Exhibit 10.21

 

 

 

SENIOR SECURED SUPERPRIORITY DEBTOR-IN-POSSESSION

CREDIT AGREEMENT

 

DATED AS OF [______], 2019

 

AMONG

 

ORCHIDS PAPER PRODUCTS COMPANY,

AS DEBTOR AND DEBTOR IN POSSESSION AND AS BORROWER,

 

THE LENDERS,

 

AND

 

BLACK DIAMOND COMMERCIAL FINANCE, L.L.C.,

AS ADMINISTRATIVE AGENT 

 

 

 

   

 

 

Table of Contents

 

    Page       ARTICLE I DEFINITIONS 1       ARTICLE II THE CREDITS 17      
2.1. Commitment 17 2.2. Required Payments 18 2.3. Ratable Loans 18 2.4. Fees 18
2.5. Minimum Amount of Each Advance 18 2.6. Reduction in Aggregate Commitment 18
2.7. New Advances 19 2.8. Interest Rates 19 2.9. Rates Applicable After Event of
Default 19 2.10. Method of Payment; Repayment of Loans 19 2.11. Noteless
Agreement; Evidence of Indebtedness 20 2.12. Interest Payment Dates: Interest
and Fee Basis 20 2.13. Notification of Advances and Commitment Reductions 20
2.14. Lending Installations 20 2.15. Non-Receipt of Funds by the Administrative
Agent 21 2.16. Replacement of Lender 21 2.17. Limitation of Interest 22      
ARTICLE III TAXES 23       3.1. Changes in Capital Adequacy Regulations 23 3.2.
Taxes 23       ARTICLE IV CONDITIONS PRECEDENT 27       4.1. Initial Credit
Extension 27 4.2. Each Credit Extension 29       ARTICLE V REPRESENTATIONS AND
WARRANTIES 29       5.1. Existence and Standing 29 5.2. Authorization and
Validity 29 5.3. No Conflict; Government Consent 30 5.4. Financial Statements 30
5.5. Material Adverse Change 30 5.6. Taxes 30 5.7. Litigation and Contingent
Obligations 31 5.8. Subsidiaries 31 5.9. ERISA 31 5.10. Accuracy of Information
31

 

 i 

 

  

5.11. Regulation U 31 5.12. Material Agreements 31 5.13. Compliance With Laws 32
5.14. Ownership of Properties 32 5.15. Plan Assets; Prohibited Transactions 32
5.16. Environmental Matters 32 5.17. Investment Company Act 32 5.18. Insurance
32 5.19. No Default 32 5.20. Anti-Corruption Laws: Sanctions: Anti-Terrorism
Laws 32       ARTICLE VI COVENANTS 33       6.1. Financial Reporting 33 6.2. Use
of Proceeds 35 6.3. Notice of Material Events 35 6.4. Conduct of Business 36
6.5. Taxes 36 6.6. Insurance 36 6.7. Compliance with Laws and Material
Contractual Obligations 36 6.8. Maintenance of Properties 37 6.9. Books and
Records; Inspection 37 6.10. Payment of Obligations 37 6.11. Indebtedness 37
6.12. Merger 37 6.13. Sale of Assets 38 6.14. Investments 38 6.15. Acquisitions
38 6.16. Liens 38 6.17. Affiliates 39 6.18. Sale and Leaseback Transactions 39
6.19. Financial Contracts 39 6.20. Restricted Payments 39 6.21. [Intentionally
omitted.] 40 6.22. Further Assurances 40 6.23. OFAC, PATRIOT Act Compliance 40
6.24. Bankruptcy Related Covenants 41 6.25. Budgeted Expenses 42       ARTICLE
VII DEFAULTS 43       ARTICLE VIII ACCELERATION. WAIVERS. AMENDMENTS AND
REMEDIES 46       8.1. Acceleration: Remedies 46 8.2. Application of Funds 47
8.3. Waivers and Amendments 47

 

 ii 

 

  

8.4. Preservation of Rights 48       ARTICLE IX GENERAL PROVISIONS 48       9.1.
Survival of Representations 48 9.2. Governmental Regulation 48 9.3. Headings 48
9.4. Entire Agreement 48 9.5. Several Obligations: Benefits of this Agreement 48
9.6. Expenses: Indemnification 49 9.7. Numbers of Documents 50 9.8. Accounting
50 9.9. Severability of Provisions 51 9.10. Nonliability of Lenders 51 9.11.
Confidentiality 51 9.12. Nonreliance 52 9.13. Disclosure 52 9.14. USA PATRIOT
ACT NOTIFICATION 52 9.15. Relationship with DIP Orders 52       ARTICLE X THE
ADMINISTRATIVE AGENT 52       10.1. Appointment: Nature of Relationship 52 10.2.
Powers 53 10.3. General Immunity 53 10.4. No Responsibility for Loans. 53 10.5.
Action on Instructions of Lenders 53 10.6. Employment of Administrative Agents
and Counsel 54 10.7. Reliance on Documents; Counsel 54 10.8. Administrative
Agent’s Reimbursement and Indemnification 54 10.9. Notice of Event of Default 55
10.10. Rights as a Lender 55 10.11. Lender Credit Decision 55 10.12. Successor
Administrative Agent 56 10.13. Administrative Agent Fees 56 10.14. Delegation to
Affiliates 56 10.15. Execution of Collateral Documents 56 10.16. Collateral
Releases 57 10.17. Documentation Administrative Agent 57 10.18. No Advisory or
Fiduciary Responsibility 57       ARTICLE XI SETOFF; RATABLE PAYMENTS 57      
11.1. Setoff 57 11.2. Ratable Payments 58

 

 iii 

 

  

ARTICLE XII BENEFIT OF AGREEMENT: ASSIGNMENTS; PARTICIPATIONS 58       12.1.
Successors and Assigns 58 12.2. Participations 59 12.3. Assignments 60      
ARTICLE XIII NOTICES 62       13.1. Notices; Effectiveness: Electronic
Communication 62       ARTICLE XIV COUNTERPARTS; INTEGRATION: EFFECTIVENESS:
ELECTRONIC EXECUTION 63       14.1. Counterparts: Effectiveness 63 14.2.
Electronic Execution of Assignments 64       ARTICLE XV CHOICE OF LAW: CONSENT
TO JURISDICTION: WAIVER OF JURY TRIAL 64       15.1. CHOICE OF LAW 64 15.2.
CONSENT TO JURISDICTION 64 15.3. WAIVER OF JURY TRIAL 64 15.4. Acknowledgement
and Consent to Bail-In of EEA Financial Institutions 64

 

SCHEDULES

 

SCHEDULE 1 – Commitments SCHEDULE 4.1(i) _ Pending or Threatened Actions
SCHEDULE 5.8 – Subsidiaries SCHEDULE 5.14 – Properties SCHEDULE 6.11 –
Indebtedness SCHEDULE 6.14 – Investments SCHEDULE 6.16 – Liens

 

EXHIBITS

 

EXHIBIT A – Form of Compliance Certificate EXHIBIT B – Form of Assignment and
Assumption Agreement EXHIBIT C-l – Form of Borrowing Notice EXHIBIT C-2 – Form
of Payment Notice

 

 iv 

 

 

SENIOR SECURED SUPERPRIORITY DEBTOR-IN-POSSESSION

CREDIT AGREEMENT

 

This Senior Secured Superpriority Debtor-in-Possession Credit Agreement (this
“Agreement”), dated as of _______, 2019, is among Orchids Paper Products
Company, a Delaware corporation, as Debtor and Debtor in Possession, the Lenders
that are party hereto, and Black Diamond Commercial Finance, L.L.C., a Delaware
limited liability company, as Administrative Agent.

 

PRELIMINARY STATEMENTS

 

On April 1, 2019 (the “Petition Date”), the Borrower and certain of its Domestic
Subsidiaries commenced chapter 11 case no.19-10729, et seq. (the “Chapter 11
Cases”) by filing a voluntary petition for relief under chapter 11 of the
Bankruptcy Code, with the United States Bankruptcy Court for the District of
Delaware (the “Bankruptcy Court”). The Borrower and such Domestic Subsidiaries
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; and

 

The Borrower has requested that the Lenders provide a revolving credit facility
and the Lenders have indicated their willingness to lend, in each case on the
terms and conditions set forth herein.

 

AGREEMENT

 

The parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

As used in this Agreement:

 

“Acquisition” means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (i) acquires any going business or all or substantially all
of the assets of any firm, corporation or limited liability company, or division
thereof, whether through purchase of assets, merger or otherwise or (ii)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage or voting
power) of the outstanding ownership interests of a partnership or limited
liability company.

 

“Administrative Agent” means BDCF in its capacity as contractual representative
of the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Administrative Agent appointed pursuant to Article X.

 

 1 

 

 

“Advance” means a borrowing hereunder of Loans made by some or all of the
Lenders on the same Borrowing Date.

 

“Affected Foreign Subsidiary” means any Foreign Subsidiary to the extent such
Foreign Subsidiary acting as a Guarantor would cause a Deemed Dividend Problem.

 

“Affected Lender” is defined in Section 2.16.

 

“Affiliate” of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person, including,
without limitation, such Person’s Subsidiaries. A Person shall be deemed to
control another Person if the controlling Person owns 25% or more of any class
of voting securities (or other ownership interests) of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through ownership
of stock, by contract or otherwise.

 

“Aggregate Commitment” means the aggregate of the Commitments of all the
Lenders, as reduced from time to time pursuant to Section 2.6. As of the date of
this Agreement, the Aggregate Commitment is $11,000,000.

 

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

 

“Agreement” means this Senior Secured Superpriority Debtor-in-Possession Credit
Agreement, as it may be amended or modified and in effect from time to time. The
term “Agreement” includes all Schedules and Exhibits attached hereto.

 

“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 Pledge Percentage” means 100% but 65% in the case of a pledge by the
Borrower or any Domestic Subsidiary of its equity interests in an Affected
Foreign Subsidiary.

 

“Applicable Rate” means, for any day, a rate per annum equal to twelve percent
(12%).

 

“Approved Budget” has the meaning specified in Section 6.25.

 

“Approved Fund” means any Fund 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.

 

“Article” means an article of this Agreement unless another document is
specifically referenced.

 

“Authorized Officer” means any of the President, Chief Executive Officer, Chief
Financial Officer, Interim Chief Strategy Officer and Secretary of the Borrower,
acting singly.

 

 2 

 

 

“Available Commitment” means, at any time, the Aggregate Commitments then in
effect minus the aggregate Loans outstanding at such time.

 

“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 Code” means title 11, United States Code.

 

“Bankruptcy Court” has the meaning specified in the recitals to this Agreement.

 

“BDCF” means Black Diamond Commercial Finance, L.L.C., a Delaware limited
liability company, in its individual capacity, and its successors.

 

“Borrower” means Orchids Paper Products Company, a Delaware corporation, as
debtor and debtor in possession.

 

“Borrowing Date” means a date on which an Advance is made hereunder.

 

“Borrowing Notice” is defined in Section 2.7.

 

“Business Day” means (i) with respect to any borrowing or payment, a day (other
than a Saturday or Sunday) on which banks generally are open in Chicago,
Illinois for the conduct of substantially all of their commercial lending
activities, interbank wire transfers can be made on the Fedwire system and (ii)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in New York City, New York, for the conduct of substantially
all of their commercial lending activities and interbank wire transfers can be
made on the Fedwire system.

 

“Capitalized Lease” of a Person means any lease of Property by such Person as
lessee which would be capitalized on a balance sheet of such Person prepared in
accordance with GAAP.

 

“Capitalized Lease Obligations” of a Person means the amount of the obligations
of such Person under Capitalized Leases which would be shown as a liability on a
balance sheet of such Person prepared in accordance with GAAP.

 

“Carve Out Trigger Notice” means written notice from the Administrative Agent to
the Borrower, its lead counsel, the U.S. Trustee and lead counsel to the
Creditors’ Committee of the occurrence and during the continuance of an Event of
Default.

 

“Case Professionals” means Persons or firms retained by the Borrower or the
Creditors’ Committee or other statutory committee appointed in the Chapter 11
Cases pursuant to sections 327, 363 and 1103 of the Bankruptcy Code.

 

 3 

 

 

“Cash Equivalent Investments” means (i) short-term obligations of, or fully
guaranteed by, the United States of America, (ii) commercial paper rated A-1 or
better by S&P or P-1 or better by Moody’s, (iii) demand deposit accounts
maintained in the ordinary course of business, and (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $500,000,000, provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest and (v) shares of money market mutual funds
that are rated at least “AAAm” or “AAAG” by S&P or “P-1” or better by Moody’s.

 

“Change” as used in Article III of this Agreement, means (i) any change after
the date of this Agreement in the Risk-Based Capital Guidelines or (ii) any
adoption of or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) or in the interpretation, promulgation, implementation
or administration thereof after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender or any
Lending Installation or any corporation controlling any Lender.

 

“Chapter 11 Cases” has the meaning provided in the recitals to this Agreement.

 

“Closing Date” means [_____], 2019.

 

“Code” means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.

 

“Collateral” means any and all Property in which a security interest or Lien is
or is required to be granted to secure the Obligations, and any and all other
Property now existing or hereafter acquired that may be or become subject to a
security Interest or Lien to secure the Obligations.

 

“Collateral Documents” means, collectively, the Security Agreement, the Mexico
Collateral Documents, and all other agreements, instruments and documents that
are intended to create, perfect or evidence Liens upon the Collateral as
security for payment of the Obligations, including without limitation, all other
security agreements, pledge agreements, financing statements, Mortgages,
assignments and deeds of trust, whether heretofore, now, or hereafter executed
by the Loan Parties or any of their Subsidiaries and delivered to the
Administrative Agent.

 

“Commitment” means, for each Lender, the obligation, if any, of such Lender to
make Loans to the Borrower, expressed as an amount representing the maximum
possible aggregate principal amount of such Lender’s Loans outstanding
hereunder. The initial amount of each Lender’s Commitment is set forth on
Schedule 1, as it may be modified (i) pursuant to Sections 2.6, (ii) as a result
of any assignment that has become effective pursuant to Section 12.3(c), or
(iii) otherwise from time to time pursuant to the terms hereof. As of the date
of this Agreement, the aggregate amount of the Lenders’ Commitments is
$11,000,000.

 

“Commitment Fee” is defined in Section 2.4.

 

 4 

 

 

“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.

 

“Consolidated Net Income” means, with reference to any period, the net income
(or loss) of the Borrower and its Subsidiaries calculated on a consolidated
basis for such period.

 

“Contingent Obligation” of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership.

 

“Credit Extension” means the making of an Advance.

 

“Creditors’ Committee” means any official committee of creditors formed,
appointed or approved in the Chapter 11 Cases pursuant to the Bankruptcy Code.

 

“Deemed Dividend Problem” means, with respect to any Foreign Subsidiary, such
Foreign Subsidiary’s accumulated and undistributed earnings and profits being
deemed to be repatriated to the Borrower or the applicable parent Domestic
Subsidiary under Section 956 of the Code and the effect of such deemed
repatriation causing materially adverse tax consequences to the Borrower or such
parent Domestic Subsidiary, in each case as determined by the Borrower in its
commercially reasonable judgment acting in good faith and in consultation with
its legal and tax advisors.

 

“Default” means an event which but for the lapse of time or the giving of
notice, or both, would constitute an Event of Default.

 

“Deposits” is defined in Section 11.1.

 

“DIP Orders” means and refers to the Interim Borrowing Order and the Final
Borrowing Order.

 

“Dollar” and “$” means the lawful currency of the United States of America.

 

“Domestic Subsidiary” means a Subsidiary of the Borrower incorporated or
organized under the laws of the United States of America, any state thereof or
the District of Columbia.

 

“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.

 

 5 

 

 

“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.

 

“Effective Date” means the date on which the conditions specified in Section 4.1
are satisfied.

 

“Eligible Assignee” means any Person except a natural Person, the Borrower or
any of the Borrower’s Affiliates or Subsidiaries.

 

“Environmental Laws” means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to (i) the
protection of the environment, (ii) personal injury or property damage relating
to the release or discharge of Hazardous Materials, (iii) emissions, discharges
or releases of pollutants, contaminants, hazardous substances or wastes into
surface water, ground water or land, or (iv) the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, hazardous substances or wastes or the clean-up or
other remediation thereof.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any rule or regulation issued thereunder.

 

“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 with
respect to any Plan 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 303(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 under
Section 4201 of ERISA or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.

 

 6 

 

 

“EU” means the European Union.

 

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.

 

“Event of Default” is defined in Article VII.

 

“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap
Obligation if, and only to the extent that, all or a portion of the guarantee of
such Guarantor of, or the grant by such Guarantor of a security interest to
secure, such Swap Obligation (or any guarantee thereof) is or becomes illegal
under the Commodity Exchange Act or any rule, regulation or order of the
Commodity Futures Trading Commission (or the application or official
interpretation of any thereof), including by virtue of such Guarantor’s failure
for any reason to constitute an “eligible contract participant” as defined in
the Commodity Exchange Act and the regulations thereunder at the time the
guarantee of such Guarantor or the grant of such security interest becomes
effective with respect to such Swap Obligation. If a Swap Obligation arises
under a master agreement governing more than one swap, such exclusion shall
apply only to the portion of such Swap Obligation that is attributable to swaps
for which such guarantee or security interest is or becomes illegal.

 

“Excluded Taxes” means, in the case of each Lender or applicable Lending
Installation, and the Administrative Agent, (i) Taxes imposed on its overall net
income, franchise Taxes, and branch profits Taxes imposed on it, by the
respective jurisdiction under the laws of which such Lender or the
Administrative Agent is incorporated or is organized or in which its principal
executive office is located or, in the case of a Lender, in which such Lender’s
applicable Lending Installation is located, (ii) in the case of a Non-U.S.
Lender, any withholding tax that is imposed on amounts payable to such Non-U.S.
Lender pursuant to the laws in effect at the time such Non-U.S. Lender becomes a
party to this Agreement or designates a new Lending Installation, except in each
case to the extent that, pursuant to Section 3.2(a), amounts with respect to
such Taxes were payable either to such Lender’s assignor immediately before such
Lender became a party hereto or to such Lender immediately before it changed its
Lending Installation, or is attributable to the Non-U.S. Lender’s failure to
comply with Section 3.2(f), and (iii) any U.S. federal withholding taxes imposed
by FATCA.

 

“Exhibit” refers to an exhibit to this Agreement, unless another document is
specifically referenced.

 

“Facility Termination Date” means September 30, 2019, or any earlier date on
which the Aggregate Commitment is reduced to zero or otherwise terminated
pursuant to the terms hereof.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
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.

 

 7 

 

 

“Federal Funds Effective Rate” means, for any day, the greater of (a) zero
percent (0.0%) and (b) the rate per annum calculated by the Federal Reserve Bank
of New York based on such day's federal funds transactions by depository
institutions (as determined in such manner as the Federal Reserve Bank of New
York shall set forth on its public website from time to time) and published on
the next succeeding Business Day by the Federal Reserve Bank of New York as the
federal funds effective rate or, if such rate is not so published for any day
which is a Business Day, the average of the quotations at approximately 10:00
a.m. (Central time) on such day on such transactions received by the
Administrative Agent from three (3) Federal funds brokers of recognized standing
selected by the Administrative Agent in its sole discretion.

 

“Fee Letter” is defined in Section 10.13.

 

“Final Borrowing Order” means an order of the Bankruptcy Court which order shall
be in form, scope and substance acceptable to the Borrower, the Administrative
Agent and the Required Lenders, which, among other matters but not by way of
limitation, authorizes the Borrower to obtain credit, incur (or guaranty)
Obligations, grant Liens under this Agreement, the other Loan Documents, and the
DIP Orders, and provides for the super priority of the Administrative Agent’s
and the Lenders’ claims, which order is a Final Order.

 

“Financial Contract” of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics or (ii) any Rate Management Transaction.

 

“Foreign Subsidiary” means any Subsidiary organized under the laws of a
jurisdiction not located in the United States of America.

 

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

 

“GAAP” means generally accepted accounting principles as in effect from time to
time in the United States, applied in a manner consistent with that used in
preparing the financial statements referred to in Section 5.4, subject at all
times to Section 9.8.

 

“Governmental Authority” means the government of the United States of America or
any other nation, or of 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 (including, without limitation, any supra-national bodies such as the
European Union or the European Central Bank) and any group or body charged with
setting financial accounting or regulatory capital rules or standards
(including, without limitation, the Financial Accounting Standards Board, the
Bank for International Settlements or the Basel Committee on Banking Supervisory
Practices or any successor or similar authority to any of the foregoing).

 

“Guarantor” means (i) Orchids Mexico (DE) Holdings, LLC, a Delaware limited
liability company, (ii) Orchids Mexico (DE) Member, LLC, a Delaware limited
liability company, (iii) the Mexico Subsidiary, (iv) Orchids South Carolina and
(v) each Subsidiary that is a party to the Guaranty, either on the date hereof
or pursuant to the terms of Section 6.22, and their respective successors and
assigns.

 

 8 

 

 

“Guaranty” means that certain Guaranty or Guaranties dated as of the Closing
Date executed by each of the Guarantors in favor of the Administrative Agent,
for the ratable benefit of the Lenders, as amended, restated, ratified,
supplemented or otherwise modified, renewed or replaced from time to time
pursuant to the terms hereof and thereof.

 

“Hazardous Material” means any explosive or radioactive substances or wastes,
any 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 any other
substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Highest Lawful Rate” means, on any day, the maximum non-usurious rate of
interest permitted for that day by applicable federal or state law stated as a
rate per annum.

 

“Indebtedness” of a Person means such Person’s (i) obligations for borrowed
money (including the Obligations hereunder), (ii) obligations representing the
deferred purchase price of Property or services (other than accounts payable
arising in the ordinary course of such Person’s business payable on terms
customary in the trade), (iii) obligations, whether or not assumed* secured by
Liens or payable out of the proceeds or production from Property now or
hereafter owned or acquired by such Person, (iv) obligations which are evidenced
by notes, acceptances, or other instruments, (v) obligations to purchase
securities or other Property arising out of or in connection with the sale of
the same or substantially similar securities or Property, (vi) Capitalized Lease
Obligations, (vii) obligations as an account party with respect to standby and
commercial Letters of Credit, (viii) Contingent Obligations of such Person, (ix)
Net Mark-to-Market Exposure under Rate Management Transactions and other
Financial Contracts, and (x) any other obligation for borrowed money or other
financial accommodation which in accordance with GAAP would be shown as a
liability on the consolidated balance sheet of such Person.

 

“Indemnified Taxes” means 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,
other than Excluded Taxes and Other Taxes.

 

“Interim Borrowing Order” means an order entered by the Bankruptcy Court, in
form, scope and substance as may be acceptable to the Borrower, the
Administrative Agent and the Required Lenders, authorizing, on an interim basis,
inter alia the Borrower to obtain credit and incur (or guaranty) Obligations,
granting Liens to secure the Obligations, and providing for the super priority
of the Administrative Agent’s and the Lenders’ claims.

 

“Interim Chief Strategy Officer” means Richard Infantino, individually, and his
firm, Deloitte Transactions and Business Analytics LLP.

 

 9 

 

 

“Investment” of a Person means (a) any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable arising
in the ordinary course of business on terms customary in the trade) or
contribution of capital by such Person; (b) stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities (including warrants
or options to purchase securities) owned by such Person; (c) any deposit
accounts and certificate of deposit owned by such Person; and (d) structured
notes, derivative financial instruments and other similar instruments or
contracts owned by such Person.

 

“Investment Banker” means Houlihan Lokey Capital, Inc.

 

“Lenders” means the lending institutions listed on the signature pages of this
Agreement and their respective successors and assigns.

 

“Lending Installation” means, with respect to a Lender or the Administrative
Agent, the office, branch, subsidiary or affiliate of such Lender or the
Administrative Agent listed on the signature pages hereof (in the case of the
Administrative Agent) or on its Administrative Questionnaire (in the case of a
Lender) or otherwise selected by such Lender or the Administrative Agent
pursuant to Section 2.14.

 

“Letter of Credit” of a Person means a letter of credit or similar instrument
which is issued upon the application of such Person or upon which such Person is
an account party or for which such Person is in any way liable.

 

“Lien” means any lien (statutory or other), mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or lessor under any
conditional sale, Capitalized Lease or other title retention agreement).

 

“Loan” means, with respect to a Lender, such Lender’s loan made pursuant to its
commitment to lend set forth in Section 2.1(a).

 

“Loan Documents” means this Agreement, the Collateral Documents, the Guaranty,
any Note or Notes executed by the Borrower in connection with this Agreement and
payable to a Lender, and any other document or agreement, now or in the future,
executed by the Borrower for the benefit of the Administrative Agent or any
Lender in connection with this Agreement.

 

“Loan Party” or “Loan Parties” means, individually or collectively, the Borrower
and the Guarantors.

 

“M3 Purported Liens” means the purported mechanic’s and/or other liens recorded
and otherwise asserted by M3 Construction, Inc. against the Property owned by
Orchids South Carolina, as set forth in that certain Complaint filed by M3
Construction, Inc. against the Borrower and Orchids South Carolina, among
others, in the Court of Common Pleas, State of South Carolina, County of
Barnwell, Case No. 2019CP0600014.

 

 10 

 

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
Property, liabilities (actual and contingent), operations or condition
(financial or otherwise), or results of operations of the Borrower and its
Subsidiaries taken as a whole, (b) the ability of the Borrower or any Guarantor
to perform its obligations under the Loan Documents to which it is a party, or
(c) the validity or enforceability of any of the Loan Documents or the rights or
remedies of the Administrative Agent or the Lenders under the Loan Documents;
provided, however, that, for the purposes of clause (a), a Material Adverse
Effect shall not be deemed to include events, occurrences, facts, conditions or
changes arising out of, relating to or resulting from: (i) changes in the price
or trading volume of the Borrower’s common stock; (ii) the announcement of the
transactions contemplated by this Agreement; (iii) the announcement of the
transactions contemplated by the Sale Motion; or (iv) the commencement or
pendency of the Chapter 11 Cases.

 

“Mexico Asset Purchase Transaction” means the purchase of assets by the Mexico
Subsidiary pursuant to that certain Asset Purchase Agreement dated as of May 5,
2014 by and among Orchids Mexico (DE) Holdings, LLC, Fabrica De Papel San
Francisco, S.A. DE L.V. and Borrower.

 

“Mexico Collateral Documents” means all documents reasonably required by
Administrative Agent for the Administrative Agent to receive a first perfected
lien or security interest in the ownership interests of the Mexico Subsidiary.

 

“Mexico Lease Agreement” means that certain Equipment Lease Agreement dated June
3, 2014, by and between the Mexico Subsidiary, as lessor, and Fabrica de Papel
San Francisco, S.A. de C.V., as Lessee, as such equipment lease agreement is
modified or amended from time to time.

 

“Mexico Subsidiary” means OPP Acquisition Mexico, S. de R.L. de C.V., a Limited
Liability Company of Variable Capital (Sociedad de Responsabilidad Limitada de
Capital Variable).

 

“Mexico Supply Agreement” means that certain Product Supply Agreement dated as
of June 3, 2014, by and between Borrower, as customer, and Fabrica de Papel San
Francisco, S.A. de C.V., as supplier, as such Product Supply Agreement is
modified or amended from time to time.

 

“Mexico Trademark Agreement” means that certain Trademark License Agreement
dated June 3, 2014 by and among Fabrica de Papel San Francisco, S.A. de C.V.,
and Golden Gate Paper Company, Incorporated, a California corporation, as
licensors, and Borrower and Mexico Subsidiary, as licensees.

 

“Mexico Transaction” means the purchase of assets by the Mexico Subsidiary under
the Mexico Asset Purchase Transaction and the closing of the Mexico Supply
Agreement and the Mexico Lease Agreement.

 

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

 

“Mortgages” means any 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 Lenders, on real property of a Loan Party,
including, without limitation, the Oklahoma Mortgage and the South Carolina
Mortgage and further including any amendment, modification or supplement
thereto.

 

 11 

 

 

“Multiemployer Plan” means a Plan maintained pursuant to a collective bargaining
agreement or any other arrangement to which the Borrower or any ERISA Affiliate
is a party to which more than one employer is obligated to make contributions.

 

“Net Mark-to-Market Exposure” of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions. “Unrealized
losses” means the fair market value of the cost to such Person of replacing such
Rate Management Transaction as of the date of determination (assuming the Rate
Management Transaction were to be terminated as of that date), and “unrealized
profits” means the fair market value of the gain to such Person of replacing
such Rate Management Transaction as of the date of determination (assuming such
Rate Management Transaction were to be terminated as of that date).

 

“Non-U.S. Lender” means a Lender that is not a United States person as defined
in Section 7701(a)(30) of the Code.

 

“Note” is defined in Section 2.11(d).

 

“Obligations” means all unpaid principal of and accrued and unpaid interest on
the Loans, all Rate Management Obligations provided to the Borrower or any
Subsidiary by the Administrative Agent or any other Lender or any Affiliate of
any of the foregoing, all accrued and unpaid fees, and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lenders
or to any Lender, the Administrative Agent or any indemnified party arising
under the Loan Documents; provided, that “Obligations” shall exclude all
Excluded Swap Obligations.

 

“OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets
Control, and any successor thereto.

 

“Oklahoma Mortgage” means that certain first priority Mortgage, Security
Agreement, Financing Statement and Assignment of Rents and Leases, dated as of
the Closing Date, as the same may be further amended, restated, replaced,
supplemented or otherwise modified from time to time.

 

“Orchids South Carolina” means Orchid Paper Products Company of South Carolina,
a Delaware corporation.

 

“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.

 

“Outstanding Credit Exposure” means, as to any Lender at any time, the aggregate
principal amount of its Loans outstanding at such time.

 

“Participant” is defined in Section 12.2(a).

 

“Participant Register” is defined in Section 12.2(c).

 

 12 

 

 

“PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)), as amended from time to time, and any successor
statute.

 

“Payment Date” means the first (1st) day of each month, provided, that if such
day is not a Business Day, the Payment Date shall be the immediately preceding
Business Day.

 

“Payment Notice” is defined in Section 2.6.

 

“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.

 

“Person” means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.

 

“Plan” means an employee pension benefit plan which is covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
as to which the Borrower or any ERISA Affiliate may have any liability.

 

“Plan of Reorganization” means a plan filed in the Chapter 11 Cases pursuant to
chapter 11 of the Bankruptcy Code.

 

“Prepayment Price” is defined in Section 2.4.

 

“Pre-Petition Credit Agreement” means that certain Second Amended and Restated
Credit Agreement dated as of June 25, 2015 by and among the Borrower, as
borrower, the Guarantors, as guarantors, Ankura Trust Company, as administrative
agent (as successor to U.S. Bank National Association) and the Lenders, as
amended, restated, replaced and/or modified from time to time.

 

“Pre-Petition Liabilities” means the “Obligations” as defined in the
Pre-Petition Credit Agreement.

 

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

 

“Professional Fee Carve Out” shall mean a carve out from the Collateral securing
the Obligations under the Loan Documents to ensure payment of the following
claims, expenses and costs: (i) all fees required to be paid to the Clerk of the
Bankruptcy Court; (ii) all statutory fees payable to the U.S. Trustee pursuant
to 28 U.S.C. § 1930(a)(6) and 28 U.S.C. § 156(c); (iii) all accrued and unpaid
fees, disbursements, costs and expenses earned or incurred by Case Professionals
to the extent allowed at any time, on or after the Petition Date through and
including the date of service by the Administrative Agent of a Carve Out Trigger
Notice, as limited by the respective Approved Budget amounts for each Case
Professional or category of Case Professionals through the date of service of
said Carve Out Trigger Notice, whether allowed by the Bankruptcy Court prior to
or after delivery of a Carve Out Trigger Notice less the amount of pre-petition
retainers received by such Case Professionals; and (iv) all accrued and unpaid
fees, disbursements, costs and expenses earned or incurred by the Case
Professionals after the date of service of a Carve Out Trigger Notice and not
otherwise covered by clause (iii) above, to the extent allowed at any time, in
an aggregate amount not to exceed $500,000, less the amount of pre-petition
retainers received by such Case Professionals and not applied to the fees,
disbursements, costs and expenses set forth in clause (iii) above. The
Professional Fee Carve Out shall be reduced on a dollar for dollar basis by any
payments of fees or expenses by the Case Professionals.

 

 13 

 

 

“Property” of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.

 

“Pro Rata Share” means, with respect to a Lender, a portion equal to a fraction
the numerator of which is such Lender’s Commitment and the denominator of which
is the Aggregate Commitments, provided, however, if all of the Commitments are
terminated pursuant to the terms of this Agreement, then “Pro Rata Share” means
the percentage obtained by dividing (i) the principal amount of such Lender’s
Loans outstanding at such time by (ii) the principal amount of all Lenders’
Loans outstanding at such time.

 

“Purchasers” is defined in Section 12.3(a).

 

“Rate Management Obligations” means any and all obligations of the Borrower or
any Subsidiary, 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 Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.

 

“Rate Management Transaction” means any transaction (including an agreement with
respect thereto) now existing or hereafter entered into by the Borrower or any
Subsidiary which is a rate swap, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
these transactions) or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices or other
financial measures.

 

“Register” is defined in Section 12.3(d).

 

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.

 

“Reports” is defined in Section 9.6(a).

 

“Required Lenders” means (i) if only one or two Lenders are party to this
Agreement, Lenders holding 100% of the Aggregate Commitments or (ii) if three or
more Lenders are party to this Agreement, Lenders in the aggregate having
greater than 50% of the Aggregate Commitment or, if the Aggregate Commitment has
been terminated, Lenders in the aggregate holding greater than 50% of the
Aggregate Outstanding Credit Exposure.

 

 14 

 

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other Property) with respect to any equity interest 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 any Subsidiary thereof or any
option, warrant or other right to acquire any such equity interest in the
Borrower or any Subsidiary thereof.

 

“Risk-Based Capital Guidelines” means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.

 

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

 

“Sale and Leaseback Transaction” means any sale or other transfer of Property by
any Person with the intent to lease such Property as lessee.

 

“Sale Motion” means that certain motion or series of motions filed by the
Borrower in the Chapter 11 Cases and acceptable to the Borrower, the
Administrative Agent and the Required Lenders in their respective discretion
requesting approval for a Section 363 sale process to sell the Borrower’s
business and assets, which shall include a motion seeking authority to establish
bidding procedures.

 

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

 

“Sanctioned Person” means, at any time, (a) any Person or group listed in any
Sanctions-related list of designated Persons maintained by OF AC or the U.S.
Department of State, the United Nations Security Council, the European Union or
any EU member state, (b) any Person or group operating, organized or resident in
a Sanctioned Country, (c) any agency, political subdivision or instrumentality
of the government of a Sanctioned Country, or (d) any Person 50% or more owned,
directly or indirectly, by any of the above.

 

“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 OF AC 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.

 

“Schedule” refers to a specific schedule to this Agreement, unless another
document is specifically referenced.

 

 15 

 

 

“Section” means a numbered section of this Agreement, unless another document is
specifically referenced.

 

“Security Agreement” means that certain Security Agreement dated as of the
Closing Date by and among the Loan Parties (other than the Mexico Subsidiary)
and the Administrative Agent, as amended, restated, supplemented or otherwise
modified, renewed or replaced from time to time pursuant to the terms hereof and
thereof.

 

“South Carolina Mortgage” means that certain Mortgage, Security Agreement,
Financing Statement and Assignment of Rents and Leases, dated as of the Closing
Date, executed by Orchids South Carolina in favor of Administrative Agent for
the benefit of the Lenders, as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

 

“Stated Rate” is defined in Section 2.17.

 

“Subsidiary” of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
Of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a “Subsidiary”
shall mean a Subsidiary of the Borrower,

 

“Substantial Portion” means, with respect to the Property of the Borrower and
its Subsidiaries, Property which represents more than 5% of the consolidated
assets of the Borrower and its Subsidiaries taken as a whole or Property which
is responsible for more than 10% of the Consolidated Net Income of the Borrower
and its Subsidiaries taken as a whole, in each case, as would be shown in the
consolidated financial statements of the Borrower and its Subsidiaries as at the
beginning of the twelve-month period ending with the month in which such
determination is made (or if financial statements have not been delivered
hereunder for that month which begins the twelve-month period, then the
financial statements delivered hereunder for the quarter ending immediately
prior to that month).

 

“Swap” means any agreement, contract or transaction that constitutes a “swap”
within the meaning of section 1a(47) of the Commodity Exchange Act.

 

“Swap Counterparty” means, with respect to any swap with the Administrative
Agent or any other Lender or any Affiliate of any of the foregoing, any Person
or entity that is or becomes a party to such swap.

 

“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or
perform under any swap between the Administrative Agent or any other Lender or
any Affiliate of any of the foregoing and one or more Swap Counterparties.

 

 16 

 

 

“Taxes” means any and all present or future taxes, duties, levies, imposts,
deductions, fees, assessments, charges or withholdings, and any and all
liabilities with respect to the foregoing, including interest, additions to tax
and penalties applicable thereto.

 

“Transferee” is defined in Section 12.3(e).

 

“Variance Report” means a report prepared by the Borrower’s management
reflecting on a line-item basis (a) the Loan Parties’ actual performance
compared to (i) the Approved Budget applicable to the immediately preceding week
and (ii) the then extant Approved Budget and all prior approved Budgets
applicable to the cumulative period on and after the Petition Date through the
end of the immediately preceding week, and (b) the percentage variance of the
Loan Parties’ actual results from those reflected in the then extant Approved
Budget, along with management’s explanation, in reasonable detail, of any
material variance.

 

“Wholly-Owned Subsidiary” of a Person means (i) any Subsidiary of which 100% of
the beneficial ownership interests shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, limited liability company, association,
joint venture or similar business organization of which 100% of the beneficial
ownership interests shall at the time be so owned or controlled.

 

“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.

 

The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.

 

ARTICLE II

 

THE CREDITS

 

2.1.         Commitment. From and including the date of this Agreement and prior
to the Facility Termination Date, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make Loans to the Borrower, provided
that, after giving effect to the making of each such Loan, (i) the aggregate
principal amount of such Lender’s outstanding Loans shall not exceed its
Commitment, and (ii) the aggregate principal amount of all Lenders’ outstanding
Loans shall not exceed the lesser of (A) the Aggregate Commitments and (B) the
total outstanding DIP borrowings line item in the Approved Budget as of the week
ended corresponding to the Borrowing Date. All Loans shall be made in Dollars.
Subject to the terms of this Agreement, the Borrower may borrow, repay and
reborrow the Loans at any time prior to the Facility Termination Date. Unless
previously terminated, the Commitments shall terminate on the Facility
Termination Date.

 

 17 

 

 

2.2.         Required Payments. (a) If at any time the amount of the aggregate
principal amount of outstanding Loans exceeds the Aggregate Commitment, the
Borrower shall, within one (1) Business Day after discovery thereof, make a
payment on the applicable Loans to the extent necessary to reduce such principal
amount to the amount of the Aggregate Commitment. The Aggregate Outstanding
Credit Exposure and all other unpaid Obligations under this Agreement and the
other Loan Documents shall be paid in full by the Borrower on the Facility
Termination Date.

 

(b)          All cash proceeds (net of reasonable and customary fees and
commissions) received by any Loan Party in connection with (i) any payments
received by any Loan Party in connection with any insurance or condemnation
policy that are not otherwise reinvested or held for reinvestment within a six
(6) month period, (ii) any issuance or sale of any equity interests, shares,
interest, participations or other equivalents (however designated) of capital
stock of any corporation, any and all equivalent ownership (and profit)
interests in a Person (other than a corporation), securities convertible into or
exchangeable for shares of capital stock of (or other ownership of profit
interests in) such Person, and any and all warrants, rights or options to
purchase any of the foregoing, whether voting or nonvoting, (iii) any incurrence
of Indebtedness, and (iv) any disposition of assets by any Loan Party, other
than Dispositions permitted under Section 6.13(a) and (b) and dispositions under
Section 6.13(c) if disposition proceeds do not exceed $250,000, shall, in each
case, be used no later than two (2) Business Days after receipt thereof to
prepay Loans in an aggregate amount equal to such proceeds.

 

2.3.         Ratable Loans. Each Advance hereunder shall consist of Loans made
from the several Lenders ratably according to their Pro Rata Shares.

 

2.4.         Fees. The Borrower agrees to pay to the Administrative Agent for
the account of each Lender according to its Pro Rata Share (a) a commitment fee
(the “Commitment Fee”) at a per annum rate equal to 5.0% on the average daily
Available Commitment from the date hereof to and including the Facility
Termination Date, payable in arrears on each Payment Date hereafter and on the
Facility Termination Date, (b) a closing fee equal to 2.5% of the aggregate
principal amount of the Commitments as of the Closing Date, payable on the
Closing Date and (c) a fee equal to 2.5% of the aggregate principal amount of
the Commitments as of the Closing Date, payable on the Facility Termination
Date; provided, however, that the fee set forth in this Section 2.4(c) shall not
be payable if (i) the Loans are indefeasibly repaid in full in cash from
proceeds of an asset sale pursuant to the Sale Motion on the Facility
Termination Date and/or (ii) the Administrative Agent, the Lenders, and/or their
Affiliates are the ultimate purchaser in the asset sale pursuant to the Sale
Motion on the Facility Termination Date or otherwise.

 

2.5.         Minimum Amount of Each Advance. Each Advance shall be in the
minimum amount of $100,000 and incremental amounts in integral multiples of
$25,000, provided, however, that any Advance may be in the amount of the
Available Commitment.

 

2.6.         Reduction in Aggregate Commitment. The Borrower may permanently
reduce the Aggregate Commitments of the Lenders in whole, or in part ratably
among the Lenders in integral multiples of $1,000,000.00, upon at least five (5)
Business Days’ prior written notice to the Administrative Agent by Borrower in
the form of Exhibit C-2 (a “Payment Notice”), which notice shall specify the
amount of any such reduction, provided, however, that the amount of the
Aggregate Commitments of the Lenders may not be reduced below the aggregate
principal amount of outstanding Loans. All accrued Commitment Fees shall be
payable on the effective date of any termination of the obligations of the
Lenders to make Credit Extensions hereunder.

 

 18 

 

  

2.7.         New Advances. The Borrower shall give the Administrative Agent
notice in the form of Exhibit C-l (a “Borrowing Notice”), specifying the
Borrowing Date, which shall be a Business Day, of such Advance and the aggregate
amount of such Advance. Borrower will deliver each Borrowing Notice to the
Administrative Agent not later than 10:00 a.m. (Chicago time) three (3) Business
Days before the Borrowing Date of each Advance. Not later than 2:00 p.m.
(Chicago time) on each Borrowing Date, each Lender shall make available its Loan
or Loans in funds immediately available to the Administrative Agent at its
address specified pursuant to Article XIII to be immediately provided to the
Borrower on the Borrowing Date. The Administrative Agent will make the funds so
received from the Lenders available to the Borrower at the Administrative
Agent’s aforesaid address.

 

2.8.         Interest Rates. Each Advance shall bear interest on the outstanding
principal amount thereof, for each day from and including the date such Advance
is made at a rate per annum equal to the Applicable Rate for such day.

 

2.9.         Rates Applicable After Event of Default. Notwithstanding anything
to the contrary contained in Section 2.8, during the continuance of a Default or
Event of Default the Required Lenders may, at their option, by notice from the
Administrative Agent to the Borrower (which notice may be revoked at the option
of the Required Lenders notwithstanding any provision of Section 8.3 requiring
unanimous consent of the Lenders to changes in interest rates), each Advance
shall bear interest at a rate per annum equal to the Applicable Rate in effect
from time to time plus 2.0% per annum, provided that, during the continuance of
an Event of Default under Section 7.2, the interest rates set forth above shall
be applicable to all Credit Extensions without any election or action on the
part of the Administrative Agent or any Lender. After an Event of Default has
been waived, the interest rate applicable to Advances shall revert to the rates
applicable prior to the occurrence of an Event of Default.

 

2.10.       Method of Payment; Repayment of Loans.

 

(a)          Each Advance shall be repaid and each payment of interest thereon
shall be paid in the currency in Dollars. All payments of the Obligations under
this Agreement and the other Loan Documents shall be made, without setoff,
deduction, or counterclaim, in immediately available funds to the Administrative
Agent at the Administrative Agent’s address specified pursuant to Article XIII,
or at any other Lending Installation of the Administrative Agent specified in
writing by the Administrative Agent to the Borrower, by 12:00 noon (Chicago
time) on the date when due and shall (except as otherwise specifically required
hereunder) be applied ratably by the Administrative Agent among the Lenders.
Each payment delivered to the Administrative Agent for the account of any Lender
shall be delivered promptly by the Administrative Agent to such Lender in the
same type of funds that the Administrative Agent received at its address
specified pursuant to Article XIII or at any Lending Installation specified in a
notice received by the Administrative Agent from such Lender.

 

(b)          The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Loan on the Facility Termination Date.

 

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2.11.       Noteless Agreement; Evidence of Indebtedness. (a) 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 from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.

 

(b)          The Administrative Agent shall also maintain accounts in which it
will record (i) the amount of each Loan made hereunder, (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 from the Borrower and each Lender’s share
thereof.

 

(c)          The entries maintained in the accounts maintained pursuant to
paragraphs (a) and (b) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Administrative Agent or any Lender to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Obligations in accordance with their terms.

 

(d)          Any Lender may request that its Loans be evidenced by a promissory
note (each, a “Note” and collectively, “Notes”). In such event, the Borrower
shall prepare, execute and deliver to such Lender such Note or Notes payable to
the order of such Lender in a form supplied by the Administrative Agent.
Thereafter, the Loans evidenced by such Note or Notes and interest thereon shall
at all times (prior to any assignment pursuant to Section 12.3) be represented
by one or more Notes payable to the order of the payee named therein, except to
the extent that any such Lender subsequently returns any such Note for
cancellation and requests that such Loans once again be evidenced as described
in clauses (b) (i) and (ii) above.

 

2.12.       Interest Payment Dates: Interest and Fee Basis. Interest accrued on
each Advance shall be payable on each Payment Date, commencing with the first
such Payment Date to occur after the date hereof and on the Facility Termination
Date. Interest accrued pursuant to Section 2.9 shall be payable on demand.
Interest on all Advances and fees shall be calculated for actual days elapsed on
the basis of a 360-day year. Interest shall be payable for the day an Advance is
made but not for the day of any payment on the amount paid if payment is
received prior to 12:00 noon (Chicago time) at the place of payment.

 

2.13.       Notification of Advances and Commitment Reductions. Promptly after
receipt thereof, the Administrative Agent will notify each Lender of the
contents of each Commitment reduction notice, Borrowing Notice, and repayment
notice received by it hereunder.

 

2.14.       Lending Installations. Each Lender may book its Advances at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Loans and any Notes issued hereunder shall be
deemed held by each Lender for the benefit of any such Lending Installation.
Each Lender may, by written notice to the Administrative Agent and the Borrower
in accordance with Article XIII, designate replacement or additional Lending
Installations through which Loans will be made by it and for whose account Loan
payments are to be made.

 

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2.15.       Non-Receipt of Funds by the Administrative Agent. Unless the
Borrower or a Lender, as the case may be, notifies the Administrative Agent
prior to the date on which it is scheduled to make payment to the Administrative
Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case
of the Borrower, a payment of principal, interest or fees to the Administrative
Agent for the account of the Lenders, that it does not intend to make such
payment, the Administrative Agent may assume that such payment has been made.
The Administrative Agent may, but shall not be obligated to, make the amount of
such payment available to the intended recipient in reliance upon such
assumption. If such Lender or the Borrower, as the case may be, has not in fact
made such payment to the Administrative Agent, the recipient of such payment
shall, on demand by the Administrative Agent, repay to the Administrative Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Administrative Agent until the date the Administrative Agent recovers
such amount at a rate per annum equal to (x) in the case of payment by a Lender,
the Federal Funds Effective Rate for such day for the first three (3) days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.

 

2.16.       Replacement of Lender. If the Borrower is required pursuant to
Sections 3.1 or 3.2 to make any additional payment to any Lender or if any
Lender defaults in its obligation to make a Loan or declines to approve an
amendment or waiver that is approved by the Required Lenders (any Lender so
affected an “Affected Lender”), the Borrower may elect, if such amounts continue
to be charged or such suspension is still effective, to replace such Affected
Lender as a Lender party to this Agreement, provided that no Default or Event of
Default shall have occurred and be continuing at the time of such replacement,
and provided further 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 Advances and other Obligations due to the Affected Lender under this
Agreement and the other Loan Documents pursuant to an assignment substantially
in the form of Exhibit B and to become a Lender for all purposes under this
Agreement and to assume all obligations of the Affected Lender to be terminated
as of such date and to comply with the requirements of Section 12.3 applicable
to assignments, and (ii) the Borrower shall pay to such Affected Lender in same
day funds on the day of such replacement all interest, fees and other amounts
then accrued but unpaid to such Affected Lender by the Borrower hereunder to and
including the date of termination, including without limitation payments due to
such Affected Lender under Sections 3.1 and 3.2.

 

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2.17.       Limitation of Interest. The Borrower, the Administrative Agent and
the Lenders intend to strictly comply with all applicable laws, including
applicable usury laws. Accordingly, the provisions of this Section 2.17 shall
govern and control over every other provision of this Agreement or any other
Loan Document which conflicts or is inconsistent with this Section 2.17, even if
such provision declares that it controls. As used in this Section 2.17, the term
“interest” includes the aggregate of all charges, fees, benefits or other
compensation which constitute interest under applicable law, provided that, to
the maximum extent permitted by applicable law, (a) any non-principal payment
shall be characterized as an expense or as compensation for something other than
the use, forbearance or detention of money and not as interest, and (b) all
interest at any time contracted for, reserved, charged or received shall be
amortized, prorated, allocated and spread, in equal parts during the full term
of this Agreement. In no event shall the Borrower or any other Person be
obligated to pay, or any Lender have any right or privilege to reserve, receive
or retain, (a) any interest in excess of the maximum amount of nonusurious
interest permitted under the applicable laws (if any) of the United States or of
any applicable state, or (b) total interest in excess of the amount which such
Lender could lawfully have contracted for, reserved, received, retained or
charged had the interest been calculated for the full term of this Agreement at
the Highest Lawful Rate. On each day, if any, that the interest rate (the
“Stated Rate”) called for under this Agreement or any other Loan Document
exceeds the Highest Lawful Rate, the rate at which interest shall accrue shall
automatically be fixed by operation of this sentence at the Highest Lawful Rate
for that day, and shall remain fixed at the Highest Lawful Rate for each day
thereafter until the total amount of interest accrued equals the total amount of
interest which would have accrued if there were no such ceiling rate as is
imposed by this sentence. Thereafter, interest shall accrue at the Stated Rate
unless and until the Stated Rate again exceeds the Highest Lawful Rate when the
provisions of the immediately preceding sentence shall again automatically
operate to limit the interest accrual rate. The daily interest rates to be used
in calculating interest at the Highest Lawful Rate shall be determined by
dividing the applicable Highest Lawful Rate per annum by the number of days in
the calendar year for which such calculation is being made. None of the terms
and provisions contained in this Agreement or in any other Loan Document which
directly or indirectly relate to interest shall ever be construed without
reference to this Section 2.17, or be construed to create a contract to pay for
the use, forbearance or detention of money at an interest rate in excess of the
Highest Lawful Rate. If the term of any Loan or any other Obligation outstanding
hereunder or under the other Loan Documents is shortened by reason of
acceleration of maturity as a result of any Event of Default or by any other
cause, and if for that (or any other) reason any Lender at any time, including
but not limited to, the stated maturity, is owed or receives (and/or has
received) interest in excess of interest calculated at the Highest Lawful Rate,
then and in any such event all of any such excess interest shall be canceled
automatically as of the date of such acceleration or other event which produces
the excess, and, if such excess interest has been paid to such Lender, it shall
be credited pro tanto against the then- outstanding principal balance of the
Borrower’s Obligations to such Lender, effective as of the date or dates when
the event occurs which causes it to be excess interest, until such excess is
exhausted or all of such principal has been fully paid and satisfied, whichever
occurs first, and any remaining balance of such excess shall be promptly
refunded to its payor.

 

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ARTICLE III

 

TAXES

 

3.1.         Changes in Capital Adequacy Regulations. If a Lender determines the
amount of capital or liquidity required or expected to be maintained by such
Lender, any Lending Installation of such Lender, or any corporation controlling
such Lender is increased as a result of a Change, then, within 15 days of demand
by such Lender, the Borrower shall pay such Lender the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender determines is attributable to this
Agreement, its Outstanding Credit Exposure or its Commitment to make Loans
hereunder (after taking into account such Lender’s policies as to capital
adequacy and liquidity). Notwithstanding the foregoing, for purposes of this
Agreement, all requests, rules, guidelines or directives in connection with the
Dodd-Frank Wall Street Reform and Consumer Protection Act shall be deemed to be
a Change regardless of the date enacted, adopted or issued and all requests,
rules, guidelines or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Regulations and Supervisory
Practices (or any successor or similar authority) or the United States financial
regulatory authorities shall be deemed to be a Change regardless of the date
adopted, issued, promulgated or implemented. Notwithstanding the foregoing, the
Borrower shall not be required to compensate any Lender pursuant to this Section
3.1 for any shortfall suffered more than 90 days prior to the date that such
Lender notifies the Borrower of the Change giving rise to such shortfall and of
such Lender’s intention to claim compensation therefor; provided further, that
if the Change giving rise to such shortfall is retroactive, then the 90-day
period referred to above shall be extended to include the period of retroactive
effect thereof.

 

3.2.         Taxes.

 

(a)          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 requires
the deduction or withholding of any Tax from any such payment, then the
applicable Loan Party 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 or Other 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 3.2) the applicable Lender or the Administrative
Agent receives an amount equal to the sum it would have received had no such
deduction or withholding been made.

 

(b)          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 the payment of, any Other Taxes.

 

(c)          The Loan Parties shall indemnify the Lenders or the Administrative
Agent, within fifteen (15) days after demand therefor, for the full amount of
any Indemnified Taxes and Other Taxes (including Indemnified Taxes and Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section 3.2) payable or paid by such Lender or the Administrative Agent or
required to be withheld or deducted from a payment to such Lender or the
Administrative Agent and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes and Other 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 the
Borrower by a Lender, or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

 

 23 

 

 

(d)          Each Lender shall severally indemnify the Administrative Agent,
within fifteen (15) days after demand therefor, for (i) any Indemnified Taxes
and Other 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 Other 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 12.2(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 the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (d).

 

(e)          As soon as practicable after any payment of Taxes by any Loan Party
to a Governmental Authority pursuant to this Section 3.2, such Loan Party shall
deliver to the Administrative Agent 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 and Required Lenders.

 

(f)           (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 3.2(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.

 

(ii)          Without limiting the generality of the foregoing,

 

(A)         any Lender that is a United States Person for U.S. federal income
Tax purposes 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 originals of IRS Form W-9 certifying that
such Lender is exempt from U.S. federal backup withholding Tax;

 

 24 

 

 

(B)         any Non-U.S. 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 Non-U.S. 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 Non-U.S. 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 originals 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)         executed originals of IRS Form W-8ECI;

 

(3)         in the case of a Non-U.S. Lender claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code, (x) a
certificate to the effect that such Non-U.S. 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
and (y) executed originals of IRS Form W-8BEN; or

 

(4)         to the extent a Non-U.S. Lender is not the beneficial owner,
executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form
W- 8BEN, IRS Form W-8IMY or IRS Form W-9, and/or other certification documents
from each beneficial owner, as applicable.

 

(C)         any Non-U.S. 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 Non-U.S. 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 originals 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

 

 25 

 

 

(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.

 

(E)         For purposes of determining withholding Taxes imposed under FATCA,
from and after the date hereof, the Borrower and the Administrative Agent shall
treat (and the Lenders hereby authorize the Administrative Agent to treat) this
Agreement as not qualifying as a “grandfathered obligation” within the meaning
of Treasury Regulation Section 1.1471- 2(b)(2)(i).

 

(iii)         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.

 

(g)          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 3.2 (including by the payment of additional
amounts pursuant to this Section 3.2), 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 3.2 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 indemnification payments or
additional amounts giving rise to such refund had never been paid. This
paragraph 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.

 

(h)          Each party’s obligations under this Section 3.2 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.

 

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ARTICLE IV

 

CONDITIONS PRECEDENT

 

4.1.         Initial Credit Extension. The Lenders shall not be required to make
the initial Credit Extension hereunder unless each of the following conditions
is satisfied:

 

(a)          The Administrative Agent shall have received executed counterparts
of each of this Agreement, the Security Agreement, the Mexico Collateral
Documents, the Guaranty and the Mortgages.

 

(b)          The Administrative Agent shall have received a certificate, signed
by the chief financial officer of the Borrower, stating that on the date of the
initial Credit Extension (1) no Default or Event of Default has occurred and is
continuing and (2) the representations and warranties contained in Article V are
(x) with respect to any representations or warranties that contain a materiality
qualifier, true and correct in all respects as of such date, except to the
extent any such representation or warranty is stated to relate solely to an
earlier date, in which case such representation or warranty shall have been true
and correct in all respects on and as of such earlier date and (y) with respect
to any representations or warranties that do not contain a materiality
qualifier, true and correct in all material respects as of such date, except to
the extent any such representation or warranty is stated to relate solely to an
earlier date, in which case such representation or warranty shall have been true
and correct in all material respects on and as of such earlier date.

 

(c)          [Intentionally omitted.]

 

(d)          The Administrative Agent shall have received any Notes requested by
a Lender pursuant to Section 2.11 payable to the order of each such requesting
Lender.

 

(e)          The Administrative Agent shall have received such documents and
certificates relating to the organization, existence and good standing of the
Borrower and each initial Guarantor, the authorization of the transactions
contemplated hereby and any other legal matters relating to the Borrower and
such Guarantors, the Loan Documents or the transactions contemplated hereby, all
in form and substance satisfactory to the Administrative Agent, the Required
Lenders and their respective counsel.

 

(f)           The Administrative Agent shall have received, to the extent
invoiced, reimbursement or payment of all reasonable out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder.

 

(g)          Other than events leading up to and resulting from the commencement
of the Chapter 11 Cases, there shall not have occurred a material adverse change
(x) in the business, Property, liabilities (actual and contingent), operations
or condition (financial or otherwise), or results of operations of the Borrower
and its Subsidiaries taken as a whole, since December 31, 2018 or (y) in the
material facts and information regarding such entities as represented to date by
such entities to the Administrative Agent or Lenders.

 

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(h)          The Administrative Agent shall have received evidence of all
governmental, equity holder and third party consents and approvals necessary in
connection with the contemplated financing and all applicable waiting periods
shall have expired without any action being taken by any authority that would be
reasonably likely to restrain, prevent or impose any material adverse conditions
on the Borrower and its Subsidiaries, taken as a whole, and no law or regulation
shall be applicable which in the reasonable judgment of the Administrative Agent
or Required Lenders could have such effect.

 

(i)           Except as set forth in Schedule 4.1(i), no action, suit,
investigation or proceeding is pending or, to the knowledge of any officer of
the Borrower, threatened in any court or before any arbitrator or Governmental
Authority that would reasonably be expected to result in a Material Adverse
Effect or which seeks to prevent, enjoin or delay the making of any Credit
Extensions.

 

(j)           [Intentionally omitted.]

 

(k)          The Administrative Agent shall have received evidence of current
insurance coverage in form, scope and substance reasonably satisfactory to the
Administrative Agent and Required Lenders and otherwise in compliance with the
terms of Sections 5.18 and 6.6.

 

(l)           The Administrative Agent shall have received the results of a
recent lien search in each of the jurisdictions where the initial Loan Parties
are organized, and such search shall reveal no Liens on any of the assets of the
initial Loan Parties except for (i) the M3 Purported Liens, (ii) Liens permitted
by Section 6.16, or (iii) Liens to be discharged on or prior to the Effective
Date pursuant to a payoff letter or other documentation satisfactory to the
Administrative Agent and Required Lenders.

 

(m)         Each document (including any Uniform Commercial Code financing
statement) required by the Collateral Documents or under law or reasonably
requested by the Administrative Agent to be filed, registered or recorded in
order to create in favor of the Administrative Agent, for the benefit of the
Lenders, a perfected Lien on the Collateral described herein, prior and superior
in right to any other Person (other than with respect to Liens expressly
permitted by Section 6.16), shall be in proper form for filing, registration or
recordation.

 

(n)          The Administrative Agent and the Lenders shall have received and
reviewed all material so-called “first day” motions, declarations, and other
pleadings to be filed in the Chapter 11 Cases, including the Sale Motion, each
of which shall be in form and substance reasonably satisfactory to the Borrower,
the Administrative Agent and the Required Lenders;

 

(o)          The Administrative Agent and the Lenders shall have received and
reviewed the Approved Budget, which shall be in form and substance satisfactory
to the Administrative Agent and the Required Lenders, which shall be attached to
the DIP Orders.

 

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(p)          All motions and other documents to be filed with and submitted to
the Bankruptcy Court in connection with the DIP Orders shall be, prior to such
filing and submittal, (x) received by the Administrative Agent and the Required
Lenders reasonably in advance of filing and (y) in form and substance
satisfactory to the Borrower, the Administrative Agent and the Required Lenders.
The Interim Borrowing Order shall have been entered, shall be in full force and
effect, and neither shall have been reversed, vacated or stayed, or modified
without the prior written consent of the Borrower, the Administrative Agent and
the Required Lenders, and all other necessary consents and approvals to the
transactions contemplated hereby shall have been obtained and shall be
satisfactory to the Administrative Agent and Required Lenders.

 

(q)          The Bankruptcy Court shall have entered the DIP Orders granting the
Administrative Agent and the Lenders under the Pre-Petition Credit Agreement
adequate protection of their interests, which orders shall be in form and
substance acceptable to the Borrower, the Administrative Agent and the Required
Lenders.

 

4.2.         Each Credit Extension. The Lenders shall not be required to make
any Credit Extension unless on the applicable Borrowing Date:

 

(a)          There exists no Default or Event of Default, nor would a Default or
Event of Default result from such Credit Extension.

 

(b)          The representations and warranties contained in Article V are (x)
with respect to any representations or warranties that contain a materiality
qualifier, true and correct in all respects as of such Borrowing Date, except to
the extent any such representation or warranty is stated to relate solely to an
earlier date, in which case such representation or warranty shall have been true
and correct in all respects on and as of such earlier date and (y) with respect
to any representations or warranties that do not contain a materiality
qualifier, true and correct in all material respects as of such Borrowing Date,
except to the extent any such representation or warranty is stated to relate
solely to an earlier date, in which case such representation or warranty shall
have been true and correct in all material respects on and as of such earlier
date.

 

Each Borrowing Notice shall constitute a representation and warranty by the
Borrower that the conditions contained in Sections 4.2(a) and (b) have been
satisfied.

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Lenders that:

 

5.1.         Existence and Standing. Each of the Borrower and its Subsidiaries
is a corporation, partnership (in the case of Subsidiaries only) or limited
liability company duly and properly incorporated or formed, as the case may be,
validly existing and (to the extent such concept applies to such entity) in good
standing under the laws of its jurisdiction of incorporation or organization and
has all requisite authority to conduct its business in each jurisdiction in
which its business is conducted.

 

5.2.         Authorization and Validity. The Borrower has the power and
authority and legal right to execute and deliver the Loan Documents to which it
is a party and to perform its obligations thereunder. The execution and delivery
by the Borrower of the Loan Documents to which it is a party and the performance
of its obligations thereunder have been duly authorized by proper corporate
proceedings, and the Loan Documents to which the Borrower is a party constitute
legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors’ rights generally.

 

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5.3.         No Conflict; Government Consent. Neither the execution and delivery
by the Borrower of the Loan Documents to which it is a party, nor the
consummation of the transactions therein contemplated, nor compliance with the
provisions thereof will violate (i) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Borrower or any of its
Subsidiaries or (ii) the Borrower’s or any Subsidiary’s articles or certificate
of incorporation, partnership agreement, certificate of partnership, articles or
certificate of organization, by-laws, or operating or other management
agreement, as the case may be, or (iii) the provisions of any indenture,
instrument or agreement to which the Borrower or any of its Subsidiaries is a
party or is subject, or by which it, or its Property, is bound, or conflict with
or constitute a default thereunder, or result in, or require, the creation or
imposition of any Lien in, of or on the Property of the Borrower or a Subsidiary
pursuant to the terms of any such indenture, instrument or agreement. No order,
consent, adjudication, approval, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, or other action in
respect of any governmental or public body or authority, or any subdivision
thereof, which has not been obtained by the Borrower or any of its Subsidiaries,
is required to be obtained by the Borrower or any of its Subsidiaries in
connection with the execution and delivery of the Loan Documents, the borrowings
under this Agreement, the payment and performance by the Borrower of the
Obligations or the legality, validity, binding effect or enforceability of any
of the Loan Documents.

 

5.4.         Financial Statements. The December 31, 2018 audited consolidated
financial statements of the Borrower and its Subsidiaries heretofore delivered
to the Lenders were prepared in accordance with GAAP in effect on the date such
statements were prepared and fairly present in all material respects the
consolidated financial condition and operations of the Borrower and its
Subsidiaries at such date and the consolidated results of their operations for
the period then ended.

 

5.5.         Material Adverse Change. Since the date of the most recent audited
financial statements delivered to the Administrative Agent, there has been no
change in the business, Property, condition (financial or otherwise) or results
of operations of the Borrower and its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect.

 

5.6.         Taxes. The Borrower and its Subsidiaries have filed all United
States federal and state income Tax returns and all other material Tax returns
which are required to be filed by them and have paid all United States federal
and state income Taxes and all other material Taxes due from the Borrower and
its Subsidiaries, including, without limitation, pursuant to any assessment
received by the Borrower or any of its Subsidiaries, except such Taxes, if any,
as are being contested in good faith and as to which adequate reserves have been
provided in accordance with GAAP and as to which no Lien exists. No Tax Liens
have been filed and no claims are being asserted with respect to any such Taxes.
The charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of any Taxes or other governmental charges are adequate.

 

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5.7.         Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Credit Extensions. Other than any liability incident to any litigation,
arbitration or proceeding which could not reasonably be expected to have a
Material Adverse Effect, the Borrower has no material Contingent Obligations not
provided for or disclosed in the financial statements referred to in Section
5.4.

 

5.8.         Subsidiaries. Schedule 5.8 contains an accurate list of all
Subsidiaries of the Borrower as of the date of this Agreement, setting forth
their respective jurisdictions of organization and the percentage of their
respective capital stock or other ownership interests owned by the Borrower or
other Subsidiaries. All of the issued and outstanding shares of capital stock or
other ownership interests of such Subsidiaries 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.

 

5.9.         ERISA. With respect to each Plan, the Borrower and all ERISA
Affiliates have paid all required minimum contributions and installments on or
before the due dates provided under Section 43 0(j) of the Code and could not
reasonably be subject to a lien under Section 430(k) of the Code or Title IV of
ERISA. Neither the Borrower nor any ERISA Affiliate has filed, pursuant to
Section 412(c) of the Code or Section 302(c) of ERISA, an application for a
waiver of the minimum funding standard. 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.

 

5.10.       Accuracy of Information. No information, exhibit or report furnished
by the Borrower or any of its Subsidiaries to the Administrative Agent or to any
Lender in connection with the negotiation of, or compliance with, the Loan
Documents contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements contained therein not
misleading.

 

5.11.       Regulation U. Margin stock (as defined in Regulation U) constitutes
less than 25% of the value of those assets of the Borrower and its Subsidiaries
which are subject to any limitation on sale, pledge, or other restriction
hereunder.

 

5.12.       Material Agreements. Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate or limited liability company restriction which could reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor any
Subsidiary is in default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in (i) any agreement to which
it is a party, which default could reasonably be expected to have a Material
Adverse Effect or (ii) any agreement or instrument evidencing or governing
Indebtedness.

 

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5.13.       Compliance With Laws. The Borrower and its Subsidiaries are in
compliance in all material respects with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign government or
any instrumentality or agency thereof having jurisdiction over the conduct of
their respective businesses or the ownership of their respective Property.

 

5.14.       Ownership of Properties. Except as set forth in Schedule 5.14, on
the date of this Agreement, the Borrower and its Subsidiaries will have good
title, free of all Liens other than those permitted by Section 6.16, to all of
the Property and assets reflected in the Borrower’s most recent consolidated
financial statements provided to the Administrative Agent as owned by the
Borrower and its Subsidiaries (other than as may have been disposed of in a
manner permitted by Section 6.13(a)).

 

5.15.       Plan Assets; Prohibited Transactions. The Borrower is not an entity
deemed to hold “plan assets” within the meaning of 29 C.F.R. § 2510.3-101 of an
employee benefit plan (as defined in Section 3(3) of ERISA) which is subject to
Title I of ERISA or any plan (within the meaning of Section 4975 of the Code),
and neither the execution of this Agreement nor the making of Credit Extensions
hereunder gives rise to a prohibited transaction within the meaning of Section
406 of ERISA or Section 4975 of the Code.

 

5.16.       Environmental Matters. In the ordinary course of its business, the
officers of the Borrower consider the effect of Environmental Laws on the
business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
due to Environmental Laws. On the basis of this consideration, the Borrower has
concluded its Property and operations and those of its Subsidiaries are in
material compliance with applicable Environmental Laws and that none of Borrower
or any of its Subsidiaries is subject to any liability under Environmental Laws
that individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any Subsidiary has received
any notice to the effect that its Property and/or operations are not in material
compliance with any of the requirements of applicable Environmental Laws or are
the subject of any federal or state investigation evaluating whether any
remedial action is needed to respond to a release of any Hazardous Material,
which non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.

 

5.17.       Investment Company Act. Neither the Borrower nor any Subsidiary is
an “investment company” or a company “controlled” by an “investment company”,
within the meaning of the Investment Company Act of 1940, as amended.

 

5.18.       Insurance. The Borrower maintains, and has caused each Subsidiary to
maintain, with financially sound and reputable insurance companies insurance on
all their Property, liability insurance and environmental insurance in such
amounts, subject to such deductibles and self-insurance retentions and covering
such Properties and risks as is consistent with sound business practice.

 

5.19.       No Default. No Default or Event of Default has occurred and is
continuing.

 

5.20.       Anti-Corruption Laws: Sanctions: Anti-Terrorism Laws.

 

 32 

 

 

(a)          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 the Borrower, any Subsidiary or, to the knowledge of the
Borrower or such Subsidiary, any of their respective directors, officers or
employees is a Sanctioned Person. No Loan, use of the proceeds of any Loan or
other transactions contemplated hereby will violate Anti-Corruption Laws or
applicable Sanctions.

 

(b)          Neither the making of the Loans hereunder nor the use of the
proceeds thereof will violate the PATRIOT Act, the Trading with the Enemy Act,
as amended, or any of the foreign assets control regulations of the United
States Treasury Department (31 C.F.R., Subtitle B, Chapter V, as amended) or any
enabling legislation or executive order relating thereto or successor statute
thereto. The Borrower and its Subsidiaries are in compliance in all material
respects with the PATRIOT Act.

 

ARTICLE VI

 

COVENANTS

 

During the term of this Agreement, unless the Required Lenders shall otherwise
consent in writing:

 

6.1.         Financial Reporting. The Borrower will maintain, for itself and
each Subsidiary, a system of accounting established and administered in
accordance with GAAP, and furnish to the Administrative Agent and the Lenders:

 

(a)          Within 120 days after the close of each of its fiscal years, an
audit report certified by independent certified public accountants acceptable to
the Administrative Agent, prepared in accordance with GAAP on a consolidated
basis for itself and its Subsidiaries, including balance sheets as of the end of
such period, related profit and loss and reconciliation of surplus statements,
and a statement of cash flows, setting forth in each case in comparative form
the figures for the previous fiscal year, and subject only to a going concern
qualification.

 

(b)          Within 45 days after each of its fiscal quarters, for itself and
its Subsidiaries, consolidated unaudited balance sheets as at the close of each
such period and consolidated profit and loss and reconciliation of surplus
statements (including sufficient detail for independent calculation of the
financial covenants set forth in Section 6.21) and a statement of cash flows for
the period from the beginning of such fiscal year to the end of such quarter,
setting forth in each case in comparative form the figures from the
corresponding fiscal quarter of the previous fiscal year, all certified by its
chief financial officer.

 

(c)          As soon as available, but in any event within 30 days after the end
of each month, an inventory report and an accounts receivable aging report, each
in form and content acceptable to Administrative Agent.

 

(d)          Together with the financial statements required under Sections
6.1(b) and (j), a compliance certificate in substantially the form of Exhibit A
signed by its chief financial officer showing the calculations necessary to
determine compliance with Section 6.21 of this Agreement and stating that no
Default or Event of Default exists, or if any Default or Event of Default
exists, stating the nature and status thereof and accompanied by a report and
analysis of management of Borrower of the financial results for the period
covered thereby.

 

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(e)          Promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy statements so
furnished.

 

(f)           Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which the
Borrower or any of its Subsidiaries files with the U.S. Securities and Exchange
Commission.

 

(g)          Such other information (including non-financial information and
environmental reports) as the Administrative Agent or any Lender may from time
to time reasonably request.

 

(h)          Any financial statement and other items required to be furnished
pursuant to Section 6.1(a), Section 6.1(b), Section 6.1(e) or Section 6.1(f)
shall be deemed to have been furnished on the date on which the Lenders receive
notice that the Borrower has filed such financial statement with the U.S.
Securities and Exchange Commission and is available on the EDGAR website on the
Internet at www.sec.gov or any successor government website that is freely and
readily available to the Administrative Agent and the Lenders without charge;
provided that the Borrower shall give notice of any such filing to the
Administrative Agent (who shall then give notice of any such filing to the
Lenders). Notwithstanding the foregoing, the Borrower shall deliver paper or
electronic copies of any such financial statement to the Administrative Agent if
the Administrative Agent reasonably requests the Borrower to furnish such paper
or electronic copies until written notice to cease delivering such paper or
electronic copies is given by the Administrative Agent.

 

(i)           On or before each of the 1st and 15th day of each month, Borrower
shall provide to Administrative Agent and Lenders an updated proposed budget and
if Administrative Agent and Lenders in their sole discretion shall approve such
updated proposed budget, it shall replace and supersede the then existing
Approved Budget. The Administrative Agent and Lenders shall notify Borrower
whether such updated proposed budget is acceptable no later than five (5)
Business Days after receipt thereof; provided that if no such notice is
provided, then the Approved Budget most recently in effect shall remain in
effect until the Administrative Agent and the Lenders notify Borrower as to
their acceptance of the proposed budget. On or before the third Business Day of
each week, Borrower shall provide to Administrative Agent (A) a Variance Report
for such week and (B) a certification by the Interim Chief Strategy Officer,
that such person has no reason to believe that such Variance Report is incorrect
or misleading in any material respect. On or before the second Business Day of
each week, Borrower shall provide to Administrative Agent (A) a schedule of
professional fees billed since inception and a schedule of professional fees
paid since inception and (B) a report on the prior weekly sales by customer,
together with a comparison to budgeted sales for such period and a certification
by the Interim Chief Strategy Officer that such person has no reason to believe
that such comparison is incorrect or misleading in any material respect.

 

(j)           Within 30 days after the last day of each calendar month, for
itself and its Subsidiaries, consolidated unaudited balance sheets as at the
close of each such period and consolidated profit and loss and reconciliation of
surplus statements (including sufficient detail for independent calculation of
the financial covenants set forth in Section 6.21), and a statement of cash
flows for the period from the beginning of such fiscal year to the end of such
month, setting forth in each case in comparative form the figures from the
corresponding month of the previous fiscal year, all certified by its chief
financial officer.

 

 34 

 

  

If any information which is required to be furnished to the Lenders under this
Section 6.1 is required by law or regulation to be filed by the Borrower with a
government body on an earlier date, then the information required hereunder
shall be furnished to the Lenders at such earlier date.

 

6.2.         Use of Proceeds. The Borrower will, and will cause each Subsidiary
to, use the proceeds of the Credit Extensions for domestic working capital
purposes. The Borrower will not, nor will it permit any Subsidiary to, use any
of the proceeds of the Advances to purchase or carry any “margin stock” (as
defined in Regulation U). No Borrower will request any Loan, and no Borrower
shall use, and the Borrower shall ensure that its Subsidiaries and its or their
respective directors, officers, employees and agents shall not use, the proceeds
of any Loan (i) in furtherance of an offer, payment, promise to pay, or
authorization of the payment or giving of money, or anything else of value, to
any Person in violation of any Anti-Corruption Laws, (ii) in any manner that
would result in the violation of any applicable Sanctions, or (iii) in any
manner that would cause the Loan to be deemed a “liquidity facility” as such
term is used in 12 C.F.R. Part 50.

 

6.3.         Notice of Material Events. The Borrower will, and will cause each
Subsidiary to, give notice in writing to the Administrative Agent and each
Lender, promptly and in any event within seven (7) days after an officer of the
Borrower obtains knowledge thereof, of the occurrence of any of the following:

 

(a)          any Default or Event of Default;

 

(b)          the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority (including pursuant to any
applicable Environmental Laws) against or affecting the Borrower or any
Affiliate thereof;

 

(c)          with respect to a Plan, (i) any failure to pay all required minimum
contributions and installments on or before the due dates provided under Section
430(j) of the Code or (ii) 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;

 

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

 

(e)          any material change in accounting policies of, or financial
reporting practices by, the Borrower or any Subsidiary;

 

(f)           the material loss of any customer or supplier; and

 

(g)          any other development, financial or otherwise, which would
reasonably be expected to have a Material Adverse Effect.

 

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Each notice delivered under this Section 6.3 shall be accompanied by a statement
of an 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.

 

6.4.         Conduct of Business. Subject to applicable provisions of the
Bankruptcy Code and orders of the Bankruptcy Court, the Borrower will, and will
cause each Subsidiary to, carry on and conduct its business in substantially the
same manner and in substantially the same fields of enterprise as it is
presently conducted and do all things necessary to remain duly incorporated or
organized, validly existing and (to the extent such concept applies to such
entity) in good standing as a domestic corporation, partnership or limited
liability company in its jurisdiction of incorporation or organization, as the
case may be, and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted.

 

6.5.         Taxes. Subject to applicable provisions of the Bankruptcy Code and
orders of the Bankruptcy Court, the Borrower will, and will cause each
Subsidiary to, timely file complete and correct United States federal and
applicable foreign, state and local tax returns required by law and pay when due
all taxes, assessments and governmental charges and levies upon it or its
income, profits or Property, except those which are being contested in good
faith by appropriate proceedings, with respect to which adequate reserves have
been set aside in accordance with GAAP and which could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.

 

6.6.         Insurance. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all their Property, liability insurance and environmental insurance in such
amounts, subject to such deductibles and self-insurance retentions and covering
such Properties and risks as is consistent with sound business practice, and the
Borrower will furnish to any Lender upon request full information as to the
insurance carried. The Administrative Agent shall be named as lender loss payee
pursuant to a standard mortgagee provision acceptable to the Administrative
Agent and/or additional insured with respect to any such insurance providing
coverage in respect of any Collateral, and each provider of any such insurance
shall agree, by endorsement upon the policy or policies issued by it or by
independent instruments furnished to the Administrative Agent, that it will give
or endeavor to give the Administrative Agent thirty (30) days prior written
notices before any such policy or policies shall be cancelled. The Borrower
shall notify the Administrative Agent in writing, promptly after any Authorized
Officer’s awareness thereof, if (i) any such policy or policies shall be
materially altered in a manner adverse to the Administrative Agent and/or the
Lenders or (ii) the amount of coverage thereunder shall be reduced.

 

6.7.         Compliance with Laws and Material Contractual Obligations. Subject
to applicable provisions of the Bankruptcy Code and orders of the Bankruptcy
Court, the Borrower will, and will cause each Subsidiary to, (i) comply in all
material respects with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject including, without
limitation, all Environmental Laws, Anti-Corruption Laws and applicable
Sanctions and (ii) perform in all material respects its obligations under
material agreements to which it is a party.

 

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6.8.         Maintenance of Properties. Subject to applicable provisions of the
Bankruptcy Code and orders of the Bankruptcy Court, the Borrower will, and will
cause each Subsidiary to, do all things necessary to maintain, preserve, protect
and keep its Property in good repair, working order and condition, ordinary wear
and tear excepted, and make all necessary and proper repairs, renewals and
replacements so that its business carried on in connection therewith may be
properly conducted at all times.

 

6.9.         Books and Records; Inspection. The Borrower will, and will cause
each of its Subsidiaries to, 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. The Borrower will, and will cause each
Subsidiary to, permit the Administrative Agent and the Lenders, by their
respective representatives and agents, at the Borrower’s expense, with
reasonable advance notice during normal business hours, to inspect any of the
Property, books and financial records of the Borrower and each Subsidiary, to
examine and make copies of the books of accounts and other financial records of
the Borrower and each Subsidiary, and to discuss the affairs, finances and
accounts of the Borrower and each Subsidiary with, and to be advised as to the
same by, their respective officers at such reasonable times and intervals as the
Administrative Agent or any Lender may reasonably designate.

 

6.10.       Payment of Obligations. Subject to applicable provisions of the
Bankruptcy Code and orders of the Bankruptcy Court, the Borrower will, and will
cause each of its Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, would reasonably be expected to result in a
Material Adverse Effect 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, and (b)the Borrower or such Subsidiary has set aside
on its books adequate reserves with respect thereto in accordance with GAAP.

 

6.11.       Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:

 

(a)          The Loans.

 

(b)          Indebtedness existing on the date hereof and described in Schedule
6.11 and any renewal or extension of such Indebtedness that does not increase
the principal amount thereof.

 

(c)          Indebtedness secured by purchase money liens permitted under
Section 6.16(h) in an outstanding principal amount not to exceed $500,000 at any
time.

 

6.12.       Merger. The Borrower will not, nor will it permit any Subsidiary to,
merge or consolidate with or into any other Person, or permit any other Person
to merge into or consolidate with it, or liquidate or dissolve, except that (i)
a Subsidiary may merge, consolidate, liquidate or dissolve into the Borrower or
a Guarantor (with the Borrower or a Guarantor being the survivor thereof, and
with the Borrower being the survivor of any merger with any Guarantor or
Subsidiary) and (ii) a non-Guarantor Subsidiary may merge, consolidate,
liquidate or dissolve into another non-Guarantor Subsidiary.

 

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6.13.       Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property to any other
Person, except:

 

(a)          The sale of the business and assets of the Borrower and its
Subsidiaries as contemplated by the Sale Motion.

 

(b)          Sales of inventory, or used, worn-out or surplus equipment, all in
the ordinary course of business, provided that aggregate disposition
consideration for all such equipment (but not inventory) shall not exceed
$500,000 during the term of this Agreement.

 

(c)          The sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are applied with reasonable promptness
to the purchase price of such replacement equipment.

 

(d)          Sales or other dispositions of its Property that, together with all
other Property of the Borrower and its Subsidiaries previously sold or disposed
of (other than inventory in the ordinary course of business) as permitted by
this Section 6.13(c) does not exceed $500,000 in aggregate disposition
consideration during the term of this Agreement.

 

6.14.       Investments. The Borrower will not, nor will it permit any
Subsidiary to, make or suffer to exist any Investments (including without
limitation, loans and advances to, and other Investments in, Subsidiaries), or
commitments therefor, or to create any Subsidiary or to become or remain a
partner in any partnership or joint venture, except:

 

(a)          Cash Equivalent Investments.

 

(b)          Existing Investments in Subsidiaries and other Investments in
existence on the date hereof and described in Schedule 6.14.

 

(c)          Travel advances to management personnel and employees in the
ordinary course of business.

 

6.15.       Acquisitions. The Borrower will not, nor will it permit any
Subsidiary, to make any Acquisition.

 

6.16.       Liens. The Borrower will not, nor will it permit any Subsidiary to,
create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:

 

(a)          Liens for taxes, assessments or governmental charges or levies on
its Property if the same shall not at the time be delinquent or thereafter can
be paid without penalty, or are being contested in good faith and by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books.

 

(b)          Liens imposed by law, such as carriers’, warehousemen’s and
mechanics’ liens and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than 60 days past due or
which are being contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books.

 

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(c)          Liens arising out of pledges or deposits under worker’s
compensation laws, unemployment insurance, old age pensions, or other social
security or retirement benefits, or similar legislation.

 

(d)          Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to Properties of a similar character and which do not in
any material way affect the marketability of the same or interfere with the use
thereof in the business of the Borrower or its Subsidiaries.

 

(e)          Liens arising solely by virtue of any statutory or common law
provision relating to bankers’ liens, rights of set-off or similar rights and
remedies as to deposit accounts, securities accounts or other funds maintained
with a creditor depository institution; provided that (i) such account is not a
dedicated cash collateral account and is not subject to restriction against
access by Borrower or a Subsidiary in excess of those set forth by regulations
promulgated by the Board of Governors of the Federal Reserve, and (ii) such
account is not intended by the Borrower or any Subsidiary to provide collateral
to the depository institution.

 

(f)           Liens existing on the date hereof and described in Schedule 6.16.

 

(g)          Liens in favor of the Administrative Agent, for the benefit of the
Lenders, granted pursuant to any Collateral Document.

 

(h)          Other Liens constituting purchase money liens securing Indebtedness
permitted under Section 6.11(c), provided that the aggregate principal amount of
Indebtedness secured by such Liens described in this clause (h) at any time does
not exceed $500,000 at any time outstanding.

 

6.17.       Affiliates. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower’s or such Subsidiary’s
business and upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction.

 

6.18.       Sale and Leaseback Transactions. Other than the Mexico Transaction,
the Borrower will not, nor will it permit any Subsidiary to, enter into or
suffer to exist any Sale and Leaseback Transactions.

 

6.19.       Financial Contracts. The Borrower will not, nor will it permit any
Subsidiary to, enter into or remain liable upon any Financial Contract.

 

6.20.       Restricted Payments. The Borrower will not, nor will it permit any
Subsidiary to, make any Restricted Payment, except that any Subsidiary may
declare and pay dividends or make distributions to the Borrower or to a
Wholly-Owned Subsidiary.

 

 39 

 

  

6.21.       [Intentionally omitted.]

 

6.22.       Further Assurances.

 

(a)          As promptly as possible but in any event within thirty (30) days
(or such later date as may be agreed by the Administrative Agent in its sole
discretion) after a Subsidiary is organized or acquired, or any Person becomes a
Subsidiary pursuant to the definition thereof, or is designated by the Borrower
or the Administrative Agent as a Subsidiary, the Borrower shall provide the
Administrative Agent with written notice thereof setting forth information in
reasonable detail describing the material assets of such Subsidiary and shall
cause each such Subsidiary to deliver to the Administrative Agent a joinder to
the Guaranty and the Security Agreement (in each case in the form contemplated
thereby) pursuant to which such Subsidiary agrees to be bound by the terms and
provisions thereof, such Guaranty and Security Agreement joinder(s) to be
accompanied by an updated Schedule 5.8 hereto designating such Subsidiary as
such, appropriate resolutions, other documentation and legal opinions, in each
case in form and substance reasonably satisfactory to the Administrative Agent
and its counsel, and such other documentation as the Administrative Agent may
reasonably request. Without limiting the foregoing, each Loan Party will, and
will cause each Subsidiary to, execute and deliver, or cause to be executed and
delivered, to the Administrative Agent such documents, agreements and
instruments (including, without limitation, account control agreements, landlord
waivers, bailee agreements, intellectual property security agreements and
Mortgages), and will 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 documents and such other actions or deliveries of the
type required by Article IV, as applicable), which may be required by law or
which the Administrative Agent may, from time to time, reasonably 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 Administrative Agent and all at the expense of the Loan
Parties.

 

(b)          As promptly as possible but in any event within thirty (30) days
(or such later date as may be agreed by the Administrative Agent in its sole
discretion) after the Borrower or any Domestic Subsidiary organizes a Foreign
Subsidiary or acquires any equity interest in a Foreign Subsidiary, or any
Person becomes a Foreign Subsidiary of the Borrower or any Domestic Subsidiary
pursuant to the definition thereof, or is designated by the Borrower, any
Domestic Subsidiary or the Administrative Agent as a Foreign Subsidiary, the
Borrower or the applicable Domestic Subsidiary will execute and deliver to the
Administrative Agent a pledge agreement in a form satisfactory to the
Administrative Agent, together with such supporting documentation (including,
without limitation, authorizing resolutions and opinions of counsel) as the
Administrative Agent may request in order to create a perfected, first-priority
security interest in the equity interests in such Foreign Subsidiary, provided
that such pledges shall not exceed the Applicable Pledge Percentage of the
equity interests of such Foreign Subsidiary.

 

6.23.       OFAC, PATRIOT Act Compliance. The Borrower shall, and shall cause
each Subsidiary to, (i) refrain from doing business in a Sanctioned Country or
with a Sanctioned Person in violation of the economic sanctions of the United
States administered by OF AC, and (ii) provide, to the extent commercially
reasonable, such information and take such actions as are reasonably requested
by the Administrative Agent or any Lender in order to assist the Administrative
Agent and the Lenders in maintaining compliance with the PATRIOT Act.

 

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6.24.       Bankruptcy Related Covenants.

 

(a)          On or prior to April 1, 2019, the Borrower shall have filed a
motion to approve this Agreement and the revolving credit facility as provided
herein. On or prior to April 4, 2019, the hearing on the Interim Borrowing Order
shall be held by the Bankruptcy Court.

 

(b)          The Borrower may not, without the prior written consent of the
Administrative Agent and the Required Lenders, assume, assume and assign, or
reject executory contracts or unexpired leases except as provided in the Sale
Motion.

 

(c)          On or prior to April 1, 2019, the Borrower shall have filed the
Sale Motion in the Chapter 11 Cases. Incidental to the filing of such Sale
Motion:

 

(i)          On or prior to May 5, 2019, the Borrower shall have obtained
approval of the bid procedures from the Bankruptcy Court (satisfactory to the
Borrower, the Administrative Agent and the Required Lenders) approving bid
procedures for the sale of the Borrower’s assets and the assumption and
assignment of the Borrower’s executory contracts and unexpired leases.

 

(ii)         After June 5, 2019 and on or prior to June 10, 2019, an auction
among qualified bidders shall be conducted with the highest and best bid or
combination of bids being selected by the Borrower, in consultation with the
Administrative Agent.

 

(iii)        On or prior to June 12, 2019, the Bankruptcy Court shall have
conducted a sale hearing with respect to such sale and the Borrower shall have
obtained an order of the Bankruptcy Court approving the Sale Motion. The
Borrower shall consummate the sale of the assets described therein on or prior
to August 16, 2019. Unless the Administrative Agent and the Required Lenders
otherwise agree, the sale shall be for cash or other proceeds sufficient to pay
in full of the Obligations and the outstanding Pre-Petition Liabilities and the
proceeds shall be so utilized without further order of the Bankruptcy Court.

 

(iv)        The Borrower shall have retained as of the Petition Date, and
continue to retain during the Chapter 11 Cases, (i) the Interim Chief Strategy
Officer and (ii) the Investment Banker, in each case on terms and conditions
acceptable to the Borrower, the Administrative Agent and the Required Lenders in
their sole and absolute discretion; provided that each of the Administrative
Agent and the Required Lenders acknowledges that the arrangements in place with
the Interim Chief Strategy Officer and the Investment Banker Advisor as of the
date of this Agreement are satisfactory to the Administrative Agent and the
Required Lenders.

 

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6.25.       Budgeted Expenses.

 

(a)          The Borrower and its Subsidiaries shall not pay any expenses other
than those set forth in the budget approved by the Administrative Agent and the
Required Lenders prior to the Effective Date (together with any subsequent
budget which the Administrative Agent and the Required Lenders may, in their
sole discretion, approve, the “Approved Budget”) to be attached to the DIP
Orders. The Borrowers and their Subsidiaries shall, in each case on a cumulative
basis from and after the Petition Date, (a) achieve cash receipts of at least
80% of those projected in the Approved Budget, and (b) not permit (i) actual
aggregate expenses incurred and disbursements made to exceed 115% of those
projected in the Approved Budget, (ii) “Net Cash Flow” (as defined in the
Approved Budget) for any week in each cumulative period covered by the Approved
Budget to be more than $1,100,000 less than the projected cumulative Net Cash
Flow as set forth in the Approved Budget for each such period or (iii) actual
expenses incurred and disbursements made for professional fees of Case
Professionals to exceed those projected in the Approved Budget by more than 20%
for any individual line item or $300,000 in the aggregate for all Case
Professionals. Compliance with this Section 6.25 shall be tested as of the close
of business on Wednesday of each week starting as of the week ending April 26,
2019 on a cumulative basis from and after the Petition Date. Compliance with the
foregoing shall be reflected in the Variance Report delivered pursuant to
Section 6.1(i).

 

(b)          The Borrower will not consent to or permit to exist any of the
following:

 

(i)          Any order which authorizes the rejection or assumption of any
executory contracts or unexpired leases of the Borrower without the prior
written consent of the Administrative Agent and the Required Lenders except as
contemplated in the Sale Motion;

 

(ii)         Any modification, stay, vacation or amendment to the DIP Orders to
which the Administrative Agent and the Required Lenders has not consented in
writing;

 

(iii)        A priority claim or administrative expense or unsecured claim
against the Borrower (now existing or hereafter arising or any kind or nature
whatsoever, including, without limitation, any administrative expense of the
kind specified in sections 105, 326, 328, 330, 331, 364(c), 503(a), 503(b),
506(c), 507(a), 507(b), 546(c), 546(d), 726 or 1114 of the Bankruptcy Code)
equal or superior to the priority claim of the Administrative Agent in respect
of the Obligations or to any priority claim with respect to the Pre-Petition
Liabilities, except in each case with respect to the Professional Fee Carve Out;

 

(iv)        Any Lien on any Collateral having a priority equal or superior to
the Lien securing the Obligations, other than with respect to the Professional
Fee Carve Out and Liens securing the Pre-Petition Liabilities;

 

(v)         Any order which authorizes the return of any of the Borrowers’
property pursuant to section 546(h) of the Bankruptcy Code;

 

(vi)        Any order which authorizes the payment of any Indebtedness (other
than the Pre-Petition Liabilities, Indebtedness reflected in the Approved
Budget, and other Indebtedness approved by the Administrative Agent and the
Required Lenders, in each case incurred prior to the Petition Date or the grant
of “adequate protection” (whether payment in cash or transfer of property) with
respect to any such Indebtedness which is secured by a Lien other than as set
forth in the DIP Orders); or

 

 42 

 

  

(c)          Any order seeking authority to take any action that is prohibited
by the terms of this Agreement or the other Loan Documents or refrain from
taking any action that is required to be taken by the terms of this Agreement or
any of the other Loan Documents.

 

ARTICLE VII

 

DEFAULTS

 

The occurrence of any one or more of the following events shall constitute an
Event of Default (each, an “Event of Default”):

 

7.1.         Any representation or warranty made or deemed made by or on behalf
of the Borrower or any of its Subsidiaries to the Lenders or the Administrative
Agent under or in connection with this Agreement (including the exhibits
attached hereto), any Credit Extension, or any certificate or information
delivered in connection with this Agreement or any other Loan Document shall be
materially false on the date made or confirmed.

 

7.2.         Nonpayment of principal or interest upon any Loan, any Commitment
Fee, or any other obligation under any of the Loan Documents within two (2)
Business Days after the same becomes due (provided, such two (2) Business Day
grace period shall not apply to payments due on the Facility Termination Date).

 

7.3.         The breach by the Borrower of any of the terms or provisions of
Section 6.1(a), 6.1(b), 6.1(c), 6.1(d), 6.1(i), 6.1(j), 6.2, 6.3, 6.4, 6.11,
6.12, 6.13, 6.14, 6.15, 6.16, 6.18, 6.19, 6.20, 6.21, 6.22, 6.23, 6.24 or 6.25.

 

7.4.         The breach by the Borrower (other than a breach which constitutes
an Event of Default under another Section of this Article VII) of any of the
terms or provisions of this Agreement which is not remedied within thirty (30)
days after the earlier of (i) an officer of the Borrower becoming aware of any
such breach and (ii) the Administrative Agent notifying the Borrower of any such
breach.

 

7.5.         Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control of, all or any portion of
the Property of the Borrower and its Subsidiaries which, when taken together
with all other Property of the Borrower and its Subsidiaries so condemned,
seized, appropriated, or taken custody or control of, during the twelve-month
period ending with the month in which any such action occurs, constitutes a
Substantial Portion.

 

7.6.         [Intentionally omitted.]

 

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7.7.         (a) With respect to a Plan, the Borrower or an ERISA Affiliate is
subject to a lien in excess of $2,500,000 pursuant to Section 430(k) of the Code
or Section 302(c) of ERISA or Title IV of ERISA, or (b) an ERISA Event shall
have occurred that, in the opinion of the Required Lenders, when taken together
with all other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect.

 

7.8.         Nonpayment by the Borrower or any Subsidiary of any Rate Management
Obligation when due or the breach by the Borrower or any Subsidiary of any term,
provision or condition contained in any Rate Management Transaction or any
transaction of the type described in the definition of “Rate Management
Transactions,” whether or not any Lender or Affiliate of a Lender is a party
thereto.

 

7.9.         The occurrence of any “default”, as defined in any Loan Document
(other than this Agreement) or the breach of any of the terms or provisions of
any Loan Document (other than this Agreement), which default or breach continues
beyond any period of grace therein provided.

 

7.10.       Any Loan Document (or any material provision thereof) 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 Loan Document (or any material
provision thereof), or any Guarantor shall fail to comply with any of the terms
or provisions of any Guaranty to which it is a party and which failure continues
beyond any period of grace therein provided, or any Guarantor shall deny that it
has any further liability under any Guaranty to which it is a party, or shall
give notice to such effect.

 

7.11.       Any Collateral Document shall for any reason fail to create a valid
and perfected first priority security interest in any Collateral purported to be
covered thereby, except as permitted by the terms of any Collateral Document or
the terms hereof, or 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, or any Loan Party
shall fail to comply with any of the terms or provisions of any Collateral
Document to which it is a party and which failure continues beyond any period of
grace therein provided.

 

7.12.       The occurrence of a termination of, or a material default which
continues beyond any period of grace as provided under, any material customer or
supply agreement.

 

7.13.       The entry of an order in any of the Chapter 11 Cases which stays,
modifies or reverses any DIP Order or which otherwise materially adversely
affects the effectiveness of any DIP Order without the express written consent
of the Administrative Agent and the Required Lenders, or the filing of any
pleading by the Borrower or any Affiliate thereof seeking the entry of such an
order.

 

7.14.       Either (i) the appointment in any of the Chapter 11 Cases of a
trustee or of any examiner having expanded powers to operate all or any part of
the business of the Borrower or its Domestic Subsidiaries, or (ii) the
conversion of any of the Chapter 11 Cases to a case under chapter 7 of the
Bankruptcy Code.

 

 44 

 

  

7.15.       The failure of the Bankruptcy Court to enter a Final Borrowing Order
on or prior to May 8, 2019.

 

7.16.       The entry of any order without the prior written consent of the
Administrative Agent and the Required Lenders which provides relief from the
automatic stay otherwise imposed pursuant to section 362 of the Bankruptcy Code
which permits any creditor to realize upon, or to exercise any right or remedy
with respect to, any asset of the Borrower or to terminate any license,
franchise, or similar agreement, where the exercise of such right or remedy or
such realization or termination would reasonably be likely to have a Material
Adverse Effect.

 

7.17.       The filing of any application by the Borrower without the express
prior written consent of the Administrative Agent and the Required Lenders for
the approval of any super-priority claim in any of the Chapter 11 Cases which is
pari passu with or senior to the priority of the claims of the Administrative
Agent and the Lenders for the Obligations or the Pre-Petition Liabilities, or
there shall arise any such super-priority claim under the Bankruptcy Code,
except in each instance the Professional Fee Carve Out.

 

7.18.       The payment or other discharge by the Borrower of any Indebtedness
or any other “claim” (as defined in the Bankruptcy Code) incurred prior to the
Petition Date, except the Pre-Petition Liabilities or otherwise as expressly
permitted hereunder or the payment of which the Administrative Agent and the
Required Lenders have provided their written consent.

 

7.19.       The entry of any order in any of the Chapter 11 Cases which provides
adequate protection (other than on account of Liens securing the Pre-Petition
Liabilities), or the granting by the Borrower of similar relief in favor of any
one or more of their pre-petition creditors, contrary to the terms and
conditions of any DIP Order.

 

7.20.       The failure of the Borrower (i) to comply with each and all of the
terms and conditions of any DIP Order, or (ii) to materially comply with any
other order entered in any of the Chapter 11 Cases if such failure would result
in a Material Adverse Effect.

 

7.21.       The filing of any motion by the Borrower or the entry of any order
in any of the Chapter 11 Cases: (i) (A) permitting working capital or other
financing (other than ordinary course trade credit or unsecured debt) for the
Borrower from any Person other than the Lenders (unless the proceeds of such
financing are used to pay in full of all Pre-Petition Liabilities and all
Obligations), (B) granting a Lien on, or security interest in any of the
Collateral, other than with respect to this Agreement or as otherwise permitted
herein (unless such Liens are granted in connection with a financing, the
proceeds of which are applied to the payment in full of all Pre-Petition
Liabilities and all Obligations), (C) except as permitted by this Agreement,
permitting the use of any of the Collateral pursuant to section 363(c) of the
Bankruptcy Code without the prior written consent of the Administrative Agent
and the Required Lenders, (D) permitting recovery from any portion of the
Collateral any costs or expenses of preserving or disposing of such Collateral
under section 506(c) of the Bankruptcy Code, or (E) dismissing any of the
Chapter 11 Cases or (ii) the filing of any motion by the Borrower or any Loan
Party (or by any party in interest or any Creditors’ Committee appointed in any
of the Chapter 11 Cases) seeking any of the matters specified in the foregoing
clause (i) that is not dismissed or denied within thirty (30) days of the date
of the filing of such motion (or such later date agreed to in writing by the
Administrative Agent).

 

 45 

 

  

7.22.       The filing of a motion by the Borrower seeking approval of a
disclosure statement and a Plan of Reorganization, or the entry of an order
confirming a Plan of Reorganization, that does not require repayment in full in
cash of all Pre-Petition Liabilities and all Obligations on the effective date
of such Plan of Reorganization or confirmation of such Plan of Reorganization is
denied by the Bankruptcy Court.

 

7.23.       (a) The filing of any pleading by the Borrower or any Affiliate
thereof challenging the validity, priority, perfection, or enforceability of the
Loan Documents (as defined in the Pre-Petition Credit Agreement), the
Pre-Petition Liabilities, or any Lien granted pursuant to the Pre-Petition Loan
Documents, or (b) any Lien granted pursuant to the Pre-Petition Loan Documents
is determined to be null and void, invalid or unenforceable by the Bankruptcy
Court or another court of competent jurisdiction in any action commenced or
asserted by any other party in interest in any of the Chapter 11 Cases,
including, without limitation, the Creditors’ Committee.

 

ARTICLE VIII

 

ACCELERATION. WAIVERS. AMENDMENTS AND REMEDIES

 

8.1.         Acceleration: Remedies. If any Event of Default occurs, the
Administrative Agent may, and at the request of the Required Lenders shall,
terminate or suspend the obligations of the Lenders to make Loans hereunder or
declare the Obligations under this Agreement and the other Loan Documents to be
due and payable, or both, whereupon the Obligations under this Agreement and the
other Loan Documents shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which the Borrower
hereby expressly waives.

 

(a)          If, within thirty (30) days after acceleration of the maturity of
the Obligations under this Agreement and the other Loan Documents or termination
of the obligations of the Lenders to make Loans hereunder as a result of any
Event of Default and before any judgment or decree for the payment of the
Obligations due under this Agreement and the other Loan Documents shall have
been obtained or entered, the Required Lenders (in their sole discretion) shall
so direct, the Administrative Agent shall, by notice to the Borrower, rescind
and annul such acceleration and/or termination.

 

(b)          Upon the occurrence and during the continuation of any Event of
Default, the Administrative Agent may, and at the request of the Required
Lenders shall, exercise all rights and remedies under the Loan Documents and
enforce all other rights and remedies under applicable law to the extent
provided in the DIP Orders.

 

 46 

 

  

8.2.         Application of Funds. After the exercise of remedies provided for
in Section 8.1, any amounts received by the Administrative Agent on account of
the Obligations shall be applied by the Administrative Agent in the following
order:

 

(a)          First, to payment of fees, indemnities, expenses and other amounts
(including fees, charges and disbursements of counsel to the Administrative
Agent and amounts payable under Article III) payable to the Administrative Agent
in its capacity as such;

 

(b)          second, to payment of fees, indemnities and other amounts (other
than principal, interest and commitment fees) payable to the Lenders (including
fees, charges and disbursements of counsel to the respective Lenders as required
by Section 9.6 and amounts payable under Article III);

 

(c)          third, to payment of accrued and unpaid commitment fees and
interest on the Loans, ratably among the Lenders in proportion to the respective
amounts described in this Section 8.2(c) payable to them;

 

(d)          fourth, to payment of all Obligations ratably among the Lenders;

 

(e)          last, the balance, if any, to the Borrower or as otherwise required
by law;

 

provided, however, that, notwithstanding anything to the contrary set forth
above, Excluded Swap Obligations with respect to any Guarantor shall not be paid
with amounts received from such Guarantor or its assets, but 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
8.2.

 

8.3.         Waivers and Amendments. Subject to the provisions of this Section
8.3, the Required Lenders (or the Administrative Agent with the consent in
writing of the Required Lenders) and the Borrower may enter into agreements
supplemental hereto for the purpose of adding or modifying any provisions to
this Agreement, the Guaranty or the Security Agreement or changing in any manner
the rights of the Lenders or the Borrower hereunder or thereunder or waiving any
Default or Event of Default hereunder; provided, however, that no such
supplemental agreement shall:

 

(a)          without the consent of each Lender directly affected thereby,
extend the final maturity of any Loan or postpone any regularly scheduled
payment of principal of any Loan or forgive all or any portion of the principal
amount thereof, or reduce the rate or extend the time of payment of interest or
fees thereon or increase the amount of the Commitment of such Lender hereunder.

 

(b)          without the consent of all of the Lenders, reduce the percentage
specified in the definition of Required Lenders.

 

(c)          without the consent of all of the Lenders, amend this Section 8.3.

 

(d)          without the consent of all of the Lenders, release all or
substantially all of the Guarantors of the Obligations or, except as otherwise
provided in Section 10.16, release all or substantially all of the Collateral.

 

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No amendment of any provision of this Agreement relating to the Administrative
Agent shall be effective without the written consent of the Administrative
Agent. The Administrative Agent may waive payment of the fee required under
Section 12.3(c) without obtaining the consent of any other party to this
Agreement. Notwithstanding anything to the contrary herein, the Administrative
Agent may, with the consent of the Borrower only, amend, modify or supplement
this Agreement or any of the other Loan Documents to cure any ambiguity,
omission, mistake, defect or inconsistency of a technical or immaterial nature,
as determined in good faith by the Administrative Agent.

 

8.4.         Preservation of Rights. No delay or omission of the Lenders or the
Administrative Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Event of Default or an
acquiescence therein, and the making of a Credit Extension notwithstanding the
existence of an Event of Default or the inability of the Borrower to satisfy the
conditions precedent to such Credit Extension shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.3, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Administrative Agent and the Lenders until the Obligations have been paid
in full.

 

ARTICLE IX

 

GENERAL PROVISIONS

 

9.1.         Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive the making of the Credit
Extensions herein contemplated.

 

9.2.         Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.

 

9.3.         Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.

 

9.4.         Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Administrative Agent and the Lenders
and supersede all prior agreements and understandings among the Borrower, the
Administrative Agent and the Lenders relating to the subject matter thereof
other than those contained in the Fee Letter which shall survive and remain in
full force and effect during the term of this Agreement.

 

9.5.         Several Obligations: Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or Administrative Agent of any other (except to the extent
to which the Administrative Agent is authorized to act as such). The failure of
any Lender to perform any of its obligations hereunder shall not relieve any
other Lender from any of its obligations hereunder. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns.

 

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9.6.         Expenses: Indemnification.

 

(a)          The Borrower shall reimburse the Administrative Agent and each
Lender upon demand for all reasonable out-of-pocket expenses paid or incurred by
the Administrative Agent or each Lender, including, without limitation, filing
and recording costs and fees, costs of any environmental review, and
consultants’ fees, travel expenses and reasonable fees, charges and
disbursements of outside counsel to the Administrative Agent and/or the
allocated costs of in-house counsel incurred from time to time, in connection
with the due diligence, preparation, administration, negotiation, execution,
delivery, syndication, distribution (including, without limitation, via DebtX
and any other internet service selected by the Administrative Agent), review,
amendment, modification, and administration of the Loan Documents and the
preparation for, monitoring of, and participation in the Chapter 11 Cases,
including the protection or enforcement of any rights or remedies of the
Administrative Agent or any Lender in the Chapter 11 Cases. The Borrower also
agrees to reimburse the Administrative Agent and the Lenders for any reasonable
costs, internal charges and out-of-pocket expenses, including, without
limitation, filing and recording costs and fees, costs of any environmental
review, and consultants’ fees, travel expenses and reasonable fees, charges and
disbursements of outside counsel to the Administrative Agent and the Lenders
and/or the reasonable allocated costs of in-house counsel incurred from time to
time, paid or incurred by the Administrative Agent or any Lender in connection
with the collection and enforcement of the Loan Documents. Expenses being
reimbursed by the Borrower under this Section 9.6(a) include, without
limitation, the cost and expense of obtaining an appraisal of each parcel of
real property or interest in real property described in the relevant Collateral
Documents, which appraisal shall be in conformity with the applicable
requirements of any law or any governmental rule, regulation, policy, guideline
or directive (whether or not having the force of law), or any interpretation
thereof, including, without limitation, the provisions of Title XI of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended,
reformed or otherwise modified from time to time, and any rules promulgated to
implement such provisions and costs and expenses incurred in connection with the
Reports described in the following sentence. The Borrower acknowledges that from
time to time BDCF may prepare and may distribute to the Lenders (but shall have
no obligation or duty to prepare or to distribute to the Lenders) certain audit
reports (the “Reports”) pertaining to the Borrower’s assets for internal use by
BDCF from information furnished to it by or on behalf of the Borrower, after
BDCF has exercised its rights of inspection pursuant to this Agreement.

 

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(b)          The Borrower hereby further agrees to indemnify and hold harmless
the Administrative Agent, each Lender, their respective affiliates, and each of
their directors, officers and employees, Administrative Agents and advisors
against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, reasonable attorneys’ fees, charges and
disbursements and settlement costs (including, without limitation, all expenses
of litigation or preparation therefor) whether or not the Administrative Agent,
any Lender or any affiliate is a party thereto) which any of them may pay or
incur arising out of or relating to this Agreement, the other Loan Documents,
the transactions contemplated hereby, any actual or alleged presence or release
of Hazardous Materials on or from any Property owned or operated by Borrower or
any of its Subsidiaries, any environmental liability related in any way to
Borrower or any of its Subsidiaries, or any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by Borrower or any of its Subsidiaries, or the direct or indirect
application or proposed application of the proceeds of any Credit Extension
hereunder except to the extent that they are determined in a final non-
appealable judgment by a court of competent jurisdiction to have resulted from
the gross negligence or willful misconduct of the party seeking indemnification.
The obligations of the Borrower under this Section 9.6 shall survive the
termination of this Agreement.

 

(c)          Notwithstanding the foregoing, the Administrative Agent and the
Lenders shall not be entitled to payment of the expenses and other items set
forth in subsections (a) and (b) immediately above to the extent that such
expenses and other items are otherwise paid to the Administrative Agent, the
Lenders, or their Affiliates in the form of an expense reimbursement pursuant to
the order entered by the Bankruptcy Court approving the bidding procedures in
the Sale Motion.

 

9.7.         Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Administrative Agent with
sufficient counterparts so that the Administrative Agent may furnish one to each
of the Lenders.

 

9.8.         Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP in a manner
consistent with that used in preparing the financial statements referred to in
Section 5.4, except that any calculation or determination which is to be made on
a consolidated basis shall be made for the Borrower and all of its Subsidiaries,
including those Subsidiaries, if any, which are unconsolidated on the Borrower’s
audited financial statements; provided, however that, 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 without giving effect to (i) any election under
Accounting Standards Codification Section 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 the Borrower or any
of its Subsidiaries at “fair value”, as defined therein, or (ii) any treatment
of Indebtedness in respect of convertible debt instruments under Financial
Accounting Standards Codification Subtopic 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. If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and the Borrower, the Administrative Agent or the Required
Lenders shall so request, the Administrative Agent, the Lenders and the Borrower
shall negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval
of the Required Lenders), provided that, until so amended, such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and the Borrower shall provide to the Administrative Agent and
the Lenders reconciliation statements showing the difference in such
calculation, together with the delivery of monthly, quarterly and annual
financial statements required hereunder.

 

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9.9.         Severability of Provisions. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.

 

9.10.       Nonliability of Lenders. The relationship between the Borrower on
the one hand and the Lenders and the Administrative Agent on the other hand
shall be solely that of borrower and lender. Neither the Administrative Agent
nor any Lender shall have any fiduciary responsibilities to the Borrower.
Neither the Administrative Agent nor any Lender undertakes any responsibility to
the Borrower to review or inform the Borrower of any matter in connection with
any phase of the Borrower’s business or operations. The Borrower agrees that
neither the Administrative Agent nor any Lender shall have liability to the
Borrower (whether sounding in tort, contract or otherwise) for losses suffered
by the Borrower in connection with, arising out of, or in any way related to,
the transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. Neither the
Administrative Agent nor any Lender shall have any liability with respect to,
and the Borrower hereby waives, releases and agrees not to sue for, any special,
indirect, consequential or punitive damages suffered by the Borrower in
connection with, arising out of, or in any way related to the Loan Documents or
the transactions contemplated thereby.

 

9.11.       Confidentiality. The Administrative Agent and each Lender agrees to
hold any confidential information which it may receive from the Borrower in
connection with this Agreement in confidence, except for disclosure (i) to its
Affiliates and to the Administrative Agent and any other Lender and their
respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to the Administrative Agent or such Lender provided such
parties have been notified of the confidential nature of such information, (iii)
as provided in Section 12.3(e), (iv) to regulatory officials, (v) to any Person
as requested pursuant to or as required by law, regulation, or legal process,
(vi) to any Person in connection with any legal proceeding to which it is a
party, (vii) to its direct or indirect contractual counterparties in swap
agreements or to legal counsel, accountants and other professional advisors to
such counterparties provided such parties have been notified of the confidential
nature of such information, (viii) to rating agencies if requested or required
by such agencies in connection with a rating relating to the Advances hereunder,
(ix) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, and (x) to the extent such
information (1) becomes publicly available other than as a result of a breach of
this Section 9.11 or (2) becomes available to the Administrative Agent or any
Lender on a non-confidential basis from a source other than the Borrower.
Without limiting Section 9.4, the Borrower agrees that the terms of this Section
9.11 shall set forth the entire agreement between the Borrower and the
Administrative Agent and each Lender with respect to any confidential
information previously or hereafter received by the Administrative Agent or such
Lender in connection with this Agreement, and this Section 9.11 shall supersede
any and all prior confidentiality agreements entered into by the Administrative
Agent or any Lender with respect to such confidential information.
Notwithstanding the foregoing, Administrative Agent or Lenders may provide to
any of its lenders previously disclosed to Borrower, copies of all financial
statements and other reports and all other notices of default, other notices,
amendments, modifications, waivers, supplements and agreements delivered under
or pursuant to any Loan Document relating to Borrower or any of its affiliates;
provided, however, that prior to providing such documents and information
Administrative Agent and Lender shall cause and such lender to execute and
deliver to and in favor of Borrower and the Guarantors a written consent to
which such lender shall be bound to the confidentiality and other provisions set
forth in this Section 9.11.

 

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9.12.       Nonreliance. Each Lender hereby represents that it is not relying on
or looking to any margin stock (as defined in Regulation U) for the repayment of
the Credit Extensions provided for herein.

 

9.13.       Disclosure. The Borrower and each Lender hereby acknowledge and
agree that BDCF and/or its Affiliates from time to time may hold investments in,
make other loans to or have other relationships with the Borrower and its
Affiliates.

 

9.14.       USA PATRIOT ACT NOTIFICATION. The following notification is provided
to Borrower pursuant to Section 326 of the PATRIOT Act:

 

Each Lender that is subject to the requirements of the PATRIOT Act hereby
notifies the Borrower and each other Loan Party that pursuant to the
requirements of the PATRIOT 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 PATRIOT Act.

 

9.15.       Relationship with DIP Orders. In the event of any inconsistency
between the terms of the DIP Orders and the Loan Documents, the terms of the DIP
Orders shall control and the representations, warranties, covenants, agreements
or events of default made herein and in the other Loan Documents shall be
subject to the terms of the DIP Orders.

 

ARTICLE X

 

THE ADMINISTRATIVE AGENT

 

10.1.       Appointment: Nature of Relationship. BDCF is hereby appointed by
each of the Lenders as its contractual representative (herein referred to as the
“Administrative Agent”) hereunder and under each other Loan Document, and each
of the Lenders irrevocably authorizes the Administrative Agent to act as the
contractual representative of such Lender with the rights and duties expressly
set forth herein and in the other Loan Documents. The Administrative Agent
agrees to act as such contractual representative upon the express conditions
contained in this Article X. Notwithstanding the use of the defined term
“Administrative Agent,” it is expressly understood and agreed that the
Administrative Agent shall not have any fiduciary responsibilities to any Lender
by reason of this Agreement or any other Loan Document and that the
Administrative Agent is merely acting as the contractual representative of the
Lenders with only those duties as are expressly set forth in this Agreement and
the other Loan Documents. In its capacity as the Lenders’ contractual
representative, the Administrative Agent (i) does not hereby assume any
fiduciary duties to any of the Lenders, and (ii) is a “representative” of the
Lenders within the meaning of the term “secured party” as defined in the New
York Uniform Commercial Code, and (iii) is acting as an independent contractor,
the rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders hereby agrees to
assert no claim against the Administrative Agent on any agency theory or any
other theory of liability for breach of fiduciary duty, all of which claims each
Lender hereby waives.

 

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10.2.       Powers. The Administrative Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders to take any
action thereunder except any action specifically provided by the Loan Documents
to be taken by the Administrative Agent.

 

10.3.       General Immunity. Neither the Administrative Agent nor any of its
directors, officers, Administrative Agents or employees shall be liable to the
Borrower, the Lenders or any Lender for any action taken or omitted to be taken
by it or them hereunder or under any other Loan Document or in connection
herewith or therewith except to the extent such action or inaction is determined
in a final non-appealable judgment by a court of competent jurisdiction to have
arisen from the gross negligence or willful misconduct of such Person.

 

10.4.       No Responsibility for Loans. Recitals, etc. Neither the
Administrative Agent nor any of its directors, officers, Administrative Agents
or employees shall be responsible for or have any duty to ascertain, inquire
into, or verify (a) any statement, warranty or representation made in connection
with any Loan Document or any borrowing hereunder; (b) the performance or
observance of any of the covenants or agreements of any obligor under any Loan
Document, including, without limitation, any agreement by an obligor to furnish
information directly to each Lender; (c) the satisfaction of any condition
specified in Article IV, except receipt of items required to be delivered solely
to the Administrative Agent; (d) the existence or possible existence of any
Default or Event of Default; (e) the validity, enforceability, effectiveness,
sufficiency or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith; (f) the value, sufficiency, creation,
perfection or priority of any Lien in any collateral security; or (g) the
financial condition of the Borrower or any guarantor of any of the Obligations
or of any of the Borrower’s or any such guarantor’s respective Subsidiaries.

 

10.5.       Action on Instructions of Lenders. The Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document in accordance with written instructions signed
by the Required Lenders, and such instructions and any action taken or failure
to act pursuant thereto shall be binding on all of the Lenders. The Lenders
hereby acknowledge that the Administrative Agent shall be under no duty to take
any discretionary action permitted to be taken by it pursuant to the provisions
of this Agreement or any other Loan Document unless it shall be requested in
writing to do so by the Required Lenders. The Administrative Agent shall be
fully justified in failing or refusing to take any action hereunder and under
any other Loan Document unless it shall first be indemnified to its satisfaction
by the Lenders pro rata against any and all liability, cost and expense that it
may incur by reason of taking or continuing to take any such action.

 

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10.6.       Employment of Administrative Agents and Counsel. The Administrative
Agent may execute any of its duties as Administrative Agent hereunder and under
any other Loan Document by or through employees, Administrative Agents, and
attorneys-in-fact and shall not be answerable to the Lenders, except as to money
or securities received by it or its authorized Administrative Agents, for the
default or misconduct of any such Administrative Agents or attorneys-in-fact
selected by it with reasonable care. The Administrative Agent shall be entitled
to advice of counsel concerning the contractual arrangement between the
Administrative Agent and the Lenders and all matters pertaining to the
Administrative Agent’s duties hereunder and under any other Loan Document.

 

10.7.       Reliance on Documents; Counsel. The Administrative Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex, electronic mail message, statement, paper or
document believed by it to be genuine and correct and to have been signed or
sent by the proper Person or Persons, and, in respect to legal matters, upon the
opinion of counsel selected by the Administrative Agent, which counsel may be
employees of the Administrative Agent. For purposes of determining compliance
with the conditions specified in Sections 4.1 and 4.2, each Lender that has
signed this Agreement shall be deemed to have consented to, approved or accepted
or to be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless the
Administrative Agent shall have received notice from such Lender prior to the
applicable date specifying its objection thereto.

 

10.8.       Administrative Agent’s Reimbursement and Indemnification. The
Lenders agree to reimburse and indemnify the Administrative Agent ratably in
proportion to their respective Pro Rata Shares (i) for any amounts not
reimbursed by the Borrower for which the Administrative Agent is entitled to
reimbursement by the Borrower under the Loan Documents, (ii) for any other
expenses incurred by the Administrative Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents (including, without limitation, for any
expenses incurred by the Administrative Agent in connection with any dispute
between the Administrative Agent and any Lender or between two or more of the
Lenders) and (iii) for any liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of the Loan Documents
or any other document delivered in connection therewith or the transactions
contemplated thereby (including, without limitation, for any such amounts
incurred by or asserted against the Administrative Agent in connection with any
dispute between the Administrative Agent and any Lender or between two or more
of the Lenders), or the enforcement of any of the terms of the Loan Documents or
of any such other documents, provided that (i) no Lender shall be liable for any
of the foregoing to the extent any of the foregoing is found in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the Administrative Agent and
(ii) any indemnification required pursuant to Section 3.2(d) shall,
notwithstanding the provisions of this Section 10.8, be paid by the relevant
Lender in accordance with the provisions thereof. The obligations of the Lenders
under this Section 10.8 shall survive payment of the Obligations and termination
of this Agreement.

 

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10.9.       Notice of Event of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received written notice
from a Lender or the Borrower referring to this Agreement describing such
Default or Event of Default and stating that such notice is a “notice of
default”. In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give prompt notice thereof to the Lenders; provided
that, except as expressly set forth in the Loan Documents, the Administrative
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Borrower or any of its
Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity.

 

10.10.     Rights as a Lender. In the event the Administrative Agent is a
Lender, the Administrative Agent shall have the same rights and powers hereunder
and under any other Loan Document with respect to its Commitment and its Loans
as any Lender and may exercise the same as though it were not die Administrative
Agent, and the term “Lender” or “Lenders” shall, at any time when the
Administrative Agent is a Lender, unless the context otherwise indicates,
include the Administrative Agent in its individual capacity. The Administrative
Agent and its Affiliates may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with the
Borrower or any of its Subsidiaries in which the Borrower or such Subsidiary is
not restricted hereby from engaging with any other Person.

 

10.11.     Lender Credit Decision. Legal Representation.

 

(a)          Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on the
financial statements prepared by the Borrower and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Administrative Agent 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 this Agreement and the
other Loan Documents. Except for any notice, report, document or other
information expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall have no duty or
responsibility (either initially or on a continuing basis) to provide any Lender
with any notice, report, document, credit information or other information
concerning the affairs, financial condition or business of the Borrower or any
of its Affiliates that may come into the possession of the Administrative Agent
or any of its Affiliates.

 

(b)          Each Lender further acknowledges that it has had the opportunity to
be represented by legal counsel in connection with its execution of this
Agreement and the other Loan Documents, that it has made its own evaluation of
all applicable laws and regulations relating to the transactions contemplated
hereby, and that the counsel to the Administrative Agent represents only the
Administrative Agent and not the Lenders in connection with this Agreement and
the transactions contemplated hereby.

 

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10.12.     Successor Administrative Agent. The Administrative Agent may resign
at any time by giving written notice thereof to the Lenders and the Borrower,
and the Required Lenders may remove the Administrative Agent at any time by
giving written notice to the Administrative Agent, the Lenders and the Borrower,
such resignation or removal to be effective upon the appointment of a successor
Administrative Agent or, if no successor Administrative Agent has been
appointed, thirty (30) days after the notice of resignation or removal, as
applicable. Upon any such resignation or removal, the Required Lenders shall
have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Required Lenders within fifteen (15) days after the
notice of resignation or removal, then the resigning Administrative Agent may
appoint, on behalf of the Borrower and the Lenders, a successor Administrative
Agent. If the Administrative Agent has resigned or been removed and no successor
Administrative Agent has been appointed, the Lenders may perform all the duties
of the Administrative Agent hereunder and the Borrower shall make all payments
in respect of the Obligations to the applicable Lender and for all other
purposes shall deal directly with the Lenders. No successor Administrative Agent
shall be deemed to be appointed hereunder until such successor Administrative
Agent has accepted the appointment. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the resigning or removed
Administrative Agent. Upon the effectiveness of the resignation or removal of
the Administrative Agent, the resigning or removed Administrative Agent shall be
discharged from its duties and obligations hereunder and under the Loan
Documents. After the effectiveness of the resignation or removal of an
Administrative Agent, the provisions of this Article X shall continue in effect
for the benefit of such Administrative Agent in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent
hereunder and under the other Loan Documents.

 

10.13.     Administrative Agent Fees. The Borrower agrees to pay to the
Administrative Agent the fees agreed to by the Borrower and the Administrative
Agent pursuant to any certain letter agreement between the Administrative Agent
and the Borrower (the “Fee Letter”), or as otherwise agreed from time to time.

 

10.14.     Delegation to Affiliates. The Borrower and the Lenders agree that the
Administrative Agent may delegate any of its duties under this Agreement to any
of its Affiliates. Any such Affiliate (and such Affiliate’s directors, officers,
Administrative Agents and employees) which performs duties in connection with
this Agreement shall be entitled to the same benefits of the indemnification,
waiver and other protective provisions to which the Administrative Agent is
entitled under Articles IX and X.

 

10.15.     Execution of Collateral Documents. The Lenders hereby empower and
authorize the Administrative Agent to execute and deliver to the Borrower on
their behalf the Collateral Documents and all related financing statements and
any financing statements, agreements, documents or instruments as shall be
necessary or appropriate to effect the purposes of the Collateral Documents.

 

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10.16.     Collateral Releases. The Lenders hereby empower and authorize the
Administrative Agent to execute and deliver to the Borrower on their behalf any
agreements, documents or instruments as shall be necessary or appropriate to
effect any releases of Collateral which shall be permitted by the terms hereof
or of any other Loan Document or which shall otherwise have been approved by the
Required Lenders (or, if required by the terms of Section 8.3, all of the
Lenders) in writing.

 

10.17.     Documentation Administrative Agent. Neither any of the Lenders
identified in this Agreement as a “co-Administrative Agent” nor the
Documentation Administrative Agent shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Lenders as such. Without limiting the foregoing, none of such
Lenders shall have or be deemed to have a fiduciary relationship with any
Lender. Each Lender hereby makes the same acknowledgments with respect to such
Lenders as it makes with respect to the Administrative Agent in Section 10.11.

 

10.18.     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, 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 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,
Administrative Agent or fiduciary for the Borrower or any of its Affiliates, or
any other Person and (B) no Lender has any obligation to the Borrower or any of
its Affiliates with respect to the transactions contemplated hereby except 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 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 with respect to any breach or alleged breach of
agency or fiduciary duty in connection with any aspect of any transaction
contemplated hereby.

 

ARTICLE XI

 

SETOFF; RATABLE PAYMENTS

 

11.1.       Setoff. The Borrower hereby grants each Lender a security interest
in all deposits, credits and deposit accounts (including all account balances,
whether provisional or final and whether or not collected or available) of the
Borrower with such Lender or any Affiliate of such Lender (the “Deposits”) to
secure the Obligations. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if any Event of Default occurs, Borrower
authorizes each Lender to offset and apply all such Deposits toward the payment
of the Obligations owing to such Lender, whether or not the Obligations, or any
part thereof, shall then be due and regardless of the existence or adequacy of
any collateral, guaranty or any other security, right or remedy available to
such Lender or the Lenders.

 

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11.2.       Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Outstanding Credit Exposure (other than payments
received pursuant to Section 3.1 or 3.2) in a greater proportion than that
received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Aggregate Outstanding Credit Exposure held by the
other Lenders so that after such purchase each Lender will hold its Pro Rata
Share of the Aggregate Outstanding Credit Exposure. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or otherwise,
receives collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the benefits of such
collateral or other protection ratably in proportion to their respective Pro
Rata Shares of the Aggregate Outstanding Credit Exposure. In case any such
payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.

 

ARTICLE XII

 

BENEFIT OF AGREEMENT: ASSIGNMENTS; PARTICIPATIONS

 

12.1.       Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns permitted hereby, except
that (i) the Borrower shall not have the right to assign its rights or
obligations under the Loan Documents without the prior written consent of each
Lender, (ii) any assignment by any Lender must be made in compliance with
Section 12.3, and (iii) any transfer by participation must be made in compliance
with Section 12.2. Any attempted assignment or transfer by any party not made in
compliance with this Section 12.1 shall be null and void, unless such attempted
assignment or transfer is treated as a participation in accordance with the
terms of this Agreement. The parties to this Agreement acknowledge that clause
(ii) of this Section 12.1 relates only to absolute assignments and this Section
12.1 does not prohibit assignments creating security interests, including,
without limitation, (x) any pledge or assignment by any Lender of all or any
portion of its rights under this Agreement and any Note to a Federal Reserve
Bank or (y) in the case of a Lender which is a Fund, any pledge or assignment of
all or any portion of its rights under this Agreement and any Note to its
trustee in support of its obligations to its trustee; provided, however, that no
such pledge or assignment creating a security interest shall release the
transferor Lender from its obligations hereunder unless and until the parties
thereto have complied with the provisions of Section 12.3. The Administrative
Agent may treat the Person which made any Loan or which holds any Note as the
owner thereof for all purposes hereof unless and until such Person complies with
Section 12.3; provided, however, that the Administrative Agent may in its
discretion (but shall not be required to) follow instructions from the Person
which made any Loan or which holds any Note to direct payments relating to such
Loan or Note to another Person. Any assignee of the rights to any Loan or any
Note agrees by acceptance of such assignment to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Loan (whether or not a Note has been
issued in evidence thereof), shall be conclusive and binding on any subsequent
holder or assignee of the rights to such Loan.

 

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12.2.       Participations.

 

(a)          Permitted Participants; Effect. Any Lender may at any time sell to
one or more entities (“Participants”) participating interests in any Outstanding
Credit Exposure owing to such Lender, any Note held by such Lender, any
Commitment of such Lender or any other interest of such Lender under the Loan
Documents. In the event of any such sale by a Lender of participating interests
to a Participant, such Lender’s obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain
the owner of its Outstanding Credit Exposure and the holder of any Note issued
to it in evidence thereof for all purposes under the Loan Documents, all amounts
payable by the Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender’s rights and obligations under the Loan
Documents.

 

(b)          Voting Rights. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents provided that each such Lender may agree in
its participation agreement with its Participant that such Lender will not vote
to approve any amendment, modification or waiver with respect to any Outstanding
Credit Exposure or Commitment in which such Participant has an interest which
would require consent of all of the Lenders pursuant to the terms of Section 8.3
or of any other Loan Document.

 

(c)          Benefit of Certain Provisions. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided in Section 11.1
in respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under the Loan Documents, provided that each
Lender shall retain the right of setoff provided in Section 11.1 with respect to
the amount of participating interests sold to each Participant. The Lenders
agree to share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each Lender, any
amount received pursuant to the exercise of its right of setoff, such amounts to
be shared in accordance with Section 11.2 as if each Participant were a Lender.
The Borrower further agrees that each Participant shall be entitled to the
benefits of Sections 3.1, 3.2, 9.6 and 9.10 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section 12.3,
provided that (i) a Participant shall not be entitled to receive any greater
payment under Section 3.1 than the Lender who sold the participating interest to
such Participant would have received had it retained such interest for its own
account, unless the sale of such interest to such Participant is made with the
prior written consent of the Borrower, and (ii) a Participant shall not be
entitled to receive any greater payment under Section 3.2 than the Lender who
sold the participating interest to such Participant would have received had it
retained such interest for its own account (A) except to the extent such
entitlement to receive a greater payment results from a change in treaty, law or
regulation (or any change in the interpretation or administration thereof by any
Governmental Authority) that occurs after the Participant acquired the
applicable participation and (B), in the case of any Participant that would be a
Non-U.S. Lender if it were a Lender, such Participant agrees to comply with the
provisions of Section 3.2 to the same extent as if it were a Lender (it being
understood that the documentation required under Section 3.2(f) shall be
delivered to the participating Lender). Each Lender that sells a participation
shall, acting solely for this purpose as an Administrative 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 any Outstanding Credit Exposure, any Note, any Commitment or any
other obligations under the Loan Documents (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 Outstanding Credit
Exposure, any Note, any Commitment or any other obligations under the Loan
Documents) to any Person except to the extent that such disclosure is necessary
to establish that such Outstanding Credit Exposure, any Note, any Commitment or
any other obligations under the Loan Documents 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.

 

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12.3.       Assignments.

 

(a)          Permitted Assignments. Any Lender may at any time assign to one or
more Eligible Assignees (“Purchasers”) all or any part of its rights and
obligations under the Loan Documents. Such assignment shall be substantially in
the form of Exhibit B or in such other form reasonably acceptable to the
Administrative Agent as may be agreed to by the parties thereto. Each such
assignment with respect to a Purchaser which is not a Lender or an Affiliate of
a Lender or an Approved Fund shall either be in an amount equal to the entire
applicable Commitment and Outstanding Credit Exposure of the assigning Lender or
(unless the Administrative Agent otherwise consents) be in an aggregate amount
not less than $5,000,000. The amount of the assignment shall be based on the
Commitment or Outstanding Credit Exposure (if the Commitment has been
terminated) subject to the assignment, determined as of the date of such
assignment or as of the “Trade Date,” if the “Trade Date” is specified in the
assignment.

 

(b)          Consents. The consent of the Administrative Agent shall be required
prior to an assignment becoming effective unless the Purchaser is a Lender, an
Affiliate of a Lender or an Approved Fund. Any consent required under this
Section 12.3(b) shall not be unreasonably withheld or delayed.

 

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(c)          Effect: Assignment Effective Date. Upon (i) delivery to the
Administrative Agent of an assignment, together with any consents required by
Sections 12.3(a) and 12.3(b), and (ii) payment of a $3,500 fee to the
Administrative Agent for processing such assignment (unless such fee is waived
by the Administrative Agent), such assignment shall become effective on the
effective date specified in such assignment. The assignment shall contain a
representation by the Purchaser to the effect that none of the consideration
used to make the purchase of the Commitment and Outstanding Credit Exposure
under the applicable assignment agreement constitutes “plan assets” as defined
under ERISA and that the rights and interests of the Purchaser in and under the
Loan Documents will not be “plan assets” under ERISA. On and after the effective
date of such assignment, such Purchaser shall for all purposes be a Lender party
to this Agreement and any other Loan Document executed by or on behalf of the
Lenders and shall have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party thereto, and the
transferor Lender shall be released with respect to the Commitment and
Outstanding Credit Exposure assigned to such Purchaser without any further
consent or action by the Borrower, the Lenders or the Administrative Agent. In
the case of an assignment covering all of the assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a Lender
hereunder but shall continue to be entitled to the benefits of, and subject to,
those provisions of this Agreement and the other Loan Documents which survive
payment of the Obligations and termination of the applicable agreement. Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this Section 12.3 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 Section 12.2. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 12.3(c), the transferor
Lender, the Administrative Agent and the Borrower shall, if the transferor
Lender or the Purchaser desires that its Loans be evidenced by Notes, make
appropriate arrangements so that new Notes or, as appropriate, replacement Notes
are issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in principal
amounts reflecting their respective Commitments, as adjusted pursuant to such
assignment.

 

(d)          Register. The Administrative Agent, acting solely for this purpose
as an Administrative Agent of the Borrower, shall maintain at one of its offices
in the United States of America, 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 Commitments of, and principal amounts (and stated interest)
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 may 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 by the Borrower and
each Lender at any reasonable time and from time to time upon reasonable prior
notice.

 

(e)          Dissemination of Information. The Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a “Transferee”) and any
prospective Transferee any and all information in such Lender’s possession;
provided that each Transferee and prospective Transferee agrees to be bound by
Section 9.11 of this Agreement.

 

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ARTICLE XIII

 

NOTICES

 

13.1.       Notices; Effectiveness: Electronic Communication.

 

(a)          Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in 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 the Borrower, to it at:

 

Orchids Paper Products Company

201 Summit View Dr., Suite 110

Brentwood, Tennessee 37027

Attention: Jeffrey Schoen

Email: jsschoen@orchidspaper.com

Facsimile: 918-824-4660;

 

with a copy to (which shall not constitute notice):

 

Polsinelli LLP

150 N. Riverside Plaza

Suite 3000

Chicago, Illinois 60606

Attention: Jerry L. Switzer, Jr.

Email: jswitzer@polsinelli.com

 

(ii)          if to the Administrative Agent, to it at:

 

Black Diamond Commercial Finance, L.L.C.

One Hundred Field Drive

Lake Forest, Illinois 60045-2596

Attention: Hugo H. Gravenhorst

Email: hgravenhorst@bdcf.com;

 

with a copy to (which shall not constitute notice):

 

Winston & Strawn LLP

35 W. Wacker Drive

Chicago, Illinois 60601

Attention: Timothy J. Dable

Email: tdable@winston.com

 

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

 

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient). Notices delivered through electronic communications to the extent
provided in paragraph (b) below, shall be effective as provided in said
paragraph (b).

 

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(b)          Electronic Communications. Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communication
(including email and internet or intranet websites) pursuant to procedures
approved by the Administrative Agent or as otherwise determined by the
Administrative Agent, provided that the foregoing shall not apply to notices to
any Lender pursuant to Article II if such Lender has notified the Administrative
Agent that it is incapable of receiving notices under such Article by electronic
communication. The Administrative Agent or the Borrower may, in its respective
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it or as it
otherwise determines, provided that such determination or approval may be
limited to particular notices or communications.

 

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications 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 such notice or other communication is
not given during the 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 for the recipient, and (ii) notices or communications
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.

 

(c)          Change of Address. Etc. Any party hereto may change its address or
facsimile number for notices and other communications hereunder by notice to the
other parties hereto given in the manner set forth in this Section 13.1.

 

ARTICLE XIV

 

COUNTERPARTS; INTEGRATION: EFFECTIVENESS: ELECTRONIC EXECUTION

 

14.1.       Counterparts: Effectiveness. This Agreement may be executed in
counterparts (and by different parties hereto in different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. Except as provided in Article IV, 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 parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.

 

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14.2.       Electronic Execution of Assignments. The words “execution,”
“signed,” “signature,” and words of like import in any assignment and assumption
agreement shall be deemed to include electronic signatures 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 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, or any other state laws based on the
Uniform Electronic Transactions Act.

 

ARTICLE XV

 

CHOICE OF LAW: CONSENT TO JURISDICTION: WAIVER OF JURY TRIAL

 

15.1.       CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE BANKRUPTCY CODE AND THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICT OF
LAWS PROVISIONS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.

 

15.2.       CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF THE BANKRUPTCY COURT AND ANY UNITED STATES
FEDERAL OR STATE COURT SITTING IN NEW YORK IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS
AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
PROCEEDING BY THE BORROWER AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER OR ANY
AFFILIATE OF THE ADMINISTRATIVE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK.

 

15.3.       WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

 

15.4.       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 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:

 

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(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 party hereto 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 paid 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.

 

[Signature Pages Follow]

 

 65 

 

 

IN WITNESS WHEREOF, the Borrower, the Lenders and the Administrative Agent have
executed this Agreement as of the date first above written.

 

  ORCHIDS PAPER PRODUCTS COMPANY, a Delaware corporation       By:
                                       

 

Signature Page to

Senior Secured Superpriority Debtor-in-Possession Credit Agreement 

 

   

 

 

  BLACK DIAMOND COMMERCIAL FINANCE, L.L.C., as Administrative Agent

 

  By:                                     

 

Signature Page to

Senior Secured Superpriority Debtor-in-Possession Credit Agreement 

 

   

 

 

  ORCHIDS INVESTMENT LLC, as a Lender

 

  By:         

  Name:  

  Title:  

 

Signature Page to

Senior Secured Superpriority Debtor-in-Possession Credit Agreement