Exhibit 10.3

INTERCREDITOR AGREEMENT THIS INTERCREDITOR AGREEMENT (this "Agreement"), dated
as of October 2, 2019, is by and between Encina Business Credit, LLC, as the ABL
Agent (as defined below) for the ABL Lender Parties (as defined below),
Deerfield Mgmt, L.P., as the Term Loan Agent (as defined below), and the Term
Loan Lenders (as defined below), which such Term Loan Lenders include as of the
date hereof Deerfield Private Design Fund III, L.P. and Deerfield Special
Situations Fund, L.P. R E C I T A L S: A.The ABL Agent, Neos Therapeutics, Inc.,
a Delaware corporation (the "Company"), Neos Therapeutics Brands, LLC, a
Delaware limited liability company ("NT Brands"), Neos Therapeutics, LP, a Texas
limited partnership ("NT LP"), and each of the Subsidiaries of the Company that
are or may from time to time become parties thereto as borrowers in accordance
with the terms thereof (together with the Company, NT Brands and NT LP,
collectively the "Borrowers"), Neos Therapeutics Commercial, LLC, a Delaware
limited liability company, as a “Loan Party Obligor” (as defined in the
below-defined ABL Credit Agreement), PharmaFab Texas, LLC, a Texas limited
liability company (as defined in the below-defined ABL Credit Agreement), the
other Obligors that are or may from time to time become parties thereto as a
“Loan Party Obligor” (as defined in the below-defined ABL Credit Agreement) in
accordance with the terms thereof and the ABL Lenders have entered into that
certain Loan and Security Agreement dated as of the date hereof (such agreement,
as amended, restated, supplemented or otherwise modified from time to time as
permitted hereunder, the "ABL Credit Agreement"), pursuant to which the ABL
Lenders may, subject to the terms and conditions thereof, make loans and provide
other financial accommodations to Borrowers and the other Obligors secured by
liens on and security interests in the Collateral (as defined herein). B. The
Term Loan Lenders, the Company, as a borrower, and each of the Company’s
Subsidiaries that may from time to time become parties thereto have entered into
that certain Facility Agreement dated as of May 11, 2016 (such agreement, as
amended, restated, supplemented or otherwise modified on or prior to the date
hereof (and as may be further amended, restated, supplemented or otherwise
modified from time to time as permitted hereunder), the "Term Credit
Agreement"), pursuant to which the Term Loan Lenders may, subject to the terms
and conditions thereof, continue to make term loans and other financial
accommodations to the Company and the other Obligors secured by liens on and
security interests in the Collateral. C. The ABL Agent, on behalf of the ABL
Lender Parties and the Term Loan Lender Parties desire to enter into this
Agreement to, among other things, confirm the relative priorities of the Liens
(as defined herein) of the ABL Agent, on behalf of the ABL Lender Parties and
the Term Loan Agent, on behalf of the Term Loan Lender Parties, in the assets
and properties of the Obligors. In consideration of the mutual benefits accruing
to the ABL Agent, the other ABL Lender Parties, the Term Loan Agent and the
other Term Loan Lender Parties hereunder, and for other 10587065v23 9/30/2019
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good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto do hereby agree as follows: SECTION 1.
DEFINITIONS All terms (whether capitalized or not) defined in the UCC as in
effect in the State of New York, unless otherwise defined herein, shall have the
meanings set forth therein. In addition, as used in this Agreement (including in
the preamble and recitals above), the following terms shall have the meanings
ascribed to them below (all references to any term in the plural shall include
the singular and all references to any term in the singular shall include the
plural): "ABL Agent" shall mean Encina Business Credit, LLC in its capacity as
agent for the ABL Lender Parties, and its successors and assigns in such
capacity (including any New ABL Agent that is deemed to be the ABL Agent
pursuant to Section 2.13(d)). “ABL Cash Collateral” shall have the meaning
assigned to such term in Section 4.2(b). "ABL Credit Agreement" shall have the
meaning assigned to such term in the Recitals of this Agreement. "ABL Debt"
shall mean any and all obligations, liabilities and indebtedness of every kind,
nature and description owing by any Obligor to the ABL Agent and/or ABL Lenders
evidenced by or arising under the ABL Loan Documents owed to the ABL Lender
Parties or their affiliates, whether direct or indirect, absolute or contingent,
joint or several, due or not due, primary or secondary, liquidated or
unliquidated, including principal, interest, charges, fees, costs, indemnities
and expenses, however evidenced, whether as principal, surety, endorser,
guarantor or otherwise, whether now existing or hereafter arising, whether
arising before, during or after the initial or any renewal term of the ABL Loan
Documents or after the commencement of any Insolvency Proceeding with respect to
any Obligor (and including, without limitation, the payment of interest, fees,
costs and other charges which would accrue and become due but for the
commencement of such Insolvency Proceeding, whether or not such interest, fees,
costs and other charges are allowed or allowable in whole or in part in any such
Insolvency Proceeding), and in each case, whether or not allowed or allowable in
an Insolvency Proceeding. "ABL Default" shall mean an Event of Default under the
ABL Credit Agreement. "ABL Deficiency Claim" shall mean any portion of the ABL
Debt consisting of an allowed unsecured claim under Section 506(a) of the
Bankruptcy Code (or any similar provision under any other law governing an
Insolvency Proceeding). "ABL Lender Parties" shall mean the ABL Agent and the
ABL Lenders. "ABL Lenders" shall mean the "Lenders" as defined in the ABL Credit
Agreement (including, for the avoidance of doubt, such Persons (other than, for
the avoidance of doubt, any Obligor) now or hereafter party to the ABL Credit
Agreement, and their respective successors and assigns as contemplated
thereunder). -2-

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"ABL Loan Documents" shall mean the ABL Credit Agreement and all agreements,
documents and instruments at any time executed and/or delivered by any Obligor
or any other Person with, to or in favor of the ABL Lenders and/or the ABL Agent
in connection therewith or related thereto (including, without limitation, the
"Loan Documents" as defined in the ABL Credit Agreement), as all of the
foregoing now exist or may hereafter be amended, modified, supplemented,
extended, replaced, renewed, Refinanced (to the extent expressly permitted by
this Agreement) or restated, except in violation of Section 2.13(a). "ABL Loan
Maximum Amount" shall mean, as of any date of determination, the result of the
sum of (which amount shall be increased by the amount of all interest, fees,
costs, expenses and indemnities accrued or charged with respect to any of the
ABL Debt in accordance with the ABL Credit Agreement (other than Excess ABL
Debt), whether or not capitalized, in each case, other than in connection with
amendments, restatements, supplements and other modifications expressly
prohibited by this Agreement, as and when the same accrues or becomes due and
payable, irrespective of whether the same is added to the principal amount of
the ABL Debt (and including the same as would accrue and become due but for the
commencement of an Insolvency Proceeding whether or not such amounts are allowed
or allowable, in whole or in part, in any such Insolvency Proceeding): (a) the
lesser of (i) $27,500,000 minus permanent reductions with respect to the
revolving loan commitments (so long as any repayments required to be made under
the ABL Credit Agreement in connection with such commitment reductions, if any,
have been made, and excluding (A) commitment reductions in connection with a
Refinancing thereof that is expressly permitted under this Agreement or (B) any
termination of commitments upon an Insolvency Proceeding or the acceleration of
the ABL Debt when any ABL Debt is outstanding at such time), and (ii) the sum of
(x) 100% of the Borrowing Base, plus (y) the Inadvertent Overadvance Amount;
plus (b) solely in the case of a DIP Financing, the lesser of (i) $2,500,000 and
(ii) 10% of the outstanding revolving loan commitments under the ABL Credit
Agreement, minus, with respect to this clause (ii), permanent reductions with
respect to the revolving loan commitments (so long as any repayments required to
be made under the ABL Credit Agreement in connection with such commitment
reductions, if any, have been made, and excluding (A) commitment reductions in
connection with a Refinancing thereof that is expressly permitted under this
Agreement or (B) any termination of commitments upon an Insolvency Proceeding or
the acceleration of the ABL Debt when any ABL Debt is outstanding at such time).
"ABL Loans" shall mean the "Revolving Loans" under (and as defined in) the ABL
Credit Agreement. "ABL Priority Collateral" shall mean all Collateral of the
Obligors consisting of the following (including for the avoidance of doubt, any
such assets that, but for the application of -3-

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Section 552 of the Bankruptcy Code (or any similar provision of any foreign
Bankruptcy Laws), would be ABL Priority Collateral): (1) identifiable
constituting all Accounts (other than Accounts constituting Term Loan Priority
Collateral or proceeds of Term Loan Priority Collateral but expressly including
Accounts ABL Priority Inventory A/R Proceeds) and all Returned Goods previously
and directly giving rise to Accounts that are not Term Loan Priority Collateral
or proceeds thereof (which proceeds, shall not include, for the avoidance of
doubt, any ABL Priority Inventory A/R Proceeds); (2) all ABL Priority Inventory
A/R Proceeds; (3) all cash, money and cash equivalents (other than cash, money
and cash equivalents (i) constituting Term Loan Priority Collateral or
identifiable proceeds of Term Loan Priority Collateral (other than, for the
avoidance of doubt, cash solely and directly generated from sales of Inventory
giving rise to Accounts except to the extent expressly set forth in clause (1)
above) or (ii) held in or on deposit in the Term Priority Deposit Account,
except solely to the extent constituting identifiable cash proceeds of ABL
Priority Collateral)); (4) all ABL Priority Deposit Accounts and all cash held
therein except, in each case, (i) identifiable Term Loan Priority Collateral or
identifiable proceeds thereof or (ii) cash held in or on deposit in the Term
Priority Deposit Account (except solely to the extent constituting identifiable
cash proceeds of ABL Priority Collateral); (5) solely to the extent evidencing
or governing any of the items referred to in the preceding clauses (1) through
(3) constituting ABL Priority Collateral and not otherwise specifically
referenced therein, all Documents, General Intangibles (including all rights
under contracts but excluding any Intellectual Property and any Equity
Interests), Instruments (including Promissory Notes), and Chattel Paper
(including Tangible Chattel Paper and Electronic Chattel Paper); (6)to the
extent solely and directly both relating to and supporting any of the items
referred to in the preceding clauses (1) through (4) constituting ABL Priority
Collateral, all Supporting Obligations and Letter-of-Credit Rights; (7)all Books
and Records reasonably relating to, evidencing or governing the items referred
to in the preceding clauses (1) through (5) constituting ABL Priority Collateral
(including all books, databases, customer lists, engineer drawings, and Records,
whether tangible or electronic, which contain any specific information relating
to, evidencing or governing any of the items referred to in the preceding
clauses (1) through (5) constituting ABL Priority Collateral but, in each case,
excluding any Intellectual Property and any Books and Records with respect to
Equity Interests); provided that to the extent that any of the foregoing also
evidence, govern, secure or otherwise reasonably relate to any Term Loan
Priority Collateral, only that portion that separately evidences, governs,
secures or reasonably relates to the ABL Priority Collateral shall constitute
ABL Priority Collateral; and (8) all cash, money, cash equivalents, insurance
proceeds (including, proceeds or rights to the extent received on account of
losses related to the foregoing, but, for the avoidance -4-

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of doubt, excluding any proceeds, payments, other amounts or other items from
business interruption insurance or representation and warranty insurance (which
shall not be ABL Priority Collateral under any circumstance)), Instruments,
Securities and Financial Assets received as proceeds of any of the foregoing;
and all Proceeds of any of the items referred to in the preceding clauses (1)
through (6). Notwithstanding anything to the contrary in this Agreement and for
the avoidance of doubt, except as expressly set forth above, ABL Priority
Collateral shall not include any Inventory, Equipment, Equity Interests,
Intellectual Property, Securities Accounts (and all cash, cash equivalents,
assets and other items located or maintained therein except to the extent
constituting identifiable proceeds of ABL Priority Collateral), Commodity
Accounts (and all cash, cash equivalents, assets and other items located or
maintained therein except to the extent constituting identifiable proceeds of
ABL Priority Collateral), the Term Priority Deposit Accounts (except solely to
the extent constituting identifiable cash proceeds of ABL Priority Collateral),
Goods, Fixtures, leasehold interests, Investment Property, Chattel Paper,
Instruments, General Intangibles, business interruption insurance proceeds,
representation and warranty insurance proceeds, tax refunds and tax rebates and
any proceeds of any of the foregoing; provided that ABL Priority Collateral
shall expressly include Accounts constituting ABL Priority Inventory A/R
Proceeds. "ABL Priority Debt" shall mean all ABL Debt, excluding any portion of
principal which exceeds the ABL Loan Maximum Amount, and any interest, charges,
fees, premiums and expenses on account, or in respect, of such excess portion.
“ABL Priority Deposit Accounts” shall mean the collection Deposit Accounts,
lockbox accounts and Deposit Accounts of the Obligors into which proceeds of
revolving loans under the ABL Credit Agreement are directly funded, in each
case, that are (a) maintained at First Republic Bank (routing number with
account number or and (b) agreed to in writing between the ABL Agent and the
Term Loan Lenders to be an ABL Priority Deposit Account. “ABL Priority Inventory
A/R Proceeds” shall mean all Accounts that are Proceeds of Inventory from the
sales of Inventory in the ordinary course of business of the Obligors, whether
or not an Insolvency Proceeding has been commenced by any Obligor. “ABL Purchase
Price” shall have the meaning assigned to such term Section 3.2. "ABL Secured
Claim" shall mean any portion of the ABL Debt not constituting an ABL Deficiency
Claim. "Account" shall mean, as to any Obligor, any "account" as defined in the
UCC. "Affiliate" shall mean, with respect to any Person, any other Person that
directly or indirectly: controls, or is controlled by, or is under common
control with, such (a) Person; or -5-

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is a general partner, manager or managing member of such Person. (b) Without
limiting the foregoing, a Person shall be deemed to be “controlled by” any other
Person if such Person possesses, directly or indirectly, power to vote ten
percent (10%) or more of the securities (on a fully diluted basis) having
ordinary voting power for the election of directors or managers or power to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise. Unless expressly stated otherwise herein, no
Term Loan Lender Party (regardless of whether it owns any Equity Interests in
any Obligor or any of its Subsidiaries) shall be deemed an Affiliate of any
Obligor or any of its Subsidiaries. "Agent" and "Agents" shall mean,
individually or collectively as the context may require, the ABL Agent and the
Term Loan Agent, and their respective successors and assigns. "Agreement" shall
have the meaning assigned to such term in the Preamble of this Agreement.
“Applicable ABL Prepayment Premium Amount” shall have the meaning assigned to
such term Section 3.2. “Assignment Agreement” shall mean that certain Form of
Assignment and Assumption attached hereto as Exhibit B (or such other assignment
agreement agreed to between the ABL Agent and the Term Loan Lender Parties).
"Bankruptcy Code" shall mean the provisions of title 11 of the United States
Code, 11 U.S.C. §§101 et seq. "Bankruptcy Laws" shall mean the Bankruptcy Code
and any other U.S. federal, state or foreign bankruptcy, insolvency,
receivership, assignment for the benefit of creditors or similar law affecting
creditors' rights. "Books and Records" shall mean all books, records, ledger
cards, files, correspondence, customer lists, invoices, blueprints, technical
specifications, manuals, computer software, computer printouts, tapes, disks and
other electronic storage media and related data processing software and similar
items that at any time evidence or contain information directly relating to any
of the Collateral or are otherwise necessary in the collection thereof or
realization thereupon. "Borrowers" shall have the meaning assigned to such term
in the Recitals of this Agreement. "Borrowing Base" shall mean the "Borrowing
Base" as defined in the ABL Credit Agreement as in effect on the date hereof and
as determined by the ABL Agent in accordance with the ABL Credit Agreement as in
effect on the date hereof based upon the most recent "Borrowing Base
Certificate" (or similar report in any ABL Credit Agreement delivered in
connection with the ABL Loan Documents or the ABL Debt) received by the ABL
Agent. "Business Day" shall mean any day other than a Saturday, Sunday or other
day on which commercial banks in New York are authorized or required to close.
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“Cash Collateral” shall have the meaning assigned to such term in Section
4.2(b). "Collateral" shall mean all assets and properties of any kind
whatsoever, real or personal, tangible or intangible and wherever located,
whether now owned or hereafter acquired, of any Obligor on which a Lien is
granted under any of the Documents. “Company” shall have the meaning assigned to
such term in the Recitals of this Agreement. "Debt" shall mean, individually or
collectively as the context requires, the ABL Debt and the Term Debt. "Default"
shall mean an "Event of Default" or similar term, as such terms are defined in
the ABL Credit Agreement, and an "Event of Default" or similar term, as such
terms are defined in the Term Credit Agreement, in each case of the foregoing,
so long as any such agreement is in effect. “DIP Financing” shall have the
meaning assigned to such term in Section 4.2(b). "Documents" shall mean,
collectively, the ABL Loan Documents and the Term Loan Documents. "Enforcement
Action" shall mean (i) the exercise of any rights and remedies in respect of the
Collateral by (or on behalf of) the applicable Lender or Lenders, (ii) any
action by (or on behalf of) any applicable Lender to foreclose on the Lien of
such Person in any Collateral, (iii) any action by (or on behalf of) any
applicable Lender to take possession of, sell or otherwise realize (judicially
or non-judicially) upon any Collateral (including, without limitation, by setoff
or notification of account debtors), (iv) a sale of ABL Priority Collateral or
Term Loan Priority Collateral to a third party during the existence of a Default
under the ABL Loan Documents or the Term Loan Documents, as the case may be, at
the direction of, or with the consent of, the applicable Lenders, (v) the
commencement by (on behalf of) any applicable Lender of any legal proceedings
against any Obligor or with respect to any Collateral to facilitate the actions
described in clauses (i) through (iv) above, and/or (vi) the exercise of cash
dominion or a cash sweep under any deposit account control agreement covering
any Collateral solely to the extent such action is coupled with (x) an action to
take possession of ABL Priority Collateral, (y) the commencement of any legal
proceedings or actions against or with respect to any Obligor of ABL Priority
Collateral or (z) an application to the ABL Loans that is accompanied by a
corresponding permanent reduction in commitments under the ABL Credit Agreement.
For purposes hereof, the establishment by the ABL Agent of borrowing base
reserves, collateral ineligibles, or other similar conditions for limiting or
restricting availability or amounts of advances shall not be deemed to be an
Enforcement Action (in each case, other than, for the avoidance of doubt, any
condition or action that concerns the reduction or termination of any
commitments under the ABL Credit Agreement or the acceleration of any ABL Debt).
"Enforcement Notice" shall mean a written notice delivered, at a time when a
Default has occurred and is continuing, either by (i) the ABL Agent notifying
the Term Loan Lender Parties that it intends to commence an Enforcement Action
with respect to the ABL Priority Collateral -7-

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or (ii) any Term Loan Lender Party notifying the ABL Agent that it or another
Term Loan Lender Party intends to commence an Enforcement Action with respect to
any of the Collateral. "Equipment" shall mean, as to any Obligor, all machinery,
apparatus, equipment, fittings, furniture, fixtures, motor vehicles and other
tangible personal property (other than, in any event, Inventory, Accounts,
chattel paper, commercial tort claims, deposit accounts, documents, general
intangibles, instruments, investment property, letter of credit rights, letters
of credit, money, documents, contracts, copyrights, patents, trademarks or other
intellectual property) of every kind and description of such Obligor, including
"Equipment" as defined in the UCC. "Equity Interest" shall mean (a) all shares
of capital stock (whether denominated as common stock or preferred stock),
equity interests, beneficial, partnership or membership interests, joint venture
interests, participations or other ownership or profit interests in or
equivalents (regardless of how designated) of or in a Person (other than an
individual), whether voting or non-voting; and (b) all securities convertible
into or exchangeable for any other equity interests or Stock and all warrants,
options or other rights to purchase, subscribe for or otherwise acquire any
other equity interests or Stock, whether or not presently convertible,
exchangeable or exercisable. "Excess ABL Debt" shall mean any ABL Debt not
constituting ABL Priority Debt. "Excess Term Debt" shall mean any Term Debt not
constituting Term Priority Debt. "Exigent Circumstances" shall mean an event or
circumstance that materially and imminently threatens the ability of the Term
Loan Agent or the ABL Agent, as applicable, to realize upon all or a material
portion of the Term Loan Priority Collateral or the ABL Priority Collateral,
respectively, such as, without limitation, fraudulent removal, concealment,
destruction (other than to the extent covered by insurance), material waste or
abscondment thereof to all or any material portion of such Term Loan Priority
Collateral or ABL Priority Collateral (as applicable). "Inadvertent Overadvance
Amount" shall mean, as of any date of determination, loans outstanding under the
ABL Credit Agreement that were made or issued, as applicable, without actual
knowledge after reasonably diligent inquiry (which shall include reviewing and
analyzing the Borrowing Base Certificate (as defined in the ABL Credit Agreement
on the date hereof) most recently delivered prior to such funding or issuance)
that such loans would cause the aggregate outstanding principal amount of all
such loans to exceed the amount of the Borrowing Base at the time such loan was
made. "Insolvency Proceeding" shall mean, as to any Person, any insolvency,
bankruptcy, receivership, custodianship, liquidation, dissolution,
reorganization, assignment for the benefit of creditors or other proceeding for
the liquidation, dissolution or other winding up of any Obligor or any of their
respective properties. “Intellectual Property” shall mean any and all of the
following, whether arising under United States, multinational or foreign laws or
otherwise: (a) all patents, patent applications, patent licenses, patent
disclosures and inventions (whether patentable or unpatentable and whether or
not reduced to practice), (b) all trademarks, trademark licenses, service marks,
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trade dress, trade names, slogans, logos, and corporate names and Internet
domain names, together with all of the goodwill associated with each of the
foregoing, (c) copyrights, copyrightable works and copyright licenses, (d)
registrations and applications for registration for any of the foregoing, (e)
computer software (including but not limited to source code and object code),
data, databases, and documentation thereof, (f) trade secrets and other
confidential information, (g) all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom, (h) other intellectual property, (i) all assets,
properties, rights, interests, priorities and privileges with respect to the
foregoing, and (j) copies and tangible embodiments of the foregoing (in whatever
form and medium). "Inventory" shall have the meaning ascribed to the term
"inventory" in the UCC, and in any event shall include all goods intended for
sale or lease, or for display or demonstration, all in the ordinary course of
business; all work in process, all raw materials, and other materials and
supplies of every nature and description used or which might be used in
connection with the manufacture, labeling, packing, shipping, advertising,
selling, leasing, furnishing or production of such goods or otherwise consumed
in any Obligor's business (but excluding Equipment). “Irrevocable Purchase
Exclusion” shall have the meaning assigned to such term Section 3.1. “Junior
507(b) Claim” shall have the meaning assigned to such term in Section 4.2(b).
"Junior Secured Creditor" has the meaning assigned to such term in the
definition of "Senior Secured Creditor". "Lender" and "Lenders" shall mean,
individually or collectively as the context may require, the ABL Lender Parties
and the Term Loan Lender Parties, and their respective successors and assigns.
"Lien" shall mean any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the UCC or
comparable law of any jurisdiction). "New ABL Agent" shall have the meaning
assigned to such term in in Section 2.13(d). "New ABL Debt" shall have the
meaning assigned to such term in in Section 2.13(d). "New ABL Documents" shall
have the meaning assigned to such term in in Section 2.13(d). "New Term Debt"
shall have the meaning assigned to such term in in Section 2.13(c). -9-

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"New Term Loan Agent" shall have the meaning assigned to such term in in Section
2.13(c). "New Term Loan Documents" shall have the meaning assigned to such term
in in Section 2.13(c). “NT Brands” shall have the meaning assigned to such term
in the Recitals of this Agreement. “NT LP” shall have the meaning assigned to
such term in the Recitals of this Agreement. "Obligors" shall mean, individually
and collectively, Company and each of its Subsidiaries liable on or in respect
of Term Debt or ABL Debt, and each of their successors and assigns, including,
without limitation, a receiver, trustee or debtor-in-possession on behalf of
such Person or on behalf of any such successor or assign. "Ordinary Course
Collections" shall mean any receipt or application of the proceeds of ABL
Priority Collateral, or proceeds thereof, received in the ordinary course of
business, and not as a result of any Enforcement Action, which are promptly
applied to outstanding ABL Loans as a reduction of the outstanding amount
thereof. "Payment in Full" or "Paid in Full" shall mean (i) when used in
connection with the ABL Debt (or ABL Priority Debt, as applicable), (a) the
termination or expiration of the revolving loan commitments (or such lower
amount of commitments making up ABL Priority Debt, as applicable) of the ABL
Lenders under the ABL Loan Documents, (b) the payment in full in cash (or other
consideration acceptable to the ABL Lenders in their sole discretion) of the
principal and interest on all outstanding ABL Debt (or the ABL Priority Debt, as
applicable) (including any such amounts which would accrue and become due but
for the commencement of an Insolvency Proceeding, whether or not such amounts
are allowed or allowable in whole or in part in such case), and (c) the payment
or, in the case of contingent obligations, cash collateralization in full in
cash (or other consideration acceptable to the ABL Lenders in their sole
discretion), of all other ABL Debt (or ABL Priority Debt, as applicable)
(including indemnification obligations in respect of known contingencies and
fees, costs or charges accruing on or after the commencement of an Insolvency
Proceeding, whether or not such fees, costs or charges would be allowed or
allowable in such Insolvency Proceeding) that are due and payable or otherwise
accrued and owing at or prior to the time the amounts referenced in clause (a)
above are paid or are reasonably expected to be incurred by ABL Agent within a
reasonable time thereafter and evidenced by reasonably detailed information
certified as true, correct and complete by an officer of the ABL Agent (other
than expense reimbursement obligations and contingent indemnification
obligations for which no claim or demand for payment, whether oral or written,
has been made at such time); provided that if after receipt of any payment of,
or Proceeds of Collateral applied to the payment of, the ABL Debt (or the ABL
Priority Debt, as applicable), the ABL Agent or any other ABL Lender Party is
required to surrender or return such payment or proceeds to any person for any
reason, -10-

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then the ABL Debt (or the ABL Priority Debt, as applicable) intended to be
satisfied by such payment or proceeds shall be reinstated and continue, and this
Agreement shall continue in full force and effect as if such payment or proceeds
had not been received by the ABL Agent or such other ABL Lender Party, as the
case may be, and no Payment in Full of the ABL Debt (or the ABL Priority Debt,
as applicable) shall be deemed to have occurred; and (ii) when used in
connection with the Term Debt (or Term Priority Debt, as applicable), (a) the
payment in full in cash (or other consideration acceptable to the Term Loan
Lenders in their sole discretion) outstanding Term Debt (or Term Priority Debt,
amounts which would accrue and become due of the principal and interest on all
as applicable) (including any such but for the commencement of an Insolvency
Proceeding, whether or not such amounts are allowed or allowable in whole or in
part in such case), (b) the payment or, in the case of contingent obligations,
cash collateralization in full in cash (or other consideration acceptable to the
Term Loan Lenders in their sole discretion), of all other Term Debt (or Term
Priority Debt, as applicable) (including indemnification obligations in respect
of known contingencies and fees, costs or charges accruing on or after the
commencement of an Insolvency Proceeding, whether or not such fees, costs or
charges would be allowed or allowable in such Insolvency Proceeding) that are
due and payable or otherwise accrued and owing at or prior to the time the
amounts referenced in clause (a) above are paid or are reasonably expected to be
incurred by Term Loan Lender Parties within a reasonable time thereafter and
evidenced by reasonably detailed information certified as true, correct and
complete by officer(s) of the applicable Term Loan Lenders (other than expense
reimbursement obligations and contingent indemnification obligations for which
no claim or demand for payment, whether oral or written, has been made at such
time) and (c) the termination or expiration of all commitments to extend credit
that would be Term Debt (or the Term Priority Debt, as applicable); provided
that if after receipt of any payment of, or Proceeds of Collateral applied to
the payment of, the Term Debt (or the Term Priority Debt, as applicable), the
Term Loan Agent or any other Term Loan Lender Party is required to surrender or
return such payment or proceeds to any person for any reason, then the Term Debt
(or the Term Priority Debt, as applicable) intended to be satisfied by such
payment or proceeds shall be reinstated and continue, and this Agreement shall
continue in full force and effect as if such payment or proceeds had not been
received by the Term Loan Agent or such other Term Loan Lender Party, as the
case may be, and no Payment in Full of the Term Debt (or the Term Priority Debt,
as applicable) shall be deemed to have occurred. "Payment Waterfall" shall mean:
(i) in connection with the application, payment or distribution of proceeds of
any ABL Priority Collateral (including without limitation in connection with any
prepayment of the ABL Debt received pursuant to the ABL Loan Documents as a
result of the disposition of any ABL Priority Collateral but excluding Ordinary
Course Collections) pursuant to the applicable terms hereof, the following
order: (A) first, to the ABL Agent to be applied pursuant to the ABL Loan
Documents until the ABL Priority Debt has been Paid in Full; (B) second, to the
Term Loan Agent to be applied pursuant to the Term Loan Documents until the Term
Priority Debt has -11-

GRAPHIC [g193481kw01i011.gif]

 

been Paid in Full; (C) third, to the ABL Agent to be applied to the Excess ABL
Debt until Paid in Full and (D) fourth, to the Term Loan Agent to be applied to
the Excess Term Debt until Paid in Full; and (ii) in connection with the
application, payment or distribution of proceeds of any Term Loan Priority
Collateral (including without limitation in connection with any prepayment of
the Term Debt received pursuant to the Term Loan Documents as a result of the
disposition of any Term Loan Priority Collateral) pursuant to the applicable
terms hereof, the following order: (A) first, to the Term Loan Agent to be
applied pursuant to the Term Loan Documents until the Term Debt has been Paid in
Full; and (B) second, to the ABL Agent to be applied pursuant to the ABL Loan
Documents until the ABL Debt has been Paid in Full. "Person" or "person" shall
mean any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, other entity or government
(whether federal, state, county, city, municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department thereof).
“Prior ABL Agent” shall have the meaning assigned to such term in Section 3.8.
“Purchase Date” shall have the meaning assigned to such term in Section 3.2.
"Purchase Deadline" shall have the meaning assigned to such term in Section 3.1.
"Purchase Notice" shall have the meaning assigned to such term Section 3.1.
“Purchase Trigger Notice” shall have the meaning assigned to such term Section
3.1. "Refinance" shall mean, in respect of any ABL Debt or Term Debt or the
commitments related thereto, to refinance, replace, refund, or repay, or to
issue other Debt or commitments in exchange or replacement for such Debt or
commitments relating thereto (whether or not fully utilized) in whole or in
part, whether with the same or different lenders, agents, or arrangers.
“Refinanced” and “Refinancing” have correlative meanings. “Required ABL Purchase
Option Information” shall have the meaning assigned to such term Section 3.1.
“Restricted Accounts” shall mean Deposit Accounts (a) established and used (and
at all times will be used) solely for the purpose of paying current payroll
obligations of the Obligors (and which do not (and will not at any time) contain
any deposits other than those necessary to fund current payroll), in each case,
in the ordinary course of business, or (b) maintained (and at all times will be
maintained) solely in connection with an employee benefit plan of an Obligor,
but solely to the extent that all funds on deposit therein are solely held for
the benefit of, and owned by, employees of such Obligor (and will continue to be
so held and owned) pursuant to such plan, in each case, in the ordinary course
of business. “Retained Interest” shall have the meaning assigned to such term in
Section 3.5. -12-

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"Returned Goods" shall mean all right, title and interest of any Obligor in and
to returned, repossessed, reclaimed, traded-in or foreclosed upon Inventory, the
sale of which previously and directly gave rise to an Account. “SEC” shall mean
the United States Securities and Exchange Commission. "Senior Secured Creditor"
shall mean any Lender in its capacity as a secured creditor with a Lien on
Collateral that is senior to the Liens of any other Lender with respect to such
Collateral (such Lender with a junior Lien, in such capacity, a “Junior Secured
Creditor”) in accordance with the Lien priorities set forth in this Agreement,
including Section 2.1. “Stock” means (a) all shares of capital stock (whether
denominated as common stock or preferred stock), equity interests, beneficial,
partnership or membership interests, joint venture interests, participations or
other ownership or profit interests in or equivalents (regardless of how
designated) of or in a Person (other than an individual), whether voting or
non-voting; and (b) all securities convertible into or exchangeable for any
other Stock and all warrants, options or other rights to purchase, subscribe for
or otherwise acquire any other Stock, whether or not presently convertible,
exchangeable or exercisable. "Subsidiary" shall mean, as to any Person, any
entity or other Person of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or other
persons performing similar functions are at the time directly or indirectly
owned by such Person. Unless the context otherwise requires, each reference to
Subsidiaries herein shall be a reference to Subsidiaries of the Company. “Tail
Period” shall have the meaning assigned to such term in Section 3.2. "Term
Credit Agreement" shall have the meaning assigned to such term in the Recitals
of this Agreement. "Term Debt" shall mean all obligations, liabilities and
indebtedness of every kind, nature and description owing by any Obligor to the
Term Loan Agent and/or Term Loan Lenders evidenced by or arising under the Term
Loan Documents, whether direct or indirect, absolute or contingent, joint or
several, due or not due, primary or secondary, liquidated or unliquidated,
including principal, interest, charges, fees, costs, indemnities and expenses,
however evidenced, whether as principal, surety, endorser, guarantor or
otherwise, whether now existing or hereafter arising, whether arising before,
during or after the initial or any renewal term of the Term Loan Documents or
after the commencement of any Insolvency Proceeding with respect to any Obligor
(and including, without limitation, the payment of interest, fees, costs and
other charges which would accrue and become due but for the commencement of such
Insolvency Proceeding, whether or not such interest, fees, costs and other
charges are allowed or allowable in whole or in part in any such Insolvency
Proceeding), and in each case, whether or not allowed or allowable in an
Insolvency Proceeding. "Term Loan Agent" shall mean Deerfield Mgmt, L.P., in its
capacity as collateral agent for the Term Loan Lender Parties, and its
successors and assigns in such capacity (including any New Term Loan Agent that
is deemed to be the Term Loan Agent pursuant to Section 2.13(c)). -13-

GRAPHIC [g193481kw01i013.gif]

 

“Term Loan Cash Collateral” shall have the meaning assigned to such term in
Section 4.2(c). "Term Loan Cash Proceeds Notice" shall mean a written notice
delivered by the Term Loan Agent, any other Term Loan Lender Party or any
Obligor to the ABL Agent stating that certain cash proceeds which may be
deposited in any Obligor's ABL Priority Deposit Accounts constitute Proceeds of
Term Loan Priority Collateral, and reasonably identifying the amount of such
Proceeds and the origin thereof. "Term Loan Default" shall mean an Event of
Default under the Term Credit Agreement. "Term Loan Deficiency Claim" shall mean
any portion of the Term Debt consisting of an allowed unsecured claim under
Section 506(a) of the Bankruptcy Code (or any similar provision under any other
law governing an Insolvency Proceeding). "Term Loan Documents" shall mean the
Term Credit Agreement and all agreements, documents and instruments at any time
executed and/or delivered by any Obligor or any other Person with, to or in
favor of Term Loan Lenders and/or the Term Loan Agent in connection therewith or
related thereto (including, without limitation, the "Loan Documents", as defined
in the Term Credit Agreement), as all of the foregoing now exist or may
hereafter be amended, modified, supplemented, extended, replaced, renewed,
Refinanced (to the extent expressly permitted by this Agreement) or restated,
except in violation of Section 2.13(b). "Term Loan Lender Parties" shall mean
the Term Loan Agent and the Term Loan Lenders. "Term Loan Lenders" shall mean
the "Lenders" as defined in the Term Credit Agreement (including, for the
avoidance of doubt, such Persons (other than, for the avoidance of doubt, any
Obligor) now or hereafter party to the Term Credit Agreement, and their
respective successors and assigns as contemplated thereunder). "Term Loan
Maximum Amount" shall mean, as of any date of determination, the result of the
sum of (which amount shall be increased by the amount of all interest, fees,
costs, expenses and indemnities accrued or charged with respect to any of the
Term Debt in accordance with the Term Credit Agreement (other than Excess Term
Debt), whether or not capitalized, in each case, other than in connection with
amendments, restatements, supplements or other modifications expressly
prohibited by this Agreement as and when the same accrues or becomes due and
payable, irrespective of whether the same is added to the principal amount of
the Term Debt (and including the same as would accrue and become due but for the
commencement of an Insolvency Proceeding whether or not such amounts are allowed
or allowable, in whole or in part, in any such Insolvency Proceeding): (a)
$49,500,000; plus (b) solely in the case of a DIP Financing, 10% of the
outstanding principal amount of Term Debt (other than Excess Term Debt)
outstanding as of the date of the commencement of such Insolvency Proceeding;
minus -14-

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(c) the aggregate amount of all principal payments of the Term Debt (other than
in connection with a Refinancing thereof expressly permitted by this Agreement,
subject to Section 2.2(d)). "Term Loan Priority Collateral" shall mean all
assets and properties of any kind whatsoever, real, personal or mixed, tangible
or intangible, and wherever located of any Obligor, including all Equity
Interests of the Obligors (other than the Company), and all proceeds thereof,
other than any of the foregoing that constitutes ABL Priority Collateral. Term
Loan Priority Collateral shall include, in any event, the following property of
the Obligors: goods, fixtures, Equipment, Inventory, leasehold interests,
investment property, intellectual property, Equity Interests, chattel paper,
instruments, general intangibles, tax refunds, tax rebates, business
interruption insurance proceeds, representation and warranty proceeds, all Term
Priority Deposit Accounts, Securities Accounts (and all cash, cash equivalents,
assets and other items therein, except to the extent constituting identifiable
proceeds of ABL Priority Collateral), Commodity Accounts (and all cash, cash
equivalents, assets and other items therein, except to the extent constituting
identifiable proceeds of ABL Priority Collateral), and all other assets and
proceeds and products of the foregoing, in each case, other than those that are
expressly defined as ABL Priority Collateral. "Term Loan Secured Claim" shall
mean any portion of the Term Debt not constituting a Term Loan Deficiency Claim.
"Term Priority Debt" shall mean all Term Debt, in each case, excluding any
portion of principal which exceeds the Term Loan Maximum Amount, and any
interest, charges, fees, premiums and expenses (in each case, which may include
paid in-kind amounts that may be added to such principal) on account, or in
respect, of such excess portion. “Term Priority Deposit Accounts” shall mean all
Deposit Accounts of the Obligors that are (a) maintained at First Republic Bank
(routing number with account number or (b) agreed to in writing between the ABL
Agent and the Term Loan Lenders to be a Term Priority Deposit Account. "Term
Purchasing Lenders” shall have the meaning assigned to such term Section 3.1.
“Triggering Event” shall have the meaning assigned to such term Section 3.6.
"UCC" shall mean the Uniform Commercial Code, as amended and in effect in any
applicable jurisdiction. SECTION 2. PAYMENTS; SECURITY INTERESTS; PRIORITIES;
REMEDIES 2.1 The ABL Agent, on behalf of the ABL Lender Parties, hereby
acknowledges that the Term Loan Agent, for the benefit of itself and the other
Term Loan Lender Parties, has been granted Liens upon all of the Collateral
pursuant to the Term Loan Documents to secure the Term Debt. The Term Loan Agent
and the other Term Loan Lenders party hereto hereby acknowledges that the ABL
Agent, for the benefit of itself and the other ABL Lender Parties, has been
granted Liens upon all of the Collateral pursuant to the ABL Loan Documents to
secure the ABL Debt. -15-

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2.2 (a) Notwithstanding the order or time of attachment, or the order, time or
manner of perfection, or the order or time of filing or recordation of any
document or instrument, or other method of perfecting a Lien in favor of a
Lender in any Collateral, and notwithstanding any conflicting terms or
conditions which may be contained in any of the Documents: (i) the Liens of the
ABL Agent upon the ABL Priority Collateral, to the extent that such Liens secure
the ABL Priority Debt, have and shall have priority over the Liens of the Term
Loan Agent upon the ABL Priority Collateral (and such Liens of the Term Loan
Agent are and shall be junior and subordinate to the Liens of the ABL Agent upon
the ABL Priority Collateral, to the extent that such Liens secure the ABL
Priority Debt); (ii) the Liens of the ABL Agent upon the ABL Priority
Collateral, to the extent that such Liens secure the Excess ABL Debt, are and
shall (x) be junior and subordinate to the Liens of the Term Loan Agent upon the
ABL Priority Collateral to the extent such Liens secure the Term Priority Debt
(and such Liens of the Term Loan Agent, to the extent such Liens secure the Term
Priority Debt, have and shall have priority over the Liens of the ABL Agent upon
the ABL Priority Collateral, to the extent that such Liens secure the Excess ABL
Debt) and (y) have priority over the Liens of the Term Loan Agent upon the ABL
Priority Collateral to the extent such Liens secure the Excess Term Debt (and
such Liens of the Term Loan Agent, to the extent such Liens secure the Excess
Term Debt, are and shall be junior and subordinate to the Liens of the ABL Agent
upon the ABL Priority Collateral); and (iii) the Liens of the Term Loan Agent
upon the Term Loan Priority Collateral, to the extent that such Liens secure the
Term Debt, have and shall have priority over the Liens of the ABL Agent upon the
Term Loan Priority Collateral (and such Liens of the ABL Agent are and shall be
junior and subordinate to the Liens of the Term Loan Agent upon the Term Loan
Priority Collateral, to the extent that such Liens secure the Term Debt). (b)
Nothing contained in this Agreement will waive any Term Loan Default resulting
from the incurrence of Excess ABL Debt. Nothing contained in this Agreement will
waive any ABL Default resulting from the incurrence of Excess Term Debt. (c) The
parties hereto acknowledge and agree that (1) the Obligors are and shall remain
the same in respect of the ABL Debt and the Term Debt, (2) each of the ABL Debt
and the Term Debt are secured solely by the Collateral, and (3) it is their
intention that, the Collateral securing the ABL Debt and the Collateral securing
the Term Debt be identical in all material respects and, in furtherance of such
intent, the parties hereto agree: (a) to cooperate in good faith in order to
determine, upon any written request by the ABL Agent or any Term Loan Lender
Party, the specific assets included in the Collateral securing their respective
Debts, the steps taken to perfect the Liens thereon and the identity of the
Obligors under any Document, and (b) any Lien upon the Collateral obtained by
any Lender in respect of any judgment obtained in respect of any Debt shall be
subject in all respects to the terms of this Agreement. -16-

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(d) The priorities given to the Liens upon the ABL Priority Collateral and Term
Loan Priority Collateral pursuant to this Section 2.2 and the terms of this
Agreement shall continue to govern the relative rights and priorities of the ABL
Lender Parties, on the one hand, and the Term Loan Lender Parties, on the other
hand, even if all or any part of the Liens in favor of a Lender are
subordinated, avoided, disallowed, unperfected, set aside or otherwise
invalidated, whether pursuant to an Insolvency Proceeding, any other judicial
proceeding or otherwise, and this Agreement shall be reinstated if at any time
any payment of any of the ABL Priority Debt or Term Priority Debt (or Term Debt,
as applicable) (including by way of application of proceeds of Collateral) is
rescinded or must be returned by any holder thereof or any representative of
such holder (and to the extent that the ABL Loan Maximum Amount or Term Loan
Maximum Amount (as applicable) was decreased in connection with any such
payment, the ABL Loan Maximum Amount or Term Loan Maximum Amount, as applicable,
will be increased to such extent). The Term Loan Lender Parties shall not bring
any claim or counterclaim for equitable subordination with respect to the ABL
Priority Debt or the Liens securing the ABL Priority Debt, and the ABL Lender
Parties shall not bring any claim or counterclaim for equitable subordination
with respect to the Term Debt or the Liens securing the Term Debt. (e) The ABL
Agent hereby represents and warrants to and for the benefit of the Term Loan
Lender Parties that the ABL Agent does not have any Liens on any of the Term
Loan Priority Collateral unless and to the extent that the Term Loan Agent has
Liens on such Term Loan Priority Collateral. The Term Loan Agent hereby
represents and warrants to and for the benefit of the ABL Lender Parties that
the Term Loan Agent does not have any Liens on any of the ABL Priority
Collateral unless and to the extent that the ABL Agent has Liens on such ABL
Priority Collateral. The ABL Agent agrees and covenants that the ABL Agent shall
not obtain, receive or accept any Liens on or in any of the Term Loan Priority
Collateral unless, and solely to the extent, that the Term Loan Agent has Liens
on such Term Loan Priority Collateral. The Term Loan Agent agrees and covenants
that the Term Loan Agent shall not obtain, receive or accept any Liens on or in
any of the ABL Priority Collateral unless, and solely to the extent, that the
ABL Agent has Liens on such ABL Priority Collateral. The ABL Agent and each
Obligor agrees and covenants that no Person other than an Obligor in respect of
the Term Debt (y) is or shall become liable, as primary obligor, guarantor,
surety or otherwise, in respect of all or any portion of the ABL Debt or (z)
shall grant any Lien on any of their respective assets and properties to secure
the ABL Debt. The Term Loan Agent and each Obligor agrees and covenants that no
Person other than an Obligor in respect of the ABL Debt (y) is or shall become
liable, as primary obligor, guarantor, surety or otherwise, in respect of all or
any portion of the Term Debt or (z) shall grant any Lien on any of their
respective assets and properties to secure the Term Debt. 2.3 The priorities of
the Liens provided in Section 2.2 shall not be altered or otherwise affected by
(a) any amendment, modification, supplement, extension, renewal, restatement,
replacement or Refinancing (to the extent any such Refinancing is expressly
permitted by this Agreement) of the ABL Debt or the Term Debt, nor (b) any
action or inaction which any of the Lenders may take or fail to take in respect
of the Collateral. Except in an Insolvency Proceeding or with respect to capital
leases or purchase money financing provided by any third party creditor, the ABL
Agent agrees not to voluntarily subordinate its Lien in any ABL Priority
Collateral to the Lien, indebtedness or claim of any other creditor of any
Obligor without the prior written consent of the Term Loan Lender Parties. -17-

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2.4 (a) Prior to the Payment in Full of the ABL Priority Debt, all ABL Priority
Collateral and all proceeds of the ABL Priority Collateral received by the Term
Loan Lenders or the Term Loan Agent in connection with an Enforcement Action
shall be forthwith paid over, in the funds and currency received, to the ABL
Agent for application to the ABL Priority Debt in accordance with the terms of
the ABL Loan Documents or to be held as collateral security for the ABL Priority
Debt. Prior to the Payment in Full of the Term Priority Debt, all proceeds of
the ABL Priority Collateral received by the ABL Agent after the ABL Priority
Debt has been Paid in Full shall be forthwith paid over, in the funds and
currency received, to the Term Loan Lender Parties (as directed by either the
Term Loan Agent or the Term Loan Lender Parties in writing) for application to
the Term Priority Debt in accordance with the terms of the Term Loan Documents
or to be held as collateral security for the Term Priority Debt. (b) Prior to
the Payment in Full of the Term Debt, all Term Loan Priority Collateral and all
proceeds of the Term Loan Priority Collateral received by the ABL Agent in
connection with an Enforcement Action shall be forthwith paid over, in the funds
and currency received, to the Term Loan Lender Parties (as directed by either
the Term Loan Agent or the Term Loan Lender Parties in writing) for application
to the Term Debt in accordance with the terms of the Term Loan Documents or to
be held as collateral security for the Term Debt. Prior to the Payment in Full
of the ABL Debt, all proceeds of the Term Loan Priority Collateral received by
the Term Loan Agent after the Term Debt has been Paid in Full shall be forthwith
paid over, in the funds and currency received, to the ABL Agent for application
to the ABL Debt in accordance with the terms of the ABL Loan Documents or to be
held as collateral security for the ABL Debt. In addition, except as a court of
competent jurisdiction may otherwise direct, to the extent that the ABL Agent
has received a Term Loan Cash Proceeds Notice (which shall be effective with
respect to the cash proceeds and other Term Loan Priority Collateral identified
therein) prior to the application of the Proceeds of Term Loan Priority
Collateral referenced therein by the ABL Agent to the ABL Debt in accordance
with the ABL Credit Agreement, such Proceeds shall be segregated and held in
trust by the ABL Agent and promptly transferred or paid over to the Term Loan
Lender Parties (as directed by either the Term Loan Agent or the Term Loan
Lender Parties in writing) to be applied by the Term Loan Lender Parties in
accordance with the Term Loan Documents in the same form as received, with any
necessary endorsements or assignments with respect thereto. (c) Prior to an
issuance of any Enforcement Notice by a Lender (unless a bankruptcy or
insolvency ABL Default or Term Loan Default then exists), any proceeds of
Collateral obtained in accordance with the terms of the ABL Loan Documents and
the Term Loan Documents, whether or not deposited under control agreements,
which are used by any Obligor to acquire other property which is Collateral
shall not (solely as between the Lenders) be treated as Proceeds of Collateral
for purposes of determining the relative priorities in the Collateral which was
so acquired, but shall be subject to Section 2.2. In addition, (A) unless and
until the Payment in Full of ABL Priority Debt occurs, Term Loan Agent hereby
consents to the application, prior to the receipt by ABL Agent of an Enforcement
Notice or a Term Loan Cash Proceeds Notice issued by any of the Term Loan Lender
Parties, of cash or other proceeds of Collateral, properly deposited in an ABL
Priority Deposit Account to the repayment of ABL Debt pursuant to the ABL Loan
Documents, and (B) unless and until the Payment in Full of Term Debt occurs, the
ABL Lender Parties hereby each consents to the application of cash or other
proceeds of Collateral properly deposited in a Term Priority Deposit Account to
the -18-

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repayment of Term Debt pursuant to the Term Loan Documents. All proceeds of
Collateral received by any Lender (i) pursuant to an Insolvency Proceeding
(other than in connection with Cash Collateral usage or DIP Financing in
accordance with Sections 4.2(b) or (c) below), (ii) in connection with or as a
result of an Enforcement Action, (iii) in connection with any insurance policy
claim or any condemnation award (except to the extent the applicable Documents
permit the use or reinvestment of such proceeds by any Obligor), or (iv) due to
the exercise of any right or remedy under any subordination agreement in respect
of subordinated indebtedness or any management fee subordination agreement, and
all proceeds of business interruption insurance received by any Lender, shall,
in each case, be paid over and applied in accordance with the applicable Payment
Waterfall. 2.5 The ABL Lender Parties and the Term Loan Lender Parties shall
each be solely responsible for perfecting and maintaining the perfection of
their respective Lien in and on each item constituting the Collateral in which
such Lender or group of Lenders has been granted a Lien. It being understood
that (a) the Lien in favor of the Term Loan Lender Parties has been granted to
and in favor of the Term Loan Agent for the benefit and on behalf of the Term
Loan Lender Parties and (b) the Lien in favor of the ABL Lender Parties has been
granted to and in favor of the ABL Agent for the benefit and on behalf of the
ABL Lender Parties. The foregoing provisions of this Agreement are intended
solely to govern the respective Lien priorities as between the Lenders and shall
not impose on any Lender any obligations in respect of the disposition of
proceeds of any Collateral which would conflict with prior perfected claims
therein in favor of any other Person or any order or decree of any court or
governmental authority or any applicable law. The Term Loan Agent, on behalf of
the Term Loan Lender Parties, agrees that they will not object to or contest, in
any proceeding (including, without limitation, an Insolvency Proceeding) or
otherwise, the validity, extent, perfection, priority or enforceability of the
Liens of the ABL Agent and the ABL Lenders upon the Collateral (or the extent,
validity, allowability or enforceability of any ABL Debt secured thereby or
purported to be secured thereby); provided, that, the foregoing is not intended
and shall not be deemed or construed to limit the ability of the Term Loan Agent
or any of the Term Loan Lenders to enforce the terms and provisions of this
Agreement. The ABL Agent, on behalf of the ABL Lender Parties, agrees that they
will not object to or contest, in any proceeding (including, without limitation,
an Insolvency Proceeding) or otherwise, the validity, extent, perfection,
priority or enforceability of the Liens of the Term Loan Agent and the Term Loan
Lenders upon the Collateral (or the extent, validity, allowability or
enforceability of any Term Debt secured thereby or purported to be secured
thereby); provided, that, the foregoing is not intended and shall not be deemed
or construed to limit the ability of the ABL Agent or any of the ABL Lenders to
enforce the terms and provisions of this Agreement. 2.6 In the event that the
ABL Agent, the ABL Lenders, the Term Loan Agent or the Term Loan Lenders shall,
in the exercise of their rights under their Documents or otherwise, receive
possession or control of any Books and Records of any applicable Obligor which
contain information identifying or pertaining to any Collateral in which the ABL
Agent, the ABL Lenders, the Term Loan Agent or the Term Loan Lenders (as the
case may be) has been granted a Lien in accordance herewith, such Person shall
notify such other Person that they have received such Books and Records and
shall, as promptly as practicable after demand therefor, make available to such
other Person (at such other Person's expense) such Books and Records for
inspection and duplication. -19-

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2.7(a) Payment in Full of Subject to the terms and conditions set forth in this
Agreement, prior to the the ABL Priority Debt, the ABL Agent shall have the
exclusive right to manage, perform and enforce the terms of the ABL Loan
Documents with respect to the ABL Priority Collateral, to exercise and enforce
all privileges and rights thereunder according to their discretion and the
exercise of their business judgment, including, without limitation, the
exclusive right to take or retake control or possession of the ABL Priority
Collateral and to hold, prepare for sale, process, sell, lease, dispose of, or
liquidate the ABL Priority Collateral, and to incur expenses in connection with
such sale, lease or other disposition and to exercise all of the rights and
remedies of a secured lender under the UCC of any applicable jurisdiction. In
conducting any public or private sale under the UCC or other applicable law,
including any foreclosure sale, the ABL Agent shall give the Term Loan Lender
Parties such notice of such sale as may be required under the applicable UCC;
provided, however, that 10 days' notice shall be deemed in all respects to be
commercially reasonable notice. (b) Subject to the terms and conditions set
forth in this Agreement, prior to the Payment in Full of the Term Debt, the Term
Loan Agent and the Term Loan Lenders shall have the exclusive right to manage,
perform and enforce the terms of the Term Loan Documents with respect to the
Term Loan Priority Collateral, to exercise and enforce all privileges and rights
thereunder according to their discretion and the exercise of their business
judgment, including, without limitation, the exclusive right to take or retake
control or possession of the Term Loan Priority Collateral and to hold, prepare
for sale, process, sell, lease, dispose of, or liquidate the Term Loan Priority
Collateral, and to incur expenses in connection with such sale, lease or other
disposition and to exercise all of the rights and remedies of a secured lender
under the UCC of any applicable jurisdiction. In conducting any public or
private sale under the UCC or other applicable law, including any foreclosure
sale, the Term Loan Agent shall give the ABL Agent and/or the ABL Lenders such
notice of such sale as may be required under the applicable UCC; provided,
however, that 10 days' notice shall be deemed in all respects to be commercially
reasonable notice. 2.8 (a) Notwithstanding anything to the contrary contained in
any of the Documents, but subject to the next sentence below, prior to the
Payment in Full of the ABL Priority Debt, whether or not an Insolvency
Proceeding has been commenced by or against any Obligor, only the ABL Lender
Parties shall have the right to restrict or permit, or approve or disapprove,
the sale, transfer or other disposition of, or otherwise deal with, the ABL
Priority Collateral or to take and continue any Enforcement Action with respect
to the ABL Priority Collateral. Notwithstanding any rights or remedies available
to the ABL Lender Parties under any of the ABL Loan Documents, applicable law or
otherwise, prior to the time that the Term Loan Agent and the Term Loan Lenders
shall have received the Payment in Full of all Term Priority Debt, the ABL
Lender Parties shall not, directly or indirectly, take any Enforcement Action
with respect to any of the ABL Priority Collateral unless it shall have first
delivered an Enforcement Notice to the Term Loan Lender Parties; provided,
however, solely in the event of Exigent Circumstances, the ABL Lender Parties
shall be permitted to provide such an Enforcement Notice to the Term Loan Lender
Parties within one Business Day after taking such Enforcement Action. (b)
Notwithstanding anything to the contrary contained in any of the Documents, but
subject to the next sentence below, prior to the Payment in Full of the Term
Debt, whether or not -20-

GRAPHIC [g193481kw01i020.gif]

 

an Insolvency Proceeding has been commenced by or against any Obligor, only the
Term Loan Lender Parties shall have the right to restrict or permit, or approve
or disapprove, the sale, transfer or other disposition of, or otherwise deal
with, the Term Loan Priority Collateral or to take and continue any Enforcement
Action with respect to the Term Loan Priority Collateral. 2.9 (a) Except as
specifically provided in Section 2.11 below, notwithstanding any rights or
remedies available to the ABL Agent or ABL Lender Parties under any of the ABL
Loan Documents, applicable law or otherwise, prior to the time that the Term
Loan Lender Parties shall have received the Payment in Full of all Term Debt,
neither the ABL Agent nor any of the ABL Lender Parties shall, directly or
indirectly, take any Enforcement Action with respect to any of the Term Loan
Priority Collateral. (b) Except as specifically provided in Section 2.11 below,
notwithstanding any rights or remedies available to the Term Loan Agent or Term
Loan Lenders under any of the Term Loan Documents, applicable law or otherwise,
prior to the time that the ABL Lender Parties shall have received the Payment in
Full of all ABL Priority Debt, neither the Term Loan Agent nor any of the Term
Loan Lenders shall, directly or indirectly, take any Enforcement Action with
respect to any of the ABL Priority Collateral; provided, that, upon the
occurrence of any Term Loan Default and for so long as such Term Loan Default is
continuing, so long as no Insolvency Proceeding is pending with respect to any
Obligor which stays the ability of ABL Lender Parties to take Enforcement
Actions against the ABL Priority Collateral, subject at all times to the
provisions of Section 2.2 and Section 2.4 of this Agreement, commencing on the
90th day after delivery by any Term Loan Lender Party to the ABL Agent of an
Enforcement Notice, the Term Loan Agent or Term Loan Lenders may take action to
enforce their Liens on the ABL Priority Collateral, but only so long as the ABL
Agent is not diligently pursuing in good faith the exercise of an Enforcement
Action against, or diligently attempting to vacate any stay of enforcement of
their Liens on, all or substantially all of the ABL Priority Collateral
(including, without limitation, commencement of any action to foreclose its
Liens on all or substantially all of the ABL Priority Collateral, notification
to all or substantially all account debtors with respect to all or substantially
all Accounts that are ABL Priority Collateral to make payments to ABL Agent, any
action to take possession of all or substantially all of the ABL Priority
Collateral or commencement of any legal proceedings or actions against or with
respect to all or substantially all of the ABL Priority Collateral). In any sale
or other disposition of any of the ABL Priority Collateral by the Term Loan
Agent and/or the Term Loan Lenders, the applicable Term Loan Lender Parties
shall conduct such sale or other disposition of such ABL Priority Collateral in
a commercially reasonable manner and the proceeds of such sale or other
disposition of such ABL Priority Collateral shall be applied in accordance with
the applicable Payment Waterfall. 2.10 (a)Upon any release, sale or disposition
of any ABL Priority Collateral (x) permitted pursuant to the terms of both the
ABL Loan Documents and the Term Loan Documents that results in the release of
the Lien of the ABL Agent in any ABL Priority Collateral or (y) in connection
with an Enforcement Action by ABL Agent or the ABL Lender Parties, in each case,
so long as the ABL Lender Parties release their Liens on such ABL Priority
Collateral prior thereto, at the same time or substantially concurrently
therewith, the Liens of the Term Loan Agent and the Term Loan Lenders shall be
automatically and unconditionally released with no further consent or action of
any Person so long as (i) the Term Loan Agent's Lien attaches to the proceeds of
such ABL Priority Collateral with the same priority as they had -21-

GRAPHIC [g193481kw01i021.gif]

 

on such ABL Priority Collateral being released, sold or disposed of upon such
release, sale or disposition thereof and (ii) the proceeds thereof are
distributed pursuant to the Payment Waterfall. The Term Loan Agent and the Term
Loan Lenders shall promptly execute and deliver such release documents as the
ABL Agent may reasonably require in connection with any such release, sale or
disposition of ABL Priority Collateral expressly permitted and required pursuant
to the immediately preceding sentence. (b) The Term Loan Agent shall, prior to
the Payment in Full of the ABL Priority Debt: (i)upon the request of the ABL
Agent with respect to the ABL Priority Collateral identified in such request as
set forth above (which request shall specify the proposed terms of the sale and
the type and amount of consideration to be received in connection therewith),
release or otherwise terminate its Liens on such ABL Priority Collateral, to the
extent such ABL Priority Collateral is to be sold or otherwise disposed of as
contemplated by this Section 2.10 (subject to the carve outs and caveats set
forth above in this Section 2.10); and (ii) deliver to the ABL Agent such
release documents as the ABL Agent may reasonably require in connection
therewith; provided, that, (A) the ABL Agent shall promptly (but, in any event,
within 2 Business Days of the receipt thereof, except as otherwise may be
required by applicable law or court order) apply such proceeds as specified in
the applicable Payment Waterfall, and (B) if the closing of the sale or
disposition of such ABL Priority Collateral is not consummated within 3 Business
Days of the date of delivery of such release documents (or such later date the
Term Loan Lender Parties agrees to in writing in their sole discretion), the ABL
Agent shall promptly (and shall use commercially reasonable efforts to do so
within 2 Business Days thereof) return all release documents to the Term Loan
Lender Parties. (c) Upon any release, sale or disposition of any Term Loan
Priority Collateral, so long as the Term Loan Lender Parties release their Liens
on such Term Loan Priority Collateral prior thereto, at the same time or
substantially concurrently therewith, the Liens of the ABL Agent and the ABL
Lenders shall be automatically and unconditionally released with no further
consent or action of any Person. The ABL Agent and the ABL Lenders shall
promptly execute and deliver such release documents as any of the Term Loan
Lender Parties may reasonably require in connection with any such release, sale
or disposition of Term Loan Priority Collateral. (d) The ABL Agent shall, prior
to the Payment in Full of the Term Debt: (i) upon the request of any Term Loan
Lender Party with respect to the Term Loan Priority Collateral identified in
such request as set forth above (which request shall specify the proposed terms
of the sale and the type and amount of consideration to be received in
connection therewith), release or otherwise terminate its Liens on such Term
Loan Priority Collateral, to the extent such Term Loan Priority Collateral is to
be sold or otherwise disposed of as contemplated by this Section 2.10; and -22-

GRAPHIC [g193481kw01i022.gif]

 

(ii) deliver to the Term Loan Lender Parties such release documents as any of
the Term Loan Lender Parties may reasonably require in connection therewith;
provided, that, (A) such proceeds shall be promptly applied as specified in the
applicable Payment Waterfall, and (B) if the closing of the sale or disposition
of such Term Loan Priority Collateral is not consummated within 3 Business Days
of the date of delivery of such release documents (or such later date the ABL
Agent agrees to in writing), the applicable Term Loan Lender Party shall
promptly return all release documents to the ABL Agent. 2.11Section 2.9 and
Section 2.10 shall not be construed to in any way limit or impair the right of:
(a) any Lender to bid for or purchase Collateral at any public sale or judicial
foreclosure upon such Collateral initiated by any other Lender in accordance
with this Agreement, (b) any Lender to join (but not control) any foreclosure or
other judicial Lien enforcement proceeding with respect to the ABL Priority
Collateral initiated by any other Lender permitted to initiate such enforcement
proceeding hereunder at such time, so long as it does not delay or interfere in
any material respect with the exercise by ABL Agent or ABL Lenders, or of Term
Loan Agent or Term Loan Lenders, as the case may be, of their respective rights
as provided in this Agreement, and (c) any Lender's right to receive in
accordance with the terms and provisions of this Agreement any proceeds of
Collateral; provided, that: (x) with respect to ABL Priority Collateral, no Term
Loan Lender Parties may make a credit bid for such Collateral and offset Term
Debt against the purchase price therefor until (or unless resulting in) the
Payment in Full of ABL Priority Debt; and (y) with respect to the Term Loan
Priority Collateral, no ABL Lender Parties may make a credit bid for such
Collateral and offset ABL Debt against the purchase price therefor until (or
unless resulting in) the Payment in Full of Term Debt. 2.12 Reserved. 2.13
(a)The ABL Agent may at any time and from time to time without the consent of or
notice to the Term Loan Agent or any Term Loan Lender, without incurring
liability to the Term Loan Agent or any Term Loan Lender and without impairing
or releasing the obligations of the Term Loan Agent or any Term Loan Lender
under this Agreement, change the manner or place of payment or extend the time
of payment of or renew or alter any ABL Debt, or amend, supplement, restate or
otherwise modify in any manner any ABL Loan Document; provided, that, the ABL
Lender Parties shall not, without the prior written consent of the Term Loan
Agent and the Term Loan Lenders holding greater than 50% of the outstanding
principal balance of the Term Debt, agree to any modification, amendment,
restatement, waiver, consent or supplement to the ABL Debt or any ABL Loan
Documents, the effect of which is to: (i)
(A)increasetheaggregatecombinedamountofunused commitments, outstanding loans
and/or other credit extensions (and/or other amounts covered under the
definition of "ABL Loan Maximum Amount") under the ABL Loan Documents to an
amount greater than the ABL Loan Maximum Amount or (B) provide or issue any
letters of credit, banker's acceptances, hedging arrangements or similar
obligations; (ii)increase any applicable interest rate margin with respect to
the ABL Debt by more than 200 basis points (per annum) in excess of the interest
rate -23-

GRAPHIC [g193481kw01i023.gif]

 

margins set forth in the ABL Credit Agreement as in effect on the date hereof,
except (x) in connection with the imposition of a default rate of interest (not
to exceed an additional 200 basis points per annum) and (y) increases in the
underlying reference rate not caused by an amendment, restatement, supplement,
waiver, consent or modification of the ABL Credit Agreement; (iii) extend the
final scheduled maturity date of the ABL Debt (or the termination date of the
commitments to lend under the ABL Credit Agreement) to a date beyond the final
scheduled maturity date (and termination date) in effect in the ABL Credit
Agreement as of the date hereof; (iv) amend or modify the (w) definition of
"Borrowing Base" in the ABL Credit Agreement as in effect on the date hereof so
as to increase, supplement, stretch, loosen or expand the amount of credit
available to the Borrowers or any other Obligor under the ABL Loan Documents,
(x) the components thereof or definitions used therein (in each case as in
effect on the date hereof) so as to increase, supplement, stretch, loosen or
expand the amount of credit available to the Borrowers or any other Obligor
under the ABL Loan Documents, (y) the advance rates set forth in the definition
of Borrowing Base in the ABL Credit Agreement to a rate higher than the advance
rates set forth in the definition of Borrowing Base in the ABL Credit Agreement
as in effect on the date hereof (which, for the avoidance of doubt, the advance
rate shall never be higher (or exceed) 85% of the outstanding face amount of
“Eligible Accounts” (as defined in the ABL Credit Agreement as of the date of
this Agreement) and the Borrowing Base shall only be composed of no more than
85% of such Eligible Accounts minus any reserves being implemented therefor), or
(z) modify the definition of "Eligible Accounts" in the ABL Credit Agreement as
in effect on the date hereof (or increase or expand the components and assets
making up the Borrowing Base in the ABL Credit Agreement as in effect on the
date hereof so as to provide for additional capacity to borrow or to be eligible
for borrowing); provided that the foregoing shall not limit or affect in any
manner the ABL Agent's discretion to establish additional blocks or reserves, to
release blocks or reserves, and to determine eligibility, in each case of this
proviso, in accordance with the terms and conditions of the ABL Credit Agreement
(as in effect on the date hereof); (v) shorten the final scheduled maturity date
of, or the scheduled commitment termination date with respect to the ABL Debt,
(vi) add any amortization payments or required prepayments in the event that any
revolving loans or related commitments are converted to term loans or other term
debt, except after the occurrence and during the continuation of an ABL Default;
(vii) (A) directly make more restrictive those provisions set forth in the ABL
Credit Agreement which restrict the ability of Obligors to prepay the Term Debt
or otherwise directly restrict or prohibit any Obligor from paying or prepaying
all or any portion of the Term Debt that would otherwise be permitted under the
ABL Loan Documents as in effect on the date hereof or (B) restrict the ability
of any Obligor to pay (or make distributions to pay) any of the Term Debt as
scheduled or required to be paid -24-

GRAPHIC [g193481kw01i024.gif]

 

pursuant to the Term Loan Documents; provided that, for the avoidance of doubt,
the only conditions or restrictions on any prepayment or payment of any Term
Debt that may exist in the ABL Loan Documents on the date hereof are set forth
in the definition of “Payment Conditions” in the ABL Credit Agreement as in
effect on the date hereof (including all components, levels, terms and
definitions thereof or related thereto as in effect on the date hereof) and such
Payment Conditions shall only apply with respect to voluntary prepayments of any
principal amount (but not any other amount) of Term Debt; (viii)restrict the
ability of any Obligor to incur Term Debt or grant Liens securing the Term Debt
in accordance with this Agreement; (ix) without limiting, and at all times
subject to, the other restrictions set forth in this Section 2.13(a), change in
a manner materially adverse to any Obligor or any Term Loan Lender Party, or add
or make materially more restrictive, any event of default or add or make more
restrictive any representation, warranty, agreement, financial covenant or other
covenant with respect to the ABL Debt (except to the extent such change,
amendment or addition to any ABL Loan Document merely mirrors a change,
amendment or addition made to the Term Loan Documents and except for changes,
amendments and additions effectuated after the occurrence and during the
continuation of an ABL Default); (x) restrict the amendment, restatement,
supplement, modification, Refinancing or extension of (or the waiver of (or
consent with respect to) any provisions in) the Term Loan Documents except as
expressly set forth in Section 2.13(b) below or the payment or prepayment (or
distributions to make any payment or prepayment) of any amounts under the Term
Loan Documents; (xi) add cash dominion related provisions to the ABL Loan
Documents that are more stringent or onerous on the Obligors than those in the
ABL Loan Documents in effect on the date of this Agreement; or (xii) change,
amend, restate, supplement, modify, Refinance, extend or waive (or consent to a
departure from) any material provision (or any other provision in any material
manner) in any of the ABL Loan Documents after a Purchase Notice has been
delivered pursuant to Section 3.1; provided, however, that (A) the ABL Agent
shall promptly (and, in any event, by the date that is the earlier of (I) within
two (2) Business Days thereof and (II) the Purchase Date) provide the Term Loan
Lender Parties with a true, correct and complete copy of any such change,
amendment, restatement, supplement, modification, Refinancing, extension, waiver
or consent, and (B) the foregoing shall not (1) apply after the Purchase
Deadline for a particular Triggering Event (but not for any other Triggering
Event for which the Purchase Deadline has not passed) and (2) restrict or
otherwise prohibit any such change, amendment, restatement, modification, waiver
or consent that occurs at least five (5) Business Days prior to the date that is
the earlier of the Purchase Deadline and the Purchase Date so long as ABL Agent
promptly provides (which, in any event, shall be provided by the date that is
the earlier of (y) within one (1) Business Day thereof and (z) the Purchase
Date) the Term Purchasing Lenders with a copy of any amendment, waiver, consent
or other document -25-

GRAPHIC [g193481kw01i025.gif]

 

evidencing the foregoing, in each case, it being acknowledged and agreed that
(1) the Term Purchasing Lenders shall have the right to revoke such Purchase
Notice upon receipt of such copy or documentation (or otherwise upon any such
change, amendment, restatement, supplement, modification, Refinancing,
extension, waiver or consent, regardless of whether such copy or documentation
has been received or delivered) for an additional 20 day period from the date
such copy or documentation is received by the Term Purchasing Lenders. (b) The
Term Loan Agent and the Term Loan Lenders may at any time and from time to time
without the consent of or notice to the ABL Agent or any ABL Lender, without
incurring liability to the ABL Agent or any ABL Lender and without impairing or
releasing the obligations of the ABL Agent or any ABL Lender under this
Agreement, change the manner or place of payment or extend the time of payment
of or renew or alter any Term Debt, or amend, supplement, restate or otherwise
modify in any manner any Term Loan Document, including, without limitation, at
any time and from time to time, increasing the aggregate outstanding principal
amount of the Term Debt; provided, that, Term Loan Lender Parties shall not,
without the prior written consent of the ABL Agent, agree to any modification,
amendment, restatement or supplement to the Term Loan Documents, the effect of
which is to: (i) [reserved]; (ii) [reserved]; (iii) shorten the final scheduled
maturity date of the Term Debt, (iv) increase the percentage amount or the
frequency of scheduled amortization payments of the Term Debt, except, in each
case of the foregoing in this clause (iv), after the occurrence and during the
continuation of a Term Loan Default; (v) directly make more restrictive those
provisions set forth in the Term Credit Agreement which restrict the ability of
Obligors to pay or prepay the ABL Debt or otherwise directly restrict or
prohibit any Obligor from paying or prepaying all or any portion of the ABL Debt
that would otherwise be permitted under the Term Loan Documents as in effect on
the date hereof or to reduce or terminate the revolving commitments under the
ABL Credit Agreement; (vi) restrict the ability of the Obligors to incur ABL
Debt or grant Liens securing the ABL Debt in accordance with this Agreement;
(vii) change the mandatory prepayment provisions thereof in a manner materially
adverse to the Obligors, except, in each case, after the occurrence and during
the continuation of a Term Loan Default; (viii)without limiting, and at all
times subject to, the other restrictions set forth in this Section 2.13(b),
change in a manner materially adverse to any Obligor, or add, any event of
default or add or make materially more restrictive any representation, warranty,
financial covenant or other covenant with respect to the Term Debt (except to
the extent such change, amendment or addition to any Term Loan Document merely
-26-

GRAPHIC [g193481kw01i026.gif]

 

mirrors a change, amendment or addition made to the ABL Loan Documents and
except for changes, amendments and additions effectuated after the occurrence
and during the continuation of a Term Loan Default); or (ix) restrict the
amendment, restatement, supplement, modification, Refinancing or extension of
(or the waiver of (or consent with respect to) any provisions in) the ABL Loan
Documents except as expressly set forth in Section 2.13(a); provided that
nothing in this Section 2.13(b) shall restrict or prohibit any changes,
additions, supplements, amendments, restatements, waivers, consents or
modifications with respect to (I) debt to equity conversion provisions, (II)
warrant, equity or registration or rights provisions, (III) public company
provisions and (IV) material nonpublic information related provisions.
Notwithstanding any provision contained in the ABL Loan Documents to the
contrary, the Obligors, the Term Loan Agent and the other Term Loan Lender
Parties may at any time and from time to time without the consent of or notice
to any ABL Lender Party and without violating any ABL Loan Document or creating
any Default under any ABL Loan Document, amend the payment waterfall provisions
contained in the Term Loan Documents, create or add new tranches of Term Debt,
and/or reallocate all or a portion of the Term Debt to the principal amount of
one or more newly created loan tranches or facilities (which new tranches or
facilities shall constitute “Term Debt” hereunder, subject to the proviso
below), each of which may be contractually senior, junior or pari passu to the
then existing or thereafter arising Term Debt and contain such terms and
provisions to be determined and agreed among the Obligors (or any one or more of
them) and the relevant Term Loan Lender Parties; provided that (x) any such
amendments, creations, additions, reallocations and modifications shall be
subject to the limitations set forth in Section 2.13(b) and (y) in no event
shall the conversion of any Term Debt into any type of equity or equity
interests be restricted by the terms of this Agreement or any ABL Loan Document
and any such conversion is expressly permitted by this Agreement and the ABL
Loan Documents. (c) If the Payment in Full of Term Priority Debt or any portion
thereof, or Payment in Full of Term Debt or any portion thereof, as applicable,
is being effected through a Refinancing; provided that (1) at least one Term
Loan Lender Party gives a notice of such Refinancing to the ABL Agent at least
10 Business Days prior to such Refinancing (except as otherwise provided in
Section 4.2) and (2) the credit agreement and the other documents evidencing
such new Term Debt (the “New Term Loan Documents”) do not effect an amendment,
restatement, supplement or other modification of the terms of the Term Debt in a
manner that is prohibited by Section 2.13(b), then (A) such Payment in Full of
Term Priority Debt or Payment in Full of Term Debt, as applicable, shall be
deemed not to have occurred for all purposes of this Agreement, (B) the
indebtedness under such Refinancing and all other obligations under the
documents evidencing such indebtedness (the “New Term Debt”) shall be treated as
Term Debt for all purposes of this Agreement, (C) the New Term Loan Documents
shall be treated as the Term Loan Documents and (D) the agent under the New Term
Loan Documents (the “New Term Loan Agent”) shall be deemed to be the Term Loan
Agent for all purposes of this Agreement. Upon receipt of a notice of
Refinancing under the preceding sentence, which notice shall include the
identity of the New Term Loan Agent, the ABL Agent shall promptly enter into
such documents, -27-

GRAPHIC [g193481kw01i027.gif]

 

instruments and agreements (including amendments, restatements, supplements or
other modifications to this Agreement) as the New Term Loan Agent or any of the
holders of the New Term Debt may reasonably request in order to provide to the
New Term Loan Agent and the holders of the New Term Debt the rights and powers
set forth herein; provided that the failure of the ABL Agent to enter into such
documents, instruments and agreements shall not affect the rights of the party
that consummates the Refinancing to rely on and enforce the terms of this
Agreement. (d) If the Payment in Full of ABL Priority Debt or any portion
thereof, or Payment in Full of ABL Debt or any portion thereof, as applicable,
is being effected through a Refinancing; provided that (1) the ABL Agent gives a
notice of such Refinancing to the Term Loan Lender Parties at least 10 Business
Days prior to such Refinancing (except as otherwise provided in Section 4.2) and
(2) the credit agreement and the other documents evidencing such new ABL Debt
(the “New ABL Documents”) do not effect an amendment, restatement, supplement,
joinder or other modification of the terms of the ABL Debt in a manner that is
prohibited by Section 2.13(a), then (A) such Payment in Full of ABL Priority
Debt or Payment in Full of ABL Debt, as applicable, shall be deemed not to have
occurred for all purposes of this Agreement, (B) the indebtedness under such
Refinancing and all other obligations under the documents evidencing such
indebtedness (the “New ABL Debt”) shall be treated as ABL Debt for all purposes
of this Agreement, (C) the New ABL Documents shall be treated as the ABL Loan
Documents and (D) the agent under the New ABL Documents (the “New ABL Agent”)
shall be deemed to be the ABL Agent for all purposes of this Agreement. Upon
receipt of a notice of Refinancing under the preceding sentence, which notice
shall include the identity of the New ABL Agent, the Term Loan Agent shall
promptly enter into such documents, instruments and agreements (including
amendments, restatements, supplements or other modifications to this Agreement)
as the New ABL Agent may reasonably request in order to provide to the New ABL
Agent and the holders of the New ABL Debt the rights and powers set forth
herein; provided, that the failure of the Term Loan Agent to enter into such
documents, instruments and agreements shall not affect the rights of the party
that consummates the Refinancing to rely on and enforce the terms of this
Agreement. (e) By their acknowledgement hereto, Obligors agree to cause the
agreement, instrument or document pursuant to which any New ABL Agent or any New
Term Loan Agent is appointed to provide that the New ABL Agent (for itself and
the creditors and lenders for which such New ABL Agent was appointed) or New
Term Loan Agent (for itself and the creditors and lenders for which such New
Term Loan Agent was appointed), as applicable, agrees to be bound by the terms
of this Agreement. (f) Obligors or Notwithstanding anything to the contrary
contained in the Documents, none of the any of their Affiliates shall be
permitted to acquire any right, title or interest (including by way of
participation) in and to the Term Debt or the ABL Debt or any commitments in
respect thereof, and, in each case, except as provided in Section 3 with respect
to the purchase of the ABL Debt by any of the Term Loan Lender Parties, the Term
Loan Lender Parties and the ABL Lender Parties as the case may be, agree not to
assign or participate any of their right, title or interest in and to the Term
Debt or ABL Debt or any commitments in respect thereof to any such Persons;
provided that nothing herein shall prevent or prohibit the conversion of any of
the Term Debt to Equity Interests or other equity by the Term Loan Lender
Parties. -28-

GRAPHIC [g193481kw01i028.gif]

 

2.14 The Term Loan Agent shall give the ABL Agent, and the ABL Agent shall give
to the Term Loan Lender Parties concurrently with the giving thereof to any
Obligor, as applicable, (i) a copy of any written notice by such Agent of a
Default under its respective Documents with such Obligor, or written notice of
demand of payment from such Obligor, and (ii) a copy of any written notice sent
by such Agent to such Obligor at any time a Default under such Agent's Documents
with such Obligor exists stating such Agent's intention to exercise any of its
enforcement rights or remedies, including written notice pertaining to any
foreclosure on any of the ABL Priority Collateral or other judicial or
non-judicial remedy in respect thereof to the extent permitted hereunder, and
any legal process served or filed in connection therewith; provided, that, the
failure of any party to give notice as required hereby shall not affect the
relative priorities of any Lender's respective Liens as provided herein or the
validity or effectiveness of any such notice as against any Obligor. 2.15 The
Lien priorities set forth herein relating to the Collateral shall apply with
respect to all insurance covering the Collateral and, in respect thereof, (i) so
long as the Term Priority Debt has not been Paid in Full, the Term Loan Lender
Parties shall have the exclusive right to settle and adjust claims in respect of
Term Loan Priority Collateral under policies of insurance and to approve any
award granted in any condemnation or similar proceeding, or any deed in lieu of
condemnation, in respect of the Term Loan Priority Collateral (and, for the
avoidance of doubt, all business interruption insurance and representation and
warranty insurance) and (ii) so long as the ABL Priority Debt has not been Paid
in Full, the ABL Agent shall have the exclusive right to settle and adjust
claims in respect of ABL Priority Collateral under policies of insurance and to
approve any award granted in any condemnation or similar proceeding, or any deed
in lieu of condemnation, in respect of the ABL Priority Collateral (but, with
respect to this clause (ii), specifically excluding those with respect to all
business interruption insurance and representation and warranty insurance). 2.16
Each Lender, to the fullest extent permitted by applicable law, waives as to
each other Lender any requirement regarding, and agrees not to demand, request,
plead or otherwise claim the benefit of, any marshalling, appraisement,
valuation or other similar right that may otherwise be available under
applicable law. SECTION 3. TERM LOAN LENDER PURCHASE OPTION 3.1Upon the
occurrence and during the continuance of a Triggering Event, the ABL Agent will
provide the Term Loan Lenders written notice thereof (the “Purchase Trigger
Notice”), which such Purchase Trigger Notice shall also include the amount of
the (a) ABL Debt, (b) the ABL Priority Debt, (c) the ABL Purchase Price
(including, without limitation, reasonable details with respect to any ABL
Purchase Price Cash Collateral), (d) the prepayment premium in existence under
the ABL Loan Documents, and (e) the other the information, agreements,
instruments and documents set forth in the form attached hereto as Exhibit A
(the items, amounts, information, agreements, instruments and documents in
clauses (a) through (e), individually and collectively, the “Required ABL
Purchase Option Information”), and the Term Loan Lenders shall have the option,
for a period of thirty (30) days after such occurrence or, if later, the receipt
of such Purchase Trigger Notice by such Term Loan Lenders or the first date on
which such Term Loan Lenders have obtained actual knowledge of the occurrence of
any Triggering Event (so long as such Triggering Event is continuing) with
respect to a Triggering -29-

GRAPHIC [g193481kw01i029.gif]

 

Event (or, at the sole option of such Term Loan Lenders such earlier date upon
such occurrence of such Triggering Event) (which, upon actual knowledge of the
occurrence of any Triggering Event by such Term Loan Lenders, such Term Loan
Lenders, may request such Required ABL Purchase Option Information from the ABL
Agent, and such period for exercising any such purchase option shall be extended
by the number of days it takes the ABL Agent to deliver such Required ABL
Purchase Option Information from the date of the request therefor by such
applicable Term Loan Lenders), exercisable by written notice delivered to the
ABL Agent by the applicable Term Loan Lenders seeking to purchase such ABL
Priority Debt (or, at the sole option of such Term Loan Lenders, the ABL Debt)
(the "Term Purchasing Lenders"), to purchase all, but not less than all, of the
ABL Priority Debt (or, at the sole option of such Term Loan Lenders, the ABL
Debt) from the ABL Lender Parties (such notice, a "Purchase Notice"). A Purchase
Notice shall be irrevocable and the issuance of a Purchase Notice shall obligate
the Term Loan Lenders to purchase all of the ABL Priority Debt from the ABL
Lender Parties on the terms set forth herein on or before the twentieth (20th)
day following the date the ABL Agent receives the Purchase Notice (such date,
after giving effect to any such additional time period provided after (I) any
Required ABL Purchase Option Information becomes incorrect, inaccurate or
incomplete or (II) any copy or documentation with respect to any change,
amendment, restatement, supplement, modification, Refinancing, extension or
waiver (or consent to a departure from) of any provision in any ABL Loan
Document has been delivered pursuant to Section 2.13(a)(xii), the "Purchase
Deadline"); provided that, in each case, such Purchase Notice may be revoked by
the Term Purchasing Lenders for a period of twenty (20) days after the
occurrence of such event or occurrence, and the Term Purchasing Lenders not be
obligated thereunder, at their sole option, if (x) any of the Required ABL
Purchase Option Information is incorrect, inaccurate or incomplete in any
material respect, and the ABL Agent agrees to provide the Term Purchasing
Lenders with prompt written notice (which, in any event, such written notice
shall be provided by the earlier of (I) within two (2) Business Days of
knowledge thereof and (II) the day prior to the Purchase Date) of any such
material incorrectness, inaccurateness or incompleteness of any such Required
ABL Purchase Option Information or (y) a change, amendment, restatement,
supplement, modification, Refinance, extension or waiver (or consent to a
departure from) any provision in any of the ABL Loan Documents has been made
after a Purchase Notice has been delivered in accordance with Section
2.13(a)(xii) (each of (x) or (y), an “Irrevocable Purchase Exclusion”). The
failure of the Term Loan Lenders to consummate such purchase as provided herein
prior to the expiration of the closing date specified in the Purchase Notice
shall result in the forfeiture of the Term Loan Lenders' rights under this
Section 3. On the date specified by the applicable Term Loan Lender Parties in
the Purchase Notice (which shall be a Business Day within the time period set
forth above), except in the case of an Irrevocable Purchase Exclusion, the ABL
Lender Parties shall sell to the Term Loan Lenders, and the Term Loan Lenders
shall purchase from the ABL Lender Parties all of the ABL Priority Debt (or, at
the sole option of the Term Purchasing Lenders, the ABL Debt), subject to
Section 3.5, pursuant to an Assignment Agreement. The ABL Agent agrees on behalf
of the ABL Lender Parties that they shall not institute, or agree with any other
Person to institute, an Insolvency Proceeding against any Obligor or any of its
Subsidiaries after the ABL Agent's receipt of a Purchase Notice unless the Term
Loan Lenders have failed to purchase the ABL Priority Debt in accordance with
this Section 3 on the closing date specified in the Purchase Notice (subject to
any Irrevocable Purchase Exclusion). -30-

GRAPHIC [g193481kw01i030.gif]

 

3.2 Upon the date of such purchase and sale (the "Purchase Date"), the Term Loan
Lenders shall pay to the ABL Lender Parties as the purchase price therefor the
amount to cause the Payment in Full of the ABL Priority Debt (but, for the
avoidance of doubt, (a) excluding any interest, fees or other amounts that have
not yet been earned or due and (b) no cash collateral shall be required to be
provided) (the "ABL Purchase Price"). Such purchase price shall be remitted by
wire transfer in federal funds to such bank account of the ABL Agent as set
forth in the Required ABL Purchase Option Information. Interest shall be
calculated to but excluding the Business Day on which such purchase and sale
shall occur if the amounts so paid by Term Loan Lenders to the bank account
designated by the ABL Agent are received in such bank account set forth in the
Required ABL Purchase Option Information prior to 4:00 p.m., Chicago time, and
interest shall be calculated to and including such Business Day if the amounts
so paid by Term Loan Lenders to the bank account set forth in the Required ABL
Purchase Option Information are received in such bank account later than 4:00
p.m., Chicago time. In addition, solely to the extent that, on or before the
date that is 180 days after the Purchase Date (the “Tail Period”), the Term
Purchasing Lenders are paid any prepayment premium that is in existence under
the ABL Loan Documents as of the date the Purchase Trigger Notice (or such
lesser prepayment premium amount that is in existence under the ABL Loan
Documents as of the Purchase Date) as a result of a voluntary prepayment of all
or any portion of the ABL Priority Debt (or the ABL Debt, as applicable) that
was purchased by the Term Purchasing Lenders, but excluding a prepayment
resulting from an Enforcement Action (or any other rights or remedies under the
Documents or under law or in equity) taken by the Term Purchasing Lenders or any
other Person (such type of voluntary prepayment for which such applicable
prepayment premium amount is required to be paid to such ABL Lender Parties (but
not any other type of prepayment) being the "Prepay Fee Event", and the
applicable prepayment premium amount, the “Applicable ABL Prepayment Premium
Amount”), then the Term Purchasing Lenders will hold such payment in trust for
the benefit of the ABL Lender Parties from which such Term Purchasing Lenders
purchased such ABL Priority Debt (or ABL Debt, as applicable) and promptly pay
it over to ABL Agent (for ABL Agent to distribute to such ABL Lender Parties);
provided that, to the extent the Applicable ABL Prepayment Premium Amount is
decreased pursuant to an amendment or other modification of the ABL Loan
Document during the Tail Period, the Applicable ABL Prepayment Premium Amount
shall continue to be the amount that applies during the Tail Period for purposes
of this sentence and shall be paid to the ABL Lender Parties by the Term Loan
Lenders after the occurrence of a Prepay Fee Event (regardless of whether the
Term Purchasing Lenders are paid any such prepayment premium) unless, in each
case of the foregoing in this sentence, either (i) any payment of any of the ABL
Debt is rescinded or must be returned by any holder thereof or (ii) otherwise
agreed to by any of the ABL Lender Parties. 3.3 Such purchase shall be expressly
made without representation or warranty of any kind by ABL Lender Parties as to
the ABL Priority Debt (or the ABL Debt, as applicable) or otherwise and without
recourse to the ABL Lender Parties, except for the representations and
warranties of the ABL Lender Parties set forth in the Assignment Agreement. 3.4
Purchasing Documents Upon the consummation of any purchase and sale provided for
herein, the Term Lenders shall thereafter be obligated pursuant to the terms of
the ABL Loan with respect to the ABL Priority Debt (or the ABL Debt, as
applicable) and responsible for the discharge and performance of all of the
duties, responsibilities and obligations of the ABL Lender Parties under the ABL
Loan Documents that are to occur after the date of -31-

GRAPHIC [g193481kw01i031.gif]

 

 

such purchase and sale, with the ABL Lender Parties being released from and
discharged of any duties, responsibilities and obligations under or in
connection with the ABL Loan Documents that occur after the date of such
purchase and sale (but, for the avoidance of doubt, not any duties,
responsibilities or obligations occurring on or prior to the date of such
purchase and sale). 3.5 Any sale and assignment by the ABL Lender Parties of the
ABL Priority Debt as provided herein shall not operate to terminate or impair
the Obligors' obligations (a) to pay, solely to the extent the ABL Debt is not
fully purchased by the Term Purchasing Lenders (and instead just the Term
Priority Debt is purchased), the Excess ABL Debt, or (b) to indemnify the ABL
Lender Parties (or any other Person) in accordance with the ABL Loan Documents
and this Agreement, all of which shall survive any such sale and assignment (all
such outstanding and owing obligations expressly set forth in clauses (a) and
(b), together with ABL Lender Parties' rights under the ABL Loan Documents
solely to the extent necessary to collect such obligations, the "Retained
Interest"). Notwithstanding anything herein to the contrary, after consummation
of any purchase of ABL Priority Debt in accordance with this Section 3, the
Retained Interest shall be secured by the Collateral solely on a junior basis,
but the ABL Lender Parties (and any other holder of the Retained Interest) shall
not have any right to vote or consent to any amendment, restatement, supplement,
consent, Refinancing, extension, waiver or modification except that no such
amendment or termination shall without the consent of the ABL Lender Parties
holding such Retained Interest provide for the termination or forgiveness, in
whole or in part, of any rights of any Person with respect to the Retained
Interest (and, as between each ABL Lender Party holding the Retained Interest),
on one hand, and the Obligors, on the other hand). 3.6 For purposes hereof,
"Triggering Event" shall mean (i) the acceleration of all or any portion of the
ABL Debt, (ii) termination of the commitments to lend under the ABL Credit
Agreement after the occurrence and during the continuance of an ABL Default,
(iii) the commencement by any ABL Lender Party of any Enforcement Action, (iv)
the commencement of an Insolvency Proceeding with respect to any Obligor, any of
its Subsidiaries or any of its properties or Equity Interests, (v) the ABL
Lenders cease providing ABL Loans following the Borrower's written request
therefor for a period of three (3) consecutive Business Days (other than in a
case where Borrowers have insufficient borrowing availability under the ABL
Credit Agreement to support such request, as determined by the ABL Agent in good
faith, and the refusal to fund ABL Loans due to the failure of any condition
precedent to the funding thereof contained in the ABL Credit Agreement not being
satisfied), (vi) the occurrence of an ABL Default under Section 11.1(a) of the
ABL Credit Agreement as a result of the failure of any Obligor to pay principal,
interest or other amounts when due thereunder; (vii) the occurrence of an ABL
Default under Section 11.1(c) of the ABL Credit Agreement as a result of any
Obligor’s (or any of its Subsidiaries’) violation of Section 8, 9.1 or 9.2 of
the ABL Credit Agreement; (viii) the occurrence of any ABL Default under Section
11.1(d), (e), (f), (g), (h), (i), (k), (l), (n), (o), (p), (q), (r), (s) or (t)
of the ABL Credit Agreement, (ix) the occurrence of any other ABL Default that
has occurred and is continuing and remains unwaived during the thirty (30) day
period following the occurrence of such ABL Default; (x) the occurrence of a
Term Loan Default under Section 5.4(a) of the Term Credit Agreement as a result
of the failure of any Obligor to pay principal, interest or other amounts when
due thereunder; (xi) the occurrence of any Term Loan Default under Section 5.4
of the Term Credit Agreement as a result of any Obligor’s (or any of its
Subsidiaries’) violation of Section 5.2 of the Term Credit Agreement; -32-

[g193481kw03i001.gif]

 

(xii) the occurrence of any Term Loan Default under Section 5.4(b) through
Section 5.4(t) (other than Section 5.4(j)(i) only) of the Term Credit Agreement;
or (xiii) the occurrence of any other Term Loan Default (other than a Term Loan
Default under only Section 5.4(j)(i) of the Term Credit Agreement) that has
occurred and is continuing and remains unwaived during the thirty (30) day
period following the occurrence of such Term Loan Default. 3.7 In the event that
the Term Loan Lenders elect to exercise their rights under this Section 3, the
Term Loan Lenders shall have the sole option (but no obligation) to elect to
purchase, together with the ABL Priority Debt, all, but not less than all, of
the Excess ABL Debt from the ABL Lender Parties, in which case such purchase
shall be subject to all of the foregoing terms and conditions of this Section 3.
3.8In connection with any purchase of the ABL Priority Debt (or, at the sole
option of the Term Purchasing Lenders, the ABL Debt), on or after the Purchase
Date, the Term Purchasing Lenders may unconditionally and irrevocably remove the
Person acting at such time as the ABL Agent (the “Prior ABL Agent”) by
delivering notice thereof to the Prior ABL Agent, and at or after such time,
appoint any Person such Term Purchasing Lenders in their sole discretion may
desire to be the ABL Agent, and the Prior ABL Agent, the ABL Lender Parties and
the Obligors hereby unconditionally and irrevocably consent to any such
replacement or appointment of the Prior ABL Agent without any further action. In
connection with the immediately preceding sentence, the Prior ABL Agent, the ABL
Lender Parties and the Obligors hereby agree to promptly take such actions and
duly, execute, acknowledge and deliver such documents, agreements and
instruments (in each case at Obligors' reasonable expense and not the reasonable
expense of ABL Agent), reasonably requested by such Term Purchasing Lenders to
effectuate the foregoing. In addition, in connection with any purchase of the
ABL Priority Debt (or, at the sole option of the Term Purchasing Lenders, the
ABL Debt), so long as the ABL Agent has provided written notice to the Term
Purchasing Lenders within two (2) Business Days of receipt of the Purchase
Notice that the ABL Agent will resign effective as of the Purchase Date (which
such written notice from the ABL Agent shall be irrevocable unless otherwise
agreed to in writing by the Term Purchasing Lenders), on the Purchase Date, the
ABL Agent shall resign as agent (including the agent capacity described in the
definition of “ABL Agent” in this Agreement) under the ABL Loan Documents;
provided, that, notwithstanding such resignation, ABL Agent shall retain all
rights of indemnification under the ABL Loan Documents (as in effect at the time
of effectiveness of such resignation, and no amendment or modification entered
into after the date of such resignation shall materially adversely affect ABL
Agent's rights of indemnification as in effect at the time of such resignation).
ABL Agent shall (at the Obligors' expense and not at the expense of ABL Agent)
promptly and duly, execute, acknowledge and deliver all such further, documents,
agreements and instruments as the Term Purchasing Lenders may from time to time
reasonably request in order to preserve, maintain or protect the creation,
perfection and/or priority of any Lien on Collateral affected by such
resignation. 3.9 The ABL Agent hereby unconditionally and irrevocably waives the
$3,500 processing fee set forth in Section 15.9(a) of the ABL Credit Agreement
(and any other purchase or assignment related fee set forth in any of the ABL
Loan Documents) in connection with any purchase or assignment of the ABL
Priority Debt (or the ABL Debt, as applicable) in accordance with this Section
3. -33-

[g193481kw03i002.gif]

 

SECTION 4. BANKRUPTCY 4.1 This Agreement shall be applicable both before and
after the filing of any petition by or against any Obligor under the Bankruptcy
Code or in any other Insolvency Proceeding and all converted or succeeding cases
in respect thereof, and all references herein to any Obligor shall be deemed to
apply to the trustee (or similar Person) for such Obligor and such Obligor as
debtor-in-possession (or any other similar designation). The relative rights of
Lenders in or to any distributions from or in respect of any Collateral or
proceeds of Collateral, shall continue after the filing thereof on the same
basis as prior to the date of the petition, subject to any court order approving
the financing of, or use of cash collateral by, any Obligor as
debtor-in-possession (or any other similar designation). 4.2 DIP Financing. (a)
None of the Term Loan Agent or any Term Loan Lender may, directly or indirectly,
seek to provide financing to the Obligors as debtor-in-possession (or any other
similar designation), or consent to or support the use of cash collateral by
such Person, in exchange for Liens on the ABL Priority Collateral equal or
senior in priority to the Liens on the ABL Priority Collateral securing the ABL
Priority Debt. None of the ABL Agent or any ABL Lender may, directly or
indirectly, seek to provide financing to any Obligor as debtor-in-possession (or
any other similar designation), or consent to or support the use of cash
collateral by such Person, in exchange for Liens on the Term Loan Priority
Collateral equal or senior in priority to the Liens on the Term Loan Priority
Collateral securing the Term Debt. (b) If the ABL Lender Parties propose to
offer financing (or consents to any other Person providing financing) to
Obligors under Section 364 of the Bankruptcy Code or similar Bankruptcy Law
("DIP Financing") during an Insolvency Proceeding secured by a Lien on ABL
Priority Collateral or if ABL Agent consents to use of cash collateral (as such
term is defined in Section 363(a) of the Bankruptcy Code or similar Bankruptcy
Law ("Cash Collateral") constituting ABL Priority Collateral ("ABL Cash
Collateral"), the Term Loan Agent (on behalf of itself and the other Term Loan
Lender Parties) agrees to consent to (and will be deemed to have consented to)
and will raise no objection to such DIP Financing or Cash Collateral use, and,
Term Loan Agent will subordinate and will be deemed to have subordinated its
Liens in the ABL Priority Collateral securing such DIP Financing to the Liens
securing such DIP Financing on the same terms (but on a basis junior to the
Liens of the ABL Agent) as the Liens of the Term Loan Agent are subordinated
thereto (and such subordination will not alter in any manner the terms of this
Agreement) and to any customary and reasonable carveout for professional fees
and/or fees of the Office of the United States Trustee authorized in connection
with such ABL Cash Collateral usage or DIP Financing so long as each of the
following conditions are satisfied: (i) the maximum amount of such DIP Financing
(inclusive of unused commitments) provided by the ABL Lender Parties in
accordance with the terms hereof, plus the aggregate combined principal amount
of outstanding loans under the ABL Loan Documents, shall not exceed at any time
the ABL Loan Maximum Amount; (ii) the Term Loan Agent's Liens with respect to
the Term Loan Priority Collateral shall remain senior and prior to the Liens of
ABL Agent with respect to such Term Loan Priority Collateral and the priority
Liens of the Term Loan Lender Parties in the Term Loan Priority Collateral shall
not be subject to any surcharges under 11 U.S.C. §§506(c), 726 or laws of
similar import and shall not be subject to any carveout provided in any such DIP
-34-

[g193481kw03i003.gif]

 

Financing, including any carveout provided to an official or unofficial
committee of creditors or Office of the United States Trustee; (iii) the Term
Loan Lender Parties shall otherwise have the right to object to such DIP
Financing and the terms thereof, including to any ancillary agreements (without
limiting the foregoing, the Term Loan Lender Parties shall be permitted to
object to any specific plan of reorganization) so long as such objections are
solely limited to those objections that could be made by an unsecured creditor
and not a secured creditor; and (iv) such DIP Financing shall not, in any event,
expressly require the liquidation of all or any portion of the Term Loan
Priority Collateral prior to a default (it being agreed that the inclusion of
milestones with respect to a going concern sale of all or substantially all of
the Collateral under such DIP Financing shall not be deemed to constitute such a
condition). The ABL Agent, on behalf of the ABL Lender Parties, agrees that the
ABL Lender Parties shall not seek adequate protection in the form of an
additional Lien or "replacement Lien" with respect to the Term Loan Priority
Collateral, unless the Term Loan Lender Parties is granted adequate protection
in the form of an additional Lien or "replacement Lien" on such Collateral,
which additional or "replacement Lien" of ABL Agent with respect to such Term
Loan Priority Collateral (if obtained) shall be subordinate to all Liens,
including adequate protection Liens or "replacement Liens" of Term Loan Agent in
such Collateral and subject to the Payment Waterfall. Any adequate protection
granted in favor of any ABL Lender Party in respect of the ABL Priority
Collateral in the form of a superpriority or other administrative expense claim
and any claim in favor of any ABL Lender Party arising under Section 507(b) of
the Bankruptcy Code shall be pari passu with the grant of adequate protection in
favor of any Term Loan Lender Party in respect of the Term Loan Priority
Collateral in the form of a superpriority or other administrative expense claim
under Section 507(b) of the Bankruptcy Code. Any claim arising under Section
507(b) of the Bankruptcy Code in favor of any ABL Lender Party in respect of the
Term Loan Priority Collateral shall be pari passu with the claims arising under
Section 507(b) of the Bankruptcy Code in favor of any Term Loan Lender Party in
respect of the ABL Priority Collateral (each a "Junior 507(b) Claim"), and in
connection with any plan of reorganization, consent and agree that
notwithstanding any rights under Section 1129(a)(9) of the Bankruptcy Code, any
Junior 507(b) Claim may be paid in any combination of cash, securities or other
property having a present value equal to the amount of such claims as of the
effective date of confirmation of such plan (subject to the Payment Waterfall).
The ABL Agent on behalf of the ABL Lender Parties agrees that no ABL Lender
Party may seek adequate protection in the form of periodic cash payments from
any Proceeds of Term Loan Priority Collateral. Subject to Section 4.2(c), the
ABL Agent, on behalf of the ABL Lender Parties, agrees that the ABL Lender
Parties shall not oppose or seek to challenge any claim by the Term Loan Lender
Parties for allowance in any Insolvency Proceeding of Term Debt consisting of
post-petition interest, fees or expenses to the extent of the value of the Lien
securing the Term Debt in the Term Loan Priority Collateral. (c) If the Term
Loan Lender Parties propose to offer DIP Financing (or consents to any other
Person providing DIP Financing) during an Insolvency Proceeding secured by a
Lien on Term Loan Priority Collateral or if any of the Term Loan Lender Parties
consents to use of Cash Collateral constituting Term Loan Priority Collateral
(the "Term Loan Cash Collateral"), the ABL Agent (on behalf of itself and the
other ABL Lender Parties) agrees to consent to (and will be deemed to have
consented to) and will raise no objection to such DIP Financing or Cash
Collateral use, and, ABL Agent will subordinate and will be deemed to have
subordinated its Liens in the Term Loan Priority Collateral securing such DIP
Financing to the Liens securing -35-

[g193481kw03i004.gif]

 

such DIP Financing on the same terms (but on a basis junior to the Liens of the
Term Loan Agent) as the Liens of the ABL Agent are subordinated thereto (and
such subordination will not alter in any manner the terms of this Agreement) and
to any customary and reasonable carveout for professional fees and/or fees of
the Office of the United States Trustee authorized in connection with such Term
Loan Cash Collateral usage or DIP Financing so long as each of the following
conditions are satisfied: (i) the ABL Agent's Liens with respect to the ABL
Priority Collateral shall remain senior and prior to the Liens of Term Loan
Agent with respect to such ABL Priority Collateral and the priority Liens of the
ABL Lender Parties in the ABL Priority Collateral shall not be subject to any
surcharges under 11 U.S.C. §§506(c), 726 or laws of similar import and shall not
be subject to any carveout provided in any such DIP Financing, including any
carveout provided to an official or unofficial committee of creditors or Office
of the United States Trustee; and (ii) such DIP Financing shall not, in any
event, expressly require the liquidation of all or any portion of the ABL
Priority Collateral prior to a default (it being agreed that the inclusion of
milestones with respect to a going concern sale of all or substantially all of
the Collateral under such DIP Financing shall not be deemed to constitute such a
condition). The Term Loan Agent, on behalf of the Term Loan Lender Parties,
agrees that the Term Loan Lender Parties shall not seek adequate protection in
the form of an additional Lien or "replacement Lien" with respect to the ABL
Priority Collateral, unless ABL Agent is granted adequate protection in the form
of an additional Lien or "replacement Lien" on such Collateral, which additional
or "replacement Lien" of Term Loan Agent with respect to such Term Loan Priority
Collateral (if obtained) shall be subordinate to all Liens, including adequate
protection Liens or "replacement Liens" of ABL Agent in such Collateral (subject
to the Payment Waterfall). Any adequate protection granted in favor of any Term
Loan Lender Party in respect of the Term Loan Priority Collateral in the form of
a superpriority or other administrative expense claim and any claim in favor of
any Term Loan Lender Party arising under Section 507(b) of the Bankruptcy Code
shall be pari passu with the grant of adequate protection in favor of any ABL
Lender Party in respect of the ABL Priority Collateral in the form of a
superpriority or other administrative expense claim and any claim in favor of
any ABL Lender Party under Section 507(b) of the Bankruptcy Code. Any Junior
507(b) Claim of any Term Loan Lender Party shall be pari passu with the Junior
507(b) Claims of any ABL Lender Party, and in connection with any plan of
reorganization, consent and agree that notwithstanding any rights under Section
1129(a)(9) of the Bankruptcy Code, any Junior 507(b) Claim may be paid in any
combination of cash, securities or other property having a present value equal
to the amount of such claims as of the effective date of confirmation of such
plan (subject to the Payment Waterfall). The Term Loan Agent, on behalf of the
Term Loan Lender Parties, agrees that no Term Loan Lender Party may seek
adequate protection payments in the form of periodic cash payments from any ABL
Priority Collateral. Subject to 4.2(b), the Term Loan Agent, on behalf of the
Term Loan Lender Parties, agrees that the Term Loan Lender Parties shall not
oppose or seek to challenge any claim by the Term Loan Lender Parties for
allowance in any Insolvency Proceeding of ABL Debt consisting of post-petition
interest, fees or expenses to the extent of the value of the Lien securing the
ABL Debt in the ABL Priority Collateral. 4.3 If any Obligor shall be subject to
any Insolvency Proceeding and the Term Loan Lender Parties shall agree to permit
a sale, liquidation or other disposition of the Term Loan Priority Collateral
free and clear of Liens or other claims, under Section 363, 365 or 1129 of the
Bankruptcy Code or otherwise, then the ABL Agent, on behalf of the ABL Lender
Parties, agrees that the ABL Lender Parties will not (i) raise any objection to
or contest such sale, -36-

[g193481kw03i005.gif]

 

liquidation or other disposition or request adequate protection or any other
relief in connection therewith, or (ii) directly or indirectly oppose or impede
entry of any order in connection with such sale, liquidation or other
disposition, including orders to retain professionals or set bid procedures in
connection with such sale, liquidation or disposition, and the ABL Lender
Parties will be deemed to have consented thereto (including pursuant to Section
363(f) of the Bankruptcy Code); provided, however, the foregoing agreements by
ABL Agent shall not apply with respect to a sale, liquidation or other
disposition of ABL Priority Collateral, which is subject to the provisions set
forth in Section 4.4. Notwithstanding the foregoing, the ABL Lender Parties
shall be permitted to raise any objections to any such disposition that could be
raised by any creditor of the Obligors whose claims were unsecured. 4.4 If any
Obligor shall be subject to any Insolvency Proceeding and the ABL Lender Parties
shall agree to permit a sale, liquidation or other disposition of the ABL
Priority Collateral free and clear of Liens or other claims, under Section 363,
365 or 1129 of the Bankruptcy Code or otherwise, then the Term Loan Agent, on
behalf of the Term Loan Lender Parties, agrees that the Term Loan Lender Parties
will not (i) raise any objection to or contest such sale, liquidation or other
disposition or request adequate protection or any other relief in connection
therewith, or (ii) directly or indirectly oppose or impede entry of any order in
connection with such sale, liquidation or other disposition, including orders to
retain professionals or set bid procedures in connection with such sale,
liquidation or disposition, and the Term Loan Lender Parties will be deemed to
have consented thereto (including pursuant to Section 363(f) of the Bankruptcy
Code); provided, however, the foregoing agreements by Term Loan Agent (or any
other Term Loan Lender Party) shall not apply with respect to a sale,
liquidation or other disposition of Term Loan Priority Collateral, which is
subject to the provisions set forth in Section 4.3. Notwithstanding the
foregoing, the Term Loan Lender Parties shall be permitted to raise any
objections to any such disposition that could be raised by any creditor of the
Obligors whose claims were unsecured. 4.5 If, in any Insolvency Proceeding
involving an Obligor, debt obligations of the reorganized debtor secured by
Liens upon any property of the reorganized debtor are distributed pursuant to a
confirmed plan of reorganization or similar dispositive restructuring plan, both
on account of ABL Debt and on account of Term Debt, then, to the extent the debt
obligations distributed on account of the ABL Debt and on account of the Term
Debt are secured by Liens upon the same property, the provisions of this
Agreement will survive the distribution of such debt obligations pursuant to
such plan and will apply with like effect to the Liens securing such debt
obligations. The provisions of Section 1129(b)(1) of the Bankruptcy Code
notwithstanding, the Lenders agree that they will not propose, support, or vote
in favor of any plan of reorganization of an Obligor that is inconsistent with
the priorities or other provisions of this Agreement. If, in connection with an
Insolvency Proceeding involving an Obligor, the Term Loan Lender Parties receive
any cash, debt, or equity securities on account of their Term Loan Secured
Claims in respect of their interest in the ABL Priority Collateral (excluding,
for the avoidance of doubt, debt obligations referenced in the first sentence of
this Section 4.5), the Term Loan Agent or the other Term Loan Lender Parties, as
applicable, shall turn over such cash, claims, or securities to ABL Agent for
application in accordance with the Payment Waterfall, unless the distribution of
such cash, claims, or securities is made pursuant to a confirmed plan of
reorganization of such Obligor that is accepted by the requisite affirmative
vote of all classes composed of the secured claims of the ABL Lender Parties in
the ABL -37-

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Priority Collateral pursuant to Section 1126 of the Bankruptcy Code. If, in
connection with an Insolvency Proceeding involving an Obligor, the ABL Lender
Parties receive any cash, debt, or equity securities on account of their ABL
Secured Claims in respect of their interest in the Term Loan Priority Collateral
(excluding, for the avoidance of doubt, debt obligations referenced in the first
sentence of this Section 4.5), the ABL Agent or the other ABL Lender Parties, as
applicable, shall turnover such cash, claims, or securities to the Term Loan
Lender Parties (as directed by either the Term Loan Agent or the Term Loan
Lender Parties in writing) for application in accordance with the Payment
Waterfall, unless the distribution of such cash, claims, or securities is made
pursuant to a confirmed plan of reorganization of such Obligor that is accepted
by the requisite affirmative vote of all classes composed of the secured claims
of the Term Loan Lender Parties in the Term Loan Priority Collateral pursuant to
Section 1126 of the Bankruptcy Code. 4.6 Each of the Term Loan Agent, for itself
and on behalf of each other Term Loan Lender Party, and the ABL Agent, for
itself and on behalf of each other ABL Lender Party, acknowledges and agrees
that (a) the claims and interests of the ABL Lender Parties and the Term Loan
Lender Parties are not "substantially similar" within the meaning of Section
1122 of the Bankruptcy Code, or any comparable provision of any other Bankruptcy
Law, (b) the grants of the Liens pursuant to the ABL Loan Documents and the Term
Loan Documents constitute two separate and distinct grants of Liens, (c) because
of, among other things, their differing rights in the Collateral, the ABL Debt
is fundamentally different from the Term Debt, and vice versa, and the ABL Debt
and the Term Debt must be separately classified in any plan of reorganization
proposed or adopted in any Insolvency Proceeding. To further effectuate the
intent of the parties as provided in the immediately preceding sentence, if it
is held that the claims of the ABL Lender Parties and the Term Loan Lender
Parties in respect of the Collateral constitute only one secured claim (rather
than separate classes of secured claims), then each of the parties hereto hereby
acknowledges and agrees that, subject to Section 2.2 and Section 2.4, all
distributions shall be made as if there were separate classes of secured claims
against the Obligors in respect of the Collateral. SECTION 5. MISCELLANEOUS 5.1
The Term Loan Agent and the Term Loan Lenders, on the one hand, and the ABL
Agent and the ABL Lenders, on the other hand, each hereby represents and
warrants to the other Lenders that: (i) the execution, delivery and performance
of this Agreement by such Lender is within the powers of such Lender, have been
duly authorized by such Lender, and do not contravene any law, any provision of
any of the Documents to which such Lender is a party or any other agreement to
which such Lender is a party or by which it is bound, and (ii) this Agreement
constitutes the legal, valid and binding obligations of such Lender, enforceable
in accordance with its terms and shall be binding on it (except as such
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors' rights generally and by equitable
principles). The ABL Agent represents and warrants to the Term Loan Lender
Parties that it has been authorized by the ABL Lender Parties under the ABL
Credit Agreement to enter into this Agreement on behalf of each of the ABL
Lender Parties and that each ABL Lender Party is bound by the terms and
provisions of this Agreement. -38-

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5.2 Any amendment, restatement, supplement, modification, waiver, permit,
consent or approval by any Lender of or under any provision, condition or
covenant to this Agreement must be in writing and shall be effective only to the
extent it is set forth in writing and as to the specific facts or circumstances
covered thereby. Any amendment, restatement, supplement, or other modification
of this Agreement must be in writing and signed by the ABL Agent and the Term
Loan Lender Parties, and Obligors shall have no right to consent to any
amendment, restatement, supplement or other modification of this Agreement (and
any such amendment, restatement, supplement or other modification of this
Agreement shall be effective without any signature of any Obligor). 5.3This
Agreement shall be binding upon each Lender and its respective successors and
assigns and shall inure to the benefit of each Lender and its respective
successors, participants and assigns. In connection with any participation or
other transfer or assignment of the ABL Debt or the Term Debt, a Lender shall
disclose to such participant or other transferee or assignee the existence and
terms and conditions of this Agreement. In the case of any participation or
other transfer or assignment the participant, assignee or transferee acquiring
any interest in the Term Debt or the ABL Debt, as the case may be, shall execute
and deliver to the ABL Agent or the Term Loan Lender Parties, respectively, a
written acknowledgment of receipt of a copy of this Agreement and the written
agreement by such Person to be bound by the terms of this Agreement. The ABL
Credit Agreement shall provide that at all times the ABL Agent has the power and
authority to bind the ABL Lender Parties for which it acts as agent to the terms
of this Agreement and to act as agent for the ABL Lender Parties in respect of
receiving all notices to be delivered to an ABL Lender Party hereunder. 5.4 In
connection with any assignment or transfer of any or all of the indebtedness of
the ABL Lender Parties or any or all rights of ABL Lender Parties in the
property of the Obligors (other than pursuant to a participation) that is
permitted by this Agreement (other than, for the avoidance of doubt, in
connection with the exercise of the purchase option in Section 3), the Term Loan
Lender Parties agree to execute and deliver an agreement identical to this
Agreement (subject to changing names of parties, documents and addresses, as
appropriate) in favor of any such permitted assignee or transferee and, in
addition, will execute and deliver an agreement identical to this Agreement
(subject to changing names of parties, documents and addresses, as appropriate)
in favor of any permitted third person who succeeds to or Refinances, replaces
or substitutes for any or all of the ABL Lender Parties' financing of the
Borrowers in a manner that is expressly permitted by this Agreement, whether
such successor or replacement financing occurs by transfer, assignment,
"takeout" or any other means or vehicle, so long as, in each case, it is
permitted by this Agreement. In connection with any assignment or transfer of
any or all of the indebtedness of the Term Loan Agent and the Term Loan Lenders
or any or all rights of the Term Loan Agent and the Term Loan Lenders in the
property of any Obligor (other than pursuant to a participation) that is
permitted by this Agreement, the ABL Lender Parties agree to execute and deliver
an agreement identical to this Agreement (subject to changing names of parties,
documents and addresses, as appropriate) in favor of any such permitted assignee
or transferee and, in addition, will execute and deliver an agreement identical
to this Agreement (subject to changing names of parties, documents and
addresses, as appropriate) in favor of any permitted third person who succeeds
to or Refinances, replaces or substitutes for any or all of the Term Loan
Agent's and the Term Loan Lenders' financing of any Obligor in a manner that is
expressly permitted by this Agreement, whether such successor or replacement
financing occurs -39-

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by transfer, assignment, "takeout" or any other means or vehicle, so long as, in
each case, it is permitted by this Agreement. Notwithstanding anything to the
contrary in this Agreement, no Lender shall assign its rights or obligations
under this Agreement to any of the Obligors or any of their Subsidiaries.
5.5(a)The ABL Agent hereby acknowledges and agrees that it holds Liens in and on
any of the Collateral in its possession or under its control (or, in each case,
in the possession or under the control of its representatives), in its capacity
as collateral agent on behalf of each of itself and the Term Loan Agent for the
benefit of the Term Loan Lender Parties, respectively, including, without
limitation, Liens on deposit accounts, securities accounts, commodity accounts,
lockboxes or other similar accounts and the Term Loan Agent hereby acknowledges
and agrees that it holds Liens in and on any of the Collateral in its possession
or under its control (or in the possession or under the control of its
representatives), in its capacity as collateral agent on behalf of each of
itself and the ABL Agent for the benefit of the ABL Lenders, respectively,
including, without limitation, Liens on deposit accounts deposit accounts,
securities accounts, commodity accounts, lockboxes or other similar accounts;
provided, that, the Lender in the possession or control of any Collateral shall
not have any duty or liability to protect or preserve any rights pertaining to
such Collateral, or any obligation to the non-possessing or non-controlling
Lenders with respect to such Collateral other than as expressly set forth in
this Section 5.5, and, except for gross negligence or willful misconduct as
determined pursuant to a final non-appealable order of a court of competent
jurisdiction, each non-possessing or non-controlling Lender hereby waives and
releases each of the other Lenders from, all claims and liabilities arising
pursuant to the possessing or controlling Lender's role as collateral agent with
respect to the Collateral. (b) Prior to the Payment in Full of the ABL Priority
Debt, any ABL Priority Collateral in the possession or under the control of the
Term Loan Agent or any Term Loan Lender shall be forthwith delivered to the ABL
Agent, except as otherwise may be required by applicable law or court order.
After Payment in Full of the ABL Priority Debt, the ABL Lender Parties shall
deliver (i) the remainder of the ABL Priority Collateral, if any, in its
possession to the Term Loan Agent (for the benefit of the Term Loan Lender
Parties), except as may otherwise be required by applicable law or court order,
(ii) a written notice prepared by any of the Term Loan Lender Parties (at
Borrowers' and the other Obligors’ sole expense) to each landlord that has
executed a landlord's waiver and each bailee that has executed a bailee waiver
stating that the Term Loan Lender Parties are entitled to exercise the rights
and take the actions set forth in such landlord's waiver or bailee waiver and
(iii) a written notice prepared by any of the Term Loan Lender Parties (at
Borrowers' and the other Obligors’ sole expense) to each institution or
intermediary maintaining a bank account, securities account, commodity account,
lockbox or other similar account of any Obligor stating that the Term Loan
Lender Parties are entitled to exercise the rights and actions set forth in such
institution's deposit account control agreement, securities account control
agreement, commodity account control agreement or other similar agreement. (c)
Prior to the Payment in Full of all of the Term Debt, any Term Loan Priority
Collateral in the possession or under the control of the ABL Agent shall be
forthwith delivered to the Term Loan Agent (for the benefit of the Term Loan
Lender Parties), except as otherwise may be required by applicable law or court
order. After Payment in Full of the Term Debt, the Term -40-

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Loan Lender Parties shall deliver (i) the remainder of the Term Loan Priority
Collateral, if any, in its possession to the ABL Agent, except as may otherwise
be required by applicable law or court order, (ii) a written notice prepared by
the ABL Agent (at Borrowers' and the other Obligors’ sole expense) to each
landlord that has executed a landlord's waiver and each bailee that has executed
a bailee waiver stating that the ABL Agent is entitled to exercise the rights
and take the actions set forth in such landlord's waiver or bailee waiver and
(iii) a written notice prepared by the ABL Agent (at Borrowers' and the other
Obligors’ sole expense) to each institution or intermediary maintaining a bank
account, securities account, commodity account, lockbox or other similar account
of any Obligor stating that the ABL Agent is entitled to exercise the rights and
actions set forth in such institution's deposit account control agreement,
securities account control agreement, commodity account control agreement or
other similar agreement. (d) The ABL Agent agrees that, with respect to any
Collateral under its control consisting of deposit accounts, securities
accounts, commodity accounts, lockboxes or other similar accounts, at the
written request of any of the Term Loan Lender Parties at any time when the Term
Loan Agent and the Term Loan Lenders would be permitted to take Enforcement
Actions against ABL Priority Collateral pursuant to the terms of this Agreement,
the ABL Agent shall deliver a written notice prepared by any of the Term Loan
Lender Parties (at Borrowers' and the other Obligors’ sole expense) to the
applicable financial institution or other institution or intermediary directing
that all proceeds of ABL Priority Collateral shall be remitted to the ABL Agent
or the Term Loan Lender Parties, as applicable, for application in accordance
with the applicable Payment Waterfall. 5.6 All notices, requests and demands to
or upon the respective parties hereto shall be in writing and shall be deemed
duly given, made or received: if delivered in person, immediately upon delivery;
if by nationally recognized overnight courier service with instructions to
deliver the next Business Day, one (1) Business Day after sending; if mailed by
certified mail, return receipt requested three (3) days after mailing to the
parties; and if delivered by facsimile or electronic mail when sent, provided
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, in each case of the foregoing, at the applicable parties'
applicable addresses set forth below (or to such other addresses as the parties
may designate in accordance with the provisions of this Section 5.6): If to the
ABL Agent or any ABL Lender: Encina Business Credit, LLC 123 N Wacker Suite 2400
Chicago, IL 60606 Attention: Thomas Sullivan Email: -41-

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with a copy to (which shall not constitute notice): Goldberg Kohn Ltd. 55 East
Monroe Street, Suite 3300 Chicago, Illinois 60603 Telephone: Facsimile: Email:
Attention: Danielle Wildern Juhle If to the Term Loan Agent or any Term Loan
Lender: c/o Deerfield Management Company, L.P. 780 Third Avenue, 37th Floor New
York, NY 10017 Facsimile: E-mail: Attention: David J. Clark, Esq. and a copy to
(which shall not constitute notice): Katten Muchin Rosenman LLP 2029 Century
Park East, Suite 2600 Los Angeles, CA 90067 Attention: Kristopher Ring and Mark
Wood Facsimile: Either of the above Lenders may change the address(es) to which
all notices, requests and other communications are to be sent by giving written
notice of such address change to the other Lender in conformity with this
Section 5.6, but such change shall not be effective until notice of such change
has been received by the other Lender. 5.7 EACH PARTY HERETO HEREBY CONSENTS AND
AGREES THAT ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW
YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN THE PARTIES HERETO PERTAINING TO THIS AGREEMENT OR TO ANY
MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT, PROVIDED, THAT, THE PARTIES
HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF NEW YORK, NEW YORK AND PROVIDED, FURTHER, NOTHING IN
THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE ANY LENDER FROM BRINGING
SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE ABL DEBT OR TERM DEBT, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH LENDER. EACH PARTY HERETO
EXPRESSLY SUBMITS AND -42-Email:

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CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY
SUCH COURT, AND EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION WHICH SUCH PARTY
MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH PARTY HERETO HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY
BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT THE ADDRESS
FOR NOTICES PURSUANT TO SECTION 5.6 AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF SUCH PARTY'S ACTUAL RECEIPT THEREOF OR THREE (3)
DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID. 5.8IN ALL
RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK (BUT NOT THE LAW OF CONFLICTS) APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA. 5.9 FINANCIAL RESOLVED BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX TRANSACTIONS AREMOST QUICKLY AND ECONOMICALLY BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES HERETO WISH APPLICABLE STATE AND FEDERAL LAWS TO
APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES HERETO DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG THE PARTIES HERETO ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO. 5.10
This Agreement is intended by the parties as a final expression of their
agreement and is intended as a complete statement of the terms and conditions of
their agreement with respect to the subject matter hereof. This Agreement may be
executed in any number of counterparts, each of which shall be an original with
the same force and effect as if the signatures thereto and hereto were upon the
same instrument. Signatures delivered by facsimile or email transmission shall
have the same force and effect as original signatures. 5.11 Except as expressly
provided in Section 5.3 and Section 5.4 and except for consents which are deemed
to have been given under Section 2.10 hereof, this Agreement is solely for the
benefit of the Lenders and their respective successors, participants and
assigns, and -43-

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no other Person shall have any right, benefit, priority or interest under, or
because of the existence of, this Agreement. 5.12 This Agreement is a continuing
agreement and shall remain in full force and effect until the earlier of (i) the
Payment in Full of the ABL Debt or (ii) the Payment in Full of the Term Debt.
5.13 The Lenders shall each be responsible for keeping themselves informed of
(a) the financial condition of the Obligors and all other all endorsers,
obligors and/or guarantors of the ABL Debt and/or Term Debt and (b) all other
circumstances bearing upon the risk of nonpayment of the ABL Debt and Term Debt.
No Lender shall have any duty to advise any other Lender of information known to
it regarding such condition or any such other circumstances. No Lender assumes
any liability to any other Lender or to any other Person with respect to: (i)
the financial or other condition of Obligors, (ii) the enforceability, validity,
value or collectability of the ABL Debt, the Term Debt, any Collateral therefor
or any guarantee or security which may have been granted in connection with any
of the foregoing or (iii) any Obligor's title or right to transfer any
Collateral or security. 5.14 For purposes of this Agreement, the words
"including" and "include" shall mean "including, without limitation" and
"include, without limitation". 5.15 Should any Lender in any way take, attempt
to, or threaten to take any action contrary to terms of this Agreement with
respect to the Collateral, or fail to take any action required by this
Agreement, the ABL Agent or any of the Term Loan Lender Parties, as the case may
be, may obtain relief against such Lender by injunction, specific performance,
or other appropriate equitable relief, it being understood and agreed that (a)
damages from such actions may at that time be difficult to ascertain and may be
irreparable, and (b) each Lender waives any defense that the ABL Agent or any of
the Term Loan Lender Parties, as the case may be, cannot demonstrate damage
and/or be made whole by the awarding of damages. The parties hereto hereby
irrevocably waive any defense based on the adequacy of a remedy at law and any
other defense which might be asserted to bar the remedy of specific performance
in any action which may be brought by the ABL Agent or any of the Term Loan
Lender Parties, as the case may be. 5.16 Each party hereto agrees to cooperate
fully with each other party hereto to effectuate the intent and provisions of
this Agreement and, from time to time, to take such further action and to
execute and deliver such additional agreements, instruments and documents (in
recordable form, if requested) as the applicable party may reasonably request to
effectuate the terms of and the Lien priorities contemplated by this Agreement.
5.17 If, in accordance with the terms of this Agreement, a Junior Secured
Creditor pays or distributes cash, property, or other assets to a Senior Secured
Creditor, the Junior Secured Creditor will be subrogated to the rights of the
Senior Secured Creditor with respect to the value of the payment or
distribution; provided that the Junior Secured Creditor postpones all rights of
subrogation arising hereunder or otherwise in respect of any such payment or
distribution until the discharge of the Debt secured by the applicable senior
Lien in accordance with the terms of this Agreement. Such payment or
distribution will not reduce the applicable Debt with respect to the Obligors.
-44-

[g193481kw03i013.gif]

 

5.18 Notwithstanding anything to the contrary in this Agreement and for the
avoidance of doubt, none of the Conversion Shares, the Principal Payment Shares,
the Interest Payment Shares, the Registration Rights Agreement or the Second
Amendment Registration Rights Agreement (in each case, as defined in the Term
Credit Agreement as in effect on the date hereof) or any obligations or payments
thereunder or in respect thereof (including in respect of the issuance of any
Conversion Shares, Principal Payment Shares or Interest Payment Shares) or in
respect of the conversion of the Notes (as defined in the Term Credit
Agreement), shall be subject to any restrictions, caps, prohibitions or
limitations under this Agreement. 5.19 The parties hereto acknowledge that (a)
neither any such party nor any Obligor has any obligation of confidentiality (or
other duty of trust or confidence) in respect of this Agreement, the ABL Loan
Documents (other than any fee letter constituting an ABL Loan Document) or the
terms hereof or thereof, and (b) the Company may describe the terms of this
Agreement and the ABL Loan Documents (other than any fees reasonably identified
as confidential by ABL Agent to any Obligor) in a filing (or filings) with the
SEC, and may file each of this Agreement and the ABL Loan Documents (other than
any fee letter constituting an ABL Loan Document) (in its entirety and without
redaction) with the SEC, and thereby make publicly available such terms and
agreements. 5.20 The parties hereto (a) acknowledge that all Deposit Accounts of
the Obligors in existence on the date hereof and that are not Restricted
Accounts have been designated between the Term Loan Agent and the ABL Agent, in
a manner acceptable to both, as either Term Priority Deposit Accounts or ABL
Priority Deposit Accounts and (b) agree to work in good faith to so designate
any new Deposit Accounts opened in the future and acknowledge and agree that any
such Deposit Accounts shall not constitute ABL Priority Deposit Accounts or Term
Priority Deposit Parties. Accounts until so agreed in writing by the ABL Agent
and the Term Loan Lender [remainder of page intentionally left blank; signature
pages follow] -45-

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IN WITNESS WHEREOF, the parties have caused this Intercreditor Agreement to be
duly executed as of the day and year first above written. ABL AGENT, on behalf
of ABL Lender Parties: ENCINA BUSINESS CREDIT, LLC By: /s/ Jean R. Elis Name:
Jean R. Elis Title: Authorized Signatory Signature Page to Intercreditor
Agreement

[g193481kw03i015.gif]

 

TERM LOAN AGENT: DEERFIELD MGMT, L.P. By: J.E. Flynn Capital III, LLC, General
Partner By: /s/ David J. ClarkName: David J. Clark Title: Authorized Signatory
TERM LOAN LENDERS: DEERFIELD PRIVATE DESIGN FUND III, L.P. By: Deerfield Mgmt
III, L.P., General Partner By: J.E. Flynn Capital III, LLC, General Partner By:
/s/ David J. ClarkName: David J. Clark Title: Authorized Signatory DEERFIELD
SPECIAL SITUATIONS FUND, L.P. By: Deerfield Mgmt III, L.P., General Partner By:
J.E. Flynn Capital III, LLC, General Partner By: /s/ David J. Clark Name: David
J. Clark Title: Authorized Signatory Signature Page to Intercreditor Agreement

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Each of the undersigned hereby acknowledges and agrees to the foregoing
Intercreditor Agreement. By its signature below, each of the undersigned agrees
that it will, together with its successors and assigns, be bound by the
provisions of the foregoing Intercreditor Agreement. In addition, each of the
undersigned agrees that (x) any Lender holding or otherwise controlling ABL
Priority Collateral (the "ABL Controlling Creditor") does so as bailee (under
the UCC) for and on behalf of the other Lenders which have a Lien on such ABL
Priority Collateral, and each ABL Controlling Creditor is hereby authorized to
and may turn over to any of the Term Loan Lender Parties upon request therefor
any such ABL Priority Collateral, after all obligations and indebtedness of the
undersigned to such ABL Controlling Creditor shall have been Paid in Full and
(y) any Lender holding or otherwise controlling Term Loan Priority Collateral
(the "Term Controlling Creditor") does so as bailee (under the UCC) for and on
behalf of the other Lenders which have a Lien on such Term Loan Priority
Collateral, and each Term Controlling Creditor is hereby authorized to and may
turn over to the ABL Agent upon request therefor any such Term Loan Priority
Collateral, after all obligations and indebtedness of the undersigned to such
Term Controlling Creditor shall have been Paid in Full. Each of the undersigned
hereby acknowledges and agrees that (a) it will not (i) open after the date
hereof any new Deposit Accounts that are not Restricted Accounts unless the Term
Loan Lender Parties and ABL Agent have agreed in writing on the designation of
such new Deposit Accounts as being either Term Priority Deposit Accounts or ABL
Priority Deposit Accounts, (ii) deposit (or otherwise hold, maintain or keep) in
any ABL Priority Deposit Account or any other Deposit Account (other than a Term
Priority Deposit Account) (A) any Term Loan Priority Collateral, (B) any amounts
held, maintained or kept in any Term Priority Deposit Account, (C) any proceeds
of any Term Loan Priority Collateral, (D) any proceeds of the sale or other
disposition of any Equity Interests in the Company or any of its Affiliates
(including, without limitation and for the avoidance of doubt cash and other
amounts which are held in any Term Priority Deposit Account as of the date
hereof or at any time after the date hereof), (E) any proceeds from third party
sources that are outside the ordinary course of business of the Company, any
other Obligor and/or their Subsidiaries and (F) any proceeds or amounts of
loans, credit extensions or other advances under the Term Loan Documents, or
(iii) deposit (or otherwise hold, maintain or keep) in any Term Priority Deposit
Account or any other Deposit Account (other than an ABL Priority Deposit Account
or a Restricted Account) (A) any ABL Priority Collateral, (B) any proceeds of
any ABL Priority Collateral or (C) any proceeds of revolving loans under the ABL
Credit Agreement; (b) any breach or violation of any clause or provision in this
paragraph shall be an immediate “Event of Default” (as defined in the Term
Credit Agreement) and an immediate “Event of Default” (as defined in the ABL
Credit Agreement); and (c) the foregoing Intercreditor Agreement is a “Loan
Document” (as defined in the Term Credit Agreement) and a “Loan Document” (as
defined in the ABL Credit Agreement). Each of the undersigned acknowledges and
agrees that: (i) although it may sign this Intercreditor Agreement it is not a
party hereto and does not and will not receive any right, benefit, priority or
interest under or because of the existence of the foregoing Intercreditor
Agreement, and (ii) it will execute and deliver such additional agreements,
instruments and documents and take such additional action as may be necessary or
desirable in the reasonable opinion of any of the Lenders to effectuate the
provisions and purposes of the foregoing Intercreditor Agreement.

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[remainder of page intentionally left blank; signature page follows] -49-

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NEOS THERAPEUTICS, INC., a Delaware corporation, as an Obligor By: /s/ Gerald
McLaughlin Name: Gerald McLaughlin Title: Chief Executive Officer and
PresidentNEOS THERAPEUTICS COMMERCIAL, LLC, a Delaware limited liability
company, as an Obligor By: /s/ Gerald McLaughlin Name: Gerald McLaughlin Title:
Chief Executive Officer and PresidentNEOS THERAPEUTICS BRANDS, LLC, a Delaware
limited liability company, as an Obligor By: /s/ Gerald McLaughlin Name: Gerald
McLaughlinTitle: Chief Executive Officer and PresidentNEOS THERAPEUTICS, LP, a
Texas limited partnership, as an Obligor By: PharmaFab Texas, LLC, its general
partner By: /s/ Gerald McLaughlin Name: /s/ Gerald McLaughlinTitle: Sole
ManagerPHARMAFAB TEXAS, LLC, a Texas limited liability company, as an Obligor
By: /s/ Gerald McLaughlin Name: Gerald McLaughlin Title: Sole Manager Signature
Page to Intercreditor Agreement

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EXHIBIT A FORM OF ABL REQUIRED PURCHASE OPTION INFORMATION [See Attached]

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APPROVED FORMAT OF REQUIRED ABL PURCHASE OPTION INFORMATION1 The amount of the
ABL Debt, the ABL Priority Debt and the ABL Purchase Price2: 1. a. ABL Debt as
of the close of the Business Day [insert date]: $ . b. ABL Priority Debt as of
the close of the Business Day [insert date]: $ . c. ABL Purchase Price: as of
the close of the Business Day [insert date]: $ . 2. (i) Definitions of the
collateral pledged thereunder, (ii) reasonable description (including, without
limitation, the legal names thereof as set forth in the most recent charter
documents (certified by the applicable governmental office of the state of
organization of such Person) delivered by the Obligors or their representatives
or ordered by any of the ABL Lender Parties or their representatives, after
giving effect to any notices of changes to such legal names provided by any of
the Obligors or their representatives in accordance with the ABL Loan Documents)
of all borrowers, guarantors, endorsers and obligors under the ABL Loan
Documents and (iii) reasonable description and definition of the Obligations
under the ABL Loan Documents: a. [Insert current definition of Collateral and
Excluded Property from ABL Credit Agreement and the other ABL Loan Documents and
provide granting clause]: Collateral definition from ABL Credit Agreement:
["Collateral" means all property and interests in property in or upon which a
security interest, mortgage, pledge or other Lien is granted pursuant to this
Agreement or the other Loan Documents, including all of the property of each
Loan Party Obligor described in Section 5.1 of the ABL Credit Agreement, but
excluding any Excluded Property.] Excluded Property definition from ABL Credit
Agreement: [Notwithstanding anything to the contrary contained herein, the
security interests granted under this Agreement or any other Loan Document shall
not extend to (a) any permit or license issued by a Governmental Authority to
any Loan Party or any agreement to which any Loan Party is a party, in each
case, only to the extent and for so long as the terms of such permit, license or
agreement or any requirement of applicable law, validly prohibit the creation by
such Loan Party of a security interest in such permit, license or agreement in
favor of the Lender (after giving effect to Sections 9-406(d), 9-407(a),
9-408(a) or 9-409 of the UCC (or any successor provision or 1 Capitalized terms
used herein without definition shall have the meaning set forth in the
Intercreditor Agreement (the “Intercreditor Agreement”) to which this Exhibit A
is attached. 2 Amounts as provided as of the date set forth herein and are
subject to change given the revolving nature of the ABL Debt and will be updated
upon request so long as the exact amounts thereof are provided in writing within
a reasonable time prior to the Purchase Date that allows the Term Purchasing
Lenders to determine whether to revoke the purchase of the ABL Priority Debt
(or, as applicable, the ABL Debt).

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provisions) or any other applicable law (including the Code) or principles of
equity); (b) any intent-to-use trademark application, to the extent and for so
long as creation by a pledgor of a security interest therein would result in the
loss, termination, invalidity, cancellation, unenforceability or abandonment by
such pledgor of any material rights therein; and (c) the Restricted Accounts
(the forgoing, collectively, the "Excluded Property"; provided, however, that
Excluded Property shall not include any Proceeds, substitutions or replacements
of any Excluded Property referred to in clauses (a), (b) or (c) (unless such
Proceeds, substitutions or replacements would constitute Excluded Property
referred to in clauses (a), (b) or (c))).] Granting clause - (Section 5.1 of the
ABL Credit Agreement): [“(a) all Accounts (whether or not Eligible Accounts) and
all Goods whose sale, lease or other disposition by any Loan Party Obligor has
given rise to Accounts and have been returned to, or repossessed or stopped in
transit by, any Loan Party Obligor; (b) all Chattel Paper (including Electronic
Chattel Paper), Instruments, Documents, and General Intangibles (including all
patents, patent applications, trademarks, trademark applications, trade names,
trade secrets, goodwill, copyrights, copyright applications, registrations,
licenses, software, franchises, customer lists, tax refund claims, claims
against carriers and shippers, guaranty claims, contracts rights, payment
intangibles, security interests, security deposits and rights to
indemnification); (c) all Inventory; (d) all Goods (other than Inventory),
including Equipment, Health-Care-Insurance Receivables, vehicles, and Fixtures;
(e) all Investment Property, including all rights, privileges, authority, and
powers of each Loan Party Obligor as an owner or as a holder of Pledged Equity,
including all economic rights, all control rights, authority and powers, and all
status rights of each Loan Party Obligor as a member, equity holder or
shareholder, as applicable, of each Issuer and any rights related to any Loan
Party Obligors' capital account within the Issuer in respect of Investment
Property; (f) all Deposit Accounts, bank accounts, deposits, money and cash; (g)
all Letter-of-Credit Rights; (h) all Commercial Tort Claims listed in Section 2
of the Perfection Certificate; (i) all Supporting Obligations; (j) all life
insurance policies; (k) all leases; (l) [Reserved]; (m) any other property of
any Loan Party Obligor now or hereafter in the possession, custody or control of
Agent or any agent or any parent, Affiliate or Subsidiary of Agent, any Lender
or any Participant with Lender in the Loans, for any purpose (whether for
safekeeping, deposit, collection, custody, pledge, transmission or otherwise);
and (n) all additions and accessions to, substitutions for, and replacements,
products and Proceeds of the foregoing property, including proceeds of all
insurance policies insuring the foregoing property (including hazard, flood and
credit insurance), and all of each Loan Party Obligor's books and records
relating to any of the foregoing and to any Loan Party's business.”] b. All
borrowers, guarantors, endorsers and obligors under the ABL Loan Documents (and
whether any such Persons are only obligated for certain (but not all)
Obligations (and/or have provided only certain assets (instead of all or
substantially all assets) as collateral), such as limited guarantors): [NEOS
THERAPEUTICS, INC., a Delaware corporation ("Company"), NEOS THERAPEUTICS, LP, a
Texas limited partnership (“NT LP”), NEOS

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THERAPEUTICS BRANDS, LLC, a Delaware limited liability company ("NT Brands");
together with Company, [and] NT LP [and ], each a "Borrower" and collectively
the "Borrowers")[, NEOS THERAPEUTICS COMMERCIAL, LLC, a Delaware limited
liability company ("NT Commercial"), [and] PHARMAFAB TEXAS, LLC, a Texas limited
liability company [and [ (“ ”)]] ("NT PharmaFab"; together with NT Commercial
[and ], each an “Obligor” and collectively the “Obligors”), each of the
foregoing in this paragraph a “Loan Party Obligor” and collectively the “Loan
Party Obligors”).] c. [Obligations (and any “Secured Obligations” or “Guaranteed
Obligations” definitions (or terms or words of similar context or meaning)): See
amounts set forth in 1 above. The ABL Credit Agreement defines “Obligations” as:
"Obligations" means all present and future Loans, advances, debts, liabilities,
fees, expenses, obligations, guaranties, covenants, duties and indebtedness at
any time owing by any Borrower or any Loan Party Obligor to Agent and Lenders,
whether evidenced by this Agreement, any other Loan Document or otherwise,
whether arising from an extension of credit, guaranty, indemnification or
otherwise, whether direct or indirect (including those acquired by assignment
and any participation by any Lender in any Borrower's or any Loan Party
Obligor’s indebtedness owing to others), whether absolute or contingent, whether
due or to become due and whether arising before or after the commencement of a
proceeding under the Bankruptcy Code or any similar statute.] 3. Copies of ABL
Loan Documents: [Dropbox link to folder which shall contain all agreements,
instruments and documents listed on the Closing Checklist set forth on Exhibit B
to the ABL Credit Agreement (and all Perfection Certificates and other
agreements, instruments and documents that are “Loan Documents” under the ABL
Credit Agreement or “ABL Loan Documents” under the Intercreditor Agreement (but
excluding (i) any Borrowing Base Certificates that were dated and delivered more
than one year prior to the date of the Purchase Trigger Notice and (ii) other
immaterial notices and certificates delivered by any Loan Party to ABL Agent
after the date of the ABL Credit Agreement), and any and all amendments,
restatements, supplements, extensions, renewals, Refinancings, waivers, consents
or other modifications to such agreements, instruments and documents entered
into since the date of the ABL Credit Agreement] 4. To the extent not covered by
#3 directly above, copies of all Lien perfection and control documents related
to the Liens granted under the ABL Loan Documents (including filed and recorded
copies thereof to the extent applicable and any amendments, continuations,
releases and terminations thereof). [Dropbox link to folder which shall contain
all such documents]

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5. The deposit account of ABL Agent in which any ABL Purchase Price shall be
paid by any Term Purchasing Lenders, any other wire information necessary or
advisable for any Term Loan Lender to make such purchase and an executed W-9
from ABL Agent: a. Deposit account and wire transfer instructions for ABL
Purchase Price: [To be completed at the time of delivery] b. W-9 from ABL Agent
[to be] attached hereto.

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EXHIBIT B FORM OF ASSIGNMENT AND ASSUMPTION 3 This Assignment and Assumption
(the “Assignment and Assumption”) is dated as of the Effective Date set forth
below and is entered into by and between [the][each]4 Assignor identified in
item 1 below ([the][each, an] “Assignor”) and [the][each]5 Assignee identified
in item 2 below ([the][each, an] “Assignee”). [It is understood and agreed that
the rights and obligations of [the Assignors][the Assignees]6 hereunder are
several and not joint.]7 Capitalized terms used but not defined herein
(including, for the avoidance of doubt, Annex 1 hereto) shall have the meanings
given to them in the Credit Agreement identified below (as amended, restated,
supplemented or otherwise modified prior to the date hereof in accordance with
the terms and provisions of the Intercreditor Agreement identified below, the
“Credit Agreement”) or in the Intercreditor Agreement, as applicable. The
Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby
agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full. For an agreed
consideration, the receipt and sufficiency of which are hereby acknowledged,
[the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the
respective Assignees], and [the][each] Assignee hereby irrevocably purchases and
assumes from [the Assignor][the respective Assignors], subject to and in
accordance with the Standard Terms and Conditions and the Credit Agreement, as
of the Effective Date inserted by the Assignor and Assignee in accordance with
the Intercreditor Agreement as contemplated below (i) all of [the
Assignor’s][the respective Assignors’] rights and obligations in [its capacity
as a Lender][their respective capacities as Lenders] under the Credit Agreement,
the Loan Documents and any other agreements, documents or instruments delivered
pursuant thereto to the extent related to the amount and percentage interest
identified below of all of such outstanding rights and obligations of [the
Assignor][the respective Assignors] under the respective facilities identified
below (including without limitation any letters of credit, guarantees, and
swingline loans included in such facilities), and (ii) to the extent permitted
to be assigned under applicable law, all claims, suits, causes of action and any
other right of [the Assignor (in its capacity as a Lender)][the respective
Assignors (in their respective capacities as Lenders)] against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement, the other Loan Documents any other agreements, documents or
instruments delivered pursuant thereto or the loan transactions governed thereby
or in any way based on or related to any of the foregoing, including, but not
limited to, contract claims, tort claims, malpractice claims, statutory claims
and all other claims at law or in equity related to the rights and obligations
sold and assigned pursuant to clause (i) above (the rights and obligations sold
and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses
(i) and (ii) above being referred to herein collectively as [the][an] 3
Additional provisions to be included herein (or in a separate agreement) if the
Person in the capacity of the ABL Agent is being removed or is resigning. 4 For
bracketed language here and elsewhere in this form relating to the Assignor(s),
if the assignment is from a single Assignor, choose the first bracketed
language. If the assignment is from multiple Assignors, choose the second
bracketed language. 5 For bracketed language here and elsewhere in this form
relating to the Assignee(s), if the assignment is to a single Assignee, choose
the first bracketed language. If the assignment is to multiple Assignees, choose
the second bracketed language. 6 Select as appropriate. 7 Include bracketed
language if there are either multiple Assignors or multiple Assignees.

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“Assigned Interest”). Except as provided in this Assignment and Assumption, each
such sale and assignment is without recourse to [the][any] Assignor and, except
as expressly provided in this Assignment and Assumption, without representation
or warranty by [the][any] Assignor. 1. Assignor[s]: 2. Assignee[s]: [Assignee is
an [Affiliate][Approved Fund] of [identify Lender] 3. Borrowers: [Neos
Therapeutics, Inc., a Delaware corporation, Neos Therapeutics Brands, LLC, a
Delaware limited liability company, and Neos Therapeutics, LP, a Texas limited
partnership] Other Loan Party Obligors: [Neos Therapeutics Commercial, LLC, a
Delaware limited liability company, and PharmaFab Texas, LLC, a Texas limited
liability company] 4. Agent: [Encina Business Credit, LLC], as the agent for the
Lenders under the Credit Agreement 5. Credit Agreement: The Loan and Security
Agreement dated as of October 2, 2019, by and among [Neos Therapeutics, Inc., a
Delaware corporation (the "Company"), Neos Therapeutics Brands, LLC, a Delaware
limited liability company ("NT Brands"), and Neos Therapeutics, LP, a Texas
limited partnership ("NT LP"; together with the Company, NT Brands and NT LP,
collectively the "Borrowers"), Neos Therapeutics Commercial, LLC, a Delaware
limited liability company, as a “Loan Party Obligor” (as defined therein),
PharmaFab Texas, LLC, a Texas limited liability company, as a “Loan Party
Obligor” (as defined therein), the “Lenders” (as defined therein) parties
thereto, Encina Business Credit, LLC, as “Agent” (as defined therein)], in the
form included in the Required ABL Purchase Option Information (as defined in the
Intercreditor Agreement dated as of October 2, 2019, by and between [Encina
Business Credit, LLC, as the “ABL Agent” (as defined therein) for the “ABL
Lender Parties” (as defined therein), Deerfield Mgmt, L.P., as the “Term Loan
Agent” (as defined therein), DeerfieldPrivate Design Fund III, L.P., as a “Term
Loan Lender” (as defined therein), and Deerfield Special Situations Fund, L.P.,
as a “Term Loan Lender” (as defined therein)] 6. Assigned Interest[s]: Assignor[
Assignee Facility Aggregate Amount of Percentage CUSIP

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(if e) ]13 [7. Trade Date: [Page break] 8 List each Assignor, as appropriate. 9
List each Assignee, as appropriate. 10 Fill in the appropriate terminology for
the types of facilities under the Credit Agreement that are being assigned under
this Assignment and Assumption (e.g., “Revolving Credit Commitment,” “Term Loan
Commitment,” etc.) 11 Amount to be adjusted by the counterparties to take into
account any payments or prepayments made between the Trade Date and the
Effective Date. 12 Set forth, to at least 9 decimals, as a percentage of the
Commitment/Loans of all Lenders thereunder. 13 To be completed if the
Assignor(s) and the Assignee(s) intend that the minimum assignment amount is to
be determined as of the Trade Date. s]8 [s]9 Assigne d10 Amount of Commitment/L
oans for all Lenders11 Commitment/ Loans Assigned8 Assigned of Commitment /
Loans12 Number applicabl $ $ % $ $ % $ $ %

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Effective Date: , 20 The terms set forth in this Assignment and Assumption are
hereby agreed to: ASSIGNOR[S]14 [NAME OF ASSIGNOR] By:_ Title: [NAME OF
ASSIGNOR] By:_ Title: ASSIGNEE[S]15 [NAME OF ASSIGNEE] By:_ Title: [NAME OF
ASSIGNEE] By:_ Title: [Consented to and]16 Accepted: [NAME OF ADMINISTRATIVE
AGENT], as Administrative Agent By: _ Title: 14 Add additional signature blocks
as needed. 15 Add additional signature blocks as needed. 16 To be added only if
the consent of the Agent is required by the terms of the Intercreditor
Agreement.

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ANNEX 1 STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ASSUMPTION 1.
Representations and Warranties. 1.1 Assignor[s]. [The][Each] Assignor (a)
represents and warrants that (i) it is the legal and beneficial owner of
[the][the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is
free and clear of any lien, security interest, encumbrance or other adverse
claim, (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby, (iv) it is not a Defaulting
Lender, (v) the Lien perfection filings and documents set forth in Section 3 (f
applicable) and Section 4 of the Required ABL Purchase Option Information (i.e.,
the document in the form of Exhibit A of the Intercreditor Agreement) have not
been terminated by the ABL Agent, ABL Lender Parties, their Affiliates or
related funds, their counsel, agents or representatives or Persons acting under
their direction or control and no other actions have been taken by any of the
foregoing Persons to (A) terminate or release the Liens that have ever been
granted under the ABL Loan Documents or (B) subordinate in writing (or in
another method enforceable by law or court or arbitration proceeding) the (or
otherwise agree in writing (or in another method enforceable by law or court or
arbitration proceeding) with any Person to provide for a lower) priority of any
such Liens, (vi) its Commitment and its outstanding Loans are set forth in the
table in Section 6 above of this Assignment and Assumption, (vii) it has not
assigned, delegated or transferred (or provided participation sales or interests
in) [the][the relevant] Assigned Interest (or any of its voting, consent or
similar rights under the Loan Documents) to any Person, (viii) it has not on or
prior to the date hereof entered into any amendments, restatements, supplements,
modifications, Refinancings, extensions, waivers, terminations, releases or
forbearance agreements (or consents to any departures) with respect to any of
the Loan Documents or any of the other Required ABL Purchase Option Information
except as disclosed prior to the date hereof in the information provided in
writing pursuant to the Required ABL Purchase Option Information in accordance
with the Intercreditor Agreement, (ix) the Required ABL Purchase Option
Information provided in connection with the Purchase Notice dated [ ]
(including, for the avoidance of doubt, any updates, supplements or changes to
any Required ABL Purchase Option Information provided on or after such date) is
true, correct, accurate and complete in all material respects (without giving
effect to any double materiality otherwise provided for), (x) the amounts making
up the ABL Purchase Price are the true, correct, accurate and complete amounts
provided in accordance with the terms and provisions of the Intercreditor
Agreement, (xi) it has been accorded the opportunity to receive such agreements,
instruments, documents and information as it deems appropriate to make its own
credit analysis and decision to enter into this Assignment and Assumption and to
sell, assign and transfer the Assigned Interest, and (xii) it has, independently
and without reliance upon the Assignee or any of the Assignee’s Affiliates and
based on such agreements, instruments, documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Assignment and Assumption and to sell, assign and transfer the Assigned
Interest; (b) acknowledges that (i) it is a sophisticated investor engaged in
the business of assessing and assuming investment risks with respect to
securities, including securities such as

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the Assigned Interest, and further acknowledges that Assignee is entering into
this Assignment and Assumption with Assignor in reliance on this acknowledgment,
(ii)(A) none of it, the Assignee, any Loan Party, any Term Loan Lender Party,
any ABL Lender Party or any of their Affiliates (or any of their related or
managed funds) has any obligation of confidentiality (or other duty of trust or
confidence) in respect of this Assignment and Assumption, the Intercreditor
Agreement, any Loan Document or the terms hereof or thereof, and (B) each Loan
Party and each of its Affiliates may describe the terms of this Assignment and
Assumption, the Intercreditor Agreement and the Loan Documents in a filing (or
filings) with the SEC, and may file each of this Assignment and Assumption, the
Intercreditor Agreement and any Loan Document (in its entirety and without
redaction) with the SEC, and thereby make publicly available such terms and
agreements; and (c) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document (in each case of this clause (c)(i),
other than those statements, warranties and/or representations by ABL Agent or
any other ABL Lender Party expressly set forth in the Intercreditor Agreement or
in this Assignment and Assumption), (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
collateral thereunder (in each case of this clause (c)(ii), other than with
respect to the due authorization, execution, delivery thereof by (and the
legality, validity, enforceability and genuineness thereof with respect to)
Assignor, managed) funds), (iii) the financial condition Affiliates or any other
Obligor obligated in its Affiliates and its and their related (and/or of the
Borrower, any of its Subsidiaries or respect of any Loan Document, or (iv) the
performance or observance by the Borrower, any of its Subsidiaries or Affiliates
or any other Obligor of any of their respective obligations under any Loan
Document. 1.2. Assignee[s]. [The][Each] Assignee represents and warrants that
(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
[the][the relevant] Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it is sophisticated with respect to decisions to acquire assets
of the type represented by the Assigned Interest and either it, or the Person
exercising discretion in making its decision to acquire the Assigned Interest,
is experienced in acquiring assets of such type, (v)(A) it has received a copy
of the Credit Agreement in the form provided in the Required ABL Purchase Option
Information, and (B) to the extent the Required ABL Purchase Option Information
(and the statements, representations and warranties by the ABL Agent or any
other ABL Lender Party expressly set forth in this Assignment and Assumption or
the Intercreditor Agreement) are true, correct, accurate and complete in all
material respects (without giving effect to any double materiality otherwise
provided for), it has received such information as it deems appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase [the][such] Assigned Interest, and (vi) other than
with respect to the Required ABL Purchase Option Information (and the
statements, representations and warranties by the ABL Agent or any other ABL
Lender Party expressly set forth in this Assignment and Assumption or the
Intercreditor Agreement), it has, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made

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its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase [the][such] Assigned Interest. 2. Payments. From and
after the Effective Date, the Agent shall make all payments in respect of
[the][each] Assigned Interest (including payments of principal, interest, fees
and other amounts) to [the][the relevant] Assignee for amounts which have
accrued prior to, on or after the Effective Date. Notwithstanding the foregoing,
the Agent shall make all payments of interest, fees or other amounts paid or
payable in kind prior to, on or after the Effective Date to [the][the relevant]
Assignee. 3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument and
agreement. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy, electronic mail or other electronic
method of transmission shall be effective as delivery of a manually executed
counterpart of this Assignment and Assumption. IN ALL RESPECTS, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS ASSIGNMENT AND
ASSUMPTION SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK (BUT NOT THE LAW OF CONFLICTS) APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA. [remainder of page intentionally left blank]

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