
Each Loan Party acknowledges that the Administrative Agent and the Specified
Lender Advisors, each after exercising its rights of inspection, may prepare and
distribute to the Lenders certain Reports pertaining to each Loan Party’s assets
(including, without limitation, the results of such inspection) for internal use
by the Administrative Agent, the Specified Lender Advisors and the Lenders.

 

Section 5.07          Compliance with Laws and Material Contractual Obligations.
Each Loan Party will, and will cause each of its Subsidiaries to, (i) comply
with all Requirements of Law applicable to it or its property (including without
limitation Environmental Laws) and (ii) perform in all material respects its
obligations under material agreements to which it is a party, except, in each
case, where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. The Borrower will
maintain in effect and enforce policies and procedures designed to ensure
compliance by the Borrower, its Subsidiaries and their respective directors,
officers, employees and agents with Anti-Corruption Laws and applicable
Sanctions.

 

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Section 5.08          Use of Proceeds. Subject to the terms and conditions
herein, the use of cash collateral and the proceeds of the Loans made hereunder
shall be used by the Borrower, solely on or after the Closing Date, in
accordance with the DIP Order and the Approved Budget (subject to Permitted
Variances): (i) to pay related transaction costs, fees and expenses (including
attorney’s fees required to be paid hereunder and to fund the Carve-Out) with
respect to the DIP Facility, (ii) to make the adequate protection payments (if
any) in accordance with the Approved Budget and the DIP Order, and (iii) to
provide working capital, and for other general corporate purposes of the Loan
Parties and their Subsidiaries, and to pay administration costs of the Chapter
11 Cases and claims or amounts approved by the Bankruptcy Court in accordance
with the Approved Budget (subject to Permitted Variance). The Loan Parties shall
not be permitted to use the proceeds of the Loans or any cash collateral in
contravention of the provisions of the Loan Documents, the Approved Budget
(subject to Permitted Variances), the DIP Order or any applicable insolvency
laws, including any restrictions or limitations on the use of proceeds contained
therein.

 

Section 5.09          Insurance. Each Loan Party will, and will cause each of
its Subsidiaries to, maintain with financially sound and reputable carriers
having a financial strength rating of at least A-by A.M. Best Company
(a) insurance in such amounts (with no greater risk retention) and against such
risks (including, without limitation: loss or damage by fire and loss in
transit; theft, burglary, pilferage, larceny, embezzlement, and other criminal
activities; business interruption; and general liability) and such other
hazards, as is customarily maintained by companies of established repute engaged
in the same or similar businesses operating in the same or similar locations and
(b) all insurance required pursuant to the Collateral Documents. The Borrower
will furnish to the Lenders, upon request of the Administrative Agent or the
Specified Lender Advisors, information in reasonable detail as to the insurance
so maintained.

 

Section 5.10          Maintenance of Ratings. The Borrower shall use
commercially reasonable efforts to obtain, prior to thirty (30) days after the
Closing Date, and at all times thereafter, maintain, the ratings of the Loans by
at least two Rating Agencies, which shall be Moody’s and S&P, or, with the
consent of the Required Lenders in the event that Moody’s and/or S&P are not
willing to so rate the Loans, such other Rating Agency or Rating Agencies, as
applicable, in their stead as are acceptable to the Required Lenders (which
acceptance may be communicated via an email from either of the Specified Lender
Advisors).

 

Section 5.11          Additional Collateral; Further Assurances.

 

(a)           Subject to applicable Requirement of Law, the Borrower and each of
its Subsidiaries that is a Loan Party will cause each of its Domestic
Subsidiaries formed or acquired after the Closing Date in accordance with the
terms of this Agreement to become a Loan Party by executing a Joinder Agreement.
Upon execution and delivery thereof, each such Person (i) shall automatically
become a Loan Guarantor hereunder and thereupon shall have all of the rights,
benefits, duties and obligations in such capacity under the Loan Documents and
(ii) on and after the Closing Date, shall automatically grant Liens to the
Administrative Agent, for the benefit of the Administrative Agent, the Lenders
and the other Secured Parties, in any property of such Loan Party which
constitutes Collateral, including any parcel of real property located in the
U.S. owned by any Loan Party, or shall take action necessary to cause such
Person to be included in the grant of liens and claims in the DIP Order.

 

(b)           [Reserved].

 

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(c)           Without limiting the foregoing, each Loan Party will, and will
cause each of its Subsidiaries to, execute and deliver, or cause to be executed
and delivered, to the Administrative Agent or the Specified Lender Advisors, as
applicable, such documents, agreements and instruments, and take or cause to be
taken such further actions (including the filing and recording of financing
statements, fixture filings, mortgages, deeds of trust and other customary
documents and such other customary actions or deliveries to perfect security
interests, as applicable), which may be required by any Requirement of Law or
which the Administrative Agent (acting at the direction of the Required Lenders
(which direction may be communicated via an email from either of the Specified
Lender Advisors)) or the Required Lenders may, from time to time, request to
carry out the terms and conditions of this Agreement and the other Loan
Documents and to ensure perfection and priority of the Liens created or intended
to be created by the Collateral Documents, all in form and substance reasonably
satisfactory to the Required Lenders and all at the expense of the Loan Parties
(which satisfaction may be communicated via an email from either of the
Specified Lender Advisors).

 

(d)           If any real property or improvements thereto or any interest
therein with a fair market value of greater than $200,000 are acquired by the
Borrower or any Subsidiary that is a Loan Party after the Closing Date, the
Borrower will (i) notify the Administrative Agent and the Lenders thereof and,
if requested by the Administrative Agent (acting at the direction of the
Required Lenders (which direction may be communicated via an email from either
of the Specified Lender Advisors)) or the Required Lenders, cause such real
property or improvements to be subjected to a Lien securing the Secured
Obligations and (ii) take, and cause each Subsidiary that is a Loan Party to
take, such actions as shall be necessary or requested by the Administrative
Agent (acting at the direction of the Required Lenders (which direction may be
communicated via an email from either of the Specified Lender Advisors)) or the
Required Lenders in its or their sole discretion to grant and perfect such
Liens, including actions described in paragraph (c) of this Section, all at the
expense of the Loan Parties.

 

(e)           Without limiting the generality of the foregoing, each Loan Party
shall deliver Mortgages and Mortgage Instruments with respect to real property
of such Loan Party that constitutes Collateral to the extent, and within such
time period as is, required by the Administrative Agent (acting at the direction
of the Required Lenders (which direction may be communicated via an email from
either of the Specified Lender Advisors)) or the Required Lenders.

 

Section 5.12          Post-Closing Obligations.

 

(a)           On or prior to the Final Hearing Date, the Administrative Agent
shall have received, on behalf of itself and the lenders, a customary written
opinion of Kirkland & Ellis LLP.

 

(b)           With respect to the insurance certificates and applicable
endorsements from the Loan Parties’ insurance broker or other evidence
reasonably satisfactory to the Administrative Agent that all insurance required
to be maintained pursuant to Section 5.09 is in full force and effect and that
such certificates and applicable endorsements comply with the requirements set
forth in Section 5.09, the Borrower shall deliver such insurance certificates
and applicable endorsements or such other evidence reasonably satisfactory to
the Administrative Agent (acting at the direction of the Required Lenders (which
direction may be communicated via an email from either of the Specified Lender
Advisors)) within ten (10) days after the Closing Date (as such time frame may
be extended by the Administrative Agent (acting at the direction of the Required
Lenders (which direction may be communicated via an email from either of the
Specified Lender Advisors))).

 

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(c)           Within ten (10) days following the Closing Date ((or such later
date as agreed to by the Required Lenders (which agreement of the Required
Lenders may be communicated via an email from either of the Specified Lender
Advisors)), the Borrower shall make the Loan Proceeds Account, subject to an
account control agreement that is in form and substance reasonably satisfactory
to the Administrative Agent and the Required Lenders (which satisfaction may be
communicated via an email from either of the Specified Lender Advisors), which
account control agreement shall establish the Administrative Agent’s “control”
(within the meaning of Section 9-104 of the UCC) thereof.

 

(d)           Within twenty (20) days following the Closing Date ((or such later
date as agreed to by the Required Lenders (which agreement of the Required
Lenders may be communicated via an email from either of the Specified Lender
Advisors)), the Borrower shall deliver (or caused to be delivered) to the
Administrative Agent a stock certificate and related transfer power evidencing
the Borrower’s 79.0% ownership interest in WorldAkorn Pharma Mauritius.

 

Section 5.13          Approved Budget.

 

(a)           The use of proceeds of Loans by the Loan Parties under this
Agreement and the other Loan Documents shall be limited solely in accordance
with the Approved Budget (subject to Permitted Variances) which shall be in form
and substance satisfactory to the Required Lenders (subject to the variances set
forth in Section 5.13(b)) (which satisfaction may be communicated via an email
from either of the Specified Lender Advisors); provided that, no proceeds of the
Loans will be used in connection with (including without limitation, to fund or
prefund) any executive retention plan without the express written consent of the
Required Lenders (which consent may be communicated via an email from either of
the Specified Lender Advisors); provided further that, for the avoidance of
doubt, the initial Approved Budget does not contemplate or include the funding
or prefunding of any executive retention plan. The Approved Budget shall set
forth, on a weekly basis, among other things, Budgeted Cash Receipts, Budgeted
Operating Disbursement Amounts, Budgeted Liquidity and Budgeted Restructuring
Related Amounts for the 13-week period commencing with the first full week after
the Closing Date and such Approved Budget shall be approved in writing by, and
be in form and substance reasonably satisfactory to, the Required Lenders (it
being acknowledged and agreed that the initial Approved Budget attached to this
Agreement is approved by and satisfactory to the Required Lenders and is and
shall be the Approved Budget unless and until replaced in accordance with terms
of this Section, and that with respect to any subsequent Approved Budget, such
approval and satisfaction of the Required Lenders may be communicated via an
email from either of the Specified Lender Advisors) and disclosed in writing to
the Administrative Agent. The Approved Budget shall be updated, modified or
supplemented by the Borrower from time to time in writing transmitted to the
Administrative Agent and the Lenders with the written consent of and/or at the
request of the Required Lenders (with a copy of such written consent or request
concurrently delivered to the Administrative Agent) (which consent may be
communicated via an email from either of the Specified Lender Advisors), but in
any event not less than one time in each four (4) consecutive week period,
commencing with the first full week after the Closing Date, and each such
updated, modified or supplemented budget shall be in form and substance
satisfactory to the Required Lenders in their sole discretion, and no such
updated, modified or supplemented budget shall be effective unless acceptable to
the Required Lenders (which acceptance may be communicated via an email from
either of the Specified Lender Advisors); and, upon delivery of any such
acceptance, the updated, modified or supplemented budget shall be deemed the
newly approved Budget; provided, however, that in the event the Required
Lenders, on the one hand, and the Borrower, on the other hand, cannot agree as
to an updated, modified or supplemented budget, after giving effect all
applicable grace or cure periods, such disagreement shall constitute an
immediate Event of Default once the period covered by the prior approved
Approved Budget has terminated (and at all times thereafter such then current
approved Approved Budget shall remain in effect unless and until a new Approved
Budget is approved by the Required Lenders (which approval may be communicated
via an email from either of the Specified Lender Advisors)). Each Approved
Budget delivered to the Lenders and the Administrative Agent shall be
accompanied by such supporting documentation as reasonably requested by the
Required Lenders. Each Approved Budget shall be prepared in good faith based
upon assumptions believed by the Borrower to be reasonable.

 

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(b)           For each Variance Testing Period, unless otherwise agreed by the
Required Lenders (which approval may be communicated via an email from either of
the Specified Lender Advisors), the Borrower shall not permit: (x) the Actual
Cash Receipts, for two consecutive weeks, to be less than Budgeted Cash Receipts
(each calculated on a cumulative basis as opposed to on a line by line basis),
in each case, for such Variance Testing Period, by more than the Permitted
Variance for such Variance Testing Period, and (y) Actual Operating Disbursement
Amounts, for two consecutive weeks, to exceed the Budgeted Operating
Disbursement Amounts (each calculated on a cumulative basis as opposed to on a
line by line basis), in each case, for such Variance Testing Period, by more
than the Permitted Variance for such Variance Testing Period.

 

(c)           The Borrower shall deliver to the Administrative Agent and the
Lenders on or before 5:00 p.m. (New York City time) on Thursday of each week
(commencing on June 4, 2020) a certificate which shall include such detail as is
reasonably satisfactory to the Required Lenders (which satisfaction may be
communicated via an email from either of the Specified Lender Advisors), signed
by a Responsible Officer of the Borrower certifying that (i) the Loan Parties
are in compliance with the covenants contained in Section 5.13(a) and (b) and
(ii) no Default or Event of Default has occurred or, if such a Default or Event
of Default has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto, together
with an Approved Budget Variance Report, each of which shall be prepared by the
Borrower as of the last day of the respective Variance Testing Period or other
period then most recently ended, and shall be in a form and substance
satisfactory to the Required Lenders in their sole discretion (which
satisfaction may be communicated via an email from either of the Specified
Lender Advisors).

 

(d)           The Administrative Agent and the Lenders (i) may assume that the
Loan Parties will comply with the Approved Budget (subject to Permitted
Variances), (ii) shall have no duty to monitor such compliance and (iii) shall
not be obligated to pay (directly or indirectly from the Collateral) any unpaid
expenses incurred or authorized to be incurred pursuant to any Approved Budget.
The line items in the Approved Budget for payment of interest, expenses and
other amounts to the Administrative Agent and the Lenders are estimates only,
and the Loan Parties remain obligated to pay any and all Obligations in
accordance with the terms of the Loan Documents regardless of whether such
amounts exceed such estimates. Nothing in any Approved Budget shall constitute
an amendment or other modification of any Loan Document or other lending limits
set forth therein.

 

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Section 5.14          Cash Flow Forecast. The Borrower shall deliver to the
Administrative Agent and the Specified Lenders Advisors (i) on Friday of every
second week (commencing with the second Friday after the Petition Date),
supplemental thirteen (13) week projections (the “13-Week Cash Flow Forecast”)
which shall set forth, on a weekly basis, among other things, cash receipts,
operating disbursement amounts, liquidity and restructuring related amounts for
the 13-week period, or (ii) on or before August 31, 2020, or such later date as
may be agreed to by the Required Lenders, a 12-month post-emergence liquidity
forecast (with the first three months being broken out weekly) (with any such
agreement of the Required Lenders being able to be communicated via an email
from either of the Specified Lender Advisors). The projections delivered
pursuant to this Section 5.14 shall not constitute the “Approved Budget” for any
purpose hereunder.

 

Section 5.15          Monthly Calls and Status Update Calls.

 

(a)           on or prior to the tenth (10th) calendar day of each month (or the
first Business Day thereafter), the Borrower shall conduct monthly telephone
conferences with all Lenders and permit questions from such Lenders and answers,
with such telephone conferences being split into (i) a Public-Siders and
non-Public-Siders portion and (ii) a solely non-Public-Siders portion; provided
that (I) questions from the Lenders shall be provided to the Borrower in writing
no later than two (2) Business Days in advance and (II) for the avoidance of
doubt, the Borrower shall not be obligated to disclose any material non-public
information during the Public-Siders and non-Public-Siders portion of such
telephone conferences;

 

(b)           on or prior to the tenth (10th) calendar day of each month (or the
first Business Day thereafter), the Borrower shall conduct monthly telephone
conferences solely with the Specified Lender Advisors and any Lenders which have
become “restricted” and are then subject to non-disclosure agreements in
customary form reasonably satisfactory to the Borrower (collectively, the
“Restricted Lenders”), and permit questions from the Specified Lender Advisors
and Restricted Lenders and provide answers; provided that, to the extent the
Restricted Lenders monthly telephone conference is combined with the
Public-Siders/non-Public-Siders telephone conference outlined in
Section 5.15(a) hereof, such telephone conference will include a separate
portion solely for Restricted Lenders; provided further that questions from the
Specified Lender Advisors and Restricted Lenders shall be provided to the
Borrower in writing no later than two (2) Business Days in advance;

 

(c)           at the request of the Specified Lender Advisors, weekly from and
after the Petition Date through the Maturity Date, the Borrower shall hold a
meeting (at a mutually agreeable location and time or telephonically) with
management of the Borrower and the Specified Lender Advisors, which meeting, at
the discretion of the Specified Lender Advisors, may include private side
Lenders, public side Lenders and/or Restricted Lenders; provided, that the
Specified Lender Advisors shall (i) communicate the participants to the Borrower
in advance of such call or meeting and (ii) provide an agenda in advance of such
call or meeting (which exercise of discretion may be communicated via an email
from either of the Specified Lender Advisors) regarding the financing results,
operations, compliance of the Loan Parties and developments in the Chapter 11
Cases; provided, that any such meeting that occurs during the same week as the
telephone conference outlined in Section 5.15(a) hereof may be combined with
such telephone conference;

 

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(d)           no less frequently than weekly from and after the Petition Date
until the date of consummation, a representative of the investment banker
engaged with respect to the Akorn India Private Ltd. sale process (the “Akorn
India Sale”) shall provide an email update every week to the Specified Lender
Advisors on the status of such sale process (or email confirmation that there
have been no material updates to such sale process);

 

(e)           the Borrower shall on or prior to the tenth (10th) calendar day of
each month (or the first Business Day thereafter) arrange for monthly update
calls among the Specified Lender Advisors and The Quantic Group and, to the
extent then-engaged by the Borrower, NSF International and Ropes & Gray LLP; and

 

(f)            promptly upon any request of either Specified Lender Advisor hold
a telephonic meeting with such Specified Lender Advisor regarding the financing
results, operations, other business developments and developments in the Chapter
11 Cases.

 

The Required Lenders may waive any requirements set forth in this Section 5.15
(which waiver may be communicated via e-mail by any Specified Lender Advisor).

 

Section 5.16          Required Milestones. The Borrower shall, or shall cause
the following to occur, by the times and dates set forth below (as any such time
and date may be extended, or any of such milestone set forth below may be
modified, with the consent of the Required Lenders (which consent, and any
consent of the Required Lenders described below in clauses (a), (c), (d),
(h) and (i), may be communicated via an email from either of the Specified
Lender Advisors):

 

(a)           By no later than three (3) days following the Petition Date, the
Bankruptcy Court shall enter the Interim Order.

 

(b)           By no later than three (3) days following the Petition Date, the
Borrower or its financial and/or restructuring advisors shall complete initial
outreach to each of the potential financing sources for the Permitted Exit ABL
Credit Agreement identified to the Specified Lender Advisors in the contact log
provided on May 15, 2020.

 

(c)           By no later than five (5) days after the Petition Date, the
Borrower shall have filed the Chapter 11 Plan, Chapter 11 Plan Disclosure
Statement, and the related motion seeking approval of the adequacy of the
Chapter 11 Plan Disclosure Statement.

 

(d)           By no later than thirty (30) days following the Petition Date, the
Bankruptcy Court shall enter the Final Order authorizing the DIP Facility, in
form and substance reasonably acceptable to the Administrative Agent, the
Required Lenders and the Borrower.

 

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(e)           By no later than thirty (30) days following the Petition Date, the
Borrower shall have obtained entry of an order from the Bankruptcy Court
approving bidding procedures in respect of a Chapter 11 Sale Transaction which
procedures are in form and substance acceptable to the Administrative Agent and
the Required Lenders (the “Bidding Procedures Order”);

 

(f)            By no later than thirty-three (33) days following the Petition
Date, non-binding terms sheets to provide the Permitted Exit ABL Credit
Agreement shall be due.

 

(g)           By no later than forty-three (48) days following the Petition Date
(or such later date as may be required to accommodate the Bankruptcy Court’s
schedule), the Bankruptcy Court shall hold a hearing on the adequacy of the
Chapter 11 Plan Disclosure Statement and enter an order approving the same, as
well as solicitation of the Chapter 11 Plan within one (1) Business day thereof.

 

(h)           By no later than sixty-six (63) days following the Petition Date,
binding commitment letters to provide the Permitted Exit ABL Credit Agreement
shall be due.

 

(i)            By no later than seventy-five (75) days following the Petition
Date, bids for the Sale Transaction shall be due.

 

(j)            By no later than eighty-two (82) days following the Petition
Date, the Borrower shall conduct the auction, if applicable, for all or
substantially all of the Borrower’s consolidated assets pursuant to Section 363
of the Bankruptcy Code and the Bidding Procedures Order.

 

(k)           By no later than eighty-nine (89) days following the Petition
Date, the Bankruptcy Court shall approve the Sale Transaction and enter an order
in form and substance acceptable to the Required Lenders and the Borrower
approving the Sale Transaction.

 

(l)            By no later than ninety-one (91) days following the Petition
Date, the Bankruptcy Court shall enter an order confirming the Chapter 11 Plan
in form and substance reasonably acceptable to the Required Lenders and the
Borrower.

 

(m)          By no later than one hundred and three (103) days following the
Petition Date, the Sale Transaction shall have closed and the effective date of
the Chapter 11 Plan shall have occurred; provided that if regulatory approvals
associated with a Sale Transaction remain pending as of such date, such date
shall be automatically extended to the date that is the third Business Day
following receipt of all necessary regulatory approvals.

 

Section 5.17          Specified Lender Advisors, Agent Advisors and Company
Advisors.

 

(a)           The Agents, on behalf of themselves and the Lenders, the Lenders,
and each of the Specified Lender Advisors, on behalf of itself and the Lenders,
shall each be entitled to retain or continue to retain (either directly or
through counsel) any advisor the Administrative Agent and the Ad Hoc Group of
Lenders may deem necessary to provide advice, analysis and reporting for the
benefit of the Administrative Agent or the Lenders, including without limitation
the Agent Advisors. The Loan Parties shall pay all fees and expenses of such
advisors in accordance with the Specified Lender Advisors Fee Letters and any
other applicable fee or engagement letters, and all such fees and expenses shall
constitute Obligations and be secured by the Collateral. The Loan Parties and
their advisors shall grant access to, and cooperate in all respects with, the
Agents, the Lenders and the Specified Lender Advisors and any other
representatives of the foregoing and provide all information that such parties
may request in a timely manner.

 

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(b)           The Borrower shall continue to retain PJT Partners and
AlixPartners as company advisors consistent with the terms of their respective
engagement agreements as in effect on the Closing Date, or, if PJT Partners and
AlixPartners are no longer retained by the Borrower, the Borrower shall retain
such other financial and restructuring advisors reasonably acceptable to the
Required Lenders (which acceptance may be communicated via an email from either
of the Specified Lender Advisors).

 

Section 5.18          Additional Bankruptcy Matters. Promptly provide the
Administrative Agent, the Lenders and the Specified Lender Advisors with updates
of any material developments in connection with the Loan Parties’ reorganization
efforts under the Chapter 11 Cases, whether in connection with the sale of all
or substantially all of the Borrower’s and its Subsidiaries’ consolidated
assets, the marketing of any Loan Parties’ assets, the formulation of bidding
procedures, an auction plan, and documents related thereto, or otherwise.

 

Section 5.19          Debtor-in-Possession Obligations. Comply in a timely
manner with their obligations and responsibilities as debtors-in-possession
under the Bankruptcy Code, the Bankruptcy Rules, the DIP Order, and any other
order of the Bankruptcy Court.

 

Section 5.20          Liquidation of WorldAkorn Pharma Mauritius.

 

(a)           In the event that, at least ten (10) Business Days prior to the
closing of the Asset Purchase Agreement, the Akorn India Sale is consummated,
then the Borrower shall, to the extent permissible under applicable law and any
other legally binding obligations of any of its Subsidiaries who are not Loan
Parties to, immediately prior to the closing of the Asset Purchase Agreement,
declare and otherwise consummate any dividend, distribution or similar
transaction (as may be requested by the Purchaser), or otherwise repay any
intercompany Indebtedness, such that, subject to Section 5.20(d), all cash and
cash equivalents of any such Person are held by a Loan Party as of immediately
prior to the closing of the Asset Purchase Agreement.

 

(b)           In the event that the Akorn India Sale is consummated after the
date that is ten (10) Business Days prior to the closing of the Asset Purchase
Agreement, then subject to Section 5.20(d), the Borrower shall pay, or cause to
be paid, to the Purchaser all cash and cash equivalents of any such Person and
the net cash proceeds received in consideration therefor no later than the later
of the closing date of the Asset Purchase Agreement and the date that is five
(5) Business Days following receipt thereof.

 

(c)           In the event that the Akorn India Sale is consummated after the
closing of the Asset Purchase Agreement, then, subject to Section 5.20(d), the
Borrower shall pay or cause to be paid, to Purchaser all cash and cash
equivalents of any such Person and the net cash proceeds received in
consideration therefor no later than the date that is five (5) Business Days
following receipt therefor.

 

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(d)           The cash and cash equivalents contemplated by Section 5.20(a),
5.20(b) and 5.20(c) and the net cash proceeds contemplated by
Section 5.20(b) and 5.20(c) shall be determined net of (i) any applicable fees,
expenses, and Taxes of the Borrower or any of its Subsidiaries in connection
with consummation of the Akorn India Sale or in connection with the distribution
of such amounts from the applicable Subsidiary to the applicable Loan Party, and
(ii) any holdbacks, reserves, escrows, or other similar amounts in respect of
indemnification, purchase price adjustments, or other contingent obligations of
the Borrower or any of its Subsidiaries in connection with such sale or
disposition or in connection with such distribution; provided that upon release,
expiration, or other applicable termination of such contingent obligations, any
such amounts, subject to the immediately preceding clause (i), shall be promptly
paid to Purchaser.

 

Article VI

 

Negative Covenants

 

Until the Commitments shall have expired or been terminated and the principal of
and interest on each Loan and all fees, expenses and other amounts payable under
any Loan Document shall have been paid in full, in each case without any pending
draw, each Loan Party executing this Agreement covenants and agrees from and
after the Closing Date, jointly and severally with all of the other Loan
Parties, with the Lenders that, unless consented to by the Required Lenders
(which approval may be communicated via an email from either of the Specified
Lender Advisors):

 

Section 6.01          Indebtedness. No Loan Party will, nor will it permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness, except:

 

(a)           the Secured Obligations;

 

(b)           [reserved];

 

(c)           Indebtedness existing on the Closing Date and set forth in
Schedule 6.01;

 

(d)           Indebtedness of the Borrower or any Subsidiary to any Subsidiary
that is a Loan Party or the Borrower or of any Subsidiary that is not a Loan
Party to another Subsidiary that is not a Loan Party;

 

(e)           Guarantees by the Borrower of Indebtedness of any of its
Subsidiaries that is a Loan Party, by any of its Subsidiaries of Indebtedness of
the Borrower or any other Subsidiary that is a Loan Party and by any of its
Subsidiaries that is not a Loan Party of Indebtedness of any other Subsidiary
that is not a Loan Party, provided that (i) the Indebtedness so Guaranteed is
permitted by this Section 6.01 and (ii) Guarantees permitted under this clause
(e) shall be subordinated to the Secured Obligations of the applicable
Subsidiary on the same terms as the Indebtedness so Guaranteed is subordinated
to the Secured Obligations;

 

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(f)            [reserved];

 

(g)           [reserved];

 

(h)           Indebtedness owed to any Person providing workers’ compensation,
health, disability or other employee benefits or property, casualty or liability
insurance, pursuant to reimbursement or indemnification obligations to such
Person, in each case incurred in the ordinary course of business; and

 

(i)            Indebtedness of any Loan Party in respect of performance bonds,
bid bonds, appeal bonds, surety bonds and similar obligations, in each case
provided in the ordinary course of business.

 

Section 6.02          Liens. No Loan Party will, nor will it permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:

 

(a)           Liens created pursuant to any Loan Document and the DIP Orders;

 

(b)           [reserved];

 

(c)           Liens permitted under the Cash Management Order;

 

(d)           Permitted Encumbrances;

 

(e)           the Carve-Out;

 

(f)            any Lien on any property or asset of the Borrower or any of its
Subsidiaries existing on the Closing Date and set forth in Schedule 6.02;
provided that (i) such Lien shall not apply to any other property or asset of
the Borrower or such Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the Closing Date;

 

(g)           Liens on fixed or capital assets acquired, constructed or improved
by the Borrower or any of its Subsidiaries; provided that (i) such Liens secure
Indebtedness permitted by clause (f) of Section 6.01, (ii) such Liens and the
Indebtedness secured thereby are incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement, (iii) the
Indebtedness secured thereby does not exceed 100% of the cost of acquiring,
constructing or improving such fixed or capital assets and (iv) such Liens shall
not apply to any other property or assets of the Borrower or such Subsidiary;

 

(h)           Liens securing the Pre-Petition First Lien Term Loan Credit
Agreement and the other Pre-Petition Loan Documents;

 

(i)            Liens of a collecting bank arising in the ordinary course of
business under Section 4-208 of the UCC in effect in the relevant jurisdiction
covering only the items being collected upon;

 

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(j)            to the extent constituting a Lien, rights of setoff, reserves and
holdbacks against credit balances of a Loan Party or any of its Subsidiaries
with credit card issuers or credit card processors to such Loan Party or any
such Subsidiaries arising in the ordinary course of business; and

 

(k)           Cash Collateral and other deposits securing obligations arising
after the Petition Date required under or imposed by the Bankruptcy Code.

 

Section 6.03          Fundamental Changes. (a) Except in connection with the
Chapter 11 Plan and the Sale Transaction, no Loan Party will, nor will it permit
any of its Subsidiaries to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or liquidate or
dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Event of Default shall have occurred and be continuing (i) any
Subsidiary of the Borrower may merge into the Borrower in a transaction in which
the Borrower is the surviving corporation. (ii) any Loan Party (other than the
Borrower) may merge into any other Loan Party in a transaction in which the
surviving entity is a Loan Party, (iii) the Loan Parties and Subsidiaries may
consummate transactions contemplated by the RSA and (iv) any applicable
Subsidiary may consummate the Akorn India Sale and the transactions described in
Section 5.20.

 

(b)           No Loan Party will, nor will it permit any of its Subsidiaries to,
engage in any business other than businesses of the type conducted by the
Borrower and its Subsidiaries on the Closing Date and businesses reasonably
related thereto.

 

(c)           No Loan Party will change its fiscal year from the basis in effect
on the Closing Date without the consent of the Administrative Agent (acting at
the direction of the Required Lenders (which direction may be communicated via
an email from either of the Specified Lender Advisors).

 

Section 6.04          Investments, Loans, Advances, Guarantees and Acquisitions.
No Loan Party will, nor will it permit any of its Subsidiaries to, (i) purchase,
hold or acquire (including pursuant to any merger with any Person that was not a
Loan Party and a wholly owned Subsidiary prior to such merger) any evidences of
Indebtedness or Equity Interests or other securities (including any option,
warrant or other right to acquire any of the foregoing) of, make or permit to
exist any loans or advances to, Guarantee any obligations of, or make or permit
to exist any investment or any other interest in, any other Person,
(ii) purchase or otherwise acquire (in one transaction or a series of
transactions) any assets of any other Person constituting a business unit,
division, product line (including rights in respect of any drug or other
pharmaceutical product) or line of business of such Person (whether through
purchase of assets, merger or otherwise), or (iii) acquire an exclusive
long-term license of rights to a drug or other product line of any Person,
except:

 

(a)           Permitted Investments, subject to control agreements in favor of
the Administrative Agent for the benefit of the Secured Parties or otherwise
subject to a perfected security interest in favor of the Administrative Agent
for the benefit of the Secured Parties;

 

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(b)           investments in existence on the Closing Date and described in
Schedule 6.04;

 

(c)           investments (i) by the Borrower and any of its Subsidiaries that
are Loan Parties in Equity Interests in their respective Subsidiaries that are
Loan Parties and (ii) by any Subsidiary of the Borrower that is not a Loan Party
in Equity Interests in any of its Subsidiaries that is not a Loan Party;

 

(d)           loans or advances made (i) by any Loan Party to another Loan Party
or (ii) made by any Subsidiary that is not a Loan Party to a Loan Party or any
other Subsidiary that is not a Loan Party, provided that any such loans and
advances made by a Subsidiary that is not a Loan Party to a Loan Party shall be
subordinated to the Secured Obligations on terms acceptable to the Required
Lenders (which acceptance may be communicated via an email from either of the
Specified Lender Advisors);

 

(e)           investments necessary to effectuate the transactions contemplated
by the RSA;

 

(f)            [reserved];

 

(g)           notes payable, or stock or other securities issued by Account
Debtors to a Loan Party pursuant to negotiated agreements with respect to
settlement of such Account Debtor’s Accounts in the ordinary course of business;

 

(h)           investments constituting deposits described in clauses (c) and
(d) of the definition of the term “Permitted Encumbrances”; and

 

(i)            Investments set forth in the Approved Budget.

 

Section 6.05          Asset Sales. No Loan Party will, nor will it permit any of
its Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interest owned by it, nor will the Borrower permit any of
its Subsidiaries to issue any additional Equity Interest in such Subsidiary
(other than to the Borrower or another Subsidiary in compliance with
Section 6.04), except:

 

(a)           sales, transfers and dispositions of (i) Inventory in the ordinary
course of business and (ii) used, obsolete, worn out or surplus Equipment or
property in the ordinary course of business; provided that the fair market value
of all such sales, transfers and dispositions permitted by this clause (ii) from
and after the Closing Date shall not exceed $100,000;

 

(b)           sales, transfers and dispositions of assets to the Borrower or any
of its Subsidiaries that is a Loan Party, provided that any such sales,
transfers or dispositions involving a Subsidiary that is not a Loan Party shall
be made in compliance with Section 6.09;

 

(c)           sales, transfers and dispositions of Accounts in connection with
the compromise, settlement or collection thereof;

 

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(d)           sales, transfers and dispositions of Permitted Investments and
other investments permitted by clause (h) of Section 6.04;

 

(e)           other sales, transfers or dispositions pursuant to an order of the
Bankruptcy Court which sale, transfer or disposition are consistent with the RSA
and the Approved Budget;

 

(f)            dispositions resulting from any casualty or other insured damage
to, or any taking under power of eminent domain or by condemnation or similar
proceeding of, any property or asset of the Borrower or any of its Subsidiaries;

 

(g)           sales, transfers and other dispositions consisting of divestitures
required by applicable law or any Governmental Authority or other regulatory
authority; and

 

(h)           sales, transfers and dispositions in connection with the Akorn
India Sale, so long as the terms thereof are satisfactory to the Required
Lenders in their sole discretion (which satisfaction may be communicated via an
email from either of the Specified Lender Advisors);

 

provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by paragraphs (b) and (f) above) shall be
made for fair value and for 100% cash consideration.

 

Section 6.06          Sale and Leaseback Transactions. No Loan Party will, nor
will it permit any Subsidiary to, enter into any arrangement, directly or
indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred.

 

Section 6.07          Swap Agreements. No Loan Party will, nor will it permit
any of its Subsidiaries to, enter into any Swap Agreement.

 

Section 6.08          Restricted Payments; Pre-Petition Indebtedness.

 

(a)           No Loan Party will, nor will it permit any of its Subsidiaries to,
declare or make, or agree to declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except (i) Restricted Payments to effectuate the transactions contemplated by
the RSA, (ii) Subsidiaries may declare and pay dividends ratably with respect to
their Equity Interests so long as any such recipient is a Loan Party or from a
Subsidiary that is not a Loan Party to another Subsidiary that is not a Loan
Party or a Subsidiary of a Loan Party, (iii) the Borrower may make Restricted
Payments pursuant to and in accordance with stock option plans or other benefit
plans for management or employees of the Borrower and its Subsidiaries.

 

(b)           No Loan Party will, nor will it permit any of its Subsidiaries to,
make or agree to pay or make, directly or indirectly, (i) any payment or other
distribution (whether in cash, securities or other property) of or in respect of
principal of or interest on any Indebtedness incurred prior to the Petition Date
(all such Indebtedness, including all loans under the Pre-Petition Term Loan
Agreement, “Pre-Petition Indebtedness”), other than payment to certain creditors
set forth in the Approved Budget and pursuant to an order of the Bankruptcy
Court in form and substance satisfactory to the Required Lenders (which
satisfaction may be communicated via an email from either of the Specified
Lender Advisors). Furthermore, no Loan Party will, nor will it permit any of its
Subsidiaries to, amend the documents evidencing any Pre-Petition Indebtedness
other than as set forth in the RSA or the Chapter 11 Plan.

 

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Section 6.09          Transactions with Affiliates. No Loan Party will, nor will
it permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) transactions that (i) are in the ordinary course of
business and (ii) are at prices and on terms and conditions not less favorable
to such Loan Party or such Subsidiary than could be obtained on an arm’s-length
basis from unrelated third parties, (b) transactions between or among the Loan
Parties not involving any other Affiliate, (c) any investment permitted by
Sections 6.04(c) or 6.04(d), (d) any Indebtedness permitted under
Section 6.01(d), (e) any Restricted Payment permitted by Section 6.08,
(f) [reserved], (g) the payment of reasonable fees to directors of the Borrower
or any of its Subsidiaries who are not employees of the Borrower or any of its
Subsidiaries, and compensation and employee benefit arrangements paid to, and
indemnities provided for the benefit of, directors, officers, independent
contractors, or employees of the Borrower or its Subsidiaries in the ordinary
course of business and (h) any issuances of securities or other payments, awards
or grants in cash, securities or otherwise pursuant to, or the funding of,
employment agreements, stock options and stock ownership plans approved by the
Borrower’s board of directors.

 

Section 6.10          Restrictive Agreements. No Loan Party will, nor will it
permit any of its Subsidiaries to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of such Loan Party or any of its
Subsidiaries to create, incur or permit to exist any Lien upon any of its
property or assets, or (b) the ability of any Subsidiary of any Loan Party to
pay dividends or other distributions with respect to any of its Equity Interests
or to make or repay loans or advances to the Borrower or any other Subsidiary or
to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that
(i) the foregoing shall not apply to restrictions and conditions imposed by any
Requirement of Law or by any Loan Document, (ii) the foregoing shall not apply
to restrictions and conditions existing on the Closing Date identified on
Schedule 6.10, (iii) [reserved], (iv) the foregoing shall not apply to
restrictions and conditions imposed by Pre-Petition Indebtedness,
(v) [reserved], (vi) clause (a) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof,
(vii) the foregoing shall not apply to customary restrictions and conditions
arising in connection with any sale, transfer, lease or disposition permitted by
Section 6.05, (viii) the foregoing shall not apply to any restrictions or
conditions set forth in any agreement in effect at any time any Person becomes a
Subsidiary (but not any modification or amendment expanding the scope of any
such restriction or condition); provided, that such agreement was not entered
into in contemplation of such Person becoming a Subsidiary and the restriction
or condition set forth in such agreement does not apply to the Borrower or any
other Subsidiary, (ix) [reserved], (x) [reserved], (xi) the foregoing shall not
apply to restrictions or conditions with respect to cash collateral so long as
the Lien in respect of such cash collateral is permitted under Section 6.02,
(xii) the foregoing shall not apply to customary net worth provisions contained
in real property leases or licenses of intellectual property, so long as the
Borrower has determined in good faith that such provisions could not reasonably
be expected to impair the ability of the Borrower and the other Loan Parties to
make any payments required hereunder or otherwise satisfy the Obligations,
(xiii) [reserved], (xiv) the foregoing shall not apply to customary provisions
in joint venture agreements, limited liability company operating agreements,
partnership agreements, stockholders agreements and other similar agreements,
and (xv) the foregoing shall not apply to restrictions on cash or other deposits
or net worth imposed by customers under contracts entered into in the ordinary
course of business.

 

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Section 6.11          Amendment of Organizational Documents. No Loan Party will,
nor will it permit any of its Subsidiaries to, amend, modify or waive any of its
rights under its certificate or articles of incorporation or organization,
by-laws, operating, management or partnership agreement or other organizational
documents, to the extent any such amendment, modification or waiver would be
adverse to the Lenders.

 

Section 6.12          Minimum Actual Liquidity. The Borrower shall not permit,
as of the Friday of each calendar week following the Closing Date, Actual
Liquidity to be less than Budgeted Liquidity (subject to Permitted Variance) for
the two (2) most recently-ended consecutive weeks.

 

Section 6.13          Orders. Notwithstanding anything to the contrary herein,
use any portion or proceeds of the Loans or the Collateral, or disbursements set
forth in the Approved Budget, for payments or purposes that would violate the
terms of the DIP Order.

 

Section 6.14          Reclamation Claims. Enter into any agreement to return any
of its Inventory to any of its creditors for application against any
Pre-Petition Indebtedness, Pre-Petition trade payables or other Pre-Petition
claims under Section 546(c) of the Bankruptcy Code or allow any creditor to take
any setoff or recoupment against any of its Pre-Petition Indebtedness,
Pre-Petition trade payables or other Pre-Petition claims based upon any such
return pursuant to Section 553(b)(1) of the Bankruptcy Code or otherwise if,
after giving effect to any such agreement, setoff or recoupment, the aggregate
amount applied to Pre-Petition Indebtedness, Pre-Petition trade payables and
other Pre-Petition claims subject to all such agreements, setoffs and
recoupments since the Petition Date would exceed $500,000.

 

Section 6.15          Insolvency Proceeding Claims. Incur, create, assume,
suffer to exist or permit any other super priority administrative claim which is
pari passu with or senior to the claim of the Administrative Agent or the
Lenders against the Debtors, except as set forth in the DIP Order.

 

Section 6.16          Bankruptcy Actions. Seek, consent to, or permit to exist,
without the prior written consent of the Required Lenders (which approval may be
communicated via an email from either of the Specified Lender Advisors) (which
consent shall constitute authorization under this Agreement), any order granting
authority to take any action that is prohibited by the terms of this Agreement,
the DIP Order or the other Loan Documents or refrain from taking any action that
is required to be taken by the terms of the DIP Order or any of the other Loan
Documents.

 

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Article VII

 

Events of Default

 

Section 7.01         Events of Default. Notwithstanding the provisions of
Section 362 of the Bankruptcy Code to the extent provided in the DIP Order, with
respect to the Debtors and without notice, application or motion, hearing
before, or order of the Bankruptcy Court or any notice to any Loan Party, any of
the following events shall constitute an “Events of Default”:

 

(a)          the Borrower shall fail to pay any principal of any Loan when and
as the same shall become due and payable, whether at the due date thereof or at
a date fixed for prepayment thereof or otherwise;

 

(b)          the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement, when and as the same shall become due and
payable, and such failure shall continue remedied for a period of three
(3) days;

 

(c)          any representation or warranty made or deemed made by or on behalf
of any Loan Party or any of its Subsidiaries in, or in connection with, this
Agreement or any other Loan Document or any amendment or modification hereof or
thereof or waiver hereunder or thereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection
with this Agreement or any other Loan Document or any amendment or modification
hereof or thereof or waiver hereunder or thereunder, shall prove to have been
materially incorrect when made or deemed made;

 

(d)          any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.01, 5.02(a), 5.02(c), 5.03 (with
respect to a Loan Party’s existence), clause (b) of Section 5.06, 5.08, 5.10,
5.12, 5.13, 5.14, 5.15, 5.16, 5.18, 5.19 or 5.20 or in Article VI;

 

(e)          any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement or any other Loan Document
(other than those which constitute a default under another Section of this
Article), and such failure shall continue unremedied for a period of five
(5) days after the occurrence thereof;

 

(f)           [reserved];

 

(g)          [reserved];

 

(h)          [reserved];

 

(i)           [reserved];

 

(j)           [reserved];

 

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(k)          solely with respect to pre-petition actions, (i) (i) one or more
judgments for the payment of money in an aggregate amount in excess of $100,000
(after giving effect to third-party insurance from a creditworthy insurer that
has not denied coverage) shall be rendered against any Loan Party, any of its
Subsidiaries or any combination thereof and the same shall remain undischarged
for a period of thirty (30) consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to attach or levy upon any assets of any Loan Party or any of its Subsidiaries
to enforce any such judgment; or (ii) any Loan Party or any of its Subsidiaries
shall fail within thirty (30) days to discharge one or more non-monetary
judgments or orders which, individually or in the aggregate, could reasonably be
expected to result in liability in excess of $100,000, which judgments or
orders, in any such case, are not stayed on appeal or otherwise being
appropriately contested in good faith by proper proceedings diligently pursued;

 

(l)           an ERISA Event shall have occurred that when taken together with
all other ERISA Events that have occurred, could reasonably be expected to
result in liability to any Loan Party in excess of $100,000;

 

(m)         other than pursuant to the Chapter 11 Plan or the Sale Transaction,
a Change in Control shall occur;

 

(n)          [reserved];

 

(o)          any Lien securing any Secured Obligation shall cease to be a
perfected, first priority Lien (subject to the Carve-Out and other Liens
specified in the DIP Orders) with respect to any material portion of the
Collateral;

 

(p)          any Collateral Document shall fail to remain in full force or
effect or any action shall be taken to discontinue or to assert the invalidity
or unenforceability of any Collateral Document;

 

(q)          any material provision of any Loan Document for any reason ceases
(other than pursuant to its express terms) to be valid, binding and enforceable
in accordance with its terms (or any Loan Party shall challenge the
enforceability of any Loan Document or shall assert in writing, or engage in any
action or inaction based on any such assertion, that any provision of any of the
Loan Documents has ceased to be or otherwise is not valid, binding and
enforceable in accordance with its terms); and

 

(r)           the occurrence of any of the following in any of the Chapter 11
Cases:

 

(i)           other than a motion in support of the DIP Order, the bringing of a
motion, taking of any action or the filing of any plan of reorganization, plan
of liquidation or disclosure statement attendant thereto by any of the Loan
Parties or any Subsidiary in the Chapter 11 Cases: (A) to obtain additional
financing under Section 364(c) or Section 364(d) of the Bankruptcy Code not
otherwise permitted pursuant to this Agreement; (B) to grant any Lien other than
Liens permitted by Section 6.02; (C) except as provided in the DIP Order, to use
cash collateral of the Administrative Agent and the other Secured Parties or
Pre-Petition Lenders or Pre-Petition Agent under Section 363(c) of the
Bankruptcy Code without the prior written consent of the Required Lenders (which
approval may be communicated via an email from either of the Specified Lender
Advisors); or (D) any other action or actions adverse to the Agents and Lenders
or their rights and remedies hereunder, under any other Loan Documents, or their
interest in the Collateral;

 

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(ii)          (A) other than in accordance with the RSA, (1) the filing of any
plan of reorganization, plan of liquidation or disclosure statement attendant
thereto, or any direct or indirect amendment to such plan or disclosure
statement, by (x) a Loan Party or (z) any other Person, in each case, that does
not propose to indefeasibly repay in full in cash the Obligations under this
Agreement on or before the effective date of such plan or plans and to which the
Required Lenders do not consent or (2) if any of the Loan Parties or their
Subsidiaries shall seek, support or fail to contest in good faith the filing or
confirmation of any such plan or entry of any such order that does not propose
to indefeasibly repay in full in cash the Obligations under this Agreement on or
before the effective date of such plan or plans, (B) the entry of any order
terminating any Loan Party’s exclusive right to file a plan of reorganization or
plan of liquidation, or (C) the expiration of any Loan Party’s exclusive right
to file a plan of reorganization or plan of liquidation;

 

(iii)         the entry of an order in any of the Chapter 11 Cases confirming a
plan of reorganization or plan of liquidation that is not in accordance with the
RSA or otherwise acceptable to the Required Lenders in their sole discretion
(which acceptance may be communicated via an email from either of the Specified
Lender Advisors), other than to the extent that such plan of reorganization or
plan of liquidation provides for the termination of the Commitments and
indefeasible repayment in full in cash of all of the Obligations under this
Agreement on or before the effective date of such plan or plans;

 

(iv)         (x) the entry of an order amending, supplementing, staying,
vacating or otherwise modifying the Loan Documents, the DIP Order, the Cash
Management Order or any other order with respect to any of the Chapter 11 Cases
affecting in any material respect this Agreement and/or the other Loan Documents
(including any order in respect of the Required Milestones specified herein)
without the written consent of the Required Lenders or the filing by a Loan
Party of a motion for reconsideration with respect to the DIP Order or the Cash
Management Order shall otherwise not be in full force and effect or (y) any Loan
Party or any Subsidiary shall fail to comply with the DIP Order, the Cash
Management Order or any other order with respect to any of the Chapter 11 Cases
affecting in any material respect this Agreement and/or the other Loan
Documents, in any material respect;

 

(v)          the Bankruptcy Court’s (A) entry of an order granting relief from
the automatic stay under Section 362 of the Bankruptcy Code to permit
foreclosure of security interests in assets of the Loan Parties of a value in
excess of $100,000; or (B) entry of an order terminating exclusivity having been
entered (or such an order is sought by any party and not actively contested by
the Loan Parties);

 

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(vi)         the allowance of any claim or claims under Section 506(c) of the
Bankruptcy Code or otherwise against the Agents, any Lender or any of the
Collateral or against the Pre-Petition Agent, any Pre-Petition Lender or any
Pre-Petition Collateral;

 

(vii)        the appointment of an interim or permanent trustee in the Chapter
11 Cases or the appointment of a trustee receiver or an examiner in the Chapter
11 Cases with expanded powers to operate or manage the financial affairs, the
business, or reorganization of the Loan Parties;

 

(viii)       (A) the dismissal of any Chapter 11 Case or (B) any Loan Party
shall file a motion or other pleading seeking the dismissal of the Chapter 11
Cases under Section 1112 of the Bankruptcy Code or otherwise;

 

(ix)          any Loan Party shall file a motion (without consent of the
Required Lenders) seeking, or the Bankruptcy Court shall enter an order
granting, relief from or modifying the automatic stay of Section 362 of the
Bankruptcy Code (A) to allow any creditor (other than the Administrative Agent)
to execute upon or enforce a Lien on any Collateral, (B) approving any
settlement or other stipulation not approved by the Required Lenders with any
creditor of any Loan Party providing for payments as adequate protection or
otherwise to such secured creditor (which approval may be communicated via an
email from either of the Specified Lender Advisors) or (C) to permit other
actions that would have a Material Adverse Effect on the Debtors or their
estates (taken as a whole);

 

(x)           the entry of an order in the Chapter 11 Cases avoiding or
requiring the disgorgement of any portion of the payments made on account of the
Obligations owing under this Agreement or the other Loan Documents or the
Pre-Petition Obligations owing under the Pre-Petition Loan Documents;

 

(xi)          the failure of any Loan Party to perform any of its obligations
under the DIP Order, the Cash Management Order, or any order of the Bankruptcy
Court approving any Transaction or to perform in any material respect its
obligations under any order of the Bankruptcy Court approving bidding
procedures;

 

(xii)         the existence of any claims or charges, or the entry of any order
of the Bankruptcy Court authorizing any claims or charges, other than in respect
of this Agreement and the other Loan Documents, or as otherwise permitted under
the applicable Loan Documents or permitted under the DIP Order, entitled to
superpriority administrative expense claim status in any Chapter 11 Case
pursuant to Section 364(c)(1) of the Bankruptcy Code pari passu with or senior
to the claims of the Administrative Agent and the Secured Parties under this
Agreement and the other Loan Documents, or there shall arise or be granted by
the Bankruptcy Court (i) any claim having priority over any or all
administrative expenses of the kind specified in clause (b) of Section 503 or
clause (b) of Section 507 of the Bankruptcy Code or (ii) any Lien on the
Collateral having a priority senior to or pari passu with the Liens and security
interests granted herein, except, in each case, as expressly provided in the
Loan Documents or in the DIP Order then in effect (including the Carve-Out),
whichever is in effect;

 

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(xiii)        the DIP Order shall cease to create a valid and perfected Lien
(which creation and perfection shall not require any further action other than
the entry of and terms of the DIP Order) on the Collateral or to be in full
force and effect, shall have been reversed, modified, amended, stayed, vacated,
or subject to stay pending appeal, in the case of modification or amendment,
without prior written consent of the Required Lenders;

 

(xiv)        an order in the Chapter 11 Cases shall be entered (i) charging any
of the Collateral under Section 506(c) of the Bankruptcy Code against the
Administrative Agent and the Secured Parties, or the “Secured Parties” under the
Pre-Petition First Lien Term Loan Credit Agreement, or (ii) limiting the
extension under Section 552(b) of the Bankruptcy Code of the Liens of the
Pre-Petition Agent on the Collateral to any proceeds, products, offspring, or
profits of the Collateral acquired by any Loan Party after the Petition Date, or
the commencement of other actions that is materially adverse to the
Administrative Agent, the Secured Parties or their respective rights and
remedies under the Loan Documents in any of the Chapter 11 Cases or inconsistent
with any of the Loan Documents;

 

(xv)         any order having been entered or granted (or requested, unless
actively opposed by the Loan Parties) by either the Bankruptcy Court or any
other court of competent jurisdiction materially adversely impacting the rights
and interests of the Agents and the Lenders, as determined by the Required
Lenders, acting reasonably, without the prior written consent of the impacted
Agent and the Required Lenders;

 

(xvi)        an order of the Bankruptcy Court shall be entered denying or
terminating use of cash collateral by the Loan Parties authorized by the DIP
Order;

 

(xvii)       if the Final Order does not include a waiver, in form and substance
satisfactory to the Administrative Agent and the Lenders (which satisfaction may
be communicated via an email from either of the Specified Lender Advisors), of
(i) the right to subcharge the Collateral under Section 506(c) of the Bankruptcy
Code and (ii) any ability to limit the extension under Section 552(b) of the
Bankruptcy Code of the Liens of the Pre-Petition Agent on the Collateral to any
proceeds, products, offspring, or profits of the Collateral acquired by any Loan
Party after the Petition Date;

 

(xviii)      any Loan Party shall challenge, support or encourage a challenge of
any payments made to the Agents or any Lender with respect to the Obligations or
to the Pre-Petition Agent or the Pre-Petition Lenders with respect to the
Pre-Petition Obligations, or without the consent of the Administrative Agent and
the Required Lenders, the filing of any motion by the Loan Parties seeking
approval of (or the entry of an order by the Bankruptcy Court approving)
adequate protection to any Pre-Petition agent or lender that is inconsistent
with the DIP Order;

 

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(xix)        without the Administrative Agent’s and the Required Lenders’
consent, the entry of any order by the Bankruptcy Court granting, or the filing
by any Loan Party or any of its Subsidiaries of any motion or other request with
the Bankruptcy Court (in each case, other than the DIP Order and motions seeking
entry thereof or permitted amendments or modifications thereto) seeking,
authority to use any cash proceeds of any of the Collateral without the
Administrative Agent’s and the Required Lenders’ consent or to obtain any
financing under Section 364 of the Bankruptcy Code other than the Loan
Documents;

 

(xx)         if, unless otherwise approved by the Administrative Agent and the
Required Lenders (which approval of the Required Lenders may be communicated via
an email from either of the Specified Lender Advisors, and which approval of the
Administrative Agent may be communicated via an email from Wilmer Cutler
Pickering Hale and Dorr LLP), an order of the Bankruptcy Court shall be entered
providing for a change in venue with respect to the Chapter 11 Cases and such
order shall not be reversed or vacated within 10 days;

 

(xxi)        without Required Lender consent (which approval may be communicated
via an email from either of the Specified Lender Advisors), any Loan Party or
any Subsidiary thereof shall file any motion or other request with the
Bankruptcy Court seeking (a) to grant or impose, under Section 364 of the
Bankruptcy Code or otherwise, liens or security interests in any Collateral,
whether senior or equal to the Administrative Agent’s liens and security
interests (except as provided in the DIP Order); or (b) to modify or affect any
of the rights of the Agents or the Lenders under the DIP Order, the Loan
Documents, and related documents, other than in accordance with the Chapter 11
Plan;

 

(xxii)       any Loan Party or any Subsidiary thereof or any Debtor shall take
any action in support of any matter set forth in this Section 7.01(r) or any
other Person shall do so and such application is not contested in good faith by
the Loan Parties and the relief requested is granted in an order that is not
stayed pending appeal;

 

(xxiii)      any Debtor shall be enjoined from conducting any material portion
of its business, any disruption of the material business operations of the
Debtors shall occur, or any material damage to or loss of material assets of any
Debtor shall occur;

 

(xxiv)      failure of the Borrower or any other Loan Party to use the proceeds
of the Loans as set forth in and in compliance with the Approved Budget (subject
to Permitted Variance) and this Agreement; or

 

(xxv)       the occurrence of any RSA Termination Event (unless waived in
accordance with the terms of the RSA).

 

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Section 7.02          Remedies Upon an Event of Default.

 

(a)           Subject to the terms of the DIP Order and to the Remedies Notice
Period, if any Event of Default occurs and is continuing, notwithstanding the
provisions of Section 362 of the Bankruptcy Code, without any application,
motion or notice to, hearing before, or order from the Bankruptcy Court, then,
the Administrative Agent upon the direction of the Required Lenders (subject to
Article IX) shall declare the Loans hereunder (with accrued interest thereon)
and all other amounts owing under this Agreement immediately become due and
payable, but without affecting the Administrative Agent’s Liens or the
Obligations, and the Administrative Agent upon the request of the Required
Lenders (subject to Article IX) shall: (i) terminate, reduce or restrict the
right or ability of the Loan Parties to use any cash collateral; (ii) declare
the Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement to be due and payable forthwith, whereupon the same shall
immediately become due and payable, (iii) subject to the Remedies Notice Period,
(A) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under the Loan Documents or applicable law or
(B) take any and all actions described in the DIP Order; and (iv) deliver a
Carve-Out Trigger Notice.

 

(b)           At any hearing during the Remedies Notice Period to contest the
enforcement of remedies, the only issue that may be raised by any party in
opposition thereto shall be whether, in fact, an Event of Default has occurred,
and the Loan Parties hereby waive their right to and shall not be entitled to
seek relief, including, without limitation, under Section 105 of the Bankruptcy
Code, to the extent that such relief would in way impair or restrict the rights
and remedies of the Administrative Agent or the Secured Parties, as set forth in
this Agreement, the applicable DIP Order or other Loan Documents. Except as
expressly provided above in this Article VII, to the maximum extent permitted by
applicable law, presentment, demand, protest and all other notices of any kind
are hereby expressly waived.

 

Section 7.03          License; Access; Cooperation. Subject to any previously
granted licenses, the Administrative Agent is hereby granted an irrevocable,
non-exclusive license or other right to use, license or sub-license (to the
extent permitted under the applicable licenses and without payment of royalty or
other compensation to any Person) any or all intellectual property of Loan
Parties, computer hardware and software, trade secrets, brochures, customer
lists, promotional and advertising materials, labels, packaging materials and
other property, in advertising for sale, marketing, selling, collecting,
completing manufacture of, or otherwise exercising any rights or remedies with
respect to, any Collateral (with respect to trademarks subject to reasonable
quality control in favor of the Borrower) in each case after the occurrence, and
during the continuance, of an Event of Default. The Administrative Agent
(together with its agents, representatives and designees) is hereby granted a
non-exclusive right to have access to, and a rent free right to use, any and all
owned or leased locations (including, without limitation, warehouse locations,
distribution centers and store locations) for the purpose of arranging for and
effecting the sale or disposition of Collateral, including the production,
completion, packaging and other preparation of such Collateral for sale or
disposition (it being understood and agreed that the Administrative Agent and
its representatives (and persons employed on their behalf), may continue to
operate, service, maintain, process and sell the Collateral, as well as to
engage in bulk sales of Collateral). Upon the occurrence and the continuance of
an Event of Default and the exercise by the Administrative Agent or Lenders of
their rights and remedies under this Agreement and the other Loan Documents,
Borrower shall assist the Administrative Agent and Lenders in effecting a sale
or other disposition of the Collateral upon such terms as are reasonably
acceptable to the Administrative Agent and Required Lenders (which acceptance
may be communicated via an email from either of the Specified Lender Advisors).

 

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Article VIII

 

The Agents

 

Section 8.01          Appointment

 

(a)           Each of the Lenders, on behalf of itself and any of its Affiliates
that are Secured Parties hereby irrevocably appoints Wilmington Savings Fund
Society, FSB as Administrative Agent and Escrow Agent hereunder and under the
other Loan Documents, and authorizes the Agents to take such actions on its
behalf, including execution of the other Loan Documents, and to exercise such
powers as are delegated to the Agents by the terms of the Loan Documents,
together with such actions and powers as are reasonably incidental thereto. In
addition, to the extent required under the laws of any jurisdiction other than
the U.S., each of the Lenders hereby grants to the Agents any required powers of
attorney to execute any Collateral Document governed by the laws of such
jurisdiction on such Lender’s behalf. The provisions of this Article are solely
for the benefit of the Administrative Agent and the Lenders, and the Loan
Parties shall not have rights as a third party beneficiary of any of such
provisions. It is understood and agreed that the use of the term “agent” as used
herein or in any other Loan Documents (or any similar term) with reference to
any Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead, such
term is used as a matter of market custom, and is intended to create or reflect
only an administrative relationship between independent contracting parties.

 

(b)           Each Lender hereby irrevocably authorizes the Administrative
Agent, based upon the instruction of the Required Lenders (but subject in all
respects to the RSA), to credit bid and purchase (either directly or through one
or more acquisition vehicles) all or any portion of the Collateral at any sale
thereof conducted by the Administrative Agent under the provisions of the UCC,
including pursuant to Sections 9-610 or 9-620 of the UCC (or any equivalent
provision of the UCC), at any sale thereof conducted under the provisions of the
Bankruptcy Code, including Section 363 of the Bankruptcy Code, or at any other
sale or foreclosure conducted by the Administrative Agent (whether by judicial
action or otherwise) in accordance with applicable Requirements of Law.

 

(c)           Each Lender irrevocably appoints each other Lender as its agent
and bailee for the purpose of perfecting Liens (whether pursuant to
Section 8-301(a)(2) of the UCC or otherwise), for the benefit of the Secured
Parties, in assets in which, in accordance with the UCC or any other applicable
Requirement of Law a security interest can be perfected by possession or
control. Should any Lender (other than the Administrative Agent) obtain
possession or control of any such Collateral, such Lender shall notify the
Administrative Agent thereof, and, promptly following the Administrative Agent’s
request therefor, shall deliver such Collateral to the Administrative Agent or
otherwise deal with such Collateral in accordance with the Administrative
Agent’s instructions.

 

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Section 8.02          Rights as a Lender

 . If applicable, the bank serving as an Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not an Agent, and such bank and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with any Loan Party or any Subsidiary or any Affiliate thereof
as if it were not an Agent hereunder.

 

Section 8.03          Duties and Obligations. The Agents shall not have any
duties or obligations except those expressly set forth in the Loan Documents.
Without limiting the generality of the foregoing, (a) the Agents shall not be
subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Agents shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that an Agent is required to exercise as directed in writing by the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 9.02), and, (c) except as
expressly set forth in the Loan Documents, the Agents shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to any Loan Party or any Subsidiary that is communicated to or obtained
by the bank serving as an Agent or any of its Affiliates in any capacity. The
Agents shall not be liable for any action taken or not taken by it with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
willful misconduct as determined by a final nonappealable judgment of a court of
competent jurisdiction. The Agents shall be deemed not to have knowledge of any
Default unless and until written notice thereof is given to the Agents by the
Borrower or a Lender, and the Agents shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered hereunder or in connection with
any Loan Document, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document or
any other agreement, instrument or document, (v) the creation, perfection or
priority of Liens on the Collateral or the existence of the Collateral, or
(vi) the satisfaction of any condition set forth in Article IV or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to an Agent.

 

Section 8.04          Reliance. The Agents shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Agents also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. The Agents may consult with legal counsel,
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.

 

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Section 8.05          Actions through Sub-Agents. The Agents may perform any and
all of their duties and exercise their rights and powers by or through any one
or more sub-agents appointed by such Agent. The Agents and any such sub-agent
may perform any and all of its duties and exercise its rights and powers through
their respective Related Parties. The exculpatory provisions of the preceding
paragraphs and the indemnification provisions in Section 9.03 shall apply to any
such sub-agent and to the Related Parties of the Agents and any such sub-agent,
and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as the Agents.

 

Section 8.06          Resignation. Subject to the appointment and acceptance of
a successor Agent as provided in this paragraph, any Agent may resign at any
time by notifying the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right (in consultation with, but in no
circumstances subject to the consent of, the Borrower), to appoint a successor.
If no successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within thirty (30) days after the retiring Agent
gives notice of its resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent. Upon the acceptance of its appointment as an
Agent hereunder by its successor, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents. The fees payable by the Borrower
to a successor Agent shall be the same as those payable to its predecessor,
unless otherwise agreed by the Borrower and such successor. Notwithstanding the
foregoing, in the event no successor Agent shall have been so appointed and
shall have accepted such appointment within thirty (30) days after the retiring
Agent gives notice of its intent to resign, the retiring Agent may give notice
of the effectiveness of its resignation to the Lenders and the Borrower,
whereupon, on the date of effectiveness of such resignation stated in such
notice, (a) the retiring Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents, provided that, solely
for purposes of maintaining any security interest granted to the Administrative
Agent under any Collateral Document for the benefit of the Secured Parties, the
retiring Administrative Agent shall continue to be vested with such security
interest as collateral agent for the benefit of the Secured Parties and, in the
case of any Collateral in the possession of the Administrative Agent, shall
continue to hold such Collateral, in each case until such time as a successor
Administrative Agent is appointed and accepts such appointment in accordance
with this paragraph (it being understood and agreed that the retiring
Administrative Agent shall have no duly or obligation to take any further action
under any Collateral Document, including any action required to maintain the
perfection of any such security interest), and (b) the Required Lenders shall
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, provided that (i) all payments required to be made
hereunder or under any other Loan Document to the Agent for the account of any
Person other than the Agent shall be made directly to such Person and (ii) all
notices and other communications required or contemplated to be given or made to
an Agent shall also directly be given or made to each Lender. Following the
effectiveness of an Agent’s resignation from its capacity as such, the
provisions of this Article, Section 2.17(d) and Section 9.03, as well as any
exculpatory, reimbursement and indemnification provisions set forth in any other
Loan Document, shall continue in effect for the benefit of such retiring Agent,
its sub agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as Agent and in
respect of the matters referred to in the proviso under clause (a) above.

 

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Section 8.07           Non-Reliance

 

(a)            Each Lender acknowledges and agrees that the extensions of credit
made hereunder are commercial loans and letters of credit and not investments in
a business enterprise or securities. Each Lender further represents that it is
engaged in making, acquiring or holding commercial loans in the ordinary course
of its business and has, independently and without reliance upon the Agents or
any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement as a Lender, and to make, acquire or hold Loans hereunder. Each Lender
shall, independently and without reliance upon the Agents or any other Lender
and based on such documents and information (which may contain material,
non-public information within the meaning of the United States securities laws
concerning the Borrower and its Affiliates) as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document, any related
agreement or any document furnished hereunder or thereunder and in deciding
whether or to the extent to which it will continue as a Lender or assign or
otherwise transfer its rights, interests and obligations hereunder.

 

(b)           Each Lender hereby agrees that (i) it has requested a copy of each
Report prepared by or on behalf of the Administrative Agent; (ii) the
Administrative Agent (A) makes no representation or warranty, express or
implied, as to the completeness or accuracy of any Report or any of the
information contained therein or any inaccuracy or omission contained in or
relating to a Report and (B) shall not be liable for any information contained
in any Report; (iii) the Reports are not comprehensive audits or examinations,
and that any Person performing any field examination will inspect only specific
information regarding the Loan Parties and will rely significantly upon the Loan
Parties’ books and records, as well as on representations of the Loan Parties’
personnel and that the Administrative Agent undertakes no obligation to update,
correct or supplement the Reports; (iv) it will keep all Reports confidential
and strictly for its internal use, not share the Report with any Loan Party or
any other Person except as otherwise permitted pursuant to this Agreement; and
(v) without limiting the generality of any other indemnification provision
contained in this Agreement, it will pay and protect, and indemnify, defend, and
hold the Administrative Agent and any such other Person preparing a Report
harmless from and against, the claims, actions, proceedings, damages, costs,
expenses, and other amounts (including reasonable attorneys’ fees) incurred by
the Administrative Agent or any such other Person as the direct or indirect
result of any third parties who might obtain all or part of any Report through
the indemnifying Lender.

 

Section 8.08          [Reserved]

 

Section 8.09          Not Partners or Co-Venturers; Administrative Agent as
Representative of the Secured Parties

 

. (a) The Lenders are not partners or co-venturers, and no Lender shall be
liable for the acts or omissions of, or (except as otherwise set forth herein in
case of the Agents) authorized to act for, any other Lender. The Administrative
Agent shall have the exclusive right on behalf of the Lenders to enforce the
payment of the principal of and interest on any Loan after the date such
principal or interest has become due and payable pursuant to the terms of this
Agreement.

 

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(b)           In its capacity, the Administrative Agent is a “representative” of
the Secured Parties within the meaning of the term “secured party” as defined in
the New York Uniform Commercial Code. Each Lender authorizes the Administrative
Agent to enter into each of the Collateral Documents to which it is a party and
to take all action contemplated by such documents. Each Lender agrees that no
Secured Party (other than the Administrative Agent) shall have the right
individually to seek to realize upon the security granted by any Collateral
Document, it being understood and agreed that such rights and remedies may be
exercised solely by the Administrative Agent for the benefit of the Secured
Parties upon the terms of the Collateral Documents. In the event that any
Collateral is hereafter pledged by any Person as collateral security for the
Secured Obligations, the Administrative Agent is hereby authorized, and hereby
granted a power of attorney, to execute and deliver on behalf of the Secured
Parties any Loan Documents necessary or appropriate to grant and perfect a Lien
on such Collateral in favor of the Administrative Agent on behalf of the Secured
Parties.

 

Section 8.10           Lender Action. Each Lender agrees that it shall not take
or institute any actions or proceedings, judicial or otherwise, for any right or
remedy against any Loan Party or any other obligor under any of the Loan
Documents (including the exercise of any right of setoff, rights on account of
any banker’s lien or similar claim or other rights of self-help), or institute
any actions or proceedings, or otherwise commence any remedial procedures or
cause any of the foregoing (through Affiliates or otherwise), with respect to
any Collateral or any other Property of any such Loan Party, without the prior
written consent of the Administrative Agent (at the direction of the Required
Lenders). Without limiting the foregoing, each Lender agrees that, except as
otherwise provided in any Loan Documents or with the written consent of the
Administrative Agent (at the direction of the Required Lenders), it will not
take any enforcement action, accelerate Obligations under any Loan Documents, or
exercise any right that it might otherwise have under applicable Legal
Requirements to credit bid or purchase any portion of the Collateral at any sale
or foreclosure thereof referred to in Section 8.01; provided that nothing
contained in this Section shall affect any Lender’s right to credit bid its pro
rata share of the Obligations pursuant to Section 363(k) of the Bankruptcy Code.

 

Section 8.11          Collateral Documents and Loan Guaranties

 

(a)           Agent under Collateral Documents and Loan Guaranties. Each Secured
Party hereby further authorizes the Administrative Agent, on behalf of and for
the benefit of the Secured Parties, to be the agent for and representative of
the Secured Parties with respect to the Loan Guaranties, the Collateral and the
Loan Documents. Subject to Section 9.03, without further written consent or
authorization from any Secured Party, the Administrative Agent (acting at the
Required Lenders’ direction) may execute any documents or instruments necessary
to in connection with a sale or disposition of assets permitted by this
Agreement, release any Lien encumbering any item of Collateral that is the
subject of such sale or other disposition of assets.

 

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(b)           Right to Realize on Collateral and Enforce Loan Guaranty. Anything
contained in any of the Loan Documents to the contrary notwithstanding, the
Borrower, the Agents, each Secured Party and each Loan Party hereby agree that
(i) no Secured Party shall have any right individually to realize upon any of
the Collateral or to enforce the Loan Guaranty, it being understood and agreed
that all powers, rights and remedies hereunder and under any of the Loan
Documents may be exercised solely by the Administrative Agent for the benefit of
the Secured Parties in accordance with the terms hereof and thereof and all
powers, rights and remedies under the Security Documents may be exercised solely
by the Administrative Agent for the benefit of the Secured Parties in accordance
with the terms thereof, and (ii) in the event of a foreclosure or similar
enforcement action by the Administrative Agent on any of the Collateral pursuant
to a public or private sale or other disposition (including, without limitation,
pursuant to Section 363(k), Section 1129(b)(2)(a)(ii) or otherwise of the
Bankruptcy Code), the Administrative Agent (or any Lender, except with respect
to a “credit bid” pursuant to Section 363(k), Section 1129(b)(2)(a)(ii) or
otherwise of the Bankruptcy Code) may, upon instructions from the Required
Lenders, be the purchaser or licensor of any or all of such Collateral at any
such sale or other disposition and the Administrative Agent, as agent for and
representative of the Secured Parties (but not any Lender or Lenders in its or
their respective individual capacities) shall be entitled, upon instructions
from the Required Lenders, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Collateral sold at
any such sale or disposition, to use and apply any of the Obligations as a
credit on account of the purchase price for any Collateral payable by the
Administrative Agent at such sale or other disposition.

 

(c)           Release of Collateral and Guarantees, Termination of Loan
Documents.

 

(i)            Notwithstanding anything to the contrary contained herein or in
any other Loan Document, the Administrative Agent (at the direction of the
Required Lenders) shall take such actions as shall be required to release its
security interest in any Collateral subject to any sale or other disposition
permitted by the Loan Documents.

 

(ii)           Notwithstanding anything to the contrary contained herein or any
other Loan Document, when all Secured Obligations have been paid in full and all
Commitments have terminated or expired, upon request of the Borrower, the
Administrative Agent shall (without notice to, or vote or consent of, any
Lender, or any other Secured Party) take such actions as shall be required or
reasonably requested to release its security interest in all Collateral, and to
release all guarantee obligations provided for in any Loan Document. Any such
release of guarantee obligations shall be deemed subject to the provision that
such guarantee obligations shall be reinstated if after such release any portion
of any payment in respect of the Obligations guaranteed thereby shall be
rescinded or must otherwise be restored or returned upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Loan Guarantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the Borrower or
any Loan Guarantor or any substantial part of its property, or otherwise, all as
though such payment had not been made.

 

(d)          The Administrative Agent shall not be responsible for or have a
duty to ascertain or inquire into any representation or warranty regarding the
existence, value or collectability of the Collateral, the existence, priority or
perfection of the Administrative Agent’s Lien thereon, or any certificate
prepared by any Loan Party in connection therewith, nor shall the Administrative
Agent be responsible or liable to the Lenders for any failure to monitor or
maintain any portion of the Collateral.

 

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Section 8.12          Administrative Agent May File Bankruptcy Disclosure and
Proofs of Claim. In case of the pendency of any proceeding under the Bankruptcy
Code or any other debtor relief laws relative to any Loan Party, the
Administrative Agent (irrespective of whether the principal of any Loan shall
then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
Borrower) shall be entitled and empowered (but not obligated) by intervention in
such proceeding or otherwise:

 

(a)           to file a verified statement pursuant to rule 2019 of the Federal
Rules of Bankruptcy Procedure that, in its sole opinion, complies with such
rule’s disclosure requirements for entities representing more than one creditor;

 

(b)           to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its respective agents
and counsel and all other amounts due the Administrative Agent under this
Agreement) allowed in such judicial proceeding; and

 

(c)           to collect and receive any monies or other Property payable or
deliverable on any such claims and to distribute the same;

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under this Agreement. To the extent that the payment of any
such compensation, expenses, disbursements and advances of the Administrative
Agent, its agents and counsel, and any other amounts due the Administrative
Agent under this Agreement out of the estate in any such proceeding, shall be
denied for any reason, payment of the same shall be secured by a Lien on, and
shall be paid out of, any and all distributions, dividends, money, securities
and other properties that the Lenders may be entitled to receive in such
proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, plan of liquidation, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.

 

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Article IX

 

Miscellaneous

 

Section 9.01          Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone or Electronic
Systems (and subject in each case to paragraph (b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by facsimile, as follows:

 

(i)            if to any Loan Party, to the Borrower at Akorn, Inc., 1925 W.
Field Court, Suite 300, Lake Forest, Illinois 60045, Attention: Duane Portwood;
Joe Bonaccorsi (Telephone No. (212) 892-1008; Telecopy No. (212) 656-1219; (847)
220-3626; email: duane.portwood@akorn.com; joe.bonaccorsi@akorn.com));

 

(ii)           if to an Agent, to Wilmington Savings Fund Society, FSB,
Attention: Geoffrey J. Lewis (Telephone No. (302)573-3218; email:
glewis@wsfsbank.com), with copies by electronic mail (which shall not constitute
notice) to: Wilmer Cutler Pickering Hale and Dorr LLP, Attention: Andrew Goldman
(Telephone No. (212) 230-8836; email: andrew.goldman@wilmerhale.com); and

 

(iii)          if to any other Lender, to it at its address or facsimile number
set forth in its Administrative Questionnaire.

 

All such notices and other communications (i) sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received, (ii) sent by facsimile shall be deemed to have been given
when sent, provided that if not given during normal business hours of the
recipient, such notice or communication shall be deemed to have been given at
the opening of business on the next Business Day of the recipient, or
(iii) delivered through Electronic Systems to the extent provided in paragraph
(b) below shall be effective as provided in such paragraph.

 

(b)           Notices and other communications to the Lenders hereunder may be
delivered or furnished by Electronic Systems pursuant to procedures approved by
the Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II or to compliance and no Default certificates delivered
pursuant to Section 5.01(d) unless otherwise agreed by the Administrative Agent
and the applicable Lender. Each of the Agents and the Borrower (on behalf of the
Loan Parties) may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications. Unless the Administrative Agent
otherwise proscribes, all such notices and other communications (i) sent to an
e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if not given during the normal business hours of
the recipient, shall be deemed to have been given at the opening of business on
the next Business Day for the recipient, and (ii) posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient, at its e-mail address as described in the foregoing clause
(i), of notification that such notice or communication is available and
identifying the website address therefor; provided that, for both clauses
(i) and (ii) above, if such notice, e-mail or other communication is not sent
during the normal business hours of the recipient, such notice or communication
shall be deemed to have been sent at the opening of business on the next
Business Day of the recipient.

 

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(c)           Any party hereto may change its address, facsimile number or
e-mail address for notices and other communications hereunder by notice to the
other parties hereto. All notices and other communications given to any party
hereto in accordance with the provisions of this Agreement shall be deemed to
have been given on the date of receipt.

 

(d)           Electronic Systems.

 

(i)            Each Loan Party agrees that the Administrative Agent may, but
shall not be obligated to, make Communications (as defined below) available to
the Lenders by posting the Communications on Debt Domain, Intralinks, Syndtrak,
ClearPar or a substantially similar Electronic System.

 

(ii)           Any Electronic System used by the Administrative Agent is
provided “as is” and “as available.” The Agent Parties (as defined below) do not
warrant the adequacy of such Electronic Systems and expressly disclaim liability
for errors or omissions in the Communications. No warranty of any kind, express,
implied or statutory, including any warranty of merchantability, fitness for a
particular purpose, non-infringement of third-party rights or freedom from
viruses or other code defects, is made by any Agent Party in connection with the
Communications or any Electronic System. In no event shall the Administrative
Agent or any of its Related Parties (collectively, the “Agent Parties”) have any
liability to the Borrower or the other Loan Parties, any Lender any other Person
or entity for damages of any kind, including direct or indirect, special,
incidental or consequential damages, losses or expenses (whether in tort,
contract or otherwise) arising out of the Borrower’s, any Loan Party’s or the
Administrative Agent’s transmission of communications through an Electronic
System. “Communications” means, collectively, any notice, demand, communication,
information, document or other material provided by or on behalf of any Loan
Party pursuant to any Loan Document or the transactions contemplated therein
which is distributed by the Administrative Agent or any Lender by means of
electronic communications pursuant to this Section, including through an
Electronic System.

 

Section 9.02          Waivers; Amendments. (a) No failure or delay by the Agents
or any Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Agents and the Lenders hereunder and under any other Loan Document are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by any Loan Party therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. Without limiting the generality of the foregoing, the making of
a Loan shall not be construed as a waiver of any Default, regardless of whether
the Agents or any Lender may have had notice or knowledge of such Default at the
time.

 

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(b)           Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders (unless otherwise
expressly provided herein with respect to modifications approved by the Required
Lenders and communicated via an email from either or both of the Specified
Lender Advisors); provided that no such agreement shall, without the consent of
each Lender directly and adversely affected thereby (including any such Lender
that is a Defaulting Lender but without the consent of the Required Lenders):
(i) increase the Commitment of such Lender (and no other Lender shall be deemed
to be directly and adversely affected by the increase of another Lender’s
Commitment), (ii) reduce or forgive the principal amount of any Loan or reduce
the rate of interest thereon, or reduce or forgive any interest or fees payable
hereunder (it being understood that only the consent of the Required Lenders
shall be necessary to waive any obligation of the Borrower to pay interest at
the Default Rate or amend Section 2.13(c), to waive any Default or Event of
Default or to waive Section 2.11(c)), or (iii) postpone any scheduled date of
payment of the principal amount of any Loan, or any date for the payment of any
interest, fees or other Obligations payable hereunder, or reduce the amount of,
waive or excuse any such payment, or postpone the scheduled date of expiration
of any Commitment, without the written consent of such Lender (it being
understood that only the consent of the Required Lenders shall be necessary to
waive any obligation of the Borrower to pay interest at the Default Rate or
amend Section 2.13(c), to waive any Default or Event of Default or to waive
Section 2.11(c)); provided, further that no such agreement shall, without the
consent of each Lender (other than any Defaulting Lender), (i) change any of the
provisions of this Section or the definition of “Required Lenders” or any other
provision of any Loan Document specifying the number or percentage of Lenders
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, (ii) release all or substantially
all of the value of the Loan Guarantors (taken as a whole) (except as otherwise
permitted herein or in the other Loan Documents), (iii) except as provided in
clause (c) of this Section or in any Collateral Document, release all or
substantially all of the Collateral, or (iv) permit any Loan Party to assign its
rights or obligations under any Loan Document. In addition, no such agreement
shall amend, modify or otherwise affect the rights or duties of the Agents
hereunder without the prior written consent of the affected Agent. The
Administrative Agent may also amend the Commitment Schedule to reflect
assignments entered into pursuant to Section 9.04.

 

(c)           The Lenders hereby irrevocably authorize the Administrative Agent,
at its option and in its sole discretion, to release any Liens granted to the
Administrative Agent by the Loan Parties on any Collateral (i) upon the
termination of the Commitments, payment and satisfaction in full in cash of all
Secured Obligations (other than Unliquidated Obligations), and the cash
collateralization of all Unliquidated Obligations in a manner reasonably
satisfactory to each affected Lender, (ii) constituting property being sold or
disposed of pursuant to Section 6.05(a) if the Loan Party disposing of such
property certifies to the Administrative Agent that the sale or disposition is
made in compliance with the terms of this Agreement (and the Administrative
Agent may rely conclusively on any such certificate, without further inquiry),
(iii) constituting property leased to a Loan Party under a lease which has
expired or been terminated in a transaction permitted under this Agreement if
the Loan Party leasing such property certifies to the Administrative Agent that
the relevant transaction is made in compliance with the terms of this Agreement
(and the Administrative Agent may rely conclusively on any such certificate,
without further inquiry), or (iv) as required to effect any sale or other
disposition of such Collateral in connection with any exercise of remedies of
the Administrative Agent and the Lenders pursuant to Article VII. Except as
provided in the preceding sentence, the Administrative Agent will not release
any Liens on Collateral without the prior written authorization of the Required
Lenders. Any such release shall not in any manner discharge, affect, or impair
the Obligations or any Liens (other than those expressly being released) upon
(or obligations of the Loan Parties in respect of) all interests retained by the
Loan Parties, including the proceeds of any sale, all of which shall continue to
constitute part of the Collateral. Any execution and delivery by the
Administrative Agent of documents in connection with any such release shall be
without recourse to or warranty by the Administrative Agent.

 

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(d)           If, in connection with any proposed amendment, waiver or consent
requiring the consent of “each Lender” or “each Lender affected thereby,” the
consent of the Required Lenders is obtained, but the consent of other necessary
Lenders is not obtained (any such Lender whose consent is necessary but not
obtained being referred to herein as a “Non-Consenting Lender”), then the
Borrower may elect to replace a Non-Consenting Lender as a Lender party to this
Agreement, provided that, concurrently with such replacement, (i) another bank
or other entity which is reasonably satisfactory to the Borrower and the
Administrative Agent shall agree, as of such date, to purchase for cash at par
the Loans and other Obligations due to the Non-Consenting Lender pursuant to an
Assignment and Assumption and to become a Lender for all purposes under this
Agreement and to assume all obligations of the Non-Consenting Lender to be
terminated as of such date and to comply with the requirements of clause (b) of
Section 9.04, and (ii) the Borrower shall pay to such Non-Consenting Lender in
same day funds on the day of such replacement (1) all interest, fees and other
amounts then accrued but unpaid to such Non-Consenting Lender by the Borrower
hereunder to and including the date of termination, including without limitation
payments due to such Non-Consenting Lender under Sections 2.15 and 2.17, and
(2) an amount, if any, equal to the payment which would have been due to such
Lender on the day of such replacement under Section 2.16 had the Loans of such
Non-Consenting Lender been prepaid on such date rather than sold to the
replacement Lender.

 

Section 9.03           Expenses; Indemnity; Damage Waiver. (a) The Loan Parties
shall, jointly and severally, pay promptly following demand all reasonable and
documented legal, accounting, appraisal, consulting, financial advisory and
other fees, costs and expenses (including, without limitation, in respect of the
Specified Lender Advisors and the Agent Advisors) incurred by the Agents, the Ad
Hoc Group of Lenders, the Lenders and their respective Affiliates in connection
with the negotiation, preparation and administration of the Loan Documents, the
Interim Order, and the Final Order or incurred in connection with:

 

(i)            amendment, modification or waiver of, consent with respect to, or
termination of, any of the Loan Documents or advice in connection with the
syndication and administration of the Loans made pursuant hereto, including any
Withdrawal, or its rights hereunder or thereunder;

 

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(ii)           any litigation, contest, dispute, suit, proceeding or action
(whether instituted by the Agents, any Lender, the Borrower or any other Person
and whether as a party, witness or otherwise) in any way relating to the
Collateral, any of the Loan Documents, the Pre-Petition Loan Documents, or any
other agreement to be executed or delivered in connection herewith or therewith,
including any litigation, contest, dispute, suit, case, proceeding or action,
and any appeal or review thereof, in connection with a case or proceeding
commenced by or against the Borrower or any other Person that may be obligated
to the Agents or the Lenders by virtue of the Loan Documents, including any such
litigation, contest, dispute, suit, proceeding or action arising in connection
with any work-out or restructuring of the Loans during the pendency of one or
more Events of Default; provided that no Person shall be entitled to
reimbursement under this clause (ii) in respect of any litigation, contest,
dispute, suit, proceeding or action to the extent any of the foregoing results
from such Person’s gross negligence or willful misconduct (as determined by a
final non-appealable judgment of a court of competent jurisdiction);

 

(iii)          any attempt to enforce or prosecute any rights or remedies of the
Agents or any Lender against any or all of the Loan Parties or any other Person
that may be obligated to the Agents or any Lender by virtue of any of the Loan
Documents, including any such attempt to enforce any such remedies in the course
of any work-out or restructuring of the Loans prior to or during the pendency of
one or more Events of Default;

 

(iv)          any work-out or restructuring of the Obligations prior to or
during the pendency of one or more Events of Default;

 

(v)           all Other Taxes in respect of the Loan Documents;

 

(vi)          the obtaining of approval of the Loan Documents by the Bankruptcy
Court or any other court;

 

(vii)         the preparation and review of pleadings, documents and reports
related to the Chapter 11 Cases and any Successor Cases, attendance at meetings,
court hearings or conferences related to the Chapter 11 Cases and any Successor
Cases, and general monitoring of the Chapter 11 Cases and any Successor Cases
and any action, arbitration or other proceeding (whether instituted by or
against the Agents, any Lender, any Loan Party, any representative of creditors
of an Loan Party or any other Person) in any way relating to any Collateral
(including the validity, perfection, priority or avoidability of the
Administrative Agent’s Liens with respect to any Collateral), the Pre-Petition
Loan Documents, Loan Documents or the Obligations, including any lender
liability or other claims;

 

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(viii)        efforts to (1) monitor the Loans or any of the other Obligations,
(2) evaluate, observe or assess any of the Loan Parties or their respective
affairs, (3) verify, protect, evaluate, assess, appraise, collect, sell,
liquidate or otherwise dispose of any of the Collateral or (4) settle or
otherwise satisfy any taxes, charges or Liens with respect to any Collateral;

 

(ix)           any lien searches or request for information listing financing
statements or liens filed or searches conducted to confirm receipt and due
filing of financing statements and security interests in all or a portion of the
Collateral; and

 

(x)            including, as to each of clauses (i) through (ix) above, all
reasonable attorneys’ and other professional and service providers’ fees arising
from such services and other advice, assistance or other representation,
including those in connection with any appellate proceedings, and all reasonable
expenses, costs, charges and other fees incurred by such counsel and others in
connection with or relating to any of the events or actions described in this
Section 9.03, all of which shall be payable by Borrower to the Agents or the
Lenders.

 

Without limiting the generality of the foregoing, such reasonable expenses,
costs, charges and fees may include: reasonable fees, costs and expenses of
accountants, sales consultants, financial advisors, the Agent Advisors, any
Specified Lender Advisors, any Lender Advisor, environmental advisors,
appraisers, investment bankers, management and other consultants and paralegals;
court costs and expenses; photocopying and duplication expenses; court reporter
fees, costs and expenses; air express charges, and reasonable expenses for
travel, lodging and food paid or incurred in connection with the performance of
such legal, professional or other advisory services.

 

(b)           The Loan Parties shall, jointly and severally, indemnify the
Agents and each Lender, and each Related Party of any of the foregoing Persons
(each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all actual losses, claims, damages, penalties,
incremental taxes, liabilities and related expenses, including the reasonable
fees, charges and disbursements of the Specified Lender Advisors, any Lender
Advisor and Agent Advisors, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of the Loan Documents or any agreement or instrument contemplated
thereby, the performance by the parties hereto of their respective obligations
thereunder or the consummation of the Transactions or any other transactions
contemplated hereby and the enforcement of the obligations thereunder, (ii) any
Loan or the use of the proceeds therefrom, (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property owned or operated by a
Loan Party or a Subsidiary, or any Environmental Liability related in any way to
a Loan Party or a Subsidiary, (iv) the failure of a Loan Party to deliver to the
Administrative Agent the required receipts or other required documentary
evidence with respect to a payment made by a Loan Party for Taxes pursuant to
Section 2.17, or (v) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, penalties, liabilities or related
expenses (1) are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from (A) the gross negligence, bad faith
or willful misconduct of such Indemnitee (or its Related Parties), or (B) a
claim made by the Borrower alleging the material breach of the Loan Documents by
such Indemnitee (or its Related Parties) or (2) arise from any disputes solely
among Indemnitees (other than any claims against an Indemnitee in its capacity
or in fulfilling its role as the Administrative Agent or similar role under the
Loan Documents and any other claims arising out of any act or omission of the
Borrower or any of its Affiliates). This Section 9.03(b) shall not apply with
respect to Taxes other than any Taxes that represent losses or damages arising
from any non-Tax claim.

 

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(c)           To the extent that a Loan Party fails to pay any amount required
to be paid by it to an Agent under paragraph (a) or (b) of this Section, each
Lender severally agrees to pay to such Agent such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount (it being understood that the payment
by any Lender of any such amount shall not relieve such Loan Party of any
default in the payment thereof); provided that the unreimbursed expense or
indemnified loss, claim, damage, penalty, liability or related expense, as the
case may be, was incurred by or asserted against the such Agent in its capacity
as such.

 

(d)           To the extent permitted by applicable law, no party hereto shall
assert, and each such party hereby waives, any claim against any other party
hereto (i) for any damages arising from the use by others of information or
other materials obtained through telecommunications, electronic or other
information transmission systems (including the Internet) or (ii) on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby, the Transactions, any Loan or the use of the
proceeds thereof; provided that, nothing in this paragraph (d) shall relieve any
Loan Party of any obligation it may have to indemnify an Indemnitee against
special, indirect, consequential or punitive damages asserted against such
Indemnitee by a third party.

 

(e)           All amounts reimbursable by the Borrower under this Section 9.03
shall constitute Obligations secured by the Collateral. The agreements in this
Section 9.03 shall survive the termination of the Commitments and repayment of
all other Obligations. All amounts due under this Section 9.03 shall be paid
within ten (10) Business Days of receipt by the Borrower of an invoice relating
thereto. If the Borrower fails to pay when due any amounts payable by it
hereunder or under any Loan Document, such amount may be paid on behalf of the
Borrower by the Administrative Agent in its discretion by charging any loan
account(s) of the Borrower, without notice to or consent from the Borrower, and
any amounts so paid shall constitute Obligations hereunder.

 

Section 9.04          Successors and Assigns. (a) 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 without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Agents and the Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

 

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(b)           (i) Subject to the conditions set forth in paragraph
(b)(ii) below, any Lender may assign to one or more Persons (other than an
Ineligible Institution) all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans at
the time owing to it) with the prior written consent (such consent not to be
unreasonably withheld, conditioned or delayed) of:

 

(A)            the Borrower, provided that the Borrower shall be deemed to have
consented to any such assignment unless it shall object thereto by written
notice to the Administrative Agent within three (3) Business Days after having
received notice thereof, and provided, further, no consent of the Borrower shall
be required for an assignment to a Lender, an Affiliate of a Lender, or an
Approved Fund, or, so long as made in accordance with the RSA, if an Event of
Default has occurred and is continuing; and

 

(B)            the Administrative Agent, provided, that no consent of the
Administrative Agent shall be required for an assignment of all or any portion
of a Loan (but not an assignment of a Commitment) to a Lender, an Affiliate of a
Lender, or an Approved Fund;

 

(ii)            Assignments shall be subject to the following additional
conditions:

 

(A)            except in the case of an assignment to a Lender, an Affiliate of
a Lender, or an Approved Fund, or an assignment of the entire remaining amount
of the assigning Lender’s Commitment or Loans, the amount of the Commitment or
Loans of the assigning Lender subject to each such assignment (determined as of
the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $1,000,000;

 

(B)            the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500;

 

(C)            the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more credit contacts to whom all syndicate-level information
(which may contain material non-public information about the Borrower, the other
Loan Parties and their Related Parties or their respective securities) will be
made available and who may receive such information in accordance with the
assignee’s compliance procedures and applicable laws, including Federal and
state securities laws; and

 

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(D)          such assignment shall be permitted by, and in accordance with, the
RSA.

 

For the purposes of this Section 9.04(b), the terms “Approved Fund” and
“Ineligible Institution” have the following meanings:

 

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

 

“Ineligible Institution” means a (a) natural person, (b) Defaulting Lender,
(c) Disqualified Institution, (d) holding company, investment vehicle or trust
for, or owned and operated for the primary benefit of, a natural person or
relative(s) thereof; provided that, such holding company, investment vehicle or
trust shall not constitute an Ineligible Institution if it (x) has not been
established for the primary purpose of acquiring any Loans or Commitments,
(y) is managed by a professional advisor, who is not such natural person or a
relative thereof, having significant experience in the business of making or
purchasing commercial loans, and (z) has assets greater than $25,000,000 and a
significant part of its activities consist of making or purchasing commercial
loans and similar extensions of credit in the ordinary course of its business,
or (e) Loan Party or Subsidiary or other Affiliate of a Loan Party.

 

(iii)          Subject to acceptance and recording thereof pursuant to paragraph
(b)(iv) of this Section, from and after the effective date specified in each
Assignment and Assumption, the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 9.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

 

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(iv)          The Administrative Agent, acting for this purpose as a
non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy
of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders shall
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection at
Administrative Agent’s offices by the Borrower and any Lender, at any reasonable
time and from time to time upon reasonable prior notice. The Borrower hereby
designates Administrative Agent to serve as the Borrower’s agent solely for
purposes of maintaining the Register as provided in this Section 9.04(b)(iv),
and the Borrower hereby agrees that to the extent Administrative Agent serves in
such capacity, Administrative Agent and its Related Parties shall be indemnified
in accordance with Section 9.03(b) hereunder in connection with servicing in
such capacity. This Section 9.04(b)(iv) shall be construed so that all Loans are
at all times maintained in “registered form” within the meaning of
Section 163(f), 871(h)(2) and 881(c)(2) of the Code and any related Treasury
Regulations (or any other relevant or successor provisions of the Code or of
such Treasury Regulations).

 

(v)           Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register;
provided that if either the assigning Lender or the assignee shall have failed
to make any payment required to be made by it pursuant to Section 2.18(d) or
9.03(c), the Administrative Agent shall have no obligation to accept such
Assignment and Assumption and record the information therein in the Register
unless and until such payment shall have been made in full, together with all
accrued interest thereon. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.

 

(c)           Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a “Participant”) other than an Ineligible Institution in all or a portion of
such Lender’s rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it); provided that (A) such
Lender’s obligations under this Agreement shall remain unchanged; (B) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations; and (C) the Borrower, the Administrative Agent
and the Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in clauses (ii) or (iii) of the
first or second proviso to Section 9.02(b) that affects such Participant. The
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations
therein, including the requirements under Section 2.17(f) and (g) (it being
understood that the documentation required under Section 2.17(f) shall be
delivered to the participating Lender and the information and documentation
required under Section 2.17(g) will be delivered to the Borrower and the
Administrative Agent)) to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section;
provided that such Participant (A) agrees to be subject to the provisions of
Sections 2.18 and 2.19 as if it were an assignee under paragraph (b) of this
Section; and (B) shall not be entitled to receive any greater payment under
Section 2.15 or 2.17, with respect to any participation, than its participating
Lender would have been entitled to receive, except to the extent such
entitlement to receive a greater payment results from a Change in Law that
occurs after the Participant acquired the applicable participation.

 

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Each Lender that sells a participation agrees, at the Borrower’s request and
expense, to use reasonable efforts to cooperate with the Borrower to effectuate
the provisions of Section 2.19(b) with respect to any Participant. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.18(d) as though it were a Lender. Each Lender that sells a
participation shall, acting solely for this purpose as a non-fiduciary agent of
the Borrower, maintain a register on which it enters the name and address of
each Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Loans or other obligations under this Agreement or
any other Loan Document (the “Participant Register”); provided that no Lender
shall have any obligation to disclose all or any portion of the Participant
Register (including the identity of any Participant or any information relating
to a Participant’s interest in any Commitments, Loans, or its other obligations
under any Loan Document) to any Person except to the extent that such disclosure
is necessary to establish that such Commitment, Loan or other obligation is in
registered form under Section 5f.103-1(c) of the United States Treasury
Regulations. The entries in the Participant Register shall be conclusive absent
manifest error, and such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary. For the avoidance
of doubt, the Administrative Agent (in its capacity as Administrative Agent)
shall have no responsibility for maintaining a Participant Register.

 

(d)         Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

 

Section 9.05        Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid and so long as the
Commitments have not expired or terminated. The provisions of Sections 2.15,
2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,
the repayment of the Loans, the expiration or termination of the Commitments or
the termination of this Agreement or any other Loan Document or any provision
hereof or thereof.

 

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Section 9.06       Counterparts; Integration; Effectiveness; Electronic
Execution. (a) This Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Agreement, the other Loan Documents, the Fee Letters and any
separate letter agreements with respect to fees payable to the Agents constitute
the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.

 

(b)         Delivery of an executed counterpart of a signature page of this
Agreement by telecopy, emailed pdf. or any other electronic means that
reproduces an image of the actual executed signature page shall be effective as
delivery of a manually executed counterpart of this Agreement. The words
“execution,” “signed,” “signature,” “delivery,” and words of like import in or
relating to any document to be signed in connection with this Agreement and the
transactions contemplated hereby or thereby shall be deemed to include
Electronic Signatures, deliveries or the keeping of records in electronic form,
each of which shall be of the same legal effect, validity or enforceability as a
manually executed signature, physical delivery thereof or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform Electronic
Transactions Act.

 

Section 9.07        Severability. Any provision of any Loan Document held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions thereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

Section 9.08        Right of Setoff. Subject to Section 8.10 and the Carve-Out,
if an Event of Default shall have occurred and be continuing, each Lender and
each of its Affiliates is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other obligations at any time owing by such Lender or Affiliate to or
for the credit or the account of the Borrower or any Loan Guarantor against any
of and all the Obligations held by such Lender, irrespective of whether or not
such Lender shall have made any demand under the Loan Documents and although
such obligations may be unmatured. The applicable Lender shall notify the
Borrower and the Administrative Agent of such set-off or application, provided
that any failure to give or any delay in giving such notice shall not affect the
validity of any such set-off or application under this Section. The rights of
each Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.

 

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Section 9.09       Governing Law; Jurisdiction; Waiver of Jury Trial; Consent to
Service of Process. (a) The Loan Documents (other than those containing a
contrary express choice of law provision) shall be governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the State of
New York, except to the extent the law of the State of New York is superseded by
the Bankruptcy Code.

 

(b)         ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT SHALL BE BROUGHT IN THE BANKRUPTCY COURT, AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH PARTY HEREBY IRREVOCABLY ACCEPTS IN RESPECT
OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
BANKRUPTCY COURT. EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF THE BANKRUPTCY COURT AND IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE ADMINISTRATIVE AGENT AT ITS ADDRESS FOR NOTICES AS SET FORTH HEREIN. THE
LOAN PARTIES AGREE 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 HEREIN SHALL AFFECT THE RIGHT OF
THE AGENTS AND THE LENDERS TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY LOAN
PARTY IN ANY OTHER JURISDICTION. EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN SUCH COURT AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY PARTY HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH LOAN PARTY
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

Section 9.10       [Reserved].

 

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Section 9.11        Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

 

Section 9.12        Confidentiality. Each of the Agents and the Lenders agrees
to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its and its Affiliates’ directors,
officers, employees and agents, including accountants, legal counsel and other
advisors (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (b) to the extent requested by any
regulatory authority (including any self-regulatory authority, such as the
National Association of Insurance Commissioners), (c) to the extent required by
any Requirement of Law or by any subpoena or similar legal process, (d) to any
other party to this Agreement, (e) in connection with the exercise of any
remedies under this Agreement or any other Loan Document or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Loan Parties and their obligations,
(g) with the consent of the Borrower, or (h)) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this
Section or (ii) becomes available to the Agents or any Lender on a
non-confidential basis from a source other than the Borrower. For the purposes
of this Section, “Information” means all information received from the Borrower
relating to the Borrower or its business, other than any such information that
is available to the Agents or any Lender on a non-confidential basis prior to
disclosure by the Borrower; provided that, in the case of information received
from the Borrower after the Closing Date, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

 

EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12 FURNISHED
TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION
CONCERNING THE BORROWER, THE OTHER LOAN PARTIES AND THEIR RELATED PARTIES OR
THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE
PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL
HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES
AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

 

ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE
BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH
MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER, THE LOAN PARTIES
AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY, EACH
LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS
IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE
INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH
ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE
SECURITIES LAWS.

 

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Section 9.13        Several Obligations; Nonreliance; Violation of Law. The
respective obligations of the Lenders hereunder are several and not joint and
the failure of any Lender to make any Loan or perform any of its obligations
hereunder shall not relieve any other Lender from any of its obligations
hereunder. Each Lender hereby represents that it is not relying on or looking to
any margin stock for the repayment of the Borrowings provided for herein.
Anything contained in this Agreement to the contrary notwithstanding, no Lender
shall be obligated to extend credit to the Borrower in violation of any
Requirement of Law.

 

Section 9.14        USA PATRIOT Act. Each Lender that is subject to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the “Act”) hereby notifies each Loan Party that pursuant
to the requirements of the Act, it is required to obtain, verify and record
information that identifies such Loan Party, which information includes the name
and address of such Loan Party and other information that will allow such Lender
to identify such Loan Party in accordance with the Act.

 

Section 9.15        Disclosure. Each Loan Party and each Lender hereby
acknowledges and agrees that the Administrative Agent and/or its Affiliates from
time to time may hold investments in, make other loans to or have other
relationships with any of the Loan Parties and their respective Affiliates.

 

Section 9.16        Appointment for Perfection. Each Lender hereby appoints each
other Lender as its agent for the purpose of perfecting Liens, for the benefit
of the Administrative Agent and the other Secured Parties, in assets which, in
accordance with Article 9 of the UCC or any other applicable law can be
perfected only by possession or control. Should any Lender (other than the
Administrative Agent) obtain possession or control of any such Collateral, such
Lender shall notify the Administrative Agent thereof, and, promptly upon the
Administrative Agent’s request therefor shall deliver such Collateral to the
Administrative Agent or otherwise deal with such Collateral in accordance with
the Administrative Agent’s instructions.

 

Section 9.17        Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.

 

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Section 9.18        No Advisory or Fiduciary Responsibility. In connection with
all aspects of each transaction contemplated hereby (including in connection
with any amendment, waiver or other modification hereof or of any other Loan
Document), the Borrower acknowledges and agrees that: (i) (A) the arranging and
other services regarding this Agreement provided by the Lenders are arm’s-length
commercial transactions between the Borrower and its Affiliates, on the one
hand, and the Lenders and their Affiliates, on the other hand, (B) the Borrower
has consulted its own legal, accounting, regulatory and tax advisors to the
extent it has deemed appropriate, and (C) the Borrower is capable of evaluating,
and understands and accepts, the terms, risks and conditions of the transactions
contemplated hereby and by the other Loan Documents; (ii) (A) each of the
Lenders and their Affiliates is and has been acting solely as a principal and,
except as expressly agreed in writing by the relevant parties, has not been, is
not, and will not be acting as an advisor, agent or fiduciary for the Borrower
or any of its Affiliates, or any other Person and (B) no Lender or any of its
Affiliates has any obligation to the Borrower or any of its Affiliates with
respect to the transactions contemplated hereby except, in the case of a Lender,
those obligations expressly set forth herein and in the other Loan Documents;
and (iii) each of the Lenders and their respective Affiliates may be engaged in
a broad range of transactions that involve interests that differ from those of
the Borrower and its Affiliates, and no Lender or any of its Affiliates has any
obligation to disclose any of such interests to the Borrower or its Affiliates.
To the fullest extent permitted by law, the Borrower hereby waives and releases
any claims that it may have against each of the Lenders and their Affiliates
with respect to any breach or alleged breach of agency or fiduciary duty in
connection with any aspect of any transaction contemplated hereby.

 

Section 9.19        Authorization to Distribute Certain Materials to
Public-Siders.

 

(a)          If the Borrower does not file this Agreement with the SEC, then the
Borrower hereby authorizes the Administrative Agent to distribute the execution
version of this Agreement and the Loan Documents to all Lenders, including their
Public-Siders. The Borrower acknowledges its understanding that Public-Siders
and their firms may be trading in any of the Loan Parties’ respective securities
while in possession of the Loan Documents.

 

(b)          The Borrower represents and warrants that none of the information
in the Loan Documents constitutes or contains material non-public information
within the meaning of federal and state securities laws. To the extent that any
of the executed Loan Documents constitutes at any time material non-public
information within the meaning of the federal and state securities laws after
the date hereof, the Borrower agrees that it will promptly make such information
publicly available by press release or public filing with the SEC.

 

Section 9.20       [Reserved].

 

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Section 9.21       Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any Bank that is an EEA
Financial Institution arising under any Loan Document, to the extent such
liability is unsecured, may be subject to the Write-Down and Conversion Powers
of an EEA Resolution Authority and agrees and consents to, and acknowledges and
agrees to be bound by:

(a)           the application of any Write-Down and Conversion Powers by an EEA
Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any Bank that is an EEA Financial Institution; and

 

(b)           the effects of any Bail-In Action on any such liability,
including, if applicable:

 

(i)            a reduction in full or in part or cancellation of any such
liability;

 

(ii)           a conversion of all, or a portion of, such liability into shares
or other instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

 

(iii)          the variation of the terms of such liability in connection with
the exercise of the Write-Down and Conversion Powers of any EEA Resolution
Authority.

 

Article X

 

Loan Guaranty

 

Section 10.01      Guaranty. Subject to the entry of and terms of the DIP Order,
each Loan Guarantor (other than those that have delivered a separate Guaranty)
hereby agrees that it is jointly and severally liable for, and, as a primary
obligor and not merely as surety, absolutely and unconditionally guarantees to
the Secured Parties, the prompt payment when due, whether at stated maturity,
upon acceleration or otherwise, and at all times thereafter, of the Secured
Obligations and all costs and expenses, including, without limitation, all court
costs and attorneys’ and paralegals’ fees (including allocated costs of in-house
counsel and paralegals) and expenses paid or incurred by the Administrative
Agent and the Lenders in endeavoring to collect all or any part of the Secured
Obligations from, or in prosecuting any action against, the Borrower, any Loan
Guarantor or any other guarantor of all or any part of the Secured Obligations
(such costs and expenses, together with the Secured Obligations, collectively
the “Guaranteed Obligations”). Each Loan Guarantor further agrees that the
Guaranteed Obligations may be extended or renewed in whole or in part without
notice to or further assent from it, and that it remains bound upon its
guarantee notwithstanding any such extension or renewal. All terms of this Loan
Guaranty apply to and may be enforced by or on behalf of any domestic or foreign
branch or Affiliate of any Lender that extended any portion of the Guaranteed
Obligations.

 

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Section 10.02      Guaranty of Payment. This Loan Guaranty is a guaranty of
payment and not of collection. Each Loan Guarantor waives any right to require
the Administrative Agent or any Lender to sue the Borrower, any Loan Guarantor,
any other guarantor of, or any other Person obligated for, all or any part of
the Guaranteed Obligations (each, an “Obligated Party”), or otherwise to enforce
its payment against any collateral securing all or any part of the Guaranteed
Obligations.

 

Section 10.03      No Discharge or Diminishment of Loan Guaranty. (a) Except as
otherwise provided for herein, the obligations of each Loan Guarantor hereunder
are unconditional and absolute and not subject to any reduction, limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Guaranteed Obligations), including: (i) any claim of waiver,
release, extension, renewal, settlement, surrender, alteration or compromise of
any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any
change in the corporate existence, structure or ownership of the Borrower or any
other Obligated Party liable for any of the Guaranteed Obligations; (iii) any
insolvency, bankruptcy, reorganization or other similar proceeding affecting any
Obligated Party or their assets or any resulting release or discharge of any
obligation of any Obligated Party; or (iv) the existence of any claim, setoff or
other rights which any Loan Guarantor may have at any time against any Obligated
Party, the Administrative Agent, any Lender or any other Person, whether in
connection herewith or in any unrelated transactions.

 

(b)          The obligations of each Loan Guarantor hereunder are not subject to
any defense or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of any of the
Guaranteed Obligations or otherwise, or any provision of applicable law or
regulation purporting to prohibit payment by any Obligated Party, of the
Guaranteed Obligations or any part thereof.

 

(c)          Further, the obligations of any Loan Guarantor hereunder are not
discharged or impaired or otherwise affected by: (i) the failure of the Agents
or any Lender to assert any claim or demand or to enforce any remedy with
respect to all or any part of the Guaranteed Obligations; (ii) any waiver or
modification of or supplement to any provision of any agreement relating to the
Guaranteed Obligations; (iii) any release, non-perfection or invalidity of any
indirect or direct security for the obligations of the Borrower for all or any
part of the Guaranteed Obligations or any obligations of any other Obligated
Party liable for any of the Guaranteed Obligations; (iv) any action or failure
to act by the Agents or any Lender with respect to any collateral securing any
part of the Guaranteed Obligations; or (v) any default, failure or delay,
willful or otherwise, in the payment or performance of any of the Guaranteed
Obligations, or any other circumstance, act, omission or delay that might in any
manner or to any extent vary the risk of such Loan Guarantor or that would
otherwise operate as a discharge of any Loan Guarantor as a matter of law or
equity (other than the indefeasible payment in full in cash of the Guaranteed
Obligations).

 

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Section 10.04      Defenses Waived. To the fullest extent permitted by
applicable law, each Loan Guarantor hereby waives any defense based on or
arising out of any defense of the Borrower or any Loan Guarantor or the
unenforceability of all or any part of the Guaranteed Obligations from any
cause, or the cessation from any cause of the liability of the Borrower, any
Loan Guarantor or any other Obligated Party, other than the indefeasible payment
in full in cash of the Guaranteed Obligations. Without limiting the generality
of the foregoing, each Loan Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest and, to the fullest extent permitted by law, any
notice not provided for herein, as well as any requirement that at any time any
action be taken by any Person against any Obligated Party or any other Person.
Each Loan Guarantor confirms that it is not a surety under any state law and
shall not raise any such law as a defense to its obligations hereunder. The
Administrative Agent may, at its election, foreclose on any Collateral held by
it by one or more judicial or nonjudicial sales, accept an assignment of any
such Collateral in lieu of foreclosure or otherwise act or fail to act with
respect to any collateral securing all or a part of the Guaranteed Obligations,
compromise or adjust any part of the Guaranteed Obligations, make any other
accommodation with any Obligated Party or exercise any other right or remedy
available to it against any Obligated Party, without affecting or impairing in
any way the liability of such Loan Guarantor under this Loan Guaranty except to
the extent the Guaranteed Obligations have been fully and indefeasibly paid in
cash. To the fullest extent permitted by applicable law, each Loan Guarantor
waives any defense arising out of any such election even though that election
may operate, pursuant to applicable law, to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of any Loan Guarantor
against any Obligated Party or any security.

 

Section 10.05      Rights of Subrogation. No Loan Guarantor will assert any
right, claim or cause of action, including, without limitation, a claim of
subrogation, contribution or indemnification, that it has against any Obligated
Party or any collateral, until the Loan Parties and the Loan Guarantors have
fully performed all their obligations to the Agents and the Lenders.

 

Section 10.06      Reinstatement; Stay of Acceleration. If at any time any
payment of any portion of the Guaranteed Obligations (including a payment
effected through exercise of a right of setoff) is rescinded, or must otherwise
be restored or returned upon the insolvency, bankruptcy or reorganization of the
Borrower or otherwise (including pursuant to any settlement entered into by a
Secured Party in its discretion), each Loan Guarantor’s obligations under this
Loan Guaranty with respect to that payment shall be reinstated at such time as
though the payment had not been made and whether or not the Agents and the
Lenders are in possession of this Loan Guaranty. If acceleration of the time for
payment of any of the Guaranteed Obligations is stayed upon the insolvency,
bankruptcy or reorganization of the Borrower, all such amounts otherwise subject
to acceleration under the terms of any agreement relating to the Guaranteed
Obligations shall nonetheless be payable by the Loan Guarantors forthwith on
demand by the Administrative Agent.

 

Section 10.07      Information. Each Loan Guarantor assumes all responsibility
for being and keeping itself informed of the Borrower’s financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks that
each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that
neither the Agents nor any Lender shall have any duty to advise any Loan
Guarantor of information known to it regarding those circumstances or risks.

 

Section 10.08      [Reserved].

 

 113 

 

 

Section 10.09      Taxes. Each payment of the Guaranteed Obligations will be
made by each Loan Guarantor without withholding for any Taxes, unless such
withholding is required by law. If any Loan Guarantor determines, in its sole
discretion exercised in good faith, that it is so required to withhold Taxes,
then such Loan Guarantor may so withhold and shall timely pay the full amount of
withheld Taxes to the relevant Governmental Authority in accordance with
applicable law. If such Taxes are Indemnified Taxes, then the amount payable by
such Loan Guarantor shall be increased as necessary so that, net of such
withholding (including such withholding applicable to additional amounts payable
under this Section), the Administrative Agent or Lender (as the case may be)
receives the amount it would have received had no such withholding been made.

 

Section 10.10      Maximum Liability. Notwithstanding any other provision of
this Loan Guaranty, the amount guaranteed by each Loan Guarantor hereunder shall
be limited to the extent, if any, required so that its obligations hereunder
shall not be subject to avoidance under Section 548 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law. In determining the limitations,
if any, on the amount of any Loan Guarantor’s obligations hereunder pursuant to
the preceding sentence, it is the intention of the parties hereto that any
rights of subrogation, indemnification or contribution which such Loan Guarantor
may have under this Loan Guaranty, any other agreement or applicable law shall
be taken into account.

 

Section 10.11      Contribution. (a)  To the extent that any Loan Guarantor
shall make a payment under this Loan Guaranty (a “Guarantor Payment”) which,
taking into account all other Guarantor Payments then previously or concurrently
made by any other Loan Guarantor, exceeds the amount which otherwise would have
been paid by or attributable to such Loan Guarantor if each Loan Guarantor had
paid the aggregate Guaranteed Obligations satisfied by such Guarantor Payment in
the same proportion as such Loan Guarantor’s “Allocable Amount” (as defined
below) (as determined immediately prior to such Guarantor Payment) bore to the
aggregate Allocable Amounts of each of the Loan Guarantors as determined
immediately prior to the making of such Guarantor Payment, then, following
indefeasible payment in full in cash of the Guarantor Payment and the Guaranteed
Obligations (other than Unliquidated Obligations that have not yet arisen), and
all Commitments have terminated or expired, and this Agreement, such Loan
Guarantor shall be entitled to receive contribution and indemnification payments
from, and be reimbursed by, each other Loan Guarantor for the amount of such
excess, pro rata based upon their respective Allocable Amounts in effect
immediately prior to such Guarantor Payment.

 

(b)          As of any date of determination, the “Allocable Amount” of any Loan
Guarantor shall be equal to the excess of the fair saleable value of the
property of such Loan Guarantor over the total liabilities of such Loan
Guarantor (including the maximum amount reasonably expected to become due in
respect of contingent liabilities, calculated, without duplication, assuming
each other Loan Guarantor that is also liable for such contingent liability pays
its ratable share thereof), giving effect to all payments made by other Loan
Guarantors as of such date in a manner to maximize the amount of such
contributions.

 

(c)          This Section 10.11 is intended only to define the relative rights
of the Loan Guarantors, and nothing set forth in this Section 10.11 is intended
to or shall impair the obligations of the Loan Guarantors, jointly and
severally, to pay any amounts as and when the same shall become due and payable
in accordance with the terms of this Loan Guaranty.

 

 114 

 

 

(d)          The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Loan Guarantor or Loan
Guarantors to which such contribution and indemnification is owing.

 

(e)          The rights of the indemnifying Loan Guarantors against other Loan
Guarantors under this Section 10.11 shall be exercisable upon the full and
indefeasible payment of the Guaranteed Obligations in cash (other than
Unliquidated Obligations that have not yet arisen) and the termination or
expiry, on terms reasonably acceptable to the Required Lenders (which acceptance
may be communicated via an email from either of the Specified Lender Advisors),
of the Commitments and the termination of this Agreement.

 

Section 10.12      Liability Cumulative. The liability of each Loan Party as a
Loan Guarantor under this Article X is in addition to and shall be cumulative
with all liabilities of each Loan Party to the Agents and the Lenders under this
Agreement and the other Loan Documents to which such Loan Party is a party or in
respect of any obligations or liabilities of the other Loan Parties, without any
limitation as to amount, unless the instrument or agreement evidencing or
creating such other liability specifically provides to the contrary.

 

 115 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

  AKORN, INC.       By /s/ Joseph Bonaccorsi   Name:   Joseph Bonaccorsi  
Title:     Executive Vice President, General Counsel and Secretary              
OTHER LOAN PARTIES:       AKORN (NEW JERSEY), INC.       By /s/ Joseph
Bonaccorsi   Name:   Joseph Bonaccorsi   Title:     Secretary           OAK
PHARMACEUTICALS, INC.       By /s/ Joseph Bonaccorsi   Name:   Joseph Bonaccorsi
  Title:     Secretary           ADVANCED VISION RESEARCH, INC.       By /s/
Joseph Bonaccorsi   Name:   Joseph Bonaccorsi   Title:     Secretary          
AKORN OPHTHALMICS, INC.       By /s/ Joseph Bonaccorsi   Name:   Joseph
Bonaccorsi   Title:     Secretary

 

 

Signature Page to DIP Loan Agreement
Akorn, Inc.

 

 

 

 

  HI-TECH PHARMACAL CO., INC.       By /s/ Joseph Bonaccorsi   Name:   Joseph
Bonaccorsi   Title:     Secretary           AKORN ANIMAL HEALTH, INC.       By
/s/ Joseph Bonaccorsi   Name:   Joseph Bonaccorsi   Title:     Secretary        
  AKORN SALES, INC.       By /s/ Joseph Bonaccorsi   Name:   Joseph Bonaccorsi  
Title:     Secretary           INSPIRE PHARMACEUTICALS, INC.       By /s/ Joseph
Bonaccorsi   Name:   Joseph Bonaccorsi   Title:     Secretary           CLOVER
PHARMACEUTICALS CORP.       By /s/ Joseph Bonaccorsi   Name:   Joseph Bonaccorsi
  Title:     Secretary

 

 

Signature Page to DIP Loan Agreement
Akorn, Inc.

 

 

 

 

  COVENANT PHARMA INC.       By /s/ Joseph Bonaccorsi   Name:   Joseph
Bonaccorsi   Title:     Secretary           OLTA PHARMACEUTICALS CORP.       By
/s/ Joseph Bonaccorsi   Name:   Joseph Bonaccorsi   Title:     Secretary        
  VERSAPHARM INCORPORATED       By /s/ Joseph Bonaccorsi   Name:   Joseph
Bonaccorsi   Title:     Secretary           VPI HOLDINGS SUB, LLC       By /s/
Joseph Bonaccorsi   Name:   Joseph Bonaccorsi   Title:     Secretary          
VPI HOLDINGS CORP.       By /s/ Joseph Bonaccorsi   Name:   Joseph Bonaccorsi  
Title:     Secretary

 

 

Signature Page to DIP Loan Agreement
Akorn, Inc.

 

 

 

 

  10 EDISON STREET LLC       By: Hi-Tech Pharmacal Co., Inc.   Its:  Sole Member
      By /s/ Joseph Bonaccorsi   Name:   Joseph Bonaccorsi  
Title:     Secretary           13 EDISON STREET LLC       By: Hi-Tech Pharmacal
Co., Inc.   Its:  Sole Member       By /s/ Joseph Bonaccorsi   Name:   Joseph
Bonaccorsi   Title:     Secretary

 

 

Signature Page to DIP Loan Agreement
Akorn, Inc.

 

 

 

 

  Credit Suisse Loan Funding LLC   as Lender       By /s/ Sathish Shanthan  
Name:   Sathish Shanthan   Title:     Director

 

 

Signature Page to DIP Loan Agreement
Akorn, Inc.

 

 

 

 

  Wilmington Savings Fund Society, FSB   as Administrative Agent       By /s/
Geoffrey J. Lewis   Name:   Geoffrey J. Lewis   Title:     Vice President

 

 

Signature Page to DIP Loan Agreement
Akorn, Inc.

 

 

 

 

COMMITMENT SCHEDULE

 

Lender  Commitment  CREDIT SUISSE LOAN FUNDING LLC  $30,000,000         Total 
$30,000,000 

 

Commitment Schedule

 

EXHIBIT A

 

[FORM OF ASSIGNMENT AND ASSUMPTION]

 

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”). Capitalized terms used but not defined herein shall have the
meanings given to them in the Senior Secured Super-Priority Term Loan
Debtor-in-Possession Loan Agreement identified below (as may be amended,
restated, supplemented or otherwise modified from time to time, the “DIP Loan
Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the DIP Loan Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below, (i) all of the Assignor’s rights and
obligations in its capacity as a Lender under the DIP Loan Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below and (ii) to the extent permitted to be assigned
under applicable law, all claims, suits, causes of action and other rights of
the Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the DIP Loan Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including contract claims, tort claims, malpractice claims, statutory claims and
all other claims at law or in equity related to the rights and obligations sold
and assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.

 

1.Assignor:     2.Assignee:         [and is an Affiliate/Approved Fund of
[identify Lender]1] 3.Borrower(s): AKORN, INC. 4.Administrative Agent:
WILMINGTON SAVINGS FUND SOCIETY, FSB, as the administrative agent under the DIP
Loan Agreement 5.Loan Agreement: The Senior Secured Super-Priority Term Loan
Debtor-In-Possession Loan Agreement dated as of May [●], 2020 among AKORN, INC.,
the other Loan Parties party thereto, the Lenders parties thereto, and
WILMINGTON SAVINGS FUND SOCIETY, FSB, as Administrative Agent.

 

 

1Select as applicable.

 

 

 

6.Assigned Interest:

 

 Aggregate Amount of
Commitment/Loans for all Lenders    Amount of
Commitment/Loans Assigned    Percentage Assigned of Commitment/Loans2  $   $  
 % $   $    % $   $    %

 

Effective Date: ____________________, 20__ [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

 

The Assignee agrees to deliver to the Administrative Agent a completed
Administrative Questionnaire in which the Assignee designates one or more credit
contacts to whom all syndicate-level information (which may contain material
non-public information about the Borrower, the other Loan Parties and their
Related Parties or their respective securities) will be made available and who
may receive such information in accordance with the Assignee’s compliance
procedures and applicable laws, including Federal and state securities laws.

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

 ASSIGNOR     [NAME OF ASSIGNOR]    By: Name:          Title:

 

 ASSIGNEE     [NAME OF ASSIGNEE]    By: Name:         Title:

 

 

2Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

 

2

 

 

[Consented to and]3 Accepted:       WILMINGTON SAVINGS FUND SOCIETY, FSB   as
Administrative Agent           By:   Name:   Title:               

 

[Consented to:]4       AKORN, INC.           By:   Name:   Title:         

 

 

4To be added only if the consent of the Administrative Agent is required by the
terms of the DIP Loan Agreement. 5To be added only if the consent of the
Borrower is required by the terms of the DIP Loan Agreement.

 

3

 

 

 

ANNEX 1

 

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

 

1.       Representations and Warranties.

 

1.1.       Assignor. The Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the DIP
Loan Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the
Borrower, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.

 

1.2.       Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the DIP Loan Agreement, (ii) it
satisfies the requirements, if any, specified in the DIP Loan Agreement that are
required to be satisfied by it in order to acquire the Assigned Interest and
become a Lender, (iii) from and after the Effective Date, it shall be bound by
the provisions of the DIP Loan Agreement as a Lender thereunder and, to the
extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the DIP Loan Agreement, together with
copies of the most recent financial statements delivered pursuant to Section
5.01] thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without
reliance on the Administrative Agent or any other Lender, and (v) if it is a
Foreign Lender, attached to the Assignment and Assumption is any documentation
required to be delivered by it pursuant to the terms of the DIP Loan Agreement,
duly completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

 

2.       Payments. From and after the Effective Date, the Administrative Agent
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees and other amounts) to the Assignor for amounts
which have accrued to but excluding the Effective Date and to the Assignee for
amounts which have accrued from and after the Effective Date.

 

4

 

 

3.       General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument.

 

Acceptance of the terms of this Assignment and Assumption by the Assignee and
the Assignor by Electronic Signature or delivery of an executed counterpart of a
signature page of this Assignment and Exhibit A-2 Assumption by any Electronic
System shall be effective as delivery of a manually executed counterpart of this
Assignment and Assumption. This Assignment and Assumption shall be governed by,
and construed in accordance with, the law of the State of New York.

 

5

 

 

EXHIBIT B

 

[FORM OF WITHDRAWAL NOTICE]

 

[●], 20[●]

 

Wilmington Savings Fund Society, FSB, as Administrative Agent and Escrow Agent

500 Delaware Avenue

Wilmington, DE 19801

Attn: Geoffrey J. Lewis

E-mail: glewis@wsfsbank.com

 

Re:         Release Instruction

 

Dear [●],

 

Reference is made to that certain Escrow Agreement dated May [●], 2020 (the
“Escrow Agreement”), by and among Wilmington Savings Fund Society, FSB, in its
capacities as administrative agent and collateral agent (the “Agent”), under the
DIP Credit Agreement (as defined in the Escrow Agreement), Akorn, Inc., a
Delaware limited liability company (“Borrower”), and Wilmington Savings Fund
Society, FSB, in its capacities as escrow agent and, as applicable, bank (the
“Escrow Agent”). Unless otherwise indicated, all capitalized terms used and not
otherwise defined herein have the respective meanings given to them in the
Escrow Agreement.

 

This notice constitutes a Withdrawal Notice signed by Borrower and delivered by
Agent pursuant to Section I-3(b) to the Escrow Agreement.

 

Borrower hereby instructs the Escrow Agent, in accordance with Section 3 of the
Escrow Agreement to release an amount of $[●] from the Deposit Account to [●] on
[Business Day], via wire transfer of immediately available funds in accordance
with the following wire instructions:

 

Name of Bank: [●]

ABA #: [●]

Beneficiary Account #: [●]

Beneficiary Account Name:     [●]

 

Agent acknowledges that prior to the remittance of funds from the Deposit
Account, the Escrow Agent will need to speak to an Authorized Representative to
confirm payment details.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

Very truly yours,

 

AKORN, INC.

 

By:     Name:     Title:  

 

Acknowledged and Agreed:

 

WILMINGTON SAVINGS FUND SOCIETY

as Administrative Agent

 

 

By:     Name:     Title:    

 

-7- 

 

 

EXHIBIT C

APPROVED BUDGET

 

[tm2020882d1_ex10-1img001.jpg] 

-8- 

 

 

 

EXHIBIT D

 

[FORM OF COMPLIANCE CERTIFICATE]

 

To:The Lenders parties to the
DIP Loan Agreement Described Below

 

This Compliance Certificate is furnished pursuant to that certain Senior Secured
Super-Priority Term Loan Debtor-in-Possession Loan Agreement, dated as of [●],
2020 (as it may be amended, amended and restated, restated, supplemented or
otherwise modified from time to time, the “DIP Loan Agreement”) among Akorn,
Inc. (the “Borrower”), the other Loan Parties party thereto, the Lenders party
thereto and Wilmington Savings Fund Society, FSB, in its capacity as
Administrative Agent for the Lenders. Unless otherwise defined herein,
capitalized terms used in this Compliance Certificate have the meanings ascribed
thereto in the DIP Loan Agreement.

 

THE UNDERSIGNED HEREBY CERTIFIES THAT:

 

1.       I am the duly elected [●] of the Borrower;

 

2.       I have reviewed the terms of the DIP Loan Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Borrower and its Subsidiaries during the
accounting period covered by the attached financial statements and such
financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to normal year-end audit adjustments and the absence of
footnotes];

 

3.       The examinations described in paragraph 2 did not disclose, except as
set forth below, and I have no knowledge of (i) the existence of any condition
or event which constitutes a Default during or at the end of the accounting
period covered by the attached financial statements or as of the date of this
Certificate or (ii) any change in GAAP or in the application thereof that has
occurred since the date of the audited financial statements referred to in
Section 3.04 of the DIP Loan Agreement; and

 

4.       I hereby certify that no Loan Party has changed (i) its name, (ii) its
chief executive office, (iii) principal place of business, (iv) the type of
entity it is or (v) its state of incorporation or organization without having
given the Administrative Agent the notice required by Section 4.15 of the
Security Agreement.

 

Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the (i) nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event or (i) the change in GAAP or
the application thereof and the effect of such change on the attached financial
statements: [●]

 

 - 9 -

 

 

The foregoing certifications, together with the financial statements delivered
with this Certificate in support hereof, are made and delivered this day of [●].

 

   Name:

Title:

 

 - 10 -

 

 

EXHIBIT E

 

[FORM OF JOINDER AGREEMENT]

 

THIS JOINDER AGREEMENT (this “Agreement”), dated as of [●], is entered into
between [●], a [●] (the “New Subsidiary”) and Wilmington Savings Fund Society,
FSB, in its capacity as administrative agent (the “Administrative Agent”) under
that certain Senior Secured Super-Priority Term Loan Debtor-in-Possession Loan
Agreement, dated as of [●], 2020 (as it may be amended, amended and restated,
restated, supplemented or otherwise modified from time to time, the “DIP Loan
Agreement”) among Akorn, Inc. (the “Borrower”), the other Loan Parties party
thereto, the Lenders party thereto and the Administrative Agent for the Lenders.
All capitalized terms used herein and not otherwise defined herein shall have
the meanings set forth in the DIP Loan Agreement.

 

The New Subsidiary and the Administrative Agent, for the benefit of the Lenders,
hereby agree as follows:

 

1.       The New Subsidiary hereby acknowledges, agrees and confirms that, by
its execution of this Agreement, the New Subsidiary will be deemed to be a Loan
Party under the DIP Loan Agreement and a “Loan Guarantor” for all purposes of
the DIP Loan Agreement and shall have all of the obligations of a Loan Party and
a Loan Guarantor thereunder as if it had executed the DIP Loan Agreement. The
New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound
by, all of the terms, provisions and conditions contained in the DIP Loan
Agreement, including without limitation (a) all of the representations and
warranties of the Loan Parties set forth in Article III of the DIP Loan
Agreement, *[and]* (b) all of the covenants set forth in Articles V and VI of
the DIP Loan Agreement *[and (c) all of the guaranty obligations set forth in
Article X of the DIP Loan Agreement. Without limiting the generality of the
foregoing terms of this paragraph 1, the New Subsidiary, subject to the
limitations set forth in Section 10.10 of the DIP Loan Agreement, hereby
guarantees, jointly and severally with the other Loan Guarantors, to the
Administrative Agent and the Lenders, as provided in Article X of the DIP Loan
Agreement, the prompt payment and performance of the Guaranteed Obligations in
full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise) strictly in accordance with the terms thereof and
agrees that if any of the Guaranteed Obligations are not paid or performed in
full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise), the New Subsidiary will, jointly and severally
together with the other Loan Guarantors, promptly pay and perform the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Guaranteed Obligations, the same
will be promptly paid in full when due (whether at extended maturity, as a
mandatory prepayment, by acceleration or otherwise) in accordance with the terms
of such extension or renewal.]* *[The New Subsidiary has delivered to the
Administrative Agent an executed Loan Guaranty.]*

 

2.       If required, the New Subsidiary is, simultaneously with the execution
of this Agreement, executing and delivering such Collateral Documents (and such
other documents and instruments) as requested by the Administrative Agent in
accordance with the DIP Loan Agreement.

 

 - 11 -

 

 

3.       The address of the New Subsidiary for purposes of Section 9.01 of the
DIP Loan Agreement is as follows: [●]

 

4.       The New Subsidiary hereby waives acceptance by the Administrative Agent
and the Lenders of the guaranty by the New Subsidiary upon the execution of this
Agreement by the New Subsidiary.

 

5.       This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument.

 

6.       THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.

 

IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly
executed by its authorized officer, and the Administrative Agent, for the
benefit of the Lenders, has caused the same to be accepted by its authorized
officer, as of the day and year first above written.

 

                                      [NEW SUBSIDIARY]

 

  By:                          

  Name:                                                 Title:        
Acknowledged and accepted:       WILMINGTON SAVINGS FUND SOCIETY, FSB, as
Administrative Agent

 

  By:              

  Name:     Title:  

 

 - 12 -

 

 

EXHIBIT F-1

 

[FORM OF U.S. TAX COMPLIANCE CERTIFICATE]
(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Senior Secured Super-Priority Term Loan
Debtor-in-Possession Loan Agreement, dated as of [●], 2020 (as it may be
amended, amended and restated, restated, supplemented or otherwise modified from
time to time, the “DIP Loan Agreement”) among AKORN, Inc. (the “Borrower”), the
other Loan Parties party thereto, the Lenders party thereto and Wilmington
Savings Fund Society, FSB, in its capacity as Administrative Agent for the
Lenders.

 

Pursuant to the provisions of Section 2.17 of the DIP Loan Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of
which it is providing this certificate, (ii) it is not a bank within the meaning
of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder
of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv)
it is not a controlled foreign corporation related to the Borrower as described
in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with a
certificate of its non-U.S. Person status on IRS Form W-8BEN or W-8BEN-E, as
applicable. By executing this certificate, the undersigned agrees that (1) if
the information provided on this certificate changes, the undersigned shall
promptly so inform the Borrower and the Administrative Agent, and (2) the
undersigned shall have at all times furnished the Borrower and the
Administrative Agent with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the DIP Loan Agreement and
used herein shall have the meanings given to them in the DIP Loan Agreement.

 

[NAME OF LENDER]

 

By:     Name:    Title:  

 

Date:

 

 - 13 -

 

 

EXHIBIT F-2

[FORM OF U.S. TAX COMPLIANCE CERTIFICATE]
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Senior Secured Super-Priority Term Loan
Debtor-in-Possession Loan Agreement, dated as of [●], 2020 (as it may be
amended, amended and restated, restated, supplemented or otherwise modified from
time to time, the “DIP Loan Agreement”) among AKORN, Inc. (the “Borrower”), the
other Loan Parties party thereto, the Lenders party thereto and Wilmington
Savings Fund Society, FSB, in its capacity as Administrative Agent for the
Lenders.

 

Pursuant to the provisions of Section 2.17 of the DIP Loan Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate, (ii)
it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii)
it is not a ten percent shareholder of the Borrower within the meaning of
Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign
corporation related to the Borrower as described in Section 881(c)(3)(C) of the
Code.

 

The undersigned has furnished its participating Lender with a certificate of its
non-U.S. Person status on IRS Form W-8BEN or W-8BEN-E, as applicable. By
executing this certificate, the undersigned agrees that (1) if the information
provided on this certificate changes, the undersigned shall promptly so inform
such Lender in writing, and (2) the undersigned shall have at all times
furnished such Lender with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the DIP Loan Agreement and
used herein shall have the meanings given to them in the DIP Loan Agreement.

 

[NAME OF PARTICIPANT]

 

By:     Name:    Title:  

 

Date:

 

 - 14 -

 

 

EXHIBIT F-3

 

[FORM OF U.S. TAX COMPLIANCE CERTIFICATE]
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

 

Reference is hereby made to the Senior Secured Super-Priority Term Loan
Debtor-in-Possession Loan Agreement, dated as of [●], 2020 (as it may be
amended, amended and restated, restated, supplemented or otherwise modified from
time to time, the “DIP Loan Agreement”) among AKORN, Inc. (the “Borrower”), the
other Loan Parties party thereto, the Lenders party thereto and Wilmington
Savings Fund Society, FSB, in its capacity as Administrative Agent for the
Lenders.

 

Pursuant to the provisions of Section 2.17 of the DIP Loan Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect such participation, neither the undersigned
nor any of its direct or indirect partners/members is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a ten percent shareholder of the
Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of
its direct or indirect partners/members is a controlled foreign corporation
related to the Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or
W-8BEN-E, as applicable, or (ii) an IRS Form W-8IMY accompanied by an IRS Form
W-8BEN or W-8BEN-E, as applicable, from each of such partner’s/member’s
beneficial owners that is claiming the portfolio interest exemption. By
executing this certificate, the undersigned agrees that (1) if the information
provided on this certificate changes, the undersigned shall promptly so inform
such Lender and (2) the undersigned shall have at all times furnished such
Lender with a properly completed and currently effective certificate in either
the calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the DIP Loan Agreement and
used herein shall have the meanings given to them in the DIP Loan Agreement.

 

[NAME OF PARTICIPANT]

 

By:     Name:    Title:  

 

Date:

 

 - 15 -

 

 

EXHIBIT F-4

 

[FORM OF U.S. TAX COMPLIANCE CERTIFICATE]
(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is hereby made to the Senior Secured Super-Priority Term Loan
Debtor-in-Possession Loan Agreement, dated as of [●], 2020 (as it may be
amended, amended and restated, restated, supplemented or otherwise modified from
time to time, the “DIP Loan Agreement”) among AKORN, Inc. (the “Borrower”), the
other Loan Parties party thereto, the Lenders party thereto and Wilmington
Savings Fund Society, FSB, in its capacity as Administrative Agent for the
Lenders.

 

Pursuant to the provisions of Section 2.17 of the DIP Loan Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the Loan(s)
(as well as any Note(s) evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) its direct or indirect partners/members are the
sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to the DIP Loan
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a ten percent shareholder of the Borrower within
the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or
indirect partners/members is a controlled foreign corporation related to the
Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent and the Borrower with IRS
Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN or W-8BEN-E, as applicable or (ii) an IRS Form W-8IMY accompanied by
an IRS Form W-8BEN or W-8BEN-E, as applicable from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform the Borrower and the Administrative Agent, and (2) the undersigned
shall have at all times furnished the Borrower and the Administrative Agent with
a properly completed and currently effective certificate in either the calendar
year in which each payment is to be made to the undersigned, or in either of the
two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the DIP Loan Agreement and
used herein shall have the meanings given to them in the DIP Loan Agreement.

 

[NAME OF LENDER]

 

By:     Name:    Title:  

 

Date:

 

 - 16 -