Exhibit 10.1

Execution Version

 

 

SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT

dated as of July 14, 2020

Among

HI-CRUSH INC.

as Borrower,

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent and an Issuing Lender,

ZIONS BANCORPORATION, N.A. DBA AMEGY BANK,

as an Issuing Lender

and

THE LENDERS NAMED HEREIN,

as Lenders

$25,000,000

 

 

JPMORGAN CHASE BANK, N.A.,

ZIONS BANCORPORATION, N.A. DBA AMEGY BANK,

as Joint Lead Arrangers and Joint Bookrunners

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TABLE OF CONTENTS

 

     Page  

ARTICLE 1 DEFINITIONS AND ACCOUNTING TERMS

     2  

Section 1.1.

  Certain Defined Terms      2  

Section 1.2.

  Computation of Time Periods      33  

Section 1.3.

  Accounting Terms; Changes in GAAP      33  

Section 1.4.

  Types of Loans      33  

Section 1.5.

  Miscellaneous      34  

Section 1.6.

  Divisions      34  

ARTICLE 2 CREDIT FACILITIES

     34  

Section 2.1.

  Commitments      34  

Section 2.2.

  Letters of Credit      35  

Section 2.3.

  Loans      42  

Section 2.4.

  Prepayments      45  

Section 2.5.

  Repayment of Loans; Evidence of Debt      46  

Section 2.6.

  Fees      47  

Section 2.7.

  Interest      48  

Section 2.8.

  Illegality      48  

Section 2.9.

  Breakage Costs      48  

Section 2.10.

  Increased Costs      49  

Section 2.11.

  Payments and Computations      50  

Section 2.12.

  Taxes      52  

Section 2.13.

  Replacement of Lenders      56  

Section 2.14.

  Defaulting Lenders      56  

Section 2.15.

  [Reserved]      58  

Section 2.16.

  Alternate Rate of Interest      58  

Section 2.17.

  Cash Dominion      59  

Section 2.18.

  Priority and Liens      59  

Section 2.19.

  No Discharge; Survival of Claims      59  

Section 2.20.

  Conversion to Exit Facility Agreement      60  

ARTICLE 3 CONDITIONS OF LENDING

     60  

Section 3.1.

  Conditions Precedent to Effectiveness      60  

Section 3.2.

  Conditions Precedent to Each Revolving Borrowing and to Each Issuance.
Extension or Renewal of a Letter of Credit      63  

Section 3.3.

  Determinations Under Sections 3.1 and 3.2      64  

ARTICLE 4 REPRESENTATIONS AND WARRANTIES

     65  

Section 4.1.

  Organization      65  

Section 4.2.

  Authorization      65  

Section 4.3.

  Enforceability      65  

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Section 4.4.

  Financial Condition      65  

Section 4.5.

  Ownership and Liens; Real Property      66  

Section 4.6.

  True and Complete Disclosure      66  

Section 4.7.

  Litigation      66  

Section 4.8.

  [Reserved]      66  

Section 4.9.

  Pension Plans      66  

Section 4.10.

  Environmental Condition      67  

Section 4.11.

  Subsidiaries      67  

Section 4.12.

  Investment Company Act      67  

Section 4.13.

  Taxes      68  

Section 4.14.

  Permits. Licenses. etc.      68  

Section 4.15.

  Use of Proceeds      68  

Section 4.16.

  Condition of Property; Casualties      68  

Section 4.17.

  Insurance      68  

Section 4.18.

  [Reserved]      69  

Section 4.19.

  Sanctions; Anti-Terrorism; Patriot Act; Anti-Corruption Laws      69  

Section 4.20.

  [Reserved]      69  

Section 4.21.

  EEA Financial Institutions      69  

Section 4.22.

  Borrowing Base Certificate      69  

ARTICLE 5 AFFIRMATIVE COVENANTS

     69  

Section 5.1.

  Organization      70  

Section 5.2.

  Reporting      70  

Section 5.3.

  Insurance      75  

Section 5.4.

  Compliance with Laws      76  

Section 5.5.

  Taxes      76  

Section 5.6.

  [Reserved]      77  

Section 5.7.

  Security      77  

Section 5.8.

  Deposit Accounts      77  

Section 5.9.

  Records; Inspection      77  

Section 5.10.

  Maintenance of Property      77  

Section 5.11.

  Royalty Agreements      78  

Section 5.12.

  Field Examinations      78  

Section 5.13.

  [Reserved]      78  

Section 5.14.

  Further Assurances      78  

Section 5.15.

  Compliance with Anti-Corruption Laws and Sanctions      79  

Section 5.16.

  Accuracy of Information      79  

Section 5.17.

  Casualty and Condemnations      79  

Section 5.18.

  Payment of Obligations      79  

Section 5.19.

  Beneficial Ownership Certificate      79  

Section 5.20.

  Use of Proceeds      79  

ARTICLE 6 NEGATIVE COVENANTS

     80  

Section 6.1.

  Debt      80  

Section 6.2.

  Liens      81  

 

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Section 6.3.

  Investments      82  

Section 6.4.

  Acquisitions      83  

Section 6.5.

  Agreements Restricting Liens      83  

Section 6.6.

  Use of Proceeds      83  

Section 6.7.

  Corporate Actions; Accounting Changes      84  

Section 6.8.

  Sale of Assets      84  

Section 6.9.

  Restricted Payments      84  

Section 6.10.

  Affiliate Transactions      84  

Section 6.11.

  Line of Business      84  

Section 6.12.

  Hazardous Materials      85  

Section 6.13.

  Compliance with ERISA      85  

Section 6.14.

  Sale and Leaseback Transactions      85  

Section 6.15.

  Limitation on Hedging      86  

Section 6.16.

  Minimum Liquidity      86  

Section 6.17.

  Landlord Agreements      86  

Section 6.18.

  Operating Leases      86  

Section 6.19.

  Amendment of Material Contracts      87  

Section 6.20.

  Budget Variance      87  

Section 6.21.

  Capital Expenditures      87  

Section 6.22.

  Key Employee Plans      87  

Section 6.23.

  Superpriority Claims      87  

Section 6.24.

  Repayment of DIP Term Loan Credit Agreement      87  

ARTICLE 7 DEFAULT AND REMEDIES

     87  

Section 7.1.

  Events of Default      87  

Section 7.2.

  Optional Acceleration of Maturity      92  

Section 7.3.

  Set-off      92  

Section 7.4.

  Remedies Cumulative. No Waiver      93  

Section 7.5.

  Application of Payments      93  

ARTICLE 8 THE ADMINISTRATIVE AGENT

     94  

Section 8.1.

  Appointment, Powers and Immunities      94  

Section 8.2.

  Reliance by Administrative Agent      95  

Section 8.3.

  Defaults      95  

Section 8.4.

  Rights as Lender      95  

Section 8.5.

  Indemnification      95  

Section 8.6.

  Non-Reliance on Administrative Agent, Lead Arranger and Other Lenders      96
 

Section 8.7.

  Resignation of Administrative Agent and Issuing Lenders      97  

Section 8.8.

  Collateral Matters      98  

Section 8.9.

  No Other Duties, etc.      99  

Section 8.10.

  Flood Laws      99  

Section 8.11.

  Credit Bidding      99  

Section 8.12.

  Not Partners or Co-Venturers; Administrative Agent as Representative of the
Secured Parties      100  

Section 8.13.

  Certain ERISA Matters      100  

 

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ARTICLE 9 MISCELLANEOUS

     102  

Section 9.1.

  Costs and Expenses      102  

Section 9.2.

  Indemnification; Waiver of Damages      103  

Section 9.3.

  Waivers and Amendments      104  

Section 9.4.

  Severability      105  

Section 9.5.

  Survival of Representations and Obligations      105  

Section 9.6.

  Binding Effect      105  

Section 9.7.

  Lender Assignments and Participations      105  

Section 9.8.

  Confidentiality      107  

Section 9.9.

  Notices. Etc.      108  

Section 9.10.

  Usury Not Intended      108  

Section 9.11.

  Usury Recapture      109  

Section 9.12.

  Governing Law; Service of Process      109  

Section 9.13.

  Submission to Jurisdiction      109  

Section 9.14.

  Execution in Counterparts; Electronic Execution      110  

Section 9.15.

  WAIVER OF JURY TRIAL      110  

Section 9.16.

  [Reserved]      111  

Section 9.17.

  USA Patriot Act      111  

Section 9.18.

  No Fiduciary or Agency Relationship      111  

Section 9.19.

  Keepwell      112  

Section 9.20.

  Acknowledgement and Consent to Bail-In of EEA Financial Institutions      112
 

Section 9.21.

  Integration      112  

Section 9.22.

  Several Obligations; Nonreliance; Violation of Law      113  

Section 9.23.

  Disclosure      113  

Section 9.24.

  Appointment for Perfection      113  

Section 9.25.

  Acknowledgement Regarding an Supported QFCs      113  

 

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EXHIBITS:

 

Exhibit A    Restructuring Term Sheet Exhibit B    Form of Assignment and
Acceptance Exhibit C    Form of Borrowing Base Certificate Exhibit D    Form of
Compliance Certificate Exhibit E    [Reserved] Exhibit F    Exit Facility Term
Sheet Exhibit G    Form of Guaranty Exhibit H    Interim Order Exhibit I    Form
of Notice of Borrowing Exhibit J    Form of Notice of Continuation/Conversion
Exhibit K    Form of Revolving Note Exhibit L    Form of Security Agreement
Exhibit M-1    U.S. Tax Certificate (For Foreign Lenders that are not
Partnerships for U.S. Federal Income Tax Purposes) Exhibit M-2    U.S. Tax
Certificate (For Foreign Participants that are not Partnerships for U.S. Federal
Income Tax Purposes) Exhibit M-3    U.S. Tax Certificate (For Foreign
Participants that are Partnerships for U.S. Federal Income Tax Purposes)
Exhibit M-4    U.S. Tax Certificate (For Foreign Lenders that are Partnerships
for U.S. Federal Income Tax Purposes)

SCHEDULES:

 

Schedule 1.1    Commitments Schedule 1.1(a)      Existing Letters of Credit
Schedule 1.1(b)    Milestones Schedule 2.20    Exit Conversion Conditions
Schedule 4.1    Credit Parties Schedule 4.5    Real Property Schedule 4.7   
Litigation Schedule 4.10    Environmental Matters Schedule 4.11    Subsidiaries
Schedule 6.1    Existing Debt Schedule 6.2    Existing Liens Schedule 6.3   
Existing Investments Schedule 9.9    Notices

 

 

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CREDIT AGREEMENT

This SENIOR SECURED DEBTOR-IN-POSSESSION CREDIT AGREEMENT dated as of July 14,
2020 (the “Agreement”) is among Hi-Crush Inc., a Delaware corporation (the
“Borrower”), which is a debtor and debtor-in-possession in a Chapter 11 Case (as
defined below), the Lenders (as defined below) and other parties from time to
time party hereto, and JPMorgan Chase Bank, N.A., as Administrative Agent (as
defined below) for the Lenders and as an Issuing Lender (as defined below), and
each other Issuing Lender (as defined below).

RECITALS

A. Reference is made to that certain (a) Credit Agreement, dated as of August 1,
2018 (as amended, supplemented, restated or otherwise modified prior to the date
hereof, the “Existing Credit Agreement”), among the Borrower, the lenders and
other parties from time to time party thereto (the “Existing Lenders”) and
JPMorgan, as administrative agent (in such capacity, the “Existing
Administrative Agent”) and (b) Restructuring Support Agreement, dated as of
July 12, 2020, among the Borrower, certain subsidiaries of the Borrower and the
Consenting Noteholders (as defined therein) (as amended, supplemented or
otherwise modified in a manner reasonably satisfactory to the Required Lenders,
the “RSA”).

B. Pursuant to the RSA, the Borrower and the other parties thereto have agreed
to a restructuring of the Borrower and its Subsidiaries pursuant to the Approved
Plan (as defined below).

C. In furtherance of the Approved Plan and the provisions of the RSA, on
July 12, 2020 (the “Petition Date”), the Credit Parties filed voluntary
petitions to commence cases (the “Chapter 11 Cases”) under title 11 of the
United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court
for the Southern District of Texas (the “Bankruptcy Court”) and continued in the
possession of their assets and in the management of their businesses pursuant to
Sections 1107 and 1108 of the Bankruptcy Code.

D. In connection with the Chapter 11 Cases and the Approved Plan, the Borrower
has requested that (x) the Lenders provide a senior secured debtor-in-possession
asset-based revolving credit facility (the “DIP Facility”) which would, upon the
satisfaction of certain conditions, convert into a senior secured exit
asset-based credit facility (the “Exit Facility” and, together with the DIP
Facility, the “Facilities”), in each case in an aggregate principal amount not
to exceed $25,000,000 and (y) certain other lenders provide a senior secured
debtor-in-possession term loan credit facility in an aggregate principal amount
not to exceed $40,000,000 (the “DIP Term Loan Facility”).

E. The Lenders have agreed to provide the Facilities upon the terms and
conditions set forth herein, including without limitation, (a) in the case of
the DIP Facility, so long as all outstanding loans and letters of credit under
the Existing Credit Agreement are refunded, refinanced and replaced in whole
with Loans and Letters of Credit under this Agreement and (b) in the case of the
Exit Facility and the consummation of the Approved Plan, so long as all
outstanding Loans and Letters of Credit under this Agreement are, pursuant to
Section 2.20, refunded, refinanced and replaced in whole with Loans and Letters
of Credit under, and as defined in, the Exit Facility Agreement.

F. To provide guarantees for the repayment of the Loans, the reimbursement of
any draft drawn under the Letters of Credit and the payment of the other Secured
Obligations of the Borrower hereunder and under the other Credit Documents, the
Credit Parties are providing to the Administrative Agent and the Lenders,
pursuant to this Agreement, the other Credit Documents and the DIP Order, a
guarantee from each of the Guarantors of the due and punctual payment and
performance of the Secured Obligations of the Borrower hereunder;

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G. To provide security for the repayment of the Loans, the reimbursement of any
draft drawn under the Letters of Credit and the payment of the other Secured
Obligations of the Borrower hereunder and under the other Credit Documents, the
Credit Parties are providing to the Administrative Agent and the Lenders,
pursuant to this Agreement, the other Credit Documents and the DIP Order,
(i) the Liens granted hereby and thereby, having the priorities set forth in the
DIP Order and the Intercreditor Agreement and (ii) the Superpriority Claims in
respect of the Secured Obligations of the Loan Parties.

H. All of the claims and the Liens granted hereunder and pursuant to the DIP
Order in the Chapter 11 Cases to the Administrative Agent, the Lenders and the
other Secured Parties shall be subject to the Carve-Out, but in each case only
to the extent provided in the DIP Order.

I. Pursuant to the terms of the DIP Order the Liens securing the Secured
Obligations shall be valid and perfected Liens.

J. In consideration of the mutual covenants and agreements herein contained and
of the loans, extensions of credit and commitments hereinafter referred to, the
parties hereto agree as follows:

ARTICLE 1

DEFINITIONS AND ACCOUNTING TERMS

Section 1.1. Certain Defined Terms. The following terms shall have the following
meanings (unless otherwise indicated, such meanings to be equally applicable to
both the singular and plural forms of the terms defined):

“13-Week Forecast” has the meaning set forth in Section 5.2(f).

“ABL Priority Collateral” means the “ABL Priority Collateral” (as defined in the
Intercreditor Agreement).

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

“ABR Loan” means a Loan which bears interest based upon the Alternate Base Rate.

“Acceptable Security Interest” means a security interest which (a) exists in
favor of the Administrative Agent for its benefit and the ratable benefit of the
Secured Parties, (b) is superior to all other security interests (other than the
Permitted Liens to the extent such Permitted Liens are made superior to such
security interest by (i) the DIP Order, (ii) the Intercreditor Agreement or
(iii) automatically by operation of law and without the consent of the
Administrative Agent or the Lenders), (c) secures the Secured Obligations,
(d) is enforceable against the Credit Party which created such security interest
and (e) is perfected to the extent required by any Credit Document.

“Account” has the meaning set forth in the Security Agreement.

 

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“Account Control Agreement” means an account control agreement (or similar
agreement), in form and substance reasonably acceptable to the Administrative
Agent, executed by the applicable Credit Party, the Administrative Agent and the
relevant depository institution, securities intermediary or as applicable, party
thereto. Such agreement shall provide a first priority perfected Lien in favor
of the Administrative Agent, for the benefit of the Secured Parties, in the
applicable Credit Party’s Deposit Account, Securities Account or Commodity
Account, as applicable.

“Account Debtor” shall mean an account debtor as defined in the UCC.

“Acquisition” means the purchase by any Credit Party of (a) any business,
division or enterprise or all or substantially all of any Person through the
purchase of assets (but, for the avoidance of doubt, excluding purchases of
equipment only with no other tangible or intangible property associated with
such equipment purchase, unless such purchase of equipment involves all or
substantially all the assets of the seller) or (b) Equity Interests of any
Person sufficient to cause such Person to become a Subsidiary of a Credit Party.

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

“Administrative Agent” means JPMCB in its capacity as administrative agent and
collateral agent for the Lenders pursuant to Article 8 and any successor agent
pursuant to Section 8.7.

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

“Affiliate” means, as to any Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person. The
term “control” (including the terms “controlled by” or “under common control
with”) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership, by contract, or otherwise.

“Aggregate Commitments” means, at any time, the aggregate of the Commitments of
all the Lenders, as increased or reduced from time to time pursuant to the terms
and conditions hereof. As of the Effective Date, the Aggregate Commitments are
equal to $25,000,000.

“Aggregate Revolving Credit Exposure” means, at any time, the aggregate of the
Revolving Credit Exposures of all the Lenders, as increased or reduced from time
to time pursuant to the terms and conditions hereof.

“Agreement” has the meaning set forth in the preamble.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on
such day plus 1⁄2 of 1% and (c) the Adjusted LIBO Rate for a one month Interest
Period on such day (or if such day is not a Business Day, the immediately
preceding Business Day) plus 1%, provided that for the purpose of this
definition, the Adjusted LIBO Rate for any day shall be based on the LIBO Screen
Rate (or if the LIBO Screen Rate is not available for such one month Interest
Period, the Interpolated Rate) at approximately 11:00 a.m. London time on such
day. Any change in the Alternate Base Rate due to a change in the Prime Rate,
the NYFRB Rate or the Adjusted LIBO Rate shall be effective from and including
the effective date of such change in the Prime Rate, the NYFRB Rate or the
Adjusted LIBO Rate, respectively. If the Alternate Base Rate is being used as an
alternate rate of interest pursuant to Section 2.16 hereof, then the Alternate
Base Rate shall be the greater of clause (a) and (b) above and shall be
determined without reference to clause (c) above. For the avoidance of doubt, if
the Alternate Base Rate shall be less than 2.00%, such rate shall be deemed to
be 2.00% for purposes of this Agreement.

 

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“Amegy” means Zions Bancorporation, N.A. DBA Amegy Bank.

“Ancillary Document” has the meaning set forth in Section 9.14.

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Borrower or its Subsidiaries from time to time
concerning or relating to bribery or corruption, including, without limitation,
the United States Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder.

“Anti-Money Laundering Laws” has the meaning set forth in Section 4.19(c).

“Applicable Margin” means, as of any date of determination, (a) in the case of
ABR Loans, a percentage per annum equal to 2.50%, and (b) in the case of
Eurodollar Loans, a percentage per annum equal to 3.50%.

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

“Approved Plan” means (a) a plan of reorganization consistent with that set
forth in the Restructuring Term Sheet attached hereto as Exhibit A or (b) any
Cash Pay Plan, in each case, as such plan may be modified, amended or
supplemented; provided that the consent of the Administrative Agent and the
Required Lenders shall be required in respect of any such modification,
amendment or supplement solely to the extent that such modification, supplement
or amendment: (i) adversely impacts the Administrative Agent’s or Lenders’
interests, economic recovery, rights or treatment in comparison to the Approved
Plan (without giving effect to any such modification, supplement or amendment),
(ii) alters the debt capital structure of the Credit Parties as set forth in the
Approved Plan, (iii) allows for the incurrence of Debt upon or in conjunction
with the effective date of the Approved Plan not otherwise contemplated under
the Approved Plan (without giving effect to any such modification, supplement or
amendment) or (iv) changes the priority or treatment of any Debt from that set
forth in the Approved Plan (without giving effect to any such modification,
supplement or amendment).

“Availability” means, at any time and without any duplication, an amount equal
to (a) the Facility Limit, minus (b) the Aggregate Revolving Credit Exposure,
minus (c) Reserves.

“Availability Trigger Period” shall occur at any time that Availability is less
than the greater of (a) $7,500,000 and (b) 20% of the Facility Limit. Once
commenced, an Availability Trigger Period shall be deemed to be continuing until
such time as (i) Availability equals or exceeds for thirty (30) consecutive days
the greater of (A) $7,500,000 and (B) 20% of the Facility Limit and (ii) no
Event of Default has occurred and is continuing during such thirty
(30) consecutive day period.

“Assignment and Acceptance” means an assignment and acceptance executed by a
Lender and an Eligible Assignee and accepted by the Administrative Agent, in
substantially the same form as Exhibit B.

“Backstop Agreement” shall mean the “Backstop Purchase Agreement” (as defined in
the RSA).

“Backstop Order” shall mean the “Backstop Order” (as defined in the RSA).

 

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

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

“Banking Services” means each and any of the following bank services provided to
any Credit Party by any Lender (other than a Defaulting Lender) or any Affiliate
of a Lender (other than a Defaulting Lender): (a) commercial credit cards,
(b) stored value cards and (c) treasury management services (including, without
limitation, controlled disbursement, automated clearinghouse transactions,
return items, overdrafts and interstate depository network services).

“Banking Services Obligations” means any and all obligations of any Credit
Party, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with Banking
Services.

“Banking Services Provider” means any Lender (other than a Defaulting Lender) or
Affiliate of a Lender (other than a Defaulting Lender) that provides Banking
Services to the Borrower or any Subsidiary.

“Bankruptcy Code” has the meaning assigned to such term in the recitals hereto.

“Bankruptcy Court” has the meaning assigned to such term in the recitals hereto.

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

“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate
(which may be a SOFR-Based Rate) that has been selected by the Administrative
Agent and the Borrower giving due consideration to (i) any selection or
recommendation of a replacement rate or the mechanism for determining such a
rate by the applicable Governmental Authority and/or (ii) any evolving or
then-prevailing market convention for determining a rate of interest as a
replacement to the LIBO Rate for U.S. dollar-denominated syndicated credit
facilities and (b) the Benchmark Replacement Adjustment; provided that, if the
Benchmark Replacement as so determined would be less than 1.00%, the Benchmark
Replacement will be deemed to be 1.00% for the purposes of this Agreement;
provided further that any such Benchmark Replacement shall be administratively
feasible as determined by the Administrative Agent in its sole discretion.

 

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“Benchmark Replacement Adjustment” means the spread adjustment, or method for
calculating or determining such spread adjustment, (which may be a positive or
negative value or zero) that has been selected by the Administrative Agent and
the Borrower giving due consideration to (a) any selection or recommendation of
a spread adjustment, or method for calculating or determining such spread
adjustment, for the replacement of the LIBO Rate with the applicable Unadjusted
Benchmark Replacement by the applicable Governmental Authority and/or (b) any
evolving or then-prevailing market convention for determining a spread
adjustment, or method for calculating or determining such spread adjustment, for
the replacement of the LIBO Rate with the applicable Unadjusted Benchmark
Replacement for U.S. dollar-denominated syndicated credit facilities at such
time (for the avoidance of doubt, such Benchmark Replacement Adjustment shall
not be in the form of a reduction to the Applicable Rate).

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark
Replacement, any technical, administrative or operational changes (including
changes to the definition of “Alternate Base Rate,” the definition of “Interest
Period,” timing and frequency of determining rates and making payments of
interest and other administrative matters) that the Administrative Agent decides
in its reasonable discretion may be appropriate to reflect the adoption and
implementation of such Benchmark Replacement and to permit the administration
thereof by the Administrative Agent in a manner substantially consistent with
market practice (or, if the Administrative Agent decides that adoption of any
portion of such market practice is not administratively feasible or if the
Administrative Agent determines that no market practice for the administration
of the Benchmark Replacement exists, in such other manner of administration as
the Administrative Agent decides is reasonably necessary in connection with the
administration of this Agreement).

“Benchmark Replacement Date” means the earlier to occur of the following events
with respect to the LIBO Rate:

(a) in the case of clause (1) or (2) of the definition of “Benchmark Transition
Event,” the later of (i) the date of the public statement or publication of
information referenced therein and (ii) the date on which the administrator of
the LIBO Screen Rate permanently or indefinitely ceases to provide the LIBO
Screen Rate; or

(b) in the case of clause (3) of the definition of “Benchmark Transition Event,”
the date of the public statement or publication of information referenced
therein.

“Benchmark Transition Event” means the occurrence of one or more of the
following events with respect to the LIBO Rate:

(1) a public statement or publication of information by or on behalf of the
administrator of the LIBO Screen Rate announcing that such administrator has
ceased or will cease to provide the LIBO Screen Rate, permanently or
indefinitely, provided that, at the time of such statement or publication, there
is no successor administrator that will continue to provide the LIBO Screen
Rate;

(2) a public statement or publication of information by the regulatory
supervisor for the administrator of the LIBO Screen Rate, the U.S. Federal
Reserve System, an insolvency official with jurisdiction over the administrator
for the LIBO Screen Rate, a resolution authority with jurisdiction over the
administrator for the LIBO Screen Rate or a court or an entity with similar
insolvency or resolution authority over the administrator for the LIBO Screen
Rate, in each case which states that the administrator of the LIBO Screen Rate
has ceased or will cease to provide the LIBO Screen Rate permanently or
indefinitely, provided that, at the time of such statement or publication, there
is no successor administrator that will continue to provide the LIBO Screen
Rate; and/or

 

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(3) a public statement or publication of information by the regulatory
supervisor for the administrator of the LIBO Screen Rate announcing that the
LIBO Screen Rate is no longer representative.

“Benchmark Transition Start Date” means (a) in the case of a Benchmark
Transition Event, the earlier of (i) the applicable Benchmark Replacement Date
and (ii) if such Benchmark Transition Event is a public statement or publication
of information of a prospective event, the 90th day prior to the expected date
of such event as of such public statement or publication of information (or if
the expected date of such prospective event is fewer than 90 days after such
statement or publication, the date of such statement or publication) and (b) in
the case of an Early Opt-in Election, the date specified by the Administrative
Agent or the Required Lenders, as applicable, by notice to the Borrower, the
Administrative Agent (in the case of such notice by the Required Lenders) and
the Lenders.

“Benchmark Unavailability Period” means, if a Benchmark Transition Event and its
related Benchmark Replacement Date have occurred with respect to the LIBO Rate
and solely to the extent that the LIBO Rate has not been replaced with a
Benchmark Replacement, the period (x) beginning at the time that such Benchmark
Replacement Date has occurred if, at such time, no Benchmark Replacement has
replaced the LIBO Rate for all purposes hereunder in accordance with
Section 2.16 and (y) ending at the time that a Benchmark Replacement has
replaced the LIBO Rate for all purposes hereunder pursuant to Section 2.16.

“Beneficial Ownership Certification” means a certificate regarding beneficial
ownership as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in
Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a “plan” as
defined in Section 4975 of the Code to which Section 4975 of the Code applies,
and (c) any Person whose assets include (for purposes of the Plan Asset
Regulations or otherwise for purposes of Title I of ERISA or Section 4975 of the
Code) the assets of any such “employee benefit plan” or “plan”.

“BHC Act Affiliate” of a party means an “affiliate’ (as such term is defined
under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

“Borrower” has the meaning set forth in the preamble.

“Borrower Materials” has the meaning set forth in Section 5.2.

“Borrowing Base” means, at any time, an amount equal to the sum of the
following: (a) 90% of each Credit Party’s Investment Grade Eligible Accounts,
plus (b) 85% of each Credit Party’s Non-Investment Grade Eligible Accounts, plus
(c) 100% of each Credit Party’s Eligible Cash, minus (d) Reserves. The
Administrative Agent may, in its Permitted Discretion, (i) impose Reserves in
accordance with the definition thereof (provided that any Reserves with respect
to the Borrowing Base shall not be duplicative of any Reserves with respect to
Availability) and (ii) modify one or more of the other elements used in
computing the Borrowing Base, with any such changes to be effective three
(3) Business Days after delivery of notice thereof to the Borrower and the
Lenders. The Borrowing Base at any time shall be determined by reference to the
most recent Borrowing Base Certificate delivered to the Administrative Agent
pursuant to and in accordance with Section 5.2(u), giving effect, for the
avoidance of doubt, to Reserves imposed subsequent to such delivery.

 

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“Borrowing Base Certificate” means a certificate, signed and certified as
accurate by a Responsible Officer, substantially in the form of Exhibit C or
another form which is acceptable to the Administrative Agent in its sole
discretion.

“Budget” means a written budget for the period from the Petition Date through
the Scheduled Maturity Date setting forth on a line-item basis the Credit
Parties’ projected cash receipts and cash disbursements, including, without
limitation, disbursements on account of the reasonable and documented fees and
expenses of advisors (including, without limitation, advisors of the
Administrative Agent, the Lenders, the DIP Term Loan Agent and the DIP Term Loan
Lenders) and, on a weekly basis, which budget shall be in form and substance
acceptable to the Required Lenders and which budget shall be updated every four
weeks in form and substance acceptable to the Required Lenders. To the extent
that any updated Budget is not acceptable to the Required Lenders, the
then-existent approved budget will remain the “Budget” until replaced by an
updated budget that is acceptable to the Required Lenders. Concurrently with the
delivery of each updated budget, the Borrower shall deliver to the
Administrative Agent a certificate of a financial officer of the Borrower
stating that such Budget has been prepared on a reasonable basis and in good
faith and is based on assumptions believed by the Borrower to be reasonable at
the time made and from the best information then available to the Borrower in
connection therewith (such certificate a “Budget Certificate”).

“Budget Certificate has the meaning assigned to such term in the definition of
“Budget”.

“Business Day” means a day (a) other than a Saturday, Sunday, or other day on
which banks are required or permitted to be closed under the laws of, or are in
fact closed in, Texas or New York, and (b) if the applicable Business Day
relates to any Eurodollar Loans, on which dealings are carried on by commercial
banks in the London interbank market.

“Cash Pay Plan” has the meaning assigned to such term in Section 7.1(m)(ii).

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

“Canadian Subs” means, collectively, (a) Hi-Crush Canada Distribution Corp., a
company incorporated under the Business Corporations Act of the Province of
British Columbia and (b) FB Industries Inc., a Manitoba corporation.

“Capital Expenditures” for any Person and period of its determination means,
without duplication, the aggregate of all expenditures and costs (whether paid
in cash or accrued as liabilities during that period and including that portion
of payments under Capital Leases that are capitalized on the balance sheet of
such Person) of such Person during such period that, in conformity with GAAP,
are required to be included in or reflected by the property, plant, or equipment
or similar fixed asset accounts reflected in the balance sheet of such Person.

“Capital Leases” means, subject to Section 1.3(d)(iii), for any Person, any
lease of any Property by such Person as lessee which would, in accordance with
GAAP, be required to be classified and accounted for as a capital lease on the
balance sheet of such Person.

“Cash Collateral Account” means a cash collateral account pledged to the
Administrative Agent containing cash deposited pursuant to the terms hereof to
be maintained with the Administrative Agent in accordance with Section 2.2(h).

 

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“Casualty Event” means the damage, destruction or condemnation, including by
process of eminent domain or any transfer or disposition of property in lieu of
condemnation, as the case may be, of property of any Person or any of its
Subsidiaries.

“CERCLA” means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, state and local analogs, and all rules and
regulations and requirements thereunder in each case as now or hereafter in
effect.

“Certificated Equipment” means any equipment the ownership of which is evidenced
by, or under applicable Legal Requirement, is required to be evidenced by, a
certificate of title.

“Change in Control” means the occurrence of any of the following events:

(i) the acquisition of ownership, directly or indirectly, beneficially or of
record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof)
of Equity Interests representing more than 35% or more of the aggregate ordinary
voting power represented by the issued and outstanding Equity Interests of the
Borrower;

(ii) the acquisition of direct or indirect Control of the Borrower by any Person
or group;

(iii) occupation at any time of a majority of the seats (other than vacant
seats) on the board of directors of the Borrower by Persons who were not
(A) directors of the Borrower on the date of this Agreement, nominated or
appointed by the board of directors of the Borrower or (B) appointed by
directors so nominated or appointed; or

(iv) a “change of control” (or similar term or concept) occurs under the
documentation related to the DIP Term Loan Facility.

“Change in Law” means the occurrence after the date of this Agreement or, with
respect to any Lender, such later date on which such Lender becomes a party to
this Agreement, of (a) the adoption of or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation, implementation or application thereof by
any Governmental Authority or (c) compliance by any Lender or Issuing Lender
(or, for purposes of Section 2.10(b), by any lending office of such Lender or by
such Lender’s or Issuing Lender’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement; provided
that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith or in the implementation
thereof and (y) all requests, rules, guidelines or directives promulgated by the
Bank for International Settlements, the Basel Committee on Banking Supervision
(or any successor or similar authority) or the United States or foreign
regulatory authorities, in each case pursuant to Basel III, shall, in each case,
be deemed to be a “Change in Law,” regardless of the date enacted, adopted,
issued or implemented.

“Chapter 11 Cases” has the meaning assigned to such term in the recitals hereto.

“Chevron” means Chevron U.S.A. Inc. and its Affiliates.

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations
and published interpretations thereof.

 

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“Collateral” means all property of the Credit Parties which is “Collateral” (as
defined in the Security Agreement) and any and all other property of any Credit
Party, now existing or hereafter acquired, that may at any time be, become or be
intended to be, subject to a security interest or Lien in favor of the
Administrative Agent, on behalf of itself and the Secured Parties, to secure the
Obligations.

“Commercial Letter of Credit Exposure” means, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding commercial Letters of Credit plus
(b) the aggregate amount of all Letter of Credit Disbursements relating to
commercial Letters of Credit that have not yet been reimbursed by or on behalf
of the Borrower. The Commercial Letter of Credit Exposure of any Lender at any
time shall be such Lender’s Pro Rata Share of the aggregate Commercial Letter of
Credit Exposure at such time.

“Commitment” means, for each Lender, the obligation of each Lender to advance to
Borrower the amount set opposite such Lender’s name on Schedule 1.1 as its
Commitment, or if such Lender has entered into any Assignment and Acceptance,
set forth for such Lender as its Commitment in the Register, as such amount may
be reduced pursuant to Section 2.1(b); provided that, after the Maturity Date,
the Commitment for each Lender shall be zero.

“Commitment Fees” means the fees required under Section 2.6(a).

“Commodities Account” has the meaning set forth in the UCC.

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

“Compliance Certificate” means a compliance certificate executed by a
Responsible Officer of the Borrower or such other Person as required by this
Agreement in substantially the same form as Exhibit D.

“Compounded SOFR” means the compounded average of SOFRs for the applicable
Corresponding Tenor, with the rate, or methodology for this rate, and
conventions for this rate (which may include compounding in arrears with a
lookback and/or suspension period as a mechanism to determine the interest
amount payable prior to the end of each Interest Period) being established by
the Administrative Agent in accordance with:

 

  (1)

the rate, or methodology for this rate, and conventions for this rate selected
or recommended by the relevant Governmental Authority for determining compounded
SOFR; provided that:

 

  (2)

if, and to the extent that, the Administrative Agent determines that Compounded
SOFR cannot be determined in accordance with clause (1) above, then the rate, or
methodology for this rate, and conventions for this rate that the Administrative
Agent determines in its reasonable discretion are substantially consistent with
any evolving or then-prevailing market convention for determining compounded
SOFR for U.S. dollar-denominated syndicated credit facilities at such time;

provided, further, that if the Administrative Agent decides that any such rate,
methodology or convention determined in accordance with clause (1) or clause
(2) is not administratively feasible for the Administrative Agent, then
Compounded SOFR will be deemed unable to be determined for purposes of the
definition of “Benchmark Replacement.”

“Concentration Account” means a Controlled Account maintained by the Borrower
with the Administrative Agent; provided that any cash in the Concentration
Account shall be subject to Section 2.4 and Section 2.17, as applicable.

 

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“Confirmation Order” means an order, in form and substance reasonably
satisfactory to the Administrative Agent, confirming the Approved Plan.

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

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

“Controlled Account” means a Deposit Account, Securities Account or Commodity
Account that is subject to an Account Control Agreement.

“Controlled Group” means all members of a controlled group of corporations and
all businesses (whether or not incorporated) under common control which,
together with the Borrower or any Subsidiary, are treated as a single employer
under Section 414 of the Code.

“Convert”, “Conversion” and “Converted” each refers to a conversion of Loans of
one Type into Loans of another Type pursuant to Section 2.3(c).

“Corresponding Tenor” with respect to a Benchmark Replacement means a tenor
(including overnight) having approximately the same length (disregarding
business day adjustment) as the applicable tenor for the applicable Interest
Period with respect to the LIBO Rate.

“Covered Entity” means any of the following: (a) a “covered entity” as that term
is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (b) a
“covered bank” as that term is defined in, and interpreted in accordance with,
12 C.F.R. § 47.3(b); or (c) a “covered FSI” as that term is defined in, and
interpreted in accordance with, 12 C.F.R. § 382.2(b).

“Covered Party” has the meaning set forth in Section 9.25(b).

“Credit Documents” means this Agreement, the Revolving Notes, the Letters of
Credit, the Letter of Credit Applications, the Guaranty, the Notices of
Borrowing, the Notices of Continuation or Conversion, the Security Documents,
the Fee Letter, and each other agreement, instrument, or document executed at
any time in connection with this Agreement.

“Credit Parties” means the Borrower and the Guarantors.

“Debt” means, for any Person, without duplication: (a) indebtedness of such
Person for borrowed money, including the face amount of any letters of credit
supporting the repayment of indebtedness for borrowed money issued for the
account of such Person; (b) to the extent not covered under clause (a) above,
obligations under letters of credit and agreements relating to the issuance of
letters of credit or acceptance financing, including Letters of Credit;
(c) obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, or upon which interest payments are customarily made;
(d) obligations of such Person under conditional sale or other title retention
agreements relating to any Properties purchased by such Person (other than
customary reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business); (e) obligations of such Person
to pay the deferred purchase price of property or services (including, without
limitation, any contingent obligations or other similar obligations associated
with such purchase, and including obligations that are non-recourse to the
credit of such Person but are secured by the assets of such Person); (f)
obligations of such Person as lessee under Capital Leases and obligations of
such Person in respect of synthetic leases; (g) obligations of such Person

 

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under any Hedging Arrangement; (h) all obligations of such Person to mandatorily
purchase, redeem, retire, defease or otherwise make any payment in respect of
any Equity Interest in such Person or any other Person on a date certain or upon
the occurrence of certain events or conditions; (i) the Debt of any partnership
or unincorporated joint venture in which such Person is a general partner or a
joint venturer, but only to the extent to which there is recourse to such Person
for the payment of such Debt; (j) obligations of such Person under direct or
indirect guaranties in respect of, and obligations (contingent or otherwise) of
such Person to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or obligations of others of the kinds
referred to in clauses (a) through (i) above; (k) indebtedness or obligations of
others of the kinds referred to in clauses (a) through (j) secured by any Lien
on or in respect of any Property of such Person; and (l) all liabilities of such
Person in respect of unfunded vested benefits under any Plan.

“Default” means (a) an Event of Default or (b) any event or condition which with
notice or lapse of time or both would, unless cured or waived, become an Event
of Default.

“Default Rate” means a per annum rate equal to (i) in the case of principal of
any Loan, 2.00% plus the rate otherwise applicable to such Loan as provided in
Sections 2.7(a) or (b), and (ii) in the case of any other Obligation, 2.00% plus
the non-default rate applicable to ABR Loans as provided hereunder.

“Default Right” has the meaning assigned to that term in, and shall be
interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as
applicable.

“Defaulting Lender” means any Lender that (a) has failed, within two Business
Days of the date required to be funded or paid, to (i) fund any portion of its
Loans, (ii) fund any portion of its participations in Letters of Credit or
(iii) pay over to any Lender Party any other amount required to be paid by it
hereunder, unless, in the case of clause (i) above, such Lender notifies the
Administrative Agent in writing that such failure is the result of such Lender’s
good faith determination that a condition precedent to funding (specifically
identified and including the particular default, if any) has not been satisfied,
(b) has notified the Borrower or any Lender Party in writing, or has made a
public statement to the effect, that it does not intend or expect to comply with
any of its funding obligations under this Agreement, (unless such writing or
public statement indicates that such position is based on such Lender’s good
faith determination that a condition precedent (specifically identified and
including the particular default, if any) to funding a loan under this Agreement
cannot be satisfied) or generally under other agreements in which it commits to
extend credit, (c) has failed to confirm in writing to the Administrative Agent,
for at least three Business Days, in response to a written request of the
Administrative Agent, that it will comply with its funding obligations hereunder
(provided that such Lender shall cease to be a Defaulting Lender pursuant to
this clause (c) upon receipt of such written confirmation by the Administrative
Agent), or (d) has become the subject of (A) a Bankruptcy Event or (B) a Bail-In
Action. Any determination that a Lender is a Defaulting Lender will be made by
the Administrative Agent in its sole discretion acting in good faith. Any
determination by the Administrative Agent that a Lender is a Defaulting Lender
under any one or more of clauses (a) through (d) above shall be conclusive and
binding absent manifest error.

“Deposit Account” has the meaning set forth in the UCC.

“DIP Facility” has the meaning assigned to such term in the recitals hereto.

“DIP Order” means the Interim Order and/or the Final Order, as applicable.

“DIP Term Loan Agent” shall mean Cantor Fitzgerald Securities, in its individual
capacity, and its successors, as administrative agent and collateral agent under
the DIP Term Loan Facility.

 

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“DIP Term Loan Credit Agreement” means that certain Senior Secured
Debtor-in-Possession Term Loan Credit Agreement dated as of even date herewith
among the Borrower, the lenders and the other parties thereto from time to time
and the DIP Term Loan Agent, as amended, restated, supplemented or otherwise
modified from time to time in accordance with the Intercreditor Agreement.

“DIP Term Loan Documents” shall have the meaning assigned to the term “Credit
Documents” in the DIP Term Loan Credit Agreement.

“DIP Term Loan Lenders” shall have the meaning assigned to the term “Lenders” in
the DIP Term Loan Credit Agreement.

“DIP Term Loan Facility” has the meaning assigned to such term in the recitals
hereto.

“DIP Term Loans” shall have the meaning assigned to the term “Loans” in the DIP
Term Loan Credit Agreement.

“Disqualified Stock” shall mean any Equity Interest that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (a) matures (excluding any
maturity as the result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof, in whole or in part, or
requires the payment of any cash dividend or any other scheduled payment
constituting a return of capital, in each case at any time on or prior to the
first anniversary of the Maturity Date, or (b) is convertible into or
exchangeable (unless at the sole option of the issuer thereof) for (i) debt
securities or (ii) any Equity Interest referred to in clause (a) above, in each
case at any time prior to the first anniversary of the Maturity Date.

“Dollars” and “$” means lawful money of the United States of America.

“Domestic Subsidiary” means, with respect to any Person, any of its Subsidiaries
that (a) is incorporated or organized under the laws of the United States, any
State thereof or the District of Columbia or (b) could provide a guarantee of
the Obligations without any material adverse federal income tax consequences to
the Borrower (including by constituting an investment of earnings in United
States property under Section 956 (or any successor provision) of the Code and,
therefore, triggering an increase in the gross income of the Borrower pursuant
to Section 951 (or a successor provision) of the Code).

“Early Opt-in Election” means the occurrence of:

(a) (i) a determination by the Administrative Agent or (ii) a notification by
the Required Lenders to the Administrative Agent (with a copy to the Borrower)
that the Required Lenders have determined that U.S. dollar-denominated
syndicated credit facilities being executed at such time, or that include
language similar to that contained in Section 2.16 are being executed or
amended, as applicable, to incorporate or adopt a new benchmark interest rate to
replace the LIBO Rate, and

(b) (i) the election by the Administrative Agent or (ii) the election by the
Required Lenders to declare that an Early Opt-in Election has occurred and the
provision, as applicable, by the Administrative Agent of written notice of such
election to the Borrower and the Lenders or by the Required Lenders of written
notice of such election to the Administrative Agent.

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

 

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

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

“Effective Date” has the meaning set forth in Section 3.1.

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

“Eligible Accounts” means, at any time, the Accounts of any Credit Party which
the Administrative Agent determines in its Permitted Discretion are eligible as
the basis for the extension of Loans and the issuance of Letters of Credit.
Without limiting the Administrative Agent’s discretion provided herein, Eligible
Accounts shall not include any Account:

(a) which is not subject to a first priority perfected security interest in
favor of the Administrative Agent;

(b) which is subject to any Lien other than (i) a Lien in favor of the
Administrative Agent and (ii) a Permitted Lien which does not have priority over
the Lien in favor of the Administrative Agent;

(c) (i) which is unpaid more than 105 days after the date of the original
invoice therefor or more than 60 days after the original due date therefor or
(ii) which has been written off the books of the Borrower or otherwise
designated as uncollectible;

(d) which is owing by an Account Debtor for which more than 50% of the Accounts
owing from such Account Debtor and its Affiliates are ineligible pursuant to
clause (c) above;

(e) with respect to which any covenant, representation or warranty contained in
this Agreement or in the Security Agreement has been breached or is not true;

(f) which (i) does not arise from the sale of goods or performance of services
in the ordinary course of business, (ii) is not evidenced by an invoice or other
documentation satisfactory to the Administrative Agent which has been sent to
the Account Debtor, (iii) represents a progress billing, (iv) is contingent upon
the Borrower’s completion of any further performance, (v) represents a sale on a
bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment,
cash-on-delivery or any other repurchase or return basis or (vi) relates to
payments of interest;

(g) for which the goods giving rise to such Account have not been shipped to the
Account Debtor or for which the services giving rise to such Account have not
been performed by the Borrower or if such Account was invoiced more than once;

 

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(h) with respect to which any check or other instrument of payment has been
returned uncollected for any reason;

(i) which is owed by an Account Debtor which has (i) applied for, suffered, or
consented to the appointment of any receiver, custodian, trustee, or liquidator
of its assets, (ii) had possession of all or a material part of its property
taken by any receiver, custodian, trustee or liquidator, (iii) filed, or had
filed against it, any request or petition for liquidation, reorganization,
arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or
voluntary or involuntary case under any state or federal bankruptcy laws,
(iv) admitted in writing its inability, or is generally unable to, pay its debts
as they become due, (v) become insolvent, or (vi) ceased operation of its
business;

(j) which is owed by any Account Debtor which has sold all or substantially all
of its assets;

(k) which is owed by an Account Debtor which (i) does not maintain its chief
executive office in the U.S. or Canada or (ii) is not organized under applicable
law of the U.S., any state of the U.S., or the District of Columbia, Canada, or
any province of Canada unless, in any such case, such Account is backed by a
Letter of Credit acceptable to the Administrative Agent which is in the
possession of, and is directly drawable by, the Administrative Agent;

(l) which is owed in any currency other than U.S. dollars;

(m) which is owed by (i) any government (or any department, agency, public
corporation, or instrumentality thereof) of any country other than the U.S.
unless such Account is backed by a Letter of Credit acceptable to the
Administrative Agent which is in the possession of, and is directly drawable by,
the Administrative Agent, or (ii) any government of the U.S., or any department,
agency, public corporation, or instrumentality thereof, unless the Federal
Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq. and 41
U.S.C. § 15 et seq.), and any other steps necessary to perfect the Lien of the
Administrative Agent in such Account have been complied with to the
Administrative Agent’s satisfaction;

(n) which is owed by any Affiliate of any Credit Party or any employee, officer,
director, agent or stockholder of any Credit Party or any of its Affiliates;

(o) which is owed by an Account Debtor or any Affiliate of such Account Debtor
to which any Credit Party is indebted, but only to the extent of such
indebtedness, or is subject to any security, deposit, progress payment,
retainage or other similar advance made by or for the benefit of an Account
Debtor, in each case to the extent thereof;

(p) which is subject to any actual or potential contra account, counterclaim,
deduction, defense, setoff or dispute, but only to the extent of any such actual
or potential contra account, counterclaim, deduction, defense, setoff or
dispute;

(q) which is evidenced by any promissory note, chattel paper or instrument;

(r) which is owed by an Account Debtor (i) located in any jurisdiction which
requires filing of a “Notice of Business Activities Report” or other similar
report in order to permit the Borrower to seek judicial enforcement in such
jurisdiction of payment of such Account, unless the Borrower has filed such
report or qualified to do business in such jurisdiction or (ii) which is a
Sanctioned Person;

 

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(s) with respect to which the Borrower has made any agreement with the Account
Debtor for any reduction thereof, other than discounts and adjustments given in
the ordinary course of business, or any Account which was partially paid and the
Borrower created a new receivable for the unpaid portion of such Account;

(t) which does not comply in all material respects with the requirements of all
applicable laws and regulations, whether Federal, state or local, including
without limitation the Federal Consumer Credit Protection Act, the Federal Truth
in Lending Act and Regulation Z of the Board;

(u) which is for goods that have been sold under a purchase order or pursuant to
the terms of a contract or other agreement or understanding (written or oral)
that indicates or purports that any Person other than the Borrower has or has
had an ownership interest in such goods, or which indicates any party other than
the Borrower as payee or remittance party;

(v) which was created on cash on delivery terms;

(w) to the extent such amount constitutes a “make-whole”, “minimum volume” or
other similar payment in connection with a sales contract where an Account
Debtor has not taken delivery of the volumes required by the terms of such sales
contract;

(x) which are owing by (i) any Account Debtor (other than the Specified Account
Debtors) to the extent the aggregate amount of Accounts owing from such Account
Debtor and its Affiliates to the Credit Parties exceeds 20% of the aggregate
Eligible Accounts, but only to the extent of such excess and (ii) any Specified
Account Debtor to the extent the aggregate amount of Accounts owing from such
Specified Account Debtor and its Affiliates to the Credit Parties exceeds 30% of
the aggregate Eligible Accounts, but only to the extent of such excess; or

(y) which the Administrative Agent determines may not be paid by reason of the
Account Debtor’s inability to pay or which the Administrative Agent otherwise
determines is unacceptable for any reason whatsoever.

In the event that an Account which was previously an Eligible Account ceases to
be an Eligible Account hereunder, the Borrower shall notify the Administrative
Agent thereof as soon as possible and, in no event later than the time of
submission to the Administrative Agent of the next Borrowing Base Certificate.
In determining the amount of an Eligible Account, the face amount of an Account
may, in the Administrative Agent’s Permitted Discretion, be reduced by, without
duplication, to the extent not reflected in such face amount, (i) the amount of
all accrued and actual discounts, claims, credits or credits pending,
promotional program allowances, price adjustments, finance charges or other
allowances (including any amount that the Borrower may be obligated to rebate to
an Account Debtor pursuant to the terms of any agreement or understanding
(written or oral)) and (ii) the aggregate amount of all cash received in respect
of such Account but not yet applied by the Borrower to reduce the amount of such
Account.

“Eligible Assignee” means (a) a Lender (other than a Defaulting Lender), (b) any
Affiliate of a Lender, (c) any Approved Fund of a Lender or (d) any other Person
(other than a natural Person) reasonably acceptable to the Administrative Agent;
provided, however, that neither the Borrower nor any of its Affiliates shall
qualify as an Eligible Assignee.

“Eligible Cash” means the amount of unrestricted cash of the Credit Parties that
is (a) held in a segregated account with the Administrative Agent and subject to
a fully-blocked account control agreement and (b) not subject to Liens other
than Liens in favor of the Administrative Agent for the benefit of the Secured
Parties, Liens in favor of the DIP Term Loan Agent for the benefit of the
secured parties under the DIP Term Loan Facility that are junior to the Liens of
the Administrative Agent and Permitted Liens attaching by operation of law in
favor of JPMorgan Chase Bank, N.A. in its capacity as depository bank.

 

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“Environment” shall have the meanings set forth in 42 U.S.C. 9601(8).

“Environmental Claim” means any third party (including governmental agencies and
employees) action, lawsuit, claim, demand, regulatory action or proceeding,
order, decree, consent agreement or notice of potential or actual responsibility
or violation (including claims or proceedings under the Occupational Safety and
Health Acts or similar laws or requirements relating to health or safety of
employees) which seeks to impose liability under any Environmental Law.

“Environmental Law” means all federal, state, and local laws, rules,
regulations, ordinances, orders, decisions, agreements, and other requirements,
including common law theories, now or hereafter in effect and relating to, or in
connection with the Environment, human health, or safety, including without
limitation CERCLA, relating to (a) pollution, contamination, injury,
destruction, loss, protection, cleanup, reclamation or restoration of the air,
surface water, groundwater, land surface or subsurface strata, or other natural
resources; (b) solid, gaseous or liquid waste generation, treatment, processing,
recycling, reclamation, cleanup, storage, disposal or transportation;
(c) exposure to pollutants, contaminants, hazardous, medical infections, or
toxic substances, materials or wastes; (d) the safety or health of employees; or
(e) the manufacture, processing, handling, transportation, distribution in
commerce, use, storage or disposal of hazardous, medical infections, or toxic
substances, materials or wastes.

“Environmental Permit” means any permit, license, order, approval, registration
or other authorization under Environmental Law.

“EOG Resources” means EOG Resources Inc. and its Affiliates.

“Equity Interest” means with respect to any Person, any shares, interests,
participation, or other equivalents (however designated) of corporate stock,
membership interests or partnership interests (or any other ownership interests)
of such Person.

“Equity Issuance” means any issuance of equity securities or any other Equity
Interests (including any preferred equity securities) by the Borrower or any of
its Subsidiaries.

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

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

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

“Eurodollar Loan” means a Loan that bears interest based upon the LIBO Rate.

“Event of Default” has the meaning specified in Section 7.1.

 

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“Excluded Deposit Accounts” means accounts that are (a) solely used for the
purposes of making payments in respect of payroll, taxes and employees’ wages
and benefits, (b) disbursement accounts where solely proceeds of the
indebtedness, including the proceeds of the Loans, are deposited, (c) zero
balance accounts (d) trust accounts, and (e) other accounts with funds on
deposit with an average weekly balance for two weeks of any four week period
less than $1,000,000 for any single account or $2,500,000 in the aggregate for
all such accounts.

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

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. Federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan, Letter of Credit or
Commitment pursuant to a law in effect on the date on which (i) such Lender
acquires such interest in the Loan, Letter of Credit or Commitment (other than
pursuant to an assignment request by the Borrower under Section 2.13) or
(ii) such Lender changes its lending office, except in each case to the extent
that, pursuant to Section 2.12, amounts with respect to such Taxes were payable
either to such Lender’s assignor immediately before such Lender acquired the
applicable interest in a Loan, Letter of Credit or Commitment or to such Lender
immediately before it changed its lending office, (c) Taxes attributable to such
Recipient’s failure to comply with Section 2.12(f) and (d) any U.S. federal
withholding Taxes imposed under FATCA.

“Exit Facility” has the meaning assigned to such term in the recitals hereto.

“Exit Facility Agreement” means the Credit Agreement governing the Exit Facility
which shall be substantially consistent with the term sheet attached hereto as
Exhibit F.

“Existing Agent” has the meaning assigned to such term in the recitals hereto.

“Existing Credit Agreement” has the meaning assigned to such term in the
recitals hereto.

“Existing Lenders” has the meaning assigned to such term in the recitals hereto.

“Existing Letters of Credit” means the letters of credit issued by Amegy and set
forth on the attached Schedule 1.1(a).

“Facilities” has the meaning assigned to such term in the recitals hereto.

“Facility Limit” means, at any time, the lesser of (a) the Aggregate Commitments
and (b) the Borrowing Base then in effect.

 

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

“Federal Funds Effective Rate” means, for any day, the rate calculated by the
NYFRB based on such day’s federal funds transactions by depository institutions,
as determined in such manner as the NYFRB shall set forth on its public website
from time to time, and published on the next succeeding Business Day by the
NYFRB as the effective federal funds rate, provided that if the Federal Funds
Effective Rate as so determined would be less than zero, such rate shall be
deemed to zero for the purposes of this Agreement.

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System or any of its successors.

“Fee Letter” means that certain Fee Letter dated as of the date hereof between
the Borrower and JPMCB.

“Final Order” means the order or judgment of the Bankruptcy Court in
substantially in the form of the Interim Order with such changes as are
acceptable to the Required Lenders.

“Final Order Entry Deadline” means, as to the Final Order, entry thereof by the
Bankruptcy Court on or before the date that is twenty-five (25) days following
the Petition Date.

“Foreign Lender” means any Lender that is not a “United States person” as
defined in Section 7701(a)(30) of the Code.

“Foreign Subsidiary” means any Subsidiary of a Person that is not a Domestic
Subsidiary.

“GAAP” means United States of America generally accepted accounting principles
as in effect from time to time, applied on a basis consistent with the
requirements of Section 1.3.

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

“Guarantors” means any Person that now or hereafter is party to a Guaranty.

“Guaranty” means the Guaranty Agreement executed and delivered in substantially
the same form as Exhibit G.

“Hazardous Substance” means any substance or material identified as such
pursuant to CERCLA and those regulated under any other Environmental Law,
including without limitation pollutants, contaminants, petroleum, petroleum
products, radionuclides, and radioactive materials.

“Hazardous Waste” means any substance or material regulated or designated as
such pursuant to any Environmental Law, including without limitation,
pollutants, contaminants, flammable substances and materials, explosives,
radioactive materials, oil, petroleum and petroleum products, chemical liquids
and solids, polychlorinated biphenyls, asbestos, toxic substances, and similar
substances and materials.

 

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“Hedging Arrangement” means a hedge, call, swap, collar, floor, cap, option,
forward sale or purchase or other contract or similar arrangement (including any
obligations to purchase or sell any commodity or security at a future date for a
specific price) which is entered into to reduce or eliminate or otherwise
protect against the risk of fluctuations in prices or rates, including interest
rates, foreign exchange rates, commodity prices and securities prices.

“Impacted Interest Period” has the meaning set forth in the definition of “LIBO
Rate”.

“Income Tax Expense” means for Borrower and its Subsidiaries, on a consolidated
basis for any period, all state and federal income taxes (including without
limitation Texas franchise taxes) paid or due to be paid during such period.

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

“Indemnitee” has the meaning assigned to such term in Section 9.2(a).

“Information” has the meaning assigned to such term in Section 9.8.

“Initial Financial Statements” means the audited consolidated financial
statements of the Borrower and its Subsidiaries for the fiscal year ended
December 31, 2019 and the unaudited consolidated financial statements of the
Borrower and its Subsidiaries for the fiscal quarter ended March 31, 2020, in
each case including statements of income, retained earnings, changes in equity
and cash flow for such fiscal period as well as a balance sheet as of the end of
each such fiscal period, all prepared in accordance with GAAP.

“Intercreditor Agreement” means the Intercreditor Agreement of even date
herewith among the Administrative Agent and the DIP Term Loan Agent, as amended,
supplemented, restated or otherwise modified from time to time in accordance
with its terms.

“Interest Payment Date” means (a) with respect to any ABR Loan, the first
Business Day of each calendar month and the Maturity Date and (b) with respect
to any Eurodollar Loan, the last day of each Interest Period applicable to the
borrowing of which such Loan is a part and, in the case of a Revolving Borrowing
of Eurodollar Loans with an Interest Period of more than one month’s duration,
each day prior to the last day of such Interest Period that occurs at intervals
of one month’s duration after the first day of such Interest Period, on the date
any Eurodollar Loan is repaid and the Maturity Date (in each case unless any
such date shall not be a Business Day in which case such payment shall be made
on the next succeeding Business Day).

“Interest Period” means for each Eurodollar Loan comprising part of the same
Revolving Borrowing, the period commencing on the date of such Eurodollar Loan
is made or deemed made and ending on the last day of the period selected by the
Borrower pursuant to the provisions below and Section 2.3 and thereafter, each
subsequent period commencing on the day following the last day of the
immediately preceding Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below and Section 2.3. The
duration of each such Interest Period shall be one or three months, in each case
as the Borrower may select, provided that:

 

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(a) Interest Periods commencing on the same date for Loans comprising part of
the same Revolving Borrowing shall be of the same duration;

(b) whenever the last day of any Interest Period would otherwise occur on a day
other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided that if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day;

(c) any Interest Period which begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month in which it would have ended if there were a
numerically corresponding day in such calendar month; and

(d) the Borrower may not select any Interest Period for any Loan which ends
after the Scheduled Maturity Date.

“Interim Order” means the order or judgment of the Bankruptcy Court as entered
on the docket of the Bankruptcy Court in the Cases substantially in the form of
Exhibit H and otherwise acceptable to the Administrative Agent.

“Interpolated Rate” means, at any time, for any Interest Period, the rate per
annum (rounded to the same number of decimal places as the LIBO Screen Rate)
determined by the Administrative Agent (which determination shall be conclusive
and binding absent manifest error) to be equal to the rate that results from
interpolating on a linear basis between: (a) the LIBO Screen Rate for the
longest period (for which the LIBO Screen Rate is available) that is shorter
than the Impacted Interest Period; and (b) the LIBO Screen Rate for the shortest
period (for which that LIBO Screen Rate is available) that exceeds the Impacted
Interest Period, in each case, at such time.

“Inventory” has the meaning set forth in Article 9 of the UCC.

“Investment” has the meaning set forth in Section 6.3.

“Investment Grade Eligible Account” means any Eligible Account of any Credit
Party which is owing by an Account Debtor whose securities are rated BBB- or
better by S&P or Baa3 or better by Moody’s.

“Issuing Lender Sublimit” means, as of the Effective Date, (i) $10,000,000, in
the case of JPMCB and (ii) $25,000,000, in the case of Amegy, such amount as
shall be designated to the Administrative Agent and the Borrower in writing by
an Issuing Lender; provided that any Issuing Lender shall be permitted at any
time to increase its Issuing Lender Sublimit upon providing five (5) days’ prior
written notice thereof to the Administrative Agent and the Borrower. For the
avoidance of doubt, while the Issuing Lender Sublimits total in excess of the
Facility Limit and the Letter of Credit Maximum Amount, the Letter of Credit
Exposure shall not exceed the Letter of Credit Maximum Amount or the Facility
Limit and the Aggregate Revolving Exposure shall not exceed the Facility Limit.

“Issuing Lenders” means, collectively, JPMCB and Amegy, each in its capacity as
a Lender that issues Letters of Credit for the account of any Credit Party
pursuant to the terms of this Agreement.

“JPMCB” means JPMorgan Chase Bank, N.A., a national banking association, in its
individual capacity, and its successors.

 

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“Landlord Agreement” means a lien waiver or subordination agreement from the
owner of real property regarding the subordination of its landlord’s lien
covering leased real property.

“Lead Arranger” means JPMCB in its capacity as sole lead arranger and sole
bookrunner hereunder.

“Legal Requirement” means any law, statute, ordinance, decree, requirement,
order, judgment, rule, regulation (or official interpretation of any of the
foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority, including, but not limited to, Regulations T, U and X.

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

“Lender Party” means the Administrative Agent, any Issuing Lender or any other
Lender.

“Lenders” means the Persons listed on the signature pages hereto as Lenders, any
other Person that shall have become a Lender hereto pursuant to Section 2.13 and
any other Person that shall have become a Lender hereto pursuant to an
Assignment and Acceptance, but in any event, excluding any such Person that
ceases to be a party hereto pursuant to an Assignment and Acceptance.

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

“Letter of Credit” means any standby or commercial letter of credit issued or
deemed issued by an Issuing Lender for the account of a Credit Party pursuant to
the terms of this Agreement, in such form as may be agreed by the Borrower and
the relevant Issuing Lender.

“Letter of Credit Application” means an Issuing Lender’s standard form letter of
credit application for standby or commercial letters of credit which has been
executed by the Borrower and accepted by such Issuing Lender in connection with
the issuance of a Letter of Credit.

“Letter of Credit Disbursement” means a payment made by an Issuing Lender
pursuant to a Letter of Credit.

“Letter of Credit Documents” means all Letters of Credit, Letter of Credit
Applications and amendments thereof, and agreements, documents, and instruments
entered into in connection therewith or relating thereto.

“Letter of Credit Exposure” means, at any time, the sum of the Commercial Letter
of Credit Exposure and the Standby Letter of Credit Exposure at such time. The
Letter of Credit Exposure of any Lender at any time shall be its Pro Rata Share
of the aggregate Letter of Credit Exposure at such time. .

“Letter of Credit Maximum Amount” means $25,000,000; provided that, on and after
the Maturity Date, the Letter of Credit Maximum Amount shall be zero.

“Letter of Credit Obligations” means any obligations of the Borrower under this
Agreement in connection with the Letters of Credit.

“LIBO Rate” means, with respect to any Revolving Borrowing of Eurodollar Loans
for any Interest Period, the LIBO Screen Rate at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period; provided that if the LIBO Screen Rate shall not be available at such
time for such Interest Period (an “Impacted Interest Period”) then the LIBO Rate
shall be the Interpolated Rate.

 

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“LIBO Screen Rate” means, for any day and time, with respect to any Revolving
Borrowing of Eurodollar Loans for any Interest Period, the London interbank
offered rate as administered by ICE Benchmark Administration (or any other
Person that takes over the administration of such rate for U.S. Dollars for a
period equal in length to such Interest Period) as displayed on such day and
time on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate
(or, in the event such rate does not appear on a Reuters page or screen, on any
successor or substitute page on such screen that displays such rate), or on the
appropriate page of such other information service that publishes such rate from
time to time as selected by the Administrative Agent in its reasonable
discretion, provided that if the LIBO Screen Rate shall be less than 1.00%, such
rate shall be deemed to be 1.00% for the purposes of this Agreement.

“Lien” means any mortgage, lien, pledge, charge, deed of trust, security
interest, or encumbrance to secure or provide for the payment of any obligation
of any Person, whether arising by contract, operation of law, or otherwise
(including the interest of a vendor or lessor under any conditional sale
agreement, Capital Lease, or other title retention agreement).

“Liquidity” means, as of any date of determination, the sum of (a) Availability
and (b) (without duplication) the aggregate amount of unrestricted cash and cash
equivalents of the Borrower or any of other Credit Parties at such time (it
being understood that unrestricted cash and cash equivalents shall exclude
(i) any cash or cash equivalents not held in a Controlled Account, (ii) any cash
and cash equivalents which are pledged to secure any Credit Party’s obligations
under any letter of credit and (iii) Eligible Cash).

“Liquid Investments” means (a) readily marketable direct full faith and credit
obligations of the United States of America or obligations unconditionally
guaranteed by the full faith and credit of the United States of America;
(b) commercial paper issued by (i) any Lender or any Affiliate of any Lender or
(ii) any commercial banking institutions or corporations rated at least P-1 by
Moody’s or A-1 by S&P; (c) certificates of deposit, time deposits, and bankers’
acceptances issued by (i) any of the Lenders or (ii) any other commercial
banking institution which is a member of the Federal Reserve System and has a
combined capital and surplus and undivided profits of not less than $250,000,000
and rated Aa by Moody’s or AA by S&P; (d) repurchase agreements which are
entered into with any of the Lenders or any major money center banks included in
the commercial banking institutions described in clause (c) and which are
secured by readily marketable direct full faith and credit obligations of the
government of the United States of America or any agency thereof;
(e) investments in any money market fund which holds investments substantially
of the type described in the foregoing Clauses (a) through (d); (f) readily and
immediately available cash held in any money market account maintained with any
Lender; provided that, such money market accounts and the funds therein shall be
unencumbered and free and clear of all Liens and other third party rights other
than a Lien in favor of the Administrative Agent pursuant to the Security
Documents; and (g) other investments made through the Administrative Agent or
its Affiliates and approved by the Administrative Agent. All the Liquid
Investments described in Clauses (a) through (d) above shall have maturities of
not more than 365 days from the date of issue.

“Loan Limit” means, at any time, the lesser of (a) the Aggregate Commitments and
(b) the difference of the Borrowing Base minus the amount of the Credit Parties’
Eligible Cash.

“Loans” means each of the loans made by the Lenders to the Borrower pursuant to
this Agreement.

“Material Adverse Change” means any event, development or circumstance (other
than (a) in the case of the Credit Parties, (i) any matters disclosed in any
“first day” pleadings or declarations and (ii) the effect of filing the Chapter
11 Cases, the events and conditions related to, resulting from and/or leading up

 

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thereto and the effects thereon and any action required to be taken under the
Credit Documents or the DIP Order. and (b) in the case of the Credit Parties,
taking into account the effect of the automatic stay under the Bankruptcy Code)
that has had or could reasonably be expected to have a material adverse effect
(A) on the business, assets, operations, Property or financial condition of the
Borrower and its Subsidiaries, taken as a whole; (B) on the validity or
enforceability of this Agreement or any of the other Credit Documents; (C) on
any Credit Party’s ability to perform its obligations under this Agreement, any
Revolving Note, the Guaranty or any other Credit Document; (D) in any right or
remedy of any Secured Party under any Credit Document; or (E) the Collateral, or
the Administrative Agent’s liens (on behalf of itself and the Secured Parties)
on the Collateral or the priority of such Liens.

“Material Contract” means each of (a) the Senior Notes, (b) the DIP Term Loan
Credit Agreement, (c) the RSA, (d) the Backstop Agreement and (e) any contract
of the Borrower and its consolidated Subsidiaries to which at least 10% of the
Borrower’s consolidated revenue for the four-fiscal quarter period most recently
ended is attributable, in each case, as each such contract is amended, restated,
supplemented or otherwise modified from time to time.

“Maturity Date” means the earliest of (a) the Scheduled Maturity Date, (b) the
date on which the Approved Plan becomes effective, (c) the date of the closing
of a sale of all or substantially all of the assets of the Credit Parties under
section 363 of the Bankruptcy Code or otherwise, and (d) the date all of the
Loans become due and payable under the Credit Documents, whether by acceleration
or otherwise.

“Maximum Rate” means the maximum nonusurious interest rate under applicable law.

“Milestones” means the milestones set forth on Schedule 1.1(b), to be completed
in each case in accordance with the applicable timing referred to therein (or
such later dates as may be agreed by the Required Lenders).

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto which
is a nationally recognized statistical rating organization.

“Mortgage” means each mortgage or deed of trust in form acceptable to the
Administrative Agent executed by any Credit Party to secure all or a portion of
the Obligations.

“Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any member of the
Controlled Group is making or accruing an obligation to make contributions.

“Net Cash Proceeds” means with respect to any Prepayment Event, all cash and
Liquid Investments received in respect of such Prepayment Event after
(a) payment of, or provision for, all brokerage commissions and other reasonable
out of pocket fees and expenses actually incurred (including attorneys’,
accountants’, investment bankers’, consultants’ or other customary fees and
expenses); (b) payment of any outstanding obligations relating to such Property
paid in connection with any such Prepayment Event; and (c) taxes paid or
reasonably estimated to be payable within one year after such Prepayment Event
as a result thereof and as a result of any gain recognized in connection
therewith.

“Net Income” means, for any period and with respect to any Person, the net
income for such period for such Person after taxes as determined in accordance
with GAAP, including any cash net gain but excluding, however, (a) extraordinary
items, including (i) any net non-cash gain or loss during such period arising
from the sale, exchange, retirement or other disposition of capital assets (such
term to include all fixed assets and all securities) other than in the ordinary
course of business, and (ii) any write up or write down of assets and (b) the
cumulative effect of any change in GAAP.

 

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“Non-Defaulting Lender” means any Lender that is not then a Defaulting Lender.

“Non-Investment Grade Eligible Account” means any Eligible Account of any Credit
Party which is owing by an Account Debtor whose securities are rated worse than
BBB- by S&P and worse than Baa3 by Moody’s.

“Notice of Borrowing” means a notice of borrowing signed by the Borrower in
substantially the same form as Exhibit I.

“Notice of Continuation or Conversion” means a notice of continuation or
conversion signed by the Borrower in substantially the same form as Exhibit J.

“NYFRB” means the Federal Reserve Bank of New York.

“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective
Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on
such day (or for any day that is not a Business Day, for the immediately
preceding Business Day); provided that if none of such rates are published for
any day that is a Business Day, the term “NYFRB Rate” means the rate for a
federal funds transaction quoted at 11:00 a.m. on such day received by the
Administrative Agent from a federal funds broker of recognized standing selected
by it; provided, further, that if any of the aforesaid rates as so determined be
less than zero, such rate shall be deemed to be zero for purposes of this
Agreement.

“Obligations” means all principal, interest (including post-petition interest),
fees, reimbursements, indemnifications, and other amounts now or hereafter owed
by any of the Credit Parties to the Lenders, the Issuing Lenders, or the
Administrative Agent under this Agreement and the Credit Documents, including,
the Letter of Credit Obligations, and any increases, extensions, and
rearrangements of those obligations under any amendments, supplements, and other
modifications of the documents and agreements creating those obligations.

“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the
Treasury.

“Operating Lease” means any lease that constitutes an operating lease under
GAAP.

“Organization Documents” means (a) for any corporation, the certificate or
articles of incorporation and the bylaws, (b) for any partnership, the
partnership agreement and, if applicable, certificate of limited partnership or
(c) for any limited liability company, the operating agreement and articles or
certificates of formation of incorporation.

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

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Credit Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 2.13).

 

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“Overnight Bank Funding Rate” means, for any day, the rate comprised of both
overnight federal funds and overnight Eurodollar borrowings by U.S.-managed
banking offices of depository institutions, as such composite rate shall be
determined by the NYFRB as set forth on its public website from time to time,
and published on the next succeeding Business Day by the NYFRB as an overnight
bank funding rate.

“Participant Register” has the meaning set forth in Section 9.7(d).

“Patriot Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.

“Permitted Debt” has the meaning set forth in Section 6.1.

“Permitted Discretion” means a determination made in good faith and in the
exercise of reasonable (from the perspective of a secured asset based lender)
business judgment.

“Permitted Investments” has the meaning set forth in Section 6.3.

“Permitted Liens” has the meaning set forth in Section 6.2.

“Person” means an individual, partnership, corporation (including a business
trust), joint stock company, trust, limited liability company, limited liability
partnership, unincorporated association, joint venture, or other entity, or a
government or any political subdivision or agency thereof, or any trustee,
receiver, custodian, or similar official.

“Petition Date” has the meaning assigned to such term in the recitals hereto.

“Plan” means an employee benefit plan, as defined in Section 3(3) of ERISA
(other than a Multiemployer Plan), maintained or contributed to by the Borrower
or any member of the Controlled Group and covered by Title IV of ERISA or
subject to the minimum funding standards under Sections 412 or 430 of the Code
or Sections 302 or 303 of ERISA.

“Plan Asset Regulations” means 29 CFR § 2510.3-101 et seq., as modified by
Section 3(42) of ERISA, as amended from time to time.

“Platform” has the meaning assigned to such term in Section 5.2.

“Prepayment Event” means (i) the sale, transfer or other disposition of assets
by the Borrower or its Subsidiaries in a single transaction or series of related
transactions that yields Net Cash Proceeds other than asset sales permitted by
Section 6.8(a), Section 6.8(b), Section 6.8(c) (other than asset sales permitted
by Section 6.8(c) yielding Net Cash Proceeds in excess of $1,000,000),
Section 6.8(d), Section 6.8(e), Section 6.8(f) or Section 6.8(g), (ii) the
receipt of any Net Cash Proceeds by any Person from the issuance of any Debt by
the Borrower or any Subsidiary not permitted hereunder and (iii) the receipt by
the Borrower or any Subsidiary of Net Cash Proceeds in respect of one or more
Casualty Events.

“Prime Rate” means the rate of interest last quoted by The Wall Street Journal
as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote
such rate, the highest per annum interest rate published by the Federal Reserve
Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest

 

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Rates) as the “bank prime loan” rate or, if such rate is no longer quoted
therein, any similar rate quoted therein (as determined by the Administrative
Agent) or any similar release by the Federal Reserve Board (as determined by the
Administrative Agent). Each change in the Prime Rate shall be effective from and
including the date such change is publicly announced or quoted as being
effective.

“Professional Fees” means “Allowed Professional Fees” (as defined in the DIP
Order).

“Projections” has the meaning set forth in Section 5.2(g).

“Property” of any Person means any property or assets (whether real, personal,
or mixed, tangible or intangible) of such Person.

“Pro Rata Share” means, at any time with respect to any Lender, (a) the ratio
(expressed as a percentage) of such Lender’s Commitment at such time to the
Aggregate Commitments at such time, or (b) if all of the Commitments have been
terminated, the ratio (expressed as a percentage) of such Lender’s aggregate
outstanding Loans at such time to the total aggregate outstanding Loans at such
time.

“PTE” means a prohibited transaction class exemption issued by the U.S.
Department of Labor, as any such exemption may be amended from time to time.

“QFC” has the meaning assigned to the term “qualified financial contract” in,
and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

“QFC Credit Support” has the meaning assigned to it in Section 9.25.

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Credit
Party that has total assets exceeding $10,000,000 at the time the relevant
guaranty or grant of the relevant security interest becomes or would become
effective with respect to such Swap Obligation or such other person as
constitutes an “eligible contract participant” under the Commodity Exchange Act
or any regulations promulgated thereunder and can cause another Person to
qualify as an “eligible contract participant” at such time by entering into a
keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Railcar Lease” has the meaning set forth in the RSA.

“Recipient” means (a) the Administrative Agent, (b) any Lender and (c) any
Issuing Lender, as applicable.

“Register” has the meaning set forth in Section 9.7(b).

“Registration Statement” means that Registration Statement on Form S-1 (File
No. 333-182574) filed by the Borrower with the SEC, amended as of August 21,
2012.

“Regulation D” means Regulation D of the Federal Reserve Board, as in effect
from time to time and all official rulings and interpretations thereunder or
thereof.

“Regulation T” means Regulation T of the Federal Reserve Board, as in effect
from time to time and all official rulings and interpretations thereunder or
thereof.

“Regulation U” means Regulation U of the Federal Reserve Board, as in effect
from time to time and all official rulings and interpretations thereunder or
thereof.

 

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“Regulation X” means Regulation X of the Federal Reserve Board, as in effect
from time to time and all official rulings and interpretations thereunder or
thereof.

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

“Release” shall have the meaning set forth in CERCLA or under any other
Environmental Law.

“Report” means reports prepared by the Administrative Agent or another Person
showing the results of appraisals, field examinations or audits pertaining to
the assets of the Credit Parties from information furnished by or on behalf of
the Borrower, which Reports may be distributed to the Lenders by the
Administrative Agent.

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA
(other than any such event not subject to the provision for 30-day notice to the
PBGC under the regulations issued under such section).

“Required Lenders” means, at any time, Lenders (other than Defaulting Lenders)
having Revolving Credit Exposures and Unused Commitments representing at least
50% of the sum of the Aggregate Revolving Credit Exposure and Unused Commitments
at such time; provided that, as long as there are three or fewer Lenders,
Required Lenders shall mean all Lenders.

“Reserves” means any and all reserves which the Administrative Agent deems
necessary, in its Permitted Discretion, to maintain (including, without
limitation, reserves applicable to Availability, reserves applicable to the
Borrowing Base, reserves for accrued and unpaid interest on the Secured
Obligations, reserves applicable to Banking Services, volatility reserves,
reserves for dilution of Accounts, reserves for obligations of any of the Credit
Parties owing to Swap Counterparties under any Hedging Arrangements, reserves
for contingent liabilities of any Credit Party, reserves for uninsured losses of
any Credit Party, reserves for uninsured, underinsured, un-indemnified or
under-indemnified liabilities or potential liabilities with respect to any
litigation and reserves for taxes, fees, assessments, and other governmental
charges) with respect to the Collateral or any Credit Party.

“Response” shall have the meaning set forth in CERCLA or under any other
Environmental Law.

“Responsible Officer” means (a) with respect to any Person that is a
corporation, such Person’s Chief Executive Officer, President, or Chief
Financial Officer, (b) with respect to any Person that is a limited liability
company, if such Person has officers, then such Person’s Chief Executive
Officer, President, or Chief Financial Officer, and if such Person is managed by
members, then a Responsible Officer of such Person’s managing member, and if
such Person is managed by managers, then a manager (if such manager is an
individual) or a Responsible Officer of such manager (if such manager is an
entity), and (c) with respect to any Person that is a general partnership,
limited partnership or a limited liability partnership, the Responsible Officer
of such Person’s general partner or partners.

“Restricted Payment” means, with respect to any Person, (a) any direct or
indirect dividend or other distribution (whether in cash, securities or other
Property) or any direct or indirect payment of any kind or character (whether in
cash, securities or other Property) made in connection with the Equity Interest
of such Person, including those dividends, distributions and payments made in
consideration for or otherwise in connection with any retirement, purchase,
redemption or other acquisition of any Equity Interest of such Person, or any
options, warrants or rights to purchase or acquire any such Equity Interest of
such Person or (b) principal or interest payments (in cash, Property or
otherwise) on, or redemptions of, subordinated debt of such Person.

 

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“Revolving Borrowing” means a borrowing consisting of simultaneous Loans of the
same Type made by the Lenders pursuant to Section 2.1(a) or Converted by each
Lender to Loans of a different Type pursuant to Section 2.3(c).

“Revolving Credit Exposure” means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender’s Loans and its Letter of
Credit Exposure at such time.

“Revolving Note” means a promissory note of the Borrower payable to the order of
a Lender in the amount of such Lender’s Commitment, in substantially the same
form as Exhibit K, evidencing indebtedness of the Borrower to such Lender
resulting from Loans owing to such Lender.

“RSA” has the meaning assigned to such term in the recitals.

“RSA Effective Date” means the date on which the RSA is signed and the terms of
which become effective.

“S&P” means Standard & Poor’s Rating Agency Group, a division of McGraw-Hill
Companies, Inc., or any successor thereof which is a national credit rating
organization.

“Sanctioned Country” means, at any time, a country, region or territory which is
itself the subject or target of any Sanctions (at the time of this Agreement,
Crimea, Cuba, Iran, North Korea and Syria).

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by OFAC, the U.S.
Department of State, the United Nations Security Council, the European Union,
any European Union member state, Her Majesty’s Treasury of the United Kingdom,
or other relevant sanctions authority, (b) any Person operating, organized or
resident in a Sanctioned Country, (c) any Person owned or controlled by any such
Person or Persons described in clauses (a) and (b) of this definition or (d) any
Person otherwise the subject of any Sanctions.

“Sanctions” means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by the U.S. government (including
those administered by OFAC or the U.S. Department of State), the European Union,
any European Union member state, Her Majesty’s Treasury of the United Kingdom,
or other relevant sanctions authority.

“Sand Reserves” means (a) at any particular time, the estimated quantities of
sand which geological and engineering data demonstrate with reasonable certainty
to be recoverable in future years under then existing economic and operating
conditions (i.e., prices and costs as of the date of the estimate is made) and
(b) any fee mineral interests, term mineral interests, leases, subleases,
farm-outs, royalties, overriding royalties, net profit interests, carried
interests, production payments and similar mineral interests, and all unsevered
and unextracted sand in, under, or attributable to the properties described in
the foregoing clause (a).

“Scheduled Maturity Date” means January 12, 2021.

“SEC” means, the Securities and Exchange Commission.

 

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“Secured Obligations” means (a) the Obligations, (b) the Banking Services
Obligations, and (c) all obligations of any of the Credit Parties owing to Swap
Counterparties under any Hedging Arrangements; provided that the “Secured
Obligations” shall not include any Excluded Swap Obligations.

“Secured Parties” means the Administrative Agent, the Issuing Lenders, the
Lenders, the Swap Counterparties and Banking Services Providers.

“Securities Account” has the meaning set forth in the UCC.

“Security Agreement” means the Pledge and Security Agreement among the Credit
Parties and the Administrative Agent in substantially the same form as Exhibit
L.

“Security Documents” means, collectively, the Mortgages, Security Agreement, the
Intercreditor Agreement, and any and all other instruments, documents or
agreements, including Account Control Agreements, now or hereafter executed by
any Credit Party or any other Person to secure the Secured Obligations.

“Senior Notes” has the meaning assigned to such term in the RSA.

“SOFR” with respect to any day means the secured overnight financing rate
published for such day by the NYFRB, as the administrator of the benchmark (or a
successor administrator), on the Federal Reserve Bank of New York’s Website.

“SOFR-Based Rate” means SOFR, Compounded SOFR or Term SOFR.

“Specified Account Debtor” means each of EOG Resources and Chevron; provided,
that EOG Resources and Chevron shall constitute “Specified Account Debtors” only
so long as their respective securities are rated BBB- or better by S&P and Baa3
or better by Moody’s.

“Standby Letter of Credit Exposure” means, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding standby Letters of Credit plus
(b) the aggregate amount of all Letter of Credit Disbursements relating to
standby Letters of Credit that have not yet been reimbursed by or on behalf of
the Borrower. The Standby Letter of Credit Exposure of any Lender at any time
shall be such Lender’s Pro Rata Share of the aggregate Standby Letter of Credit
Exposure at such time.

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

“Subject Lender” has the meaning set forth in Section 2.13.

 

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“Subsidiary” means, with respect to any Person (the “holder”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the holder in the
holder’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other
entity, a majority of whose outstanding Voting Securities shall at any time be
owned by the holder or one more Subsidiaries of the holder. Unless expressly
provided otherwise, all references herein and in any other Credit Document to
any “Subsidiary” or “Subsidiaries” means a Subsidiary or Subsidiaries of the
Borrower.

“Superpriority Claim” means a claim against a Credit Party in any of the Chapter
11 Cases that is a superpriority administrative expense claim having priority
over any or all administrative expenses and other claims of the kind specified
in, or otherwise arising or ordered under, any sections of the Bankruptcy Code
(including, without limitation, sections 105, 326, 328, 330, 331, 503(b),
507(a), 507(b), 546(c) and/or 726 thereof), whether or not such claim or
expenses may become secured by a judgment Lien or other non-consensual Lien,
levy or attachment.

“Supported QFC” has the meaning assigned to it in Section 9.25.

“Swap Counterparty” means a Lender or an Affiliate of a Lender that has entered
into a Hedging Arrangement with a Credit Party as permitted by the terms of this
Agreement.

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

“Tax Group” has the meaning assigned to it in Section 4.13.

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

“Termination Event” means (a) a Reportable Event with respect to a Plan, (b) the
withdrawal of the Borrower or any member of the Controlled Group from a Plan
during a plan year in which it was a “substantial employer” as defined in
Section 4001(a)(2) of ERISA or a cessation of operations that is treated as a
termination under Section 4062(e) of ERISA, (c) the filing of a notice of intent
to terminate a Plan or the treatment of a Plan amendment as a termination under
Section 4041(c) of ERISA, (d) the institution of proceedings to terminate a Plan
by the PBGC, (e) the occurrence of a nonexempt prohibited transaction (within
the meaning of Section 4975 of the Code or Section 406 of ERISA) which could
result in liability to the Borrower, (f) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA, upon the Borrower or any member of the Controlled Group,
or (g) any other event or condition which constitutes grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Plan.

“Term Loan Priority Collateral” means the “Term Loan Priority Collateral” (as
defined in the Intercreditor Agreement).

“Term SOFR” means the forward-looking term rate based on SOFR that has been
selected or recommended by the relevant Governmental Authority.

“Testing Date” has the meaning assigned to such term in Section 6.20.

“Testing Period” has the meaning assigned to such term in Section 6.20.

“Type” has the meaning set forth in Section 1.4.

 

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“UCC” means the Uniform Commercial Code, as in effect in the State of New York,
as the same may be amended from time to time.

“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the
Benchmark Replacement Adjustment; provided that, if the Unadjusted Benchmark
Replacement as so determined would be less than zero, the Unadjusted Benchmark
Replacement will be deemed to be zero for the purposes of this Agreement.

“Unused Commitment” means, at any time and with respect to any Lender, the
difference between the amount of such Lender’s Commitment and the amount of such
Lender’s Revolving Credit Exposure at such time.

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

“U.S. Special Resolution Regime” has the meaning set forth in Section 9.25.

“U.S. Tax Compliance Certificate” has the meaning set forth in
Section 2.12(f)(ii)(B)(3).

“Variance and Liquidity Report” means a line-by-line report in a form reasonably
satisfactory to the Required Lenders (a) detailing any variance (whether plus or
minus and expressed as a percentage) (x) between the actual aggregate cash
expenses and disbursements other than Professional Fees made during the relevant
Testing Period by the Borrower and its Subsidiaries against the projected
aggregate cash expenses and disbursements other than Professional Fees set forth
in the Budget for the relevant Testing Period, (y) the actual total cash
receipts received during the relevant Testing Period by the Borrower and its
Subsidiaries against the projected total cash receipts set forth in the Budget
for the relevant Testing Period, and (z) the actual aggregate amount of Capital
Expenditures made during the relevant Testing Period by the Borrower and its
Subsidiaries against the projected aggregate amount of Capital Expenditures set
forth in the Budget for the relevant Testing Period, (b) certifying as to
whether a Default has occurred since the last date on which a Variance and
Liquidity Report was delivered and, if a Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with respect
thereto and (c) certifying that the Borrower has been in compliance with
Section 6.16 and Section 6.20 as required therein since the last date on which a
Variance and Liquidity Report was delivered.

“Voting Securities” means (a) with respect to any corporation, capital stock of
the corporation having general voting power under ordinary circumstances to
elect directors of such corporation (irrespective of whether at the time stock
of any other class or classes shall have or might have special voting power or
rights by reason of the happening of any contingency), (b) with respect to any
partnership, any partnership interest or other ownership interest having general
voting power to elect the general partner or other management of the partnership
or other Person, and (c) with respect to any limited liability company,
membership certificates or interests having general voting power under ordinary
circumstances to elect managers of such limited liability company.

“Wisconsin Letter of Credit” means any letter of credit issued for the account
of Credit Party for the benefit of the Wisconsin Department of Natural
Resources; provided that the aggregate amount of all Wisconsin Letters of Credit
shall not exceed $1,275,768 at any time.

“Withholding Agent” means any Credit Party and the Administrative Agent.

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

 

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Section 1.2. Computation of Time Periods. In this Agreement in the computation
of periods of time from a specified date to a later specified date, the word
“from” means “from and including” and the words “to” and “until” each means “to
but excluding”.

Section 1.3. Accounting Terms; Changes in GAAP.

(a) All accounting terms not specifically defined in this Agreement shall be
construed in accordance with GAAP applied on a consistent basis with those
applied in the preparation of the Initial Financial Statements.

(b) Unless otherwise indicated, all financial statements of the Borrower, all
calculations for compliance with covenants in this Agreement, all determinations
of the Applicable Margin, and all calculations of any amounts to be calculated
under the definitions in Section 1.1 shall be based upon the consolidated
accounts of the Borrower and its Subsidiaries in accordance with GAAP and
consistent with the principles of consolidation applied in preparing the Initial
Financial Statements.

(c) If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Credit Document, and either the
Borrower or the Required Lenders shall so request, the Administrative Agent, the
Lenders and the Borrower shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.

(d) Notwithstanding any other provision contained herein, all terms of an
accounting or financial nature used herein shall be construed, and all
computations of amounts and ratios referred to herein shall be made (i) without
giving effect to any election under Accounting Standards Codification 825-10-25
(or any other Accounting Standards Codification or Financial Accounting Standard
having a similar result or effect) to value any Debt or other liabilities of the
Borrower or any Subsidiary at “fair value”, as defined therein, (ii) without
giving effect to any treatment of Debt in respect of convertible debt
instruments under Accounting Standards Codification 470-20 (or any other
Accounting Standards Codification or Financial Accounting Standard having a
similar result or effect) to value any such Debt in a reduced or bifurcated
manner as described therein, and such Debt shall at all times be valued at the
full stated principal amount thereof and (iii) in a manner such that any
obligations relating to a lease that was accounted for by a Person as an
operating lease as of the Effective Date (as defined in the Existing Credit
Agreement) in accordance with GAAP and any similar lease entered into after the
Effective Date (as defined in the Existing Credit Agreement) by such Person
shall be accounted for as obligations relating to an operating lease and not as
a Capital Lease; provided that, notwithstanding the foregoing, all financial
statements of the Credit Parties with respect to operating leases shall be
calculated as required by and in accordance with GAAP.

Section 1.4. Types of Loans. Loans are distinguished by “Type”. The “Type” of a
Loan refers to the determination of whether such Loan is an ABR Loan or a
Eurodollar Loan.

 

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Section 1.5. Miscellaneous. Article, Section, Schedule, and Exhibit references
are to this Agreement, unless otherwise specified. All references to
instruments, documents, contracts, and agreements (including this Agreement) are
references to such instruments, documents, contracts, and agreements as the same
may be amended, supplemented, and otherwise modified from time to time, unless
otherwise specified and shall include all schedules and exhibits thereto unless
otherwise specified. Any reference herein to any law shall be construed as
referring to such law as amended, modified, codified or reenacted, in whole or
in part, and in effect from time to time. Any reference herein to any Person
shall be construed to include such Person’s successors and assigns (subject to
the restrictions contained herein). The words “hereof”, “herein”, and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. The term “including” means “including, without limitation,”.
Paragraph headings have been inserted in this Agreement as a matter of
convenience for reference only and it is agreed that such paragraph headings are
not a part of this Agreement and shall not be used in the interpretation of any
provision of this Agreement. Terms defined in the UCC which are not otherwise
defined in this Agreement or in any other Credit Document, as applicable, are
used herein and/or therein as defined in the UCC.

Section 1.6. Divisions. For all purposes under the Credit Documents, in
connection with any division or plan of division under Delaware law (or any
comparable event under a different jurisdiction’s laws): (a) if any asset,
right, obligation or liability of any Person becomes the asset, right,
obligation or liability of a different Person, then it shall be deemed to have
been transferred from the original Person to the subsequent Person, and (b) if
any new Person comes into existence, such new Person shall be deemed to have
been organized and acquired on the first date of its existence by the holders of
its Equity Interests at such time.

ARTICLE 2

CREDIT FACILITIES

Section 2.1. Commitments.

(a) Commitment. Each Lender severally agrees, subject to the terms and
conditions set forth in this Agreement, including without limitation, entry of
the Final DIP Order, to make Loans in Dollars to the Borrower from time to time
on any Business Day during the period from the Effective Date until the Maturity
Date, in an aggregate amount not to exceed such Lender’s Commitment; provided
that, in each case, after giving effect to such Loans, the sum of the aggregate
outstanding amount of all Loans plus the Letter of Credit Exposure shall not
exceed the Loan Limit. Within the limits of the Loan Limit and subject to the
terms and conditions set forth herein, the Borrower may from time to time
borrow, prepay and reborrow Loans.

(b) Reduction of the Commitments. The Borrower shall have the right, upon at
least three Business Days’ irrevocable notice (which notice shall specify such
election and the effective date thereof) to the Administrative Agent, to
terminate in whole or reduce in part the unused portion of the Commitments;
provided that each partial reduction shall be in a minimum amount of $5,000,000
and in integral multiples of $1,000,000 in excess thereof. Any reduction or
termination of the Commitments pursuant to this Section 2.1(b) shall be applied
ratably to each Lender’s Commitment and shall be permanent, with no obligation
of the Lenders to reinstate such Commitments, and the applicable Commitment Fees
shall thereafter be computed on the basis of the Commitments, as so reduced.
Notwithstanding the foregoing, the Borrower may (subject to payment to the
Lenders of any applicable amounts under Section 2.9 hereof) rescind or postpone
any notice to terminate in whole the Commitments if such termination would have
resulted from a refinancing of this Agreement, which refinancing shall not be
consummated or shall otherwise be delayed.

(c) Revolving Notes. The indebtedness of the Borrower to each Lender resulting
from Loans owing to such Lender shall be evidenced by a Revolving Note if so
requested by such Lender.

 

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Section 2.2. Letters of Credit.

(a) Commitment for Letters of Credit. Subject to the terms and conditions set
forth in this Agreement, including, without limitation, entry of the DIP Order,
the Issuing Lenders agree in reliance upon the agreements of the other Lenders
set forth in this Section 2.2, (i) that the Existing Letters of Credit shall be
deemed issued under this Agreement on and after the Effective Date and shall
constitute Letters of Credit for all purposes hereunder and under the Credit
Documents, (ii) from time to time on any Business Day on and after the Effective
Date but prior to the entry of the Final Order, to (x) renew or extend Existing
Letters of Credit or replace an Existing Letter of Credit that has expired or
terminated without being drawn, and (y) to issue the Wisconsin Letter(s) of
Credit, in each case, in accordance with the Budget and (iii) from time to time
on any Business Day during the period from the beginning on the date of the
entry of the Final Order until the fifth Business Day prior to the Scheduled
Maturity Date, to issue, increase or extend the expiration date of, Letters of
Credit (including any Wisconsin Letter(s) of Credit issued prior to the entry of
the Final Order), for the account of any Credit Party, provided that no Letter
of Credit will be issued, increased, or extended:

(i) if such issuance, increase, or extension would cause the Letter of Credit
Exposure to exceed the lesser of (A) the Letter of Credit Maximum Amount and
(B) an amount equal to (1) the Facility Limit minus (2) the Aggregate Revolving
Credit Exposure;

(ii) unless such Letter of Credit has an expiration date not later than the
earlier of (A) one year after its issuance or extension and (B) five (5)
Business Days prior to the Scheduled Maturity Date; provided that, (1) if the
Commitments are terminated in whole pursuant to Section 2.1(b), the Borrower
shall either (y) deposit into the Cash Collateral Account cash in an amount
equal to 105% of the Letter of Credit Exposure for the Letters of Credit which
have an expiry date beyond the date the Commitments are terminated or
(z) provide a replacement letter of credit (or other security) reasonably
acceptable to the Administrative Agent and the applicable Issuing Lender in an
amount equal to 105% of the Letter of Credit Exposure, and (2) any such Letter
of Credit with a one-year tenor may expressly provide for an automatic extension
of one additional year so long as such Letter of Credit expressly allows the
applicable Issuing Lender, at its sole discretion, to elect not to provide such
extension; provided that, in any event, such automatic extension may not result
in an expiration date that occurs after the fifth Business Day prior to the
Scheduled Maturity Date;

(iii) unless such Letter of Credit is (A) a standby letter of credit not
supporting the repayment of indebtedness for borrowed money of any Person, or
(B) with the consent of the applicable Issuing Lender and so long as the
Borrower has agreed to such additional fees which may apply, a commercial letter
of credit;

(iv) unless such Letter of Credit is in form and substance acceptable to the
applicable Issuing Lender in its reasonable discretion;

(v) unless the Borrower has delivered to the applicable Issuing Lender a
completed and executed Letter of Credit Application; provided that, if the terms
of any Letter of Credit Application conflicts with the terms of this Agreement,
the terms of this Agreement shall control;

(vi) unless such Letter of Credit is governed by (A) with respect to Commercial
Letters of Credit, the Uniform Customs and Practice for Documentary Credits
(2007 Revision), International Chamber of Commerce Publication No. 600, or
(B) with respect to Standby Letters of Credit, the International Standby
Practices (ISP98), International Chamber of Commerce Publication No. 590, in
either case, including any subsequent revisions thereof approved by a Congress
of the International Chamber of Commerce and adhered to by the applicable
Issuing Lender;

 

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(vii) if any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the applicable
Issuing Lender from issuing such Letter of Credit, or any applicable requirement
of law relating to such Issuing Lender or any request or directive (whether or
not having the force of law) from any Governmental Authority with jurisdiction
over such Issuing Lender shall prohibit, or request that such Issuing Lender
refrain from, the issuance, increase or extension of letters of credit generally
or such Letter of Credit in particular or shall impose upon such Issuing Lender
with respect to such Letter of Credit any restriction, reserve or capital
requirement (for which such Issuing Lender is not otherwise compensated
hereunder) not in effect on the Effective Date, or shall impose upon such
Issuing Lender any unreimbursed loss, cost or expense which was not applicable
on the Effective Date and which such Issuing Lender in good faith deems material
to it;

(viii) if the issuance of such Letter of Credit would violate one or more
policies of the applicable Issuing Lender applicable to letters of credit
generally; provided that, notwithstanding anything herein to the contrary,
(x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all
requests, rules, guidelines, requirements or directives thereunder or issued in
connection therewith or in the implementation thereof, and (y) all requests,
rules, guidelines, requirements or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed
not to be in effect on the Effective Date for purposes of clause (xi) below,
regardless of the date enacted, adopted, issued or implemented;

(ix) if Letter of Credit is to be denominated in a currency other than Dollars;

(x) if any Lender is at such time a Defaulting Lender hereunder, unless the
applicable Issuing Lender has entered into satisfactory arrangements with the
Borrower or such Lender to eliminate such Issuing Lender’s risk with respect to
such Lender;

(xi) the proceeds of which would be made available to any Person (A) to fund any
activity or business of or with any Sanctioned Person, or in any country or
territory that, at the time of such funding, is the subject of any Sanctions or
(B) in any manner that would result in a violation of any Sanctions by any party
to this Agreement; or

(xii) if such Letter of Credit supports the obligations of any Person in respect
of (A) a lease of real property, or (B) an employment contract, in each case, if
the applicable Issuing Lender reasonably determines that the Borrower’s
obligation to reimburse any draws under such Letter of Credit may be limited.

Each Existing Letter of Credit, as of the Effective Date, shall be a Letter of
Credit deemed to have been issued pursuant to the Commitments and shall
constitute a portion of the Letter of Credit Exposure.

(b) Requesting Letters of Credit. Each Letter of Credit (other than the Existing
Letters of Credit which are deemed issued hereunder) shall be issued pursuant to
a Letter of Credit Application given by the Borrower to the Administrative Agent
and the applicable Issuing Lender by electronic mail or other writing prior to
9:00 am, Chicago time, at least three (3) Business Days prior to the proposed
date of issuance for the Letter of Credit. Each Letter of Credit Application
shall be fully completed and shall specify the information required therein,
including identifying the Letter of Credit to be amended, renewed or extended,

 

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and specifying the date of issuance, amendment, renewal or extension (which
shall be a Business Day), the date on which such Letter of Credit is to expire
(which shall comply with the requirements of this Section), the amount of such
Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by such Issuing Lender, the Borrower also shall submit a
letter of credit application on such Issuing Lender’s standard form in
connection with any request for a Letter of Credit. Each Letter of Credit
Application shall be irrevocable and binding on the Borrower. Subject to the
terms and conditions hereof, such Issuing Lender shall before 2:00 p.m.
(Chicago, Illinois time) on the date of such Letter of Credit Application issue
such Letter of Credit to the beneficiary of such Letter of Credit.
Notwithstanding the foregoing or anything to the contrary contained herein, no
Issuing Lender shall be obligated to issue or modify any Letter of Credit if,
immediately after giving effect thereto, the outstanding Letter of Credit
Exposure in respect of all Letters of Credit issued by such Person and its
Affiliates would exceed such Issuing Lender’s Issuing Lender Sublimit; provided
that any Issuing Lender may agree in its sole discretion and in writing to
issue, amend, renew or extend a Letter of Credit in excess of its Issuing Lender
Sublimit; provided, further that, for the avoidance of doubt, (i) any such
agreement shall not be deemed to increase such Issuing Lender’s Issuing Lender
Sublimit and shall be made on a case-by-case basis without any consideration to
previous agreements pursuant to the first proviso of this sentence with respect
to the applicable Letter of Credit (in the case of an amendment, renewal or
extension) or otherwise, (ii) no Lender’s Revolving Credit Exposure shall exceed
its Commitment, (iii) the Aggregate Revolving Credit Exposure shall not exceed
the Aggregate Commitments and (iv) the Letter of Credit Exposure shall not
exceed the Letter of Credit Maximum Amount. Any Letter of Credit so issued by an
Issuing Lender in excess of its individual Issuing Lender Sublimit then in
effect shall nonetheless constitute a Letter of Credit for all purposes of the
Credit Agreement, and shall not affect the Issuing Lender Sublimit of any other
Issuing Lender, subject to the limitations on the aggregate Letter of Credit
Exposure set forth Section 2.2(a)(i).

(c) Reimbursements for Letters of Credit; Funding of Participations.

(i) If an Issuing Lender shall make any Letter of Credit Disbursement in respect
of a Letter of Credit, the Borrower shall reimburse such Letter of Credit
Disbursement by paying to the Administrative Agent an amount equal to such
Letter of Credit Disbursement (i) not later than 11:00 a.m., Chicago time, on
the date that such Letter of Credit Disbursement is made, if the Borrower shall
have received notice of such Letter of Credit Disbursement prior to 9:00 a.m.,
Chicago time, on such date, or, (ii) if such notice has not been received by the
Borrower prior to such time on such date, then not later than 11:00 a.m.,
Chicago time, on (A) the Business Day that the Borrower receives such notice, if
such notice is received prior to 9:00 a.m., Chicago time, on the day of receipt,
or (B) the Business Day immediately following the day that the Borrower receives
such notice, if such notice is not received prior to such time, on the day of
receipt. Upon the applicable Issuing Lender’s demand for payment under the terms
of a Letter of Credit Application, the Borrower may, with a written notice,
request that the Borrower’s obligations to such Issuing Lender thereunder be
satisfied with the proceeds of an ABR Loan in the same amount (notwithstanding
any minimum size or increment limitations on individual Loans). If the Borrower
does not make such request and does not otherwise make the payments demanded by
such Issuing Lender as required under this Agreement or the Letter of Credit
Application, then the Borrower shall be deemed for all purposes of this
Agreement to have requested such a Loan in the same amount and the transfer of
the proceeds thereof to satisfy the Borrower’s obligations to such Issuing
Lender, and the Borrower hereby unconditionally and irrevocably authorizes,
empowers, and directs the Lenders to make such Loan, to transfer the proceeds
thereof to such Issuing Lender in satisfaction of such obligations, and to
record and otherwise treat such payments as a Loan to the Borrower. The
Administrative Agent and each Lender may record and otherwise treat the making
of such Revolving Borrowings as the making of a Revolving Borrowing to the
Borrower under this Agreement as if requested by the Borrower. Nothing herein is
intended to release any of the

 

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Borrower’s obligations under any Letter of Credit Application, but only to
provide an additional method of payment therefor. The making of any Revolving
Borrowing under this Section 2.2(c) shall not constitute a cure or waiver of any
Default, other than the payment Default which is satisfied by the application of
the amounts deemed advanced hereunder, caused by the Borrower’s failure to
comply with the provisions of this Agreement or the Letter of Credit
Application.

(ii) Each Lender (including the Lenders acting as Issuing Lenders) shall, upon
notice from the Administrative Agent that the Borrower has requested or is
deemed to have requested a Loan pursuant to Section 2.2(c)(i) and regardless of
whether (A) the conditions in Section 3.2 have been met, (B) such notice
complies with Section 2.3(b), or (C) a Default exists, make funds available to
the Administrative Agent for the account of the applicable Issuing Lender in an
amount equal to such Lender’s Pro Rata Share of the amount of such Loan not
later than 11:00 a.m., Chicago, Illinois time, on the Business Day specified in
such notice by the Administrative Agent, whereupon each Lender that so makes
funds available shall be deemed to have made a Loan to the Borrower in such
amount. The Administrative Agent shall remit the funds so received to such
Issuing Lender.

(iii) If any such Lender shall not have so made its Loan available to the
Administrative Agent pursuant to this Section 2.2. such Lender agrees to pay
interest thereon for each day from such date until the date such amount is paid
at the lesser of (A) the Federal Funds Effective Rate for such day for the first
three days and thereafter the interest rate applicable to the Loan and (B) the
Maximum Rate. Whenever, at any time after the Administrative Agent has received
from any Lender such Lender’s Loan, the Administrative Agent receives any
payment on account thereof, the Administrative Agent will pay to such Lender its
participating interest in such amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender’s Loan
was outstanding and funded), which payment shall be subject to repayment by such
Lender if such payment received by the Administrative Agent is required to be
returned. Each Lender’s obligation to make the Loan pursuant to this Section 2.2
shall be absolute and unconditional and shall not be affected by any
circumstance, including (1) any set-off, counterclaim, recoupment, defense or
other right which such Lender or any other Person may have against any Issuing
Lender, the Administrative Agent or any other Person for any reason whatsoever;
(2) the occurrence or continuance of a Default or the termination of the
Commitments; (3) any breach of this Agreement by any Credit Party or any other
Lender; or (4) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing.

(d) Participations. Upon the date of the issuance or increase of a Letter of
Credit, the applicable Issuing Lender shall be deemed to have sold to each other
Lender and each other Lender shall have been deemed to have purchased from such
Issuing Lender a participation in the related Letter of Credit Obligations equal
to such Lender’s Pro Rata Share at such date and such sale and purchase shall
otherwise be in accordance with the terms of this Agreement. The applicable
Issuing Lender shall promptly notify each such participant Lender by electronic
mail or telephone of each Letter of Credit issued or increased and the actual
dollar amount of such Lender’s participation in such Letter of Credit.

(e) Obligations Unconditional. The obligations of the Borrower under this
Agreement in respect of each Letter of Credit shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, notwithstanding the following circumstances:

(i) any lack of validity or enforceability of any Letter of Credit Documents or
this Agreement, or any term or provision therein or herein;

 

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(ii) any amendment or waiver of or any consent to departure from any Letter of
Credit Documents;

(iii) the existence of any claim, set-off, defense or other right which any
Credit Party may have at any time against any beneficiary or transferee of such
Letter of Credit (or any Persons for whom any such beneficiary or any such
transferee may be acting), any Issuing Lender, any Lender or any other person or
entity, whether in connection with this Agreement, the transactions contemplated
in this Agreement or in any Letter of Credit Documents or any unrelated
transaction;

(iv) any statement or any other document presented under such Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect to the extent any
Issuing Lender would not be liable therefor pursuant to Section 2.2(g);

(v) payment by any Issuing Lender under such Letter of Credit against
presentation of a draft or certificate which does not comply with the terms of
such Letter of Credit; or

(vi) any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section 2.2(e),
constitute a legal or equitable discharge of, or provide a right of setoff
against, the Borrower’s obligations hereunder;

provided, however, that nothing contained in this paragraph (e) shall be deemed
to constitute a waiver of any remedies of the Borrower in connection with the
Letters of Credit.

(f) Prepayments of Letters of Credit. In the event that any Letter of Credit
shall be outstanding or shall be drawn and not reimbursed on or prior to the
fifth Business Day prior to the Scheduled Maturity Date, the Borrower shall pay
to the Administrative Agent an amount equal to 105% of the Letter of Credit
Exposure allocable to such Letter of Credit, such amount to be due and payable
on the fifth Business Day prior to the Scheduled Maturity Date, and to be held
in the Cash Collateral Account and applied in accordance with paragraph
(h) below.

(g) Liability of Issuing Lenders. The Borrower assumes all risks of the acts or
omissions of any beneficiary or transferee of any Letter of Credit with respect
to its use of such Letter of Credit. None of the Administrative Agent, the
Lenders, nor any Issuing Lender nor any of their Related Parties shall have any
liability or responsibility by reason of or in connection with:

(i) the issuance or transfer of any Letter of Credit or any payment or failure
to make any payment thereunder (irrespective of any of the circumstances
referred to in the preceding sentence) any error, omission, interruption, loss
or delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder);

(ii) any error in interpretation of technical terms or any consequence arising
from causes beyond the control of any Issuing Lender;

(iii) the use which may be made of any Letter of Credit or any acts or omissions
of any beneficiary or transferee in connection therewith;

(iv) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged (including, for the
avoidance of doubt, in connection with the Administrative Agent’s reliance on
any Electronic Signature transmitted by telecopy, emailed pdf. or any other
electronic means that reproduces an image of an actual executed signature page);

 

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(v) payment by any Issuing Lender against presentation of documents which do not
comply with the terms of a Letter of Credit, including failure of any documents
to bear any reference or adequate reference to the relevant Letter of Credit; or

(vi) any other circumstances whatsoever in making or failing to make payment
under any Letter of Credit (including any Issuing Lender’s own negligence),

except that the Borrower shall have a claim against an Issuing Lender, and such
Issuing Lender shall be liable to, and shall promptly pay to, the Borrower, to
the extent of any direct, as opposed to consequential, damages suffered by the
Borrower which the Borrower proves were caused by (A) such Issuing Lender’s
willful misconduct or gross negligence in determining whether documents
presented under a Letter of Credit comply with the terms of such Letter of
Credit or (B) such Issuing Lender’s willful failure to make lawful payment under
any Letter of Credit after the presentation to it of a draft and certificate
strictly complying with the terms and conditions of such Letter of Credit. The
parties hereto expressly agree that, in the absence of gross negligence or
willful misconduct on the part of an Issuing Lender (as finally determined by a
court of competent jurisdiction), such Issuing Lender shall be deemed to have
exercised care in each such determination. In furtherance and not in limitation
of the foregoing, such Issuing Lender may either accept and make payment upon
documents that appear on their face to be in substantial compliance with the
terms of a Letter of Credit, without responsibility for further investigation,
regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance
with the terms of such Letter of Credit.

(h) Cash Collateral Account.

(i) If the Borrower is required to deposit funds in the Cash Collateral Account
pursuant to Sections 2.2(a)(ii), 2.2(f), 2.2(h)(iv), 2.2(i), 2.4(c), 2.14, or
7.2(b) or any other provision under this Agreement, then the Borrower and the
Administrative Agent shall establish the Cash Collateral Account (which may be a
Cash Collateral Account under the Existing Credit Agreement) and the Borrower
shall execute any documents and agreements, including the Administrative Agent’s
standard form assignment of deposit accounts, that the Administrative Agent
requests in connection therewith to establish the Cash Collateral Account and
grant the Administrative Agent an Acceptable Security Interest in such account
and the funds therein. The Borrower hereby pledges to the Administrative Agent
and grants the Administrative Agent a security interest in the Cash Collateral
Account, whenever established, and all funds held in the Cash Collateral Account
from time to time, and all proceeds thereof as security for the payment of the
Secured Obligations.

(ii) Funds held in the Cash Collateral Account shall be held as cash collateral
for obligations with respect to Letters of Credit and promptly applied by the
Administrative Agent at the request of the Issuing Lenders to any reimbursement
or other obligations under Letters of Credit that exist or occur. To the extent
that any surplus funds are held in the Cash Collateral Account above the Letter
of Credit Exposure during the existence of an Event of Default the
Administrative Agent may (A) hold such surplus funds in the Cash Collateral
Account as cash collateral for the Secured Obligations or (B) apply such surplus
funds to any Secured Obligations in any manner directed by the Required Lenders.
If no Default exists, the Administrative Agent shall release any surplus funds
held in the Cash Collateral Account above the Letter of Credit Exposure to the
Borrower at the Borrower’s written request.

 

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(iii) Funds held in the Cash Collateral Account may be invested in Liquid
Investments maintained with, and under the sole dominion and control of, the
Administrative Agent or in another investment if mutually agreed upon by the
Borrower and the Administrative Agent, but the Administrative Agent shall have
no obligation to make any investment of the funds therein. The Administrative
Agent shall exercise reasonable care in the custody and preservation of any
funds held in the Cash Collateral Account and shall be deemed to have exercised
such care if such funds are accorded treatment substantially equivalent to that
which the Administrative Agent accords its own property, it being understood
that the Administrative Agent shall not have any responsibility for taking any
necessary steps to preserve rights against any parties with respect to any such
funds.

(iv) If any Event of Default shall occur and be continuing, on the Business Day
that the Borrower receives notice from the Administrative Agent or the Required
Lenders (or, if the maturity of the Loans has been accelerated, the Required
Lenders) demanding the deposit of cash collateral pursuant to this paragraph,
the Borrower shall (A) establish a deposit account with the Administrative
Agent, in the name of the Administrative Agent and for the benefit of the
Lenders (the “Cash Collateral Account”), (B) execute any documents and
agreements, including the Administrative Agent’s standard form assignment of
deposit accounts, that the Administrative Agent requests in connection therewith
to establish the Cash Collateral Account and grant the Administrative Agent an
Acceptable Security Interest in such account and the funds therein including and
(C) deposit into the Cash Collateral Account an amount in cash equal to 105% of
the amount of the Letter of Credit Exposure as of such date plus accrued and
unpaid interest thereon; provided that the obligation to deposit such cash
collateral shall become effective immediately. Such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
Secured Obligations. The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over the Cash Collateral
Account and the Borrower hereby grants the Administrative Agent a security
interest in the Cash Collateral Account and all money or other assets on deposit
therein or credited thereto. Other than any interest earned on the investment of
such deposits, which investments shall be made at the option and sole discretion
of the Administrative Agent and at the Borrower’s risk and expense, such
deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in the Cash Collateral Account. Moneys in the Cash
Collateral Account shall be applied by the Administrative Agent to reimburse one
or both Issuing Lenders for Letter of Credit Disbursements for which it has not
been reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrower for the Letter of
Credit Exposure at such time or, if the maturity of the Loans has been
accelerated (but subject to the consent of the Required Lenders), be applied to
satisfy other Secured Obligations. If the Borrower is required to provide an
amount of cash collateral hereunder as a result of the occurrence of an Event of
Default, such amount (to the extent not applied as aforesaid) shall be returned
to the Borrower within three (3) Business Days after all such Events of Default
have been cured or waived as confirmed in writing by the Administrative Agent.
The Administrative Agent shall exercise reasonable care in the custody and
preservation of any funds held in the Cash Collateral Account and shall be
deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Administrative Agent accords its own
property, it being understood that the Administrative Agent shall not have any
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any such funds.

(v) Notwithstanding the foregoing or anything to the contrary contained herein,
so long as (A) no Default has occurred and is continuing and (B) Availability
exceeds $1,000,000 for the immediately preceding twenty-eight (28) consecutive
days, then subject to Borrower’s delivery of a pro forma Borrowing Base
Certificate, Borrower may request that Eligible Cash in an amount equal to the
lowest amount by which Availability exceeded $1,000,000 in the immediately
preceding twenty-eight (28) consecutive days be transferred to another
Controlled Account of the Credit Parties that is not fully-blocked, it being
understood that upon such transfer, Eligible Cash shall be reduced by the amount
of such transferred cash. Upon such request, the Administrative Agent shall
promptly transfer such cash as directed by the Borrower.

 

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(i) Defaulting Lender. If, at any time, a Defaulting Lender exists hereunder,
then, at the request of the Issuing Lenders subject to Section 2.14(c), the
Borrower shall deposit funds with Administrative Agent into the Cash Collateral
Account an amount equal to such Defaulting Lender’s Pro Rata Share of the Letter
of Credit Exposure.

(j) Letters of Credit Issued for Guarantors or any Subsidiary. Notwithstanding
that a Letter of Credit issued or outstanding hereunder is in support of any
obligations of, or is for the account of, a Guarantor or any Subsidiary, the
Borrower shall be obligated to reimburse any Issuing Lender hereunder for any
and all drawings under such Letter of Credit issued hereunder by any Issuing
Lender. The Borrower hereby acknowledges that the issuance of Letters of Credit
for the account of any Guarantor, the Borrower or any Subsidiary inures to the
benefit of the Borrower, and that the Borrower’s business (indirectly or
directly) derives substantial benefits from the businesses of such other
Persons.

(k) Disbursement Procedures. The applicable Issuing Lender shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. Such Issuing Lender shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
facsimile) of such demand for payment and whether such Issuing Lender has made
or will make an Letter of Credit Disbursement thereunder; provided that any
failure to give or delay in giving such notice shall not relieve the Borrower of
its obligation to reimburse such Issuing Lender and the Lenders with respect to
any such Letter of Credit Disbursement.

(l) Interim Interest. If any Issuing Lender shall make any Letter of Credit
Disbursement, then, unless the Borrower shall reimburse such Letter of Credit
Disbursement in full on the date such Letter of Credit Disbursement is made, the
unpaid amount thereof shall bear interest, for each day from and including the
date such Letter of Credit Disbursement is made to but excluding the date that
the Borrower reimburses such Letter of Credit Disbursement, at the rate per
annum then applicable to ABR Loans and such interest shall be due and payable on
the date when such reimbursement is payable; provided that, if the Borrower
fails to reimburse such Letter of Credit Disbursement when due pursuant to
Section 2.2(c), then Section 2.7(d) shall apply. Interest accrued pursuant to
this paragraph shall be for the account of such Issuing Lender, except that
interest accrued on and after the date of payment by any Lender pursuant to
Section 2.2(c) to reimburse such Issuing Lender shall be for the account of such
Lender to the extent of such payment.

Section 2.3. Loans.

(a) Generally.

(i) Each Loan shall be made as part of a Revolving Borrowing consisting of Loans
made by the Lenders ratably in accordance with their respective Commitments. The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender’s failure to make Loans as required.

(ii) Subject to Section 2.16, each Revolving Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.

 

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(iii) Each Revolving Borrowing shall (i) if comprised of ABR Loans be in an
aggregate amount not less than $500,000 and in integral multiples of $50,000 in
excess thereof; provided that an ABR Revolving Borrowing may be in an aggregate
amount that is equal to the entire unused balance of the Loan Limit or that is
required to finance the reimbursement of an Letter of Credit Disbursement as
contemplated by Section 2.2(c)(i), (ii) at the commencement of each Interest
Period for any Eurodollar Revolving Borrowing, if comprised of Eurodollar Loans
be in an aggregate amount not less than $1,000,000 and in integral multiples of
$500,000 in excess thereof, and (iii) consist of Loans of the same Type made on
the same day by the Lenders ratably according to their respective Commitments.
Revolving Borrowings of more than one Type may be outstanding at the same time;
provided that there shall not at any time be more than a total of seven
(7) Eurodollar Revolving Borrowings outstanding.

(iv) Notwithstanding any other provision of this Agreement, the Borrower shall
not be entitled to request, or to elect to convert or continue, any Revolving
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.

(b) Notice. Each Revolving Borrowing, shall be made pursuant to the applicable
Notice of Borrowing submitted by the Borrower to the Administrative Agent not
later than (i) 10:00 a.m. (Chicago, Illinois time) on the third Business Day
before the date of the proposed Revolving Borrowing, in the case of a Eurodollar
Loan or (ii) 10:00 a.m. (Chicago, Illinois time) on the Business Day on the date
of the proposed Revolving Borrowing, in the case of a ABR Loan, by the Borrower
to the Administrative Agent, which shall give to each Lender prompt notice of
such proposed Revolving Borrowing, by electronic mail. Each Notice of Borrowing
shall be submitted by electronic mail, specifying (A) the requested date of such
Revolving Borrowing, which shall be a Business Day, (B) the requested Type of
Loans comprising such Revolving Borrowing, (C) the aggregate amount of such
Revolving Borrowing, (D) if such Revolving Borrowing is to be comprised of
Eurodollar Loans, the requested Interest Period to be applicable to each such
Loan, which shall be a period contemplated by the definition of the term
“Interest Period”, and (E) that the intended use of proceeds of such Borrowing
are in accordance with the Budget. Each Lender shall, before 12:00 p.m.
(Chicago, Illinois time) on the date of such Revolving Borrowing (or, in the
case of Revolving Borrowings on the Effective Date, 2:00 p.m. (Chicago, Illinois
time)), make available for the account of its applicable Lending Office to the
Administrative Agent at its address referred to in Section 9.9 or such other
location as the Administrative Agent may specify by notice to the Lenders,
solely by wire transfer of immediately available funds, such Lender’s Pro Rata
Share of such Revolving Borrowing. After the Administrative Agent’s receipt of
such funds and upon fulfillment of the applicable conditions set forth in
Article 3, except in respect of the provisions of this Agreement covering the
reimbursement of Letters of Credit, the Administrative Agent will make such
Loans available to the Borrower by promptly crediting the funds so received in
the aforesaid account of the Administrative Agent to an account of the Borrower
maintained with the Administrative Agent in Houston, Texas and designated by the
Borrower in the applicable Notice of Borrowing; provided that ABR Loans made to
finance the reimbursement of an Letter of Credit Disbursement as provided in
Section 2.2(c) shall be remitted by the Administrative Agent to the applicable
Issuing Lender.

(c) Conversions and Continuations. In order to elect to Convert or continue a
Loan under this paragraph, the Borrower shall deliver an irrevocable Notice of
Continuation or Conversion to the Administrative Agent at the Administrative
Agent’s office no later than 11:00 a.m. (Chicago, Illinois time) (i) on the
Business Day before the date of the proposed conversion date in the case of a
Conversion to a ABR Loan and (ii) at least three Business Days in advance of the
proposed Conversion or continuation date in the case of a Conversion to, or a
continuation of, a Eurodollar Loan. Each such Notice of Continuation

 

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or Conversion shall be in writing or by electronic mail, specifying (A) the
requested Conversion or continuation date (which shall be a Business Day), (B)
the amount and Type of the Loan to be Converted or continued, (C) whether a
Conversion or continuation is requested and, if a Conversion, into what Type of
Loan, and (D) in the case of a Conversion to, or a continuation of, a Eurodollar
Loan, the requested Interest Period. Promptly after receipt of a Notice of
Conversion or Continuation under this paragraph, the Administrative Agent shall
provide each Lender with a copy thereof and, in the case of a Conversion to or a
continuation of a Eurodollar Loan, notify each Lender of the applicable interest
rate under Section 2.7(b). The portion of Loans comprising part of the same
Revolving Borrowing that are Converted to Loans of another Type shall constitute
a new Revolving Borrowing. If the Borrower fails to deliver a timely Notice of
Continuation or Conversion with respect to a Eurodollar Revolving Borrowing
prior to the end of the Interest Period applicable thereto, then, unless such
Revolving Borrowing is repaid as provided herein, at the end of such Interest
Period such Revolving Borrowing shall be converted to an ABR Revolving
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Administrative Agent, at the request of
the Required Lenders, so notifies the Borrower, then, so long as an Event of
Default is continuing (i) no outstanding Revolving Borrowing may be converted to
or continued as a Eurodollar Revolving Borrowing and (ii) unless repaid, each
Eurodollar Revolving Borrowing shall be converted to an ABR Revolving Borrowing
at the end of the Interest Period applicable thereto.

(d) Certain Limitations.

(i) Notwithstanding anything in paragraphs (a) and (b) above, at no time shall
there be more than seven Interest Periods applicable to outstanding Eurodollar
Loans;

(ii) the Borrower may not select Eurodollar Loans for any Revolving Borrowing at
any time when an Event of Default has occurred and is continuing;

(iii) if any Lender shall notify the Administrative Agent that any Change in Law
makes it unlawful, or that any central bank or other Governmental Authority
asserts that it is unlawful, for such Lender or its applicable Lending Office to
perform its obligations under this Agreement to make Eurodollar Loans or to fund
or maintain Eurodollar Loans, (A) the obligation of such Lender to make such
Eurodollar Loan as part of the requested Revolving Borrowing or for any
subsequent Revolving Borrowing shall be suspended until such Lender shall notify
the Borrower that the circumstances causing such suspension no longer exist and
such Lender’s portion of such requested Revolving Borrowing or any subsequent
Revolving Borrowing of Eurodollar Loans shall be made in the form of a ABR Loan,
and (B) such Lender agrees to use commercially reasonable efforts (consistent
with its internal policies and legal and regulatory restrictions) to designate a
different Lending Office if the making of such designation would avoid the
effect of this paragraph and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender;

(iv) if the Required Lenders shall notify the Administrative Agent that the LIBO
Rate for Eurodollar Loans comprising such Revolving Borrowing will not
adequately reflect the cost to such Lenders of making or funding their
respective Eurodollar Loans, as the case may be, for such Revolving Borrowing,
the right of the Borrower to select Eurodollar Loans for such Revolving
Borrowing or for any subsequent Revolving Borrowing shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, and each Loan comprising
such Revolving Borrowing shall be an ABR Loan; and

(v) if the Borrower shall fail to select the duration or continuation of any
Interest Period for any Eurodollar Loans in accordance with the provisions
contained in the definition of Interest Period in Section 1.1 and paragraph
(b) above, the Administrative Agent will forthwith so notify the Borrower and
the Lenders and such Loans will be made available to the Borrower on the date of
such Revolving Borrowing as Eurodollar Loans with an Interest Period duration of
one month or, in the case of continuation of an existing Loan, Convert into ABR
Loans.

 

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(e) Notices Irrevocable. Each Notice of Borrowing and Notice of Continuation or
Conversion delivered by the Borrower hereunder, including its deemed request for
borrowing made under Section 2.2(c), shall be irrevocable and binding on the
Borrower.

(f) Administrative Agent Reliance. Unless the Administrative Agent shall have
received notice from a Lender prior to the proposed date of any Revolving
Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Revolving Borrowing, the Administrative Agent may
assume that such Lender has made such share available on such date in accordance
with this Section and may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Revolving Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the greater of the
NYFRB Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender’s Loan included in such Revolving Borrowing.

Section 2.4. Prepayments.

(a) Right to Prepay; Ratable Prepayment. The Borrower shall have no right to
prepay any principal amount of any Loan except as provided in this Section 2.4
and all notices given pursuant to this Section 2.4 shall, except as provided in
this Section 2.4, be irrevocable and binding upon the Borrower. Each payment of
any Loan pursuant to this Section 2.4 shall be made in a manner such that all
Loans comprising part of the same Revolving Borrowing are paid in whole or
ratably in part other than Loans owing to a Defaulting Lender as provided in
Section 2.14.

(b) Optional. The Borrower may elect to prepay any of the Loans without penalty
or premium except as set forth in Section 2.9 and after giving by 10:00 a.m.
(Chicago, Illinois time) (i) in the case of Eurodollar Loans, at least three
Business Days’ or (ii) in case of ABR Loans, one Business Day’s prior written
notice to the Administrative Agent stating the proposed date and aggregate
principal amount of such prepayment. Each such notice shall be irrevocable and
shall specify the prepayment date and the principal amount of each Revolving
Borrowing or portion thereof to be prepaid. Notwithstanding the foregoing, the
Borrower may (subject to payment to the Lenders of any applicable amounts under
Section 2.9 hereof) rescind or postpone any notice to prepay any Loans if such
repayment would have resulted from a refinancing of this Agreement, which
refinancing shall not be consummated or shall otherwise be delayed. Promptly
following receipt of any such notice relating to a Revolving Borrowing, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
prepayment of a Revolving Borrowing shall be applied ratably to the Loans
included in the prepaid Revolving Borrowing. Prepayments shall be accompanied by
accrued interest to the extent required by Section 2.7 and any break funding
payments required by Section 2.9. If any such notice is given, the Borrower
shall prepay Loans comprising part of the same Revolving Borrowing in whole or
ratably in part in an aggregate principal amount equal to the amount specified
in such notice, together with accrued interest to the date of such prepayment on
the principal amount prepaid and amounts, if any, required to be paid pursuant
to Section 2.9 as a result of such prepayment being made on such date; provided
that (A) each optional prepayment of Eurodollar Loans shall be in a minimum
amount not less than $500,000 and in multiple integrals of $100,000 in excess
thereof

 

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and (B) each optional prepayment of ABR Loans shall be in a minimum amount not
less than $500,000 and in multiple integrals of $50,000 in excess thereof.
Notwithstanding the foregoing, the Borrower may (subject to payment to the
Lenders of any applicable amounts under Section 2.9 hereof) rescind or postpone
any notice of prepayment under this Section 2.4(b) if such prepayment would have
resulted from a refinancing of this Agreement, which refinancing shall not be
consummated or shall otherwise be delayed.

(c) Mandatory.

(i) On any date that (A)(1) the sum of the outstanding principal amount of all
Loans plus the Letter of Credit Exposure exceeds (2) the Facility Limit or
(B)(1) the sum of the principal amount of all Loans exceeds (2) the Loan Limit,
as notified to the Borrower by the Administrative Agent (with such calculation
set forth in reasonable detail which shall be conclusive absent manifest error),
the Borrower shall, within one Business Day, to the extent of such excess, first
prepay to the Lenders on a pro rata basis the outstanding principal amount of
the Loans, and second make deposits into the Cash Collateral Account to provide
cash collateral in the amount of such excess for the Letter of Credit Exposure.

(ii) If any Credit Party receives any Net Cash Proceeds in respect of any
Prepayment Event, then the Borrower shall, no later than three Business Days
following the receipt thereof, apply (A) in respect of any sale, transfer or
other disposition of ABL Priority Collateral or receipt of Net Cash Proceeds in
connection with a Casualty Event involving ABL Priority Collateral, an amount
equal to 100% of such Net Cash Proceeds first to prepay to the Lenders on a pro
rata basis the outstanding principal amount of the Loans, and second to make
deposits into the Cash Collateral Account to provide cash collateral up to the
amount of such Letter of Credit Exposure and, in each case, if any such ABL
Priority Collateral was included in the calculation of the Borrowing Base, the
Borrower shall deliver a Borrowing Base Certificate including pro forma
adjustments for such sale and/or Casualty Event concurrently with the making of
any prepayment required by this Section 2.4(c)(ii) and (B) in respect of any
other Prepayment Event, an amount equal to 100% of such Net Cash Proceeds that
were not used to prepay the DIP Term Loan Facility.

(d) Interest; Costs. Each prepayment pursuant to this Section 2.4 shall be
accompanied by accrued interest on the amount prepaid to the date of such
prepayment and amounts, if any, required to be paid pursuant to Section 2.9 as a
result of such prepayment being made on such date.

Section 2.5. Repayment of Loans; Evidence of Debt.

(a) The Borrower hereby unconditionally promises to (i) pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Loan on the Maturity Date and (ii) and the cash collateralize all
outstanding Letters of Credit in an amount equal to 105% of the Letter of Credit
Exposure for such Letters of Credit and subject to documentation reasonably
satisfactory to the Issuing Lenders on the Maturity Date. Upon the Maturity Date
of any of the Secured Obligations under this Agreement or any of the other
Credit Documents, the Lenders shall be entitled to immediate payment and cash
collateralization of such Secured Obligations without further application to or
order of the Bankruptcy Court.

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

 

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

(d) The entries made in the accounts maintained pursuant to paragraph (b) or
(c) of this Section 2.5 shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.

Section 2.6. Fees.

(a) Commitment Fees. The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a facility fee, which shall accrue at the rate of
0.50% per annum on the daily amount of the aggregate Unused Commitment of each
Lender (determined for each calendar month as of the end of each such calendar
month) during the period from and including the Effective Date to but excluding
the date on which such Commitment terminates; provided that, if such Lender
continues to have any Revolving Credit Exposure after its Commitment terminates,
then such facility fee shall continue to accrue on the daily amount of such
Lender’s Revolving Credit Exposure from and including the date on which its
Commitment terminates to but excluding the date on which such Lender ceases to
have any Revolving Credit Exposure. Facility fees accrued through and including
the last day of each calendar month shall be payable in arrears commencing, with
respect to such fees accrued through and including the last day of the first
calendar month ending after the Effective Date, on the first Business Day of
each calendar month and on the date on which the Commitments terminate; provided
that any facility fees accruing after the date on which the Commitments
terminate shall be payable on demand. All facility fees shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).

(b) Fees for Letters of Credit. The Borrower agrees to pay (i) to the
Administrative Agent for the account of each Lender a participation fee with
respect to its participations in Letters of Credit, which shall accrue at the
same Applicable Margin used to determine the interest rate applicable to
Eurodollar Loans on the average daily amount of such Lender’s Letter of Credit
Exposure (excluding any portion thereof attributable to unreimbursed Letter of
Credit Disbursements) during the period from and including the Effective Date to
but excluding the later of the date on which such Lender’s Commitment terminates
and the date on which such Lender ceases to have any Letter of Credit Exposure,
and (ii) to the applicable Issuing Lender (A) a fronting fee to be agreed by the
Borrower and the applicable Issuing Lender on the face amount of each Letter of
Credit issued by such Issuing Lender, together with (B) the applicable Issuing
Lender’s standard documentary, processing, administrative, issuance, amendment
and negotiation fees in connection with Letters of Credit, during the period
from and including the Effective Date to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any
Letter of Credit Exposure, as well as such Issuing Lender’s standard fees with
respect to the renewal or extension of any Letter of Credit or processing of
drawings thereunder. Participation fees and fronting fees accrued through and
including the last day of each calendar month shall be payable in arrears
commencing, with respect to such fees accrued through and including the last day
of the first calendar month ending after the Effective Date, on the first
Business Day of each calendar month; provided that all such fees shall be
payable on the date on which the Commitments terminate and any such fees
accruing after the date on which the Commitments terminate shall be payable on
demand. Any other fees payable to the any Issuing Lender pursuant to this
paragraph shall be payable within 10 days after demand. All participation fees
and fronting fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but
excluding the last day).

 

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(c) All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Administrative Agent (or to any Issuing Lender, as the
case may be) for distribution, in the case of facility fees and participation
fees, to the Lenders. Fees paid shall not be refundable under any circumstances.

(d) Fee Letter. The Borrower agrees to pay the fees as set forth in the Fee
Letter.

Section 2.7. Interest.

(a) ABR Loans. Each ABR Loan shall bear interest at the Alternate Base Rate in
effect from time to time plus the Applicable Margin for ABR Loans for such
period. The Borrower shall pay to Administrative Agent for the ratable account
of each Lender all accrued but unpaid interest on such Lender’s Loans which are
ABR Loans on the applicable Interest Payment Date.

(b) Eurodollar Loans. Each Eurodollar Loan shall bear interest during its
Interest Period equal to at all times the LIBO Rate for such Interest Period
plus the Applicable Margin for Eurodollar Loans for such period. The Borrower
shall pay to the Administrative Agent for the ratable account of each Lender all
accrued but unpaid interest on each of such Lender’s Eurodollar Loans on the
applicable Interest Payment Date.

(c) [Reserved].

(d) Default Rate. Notwithstanding the foregoing, (i) upon the occurrence and
during the continuance of an Event of Default, all Obligations shall bear
interest, after as well as before judgment, at the Default Rate. Interest
accrued pursuant to this Section 2.7(d) and all interest accrued but unpaid on
or after the Maturity Date shall be due and payable on demand, and if no express
demand is made, then due and payable on the otherwise required interest payment
dates hereunder.

Section 2.8. Illegality. If any Lender shall notify the Borrower that any Change
in Law makes it unlawful, or that any central bank or other Governmental
Authority asserts that it is unlawful, for such Lender or its applicable Lending
Office to perform its obligations under this Agreement to make, maintain, or
fund any Eurodollar Loans of such Lender then outstanding hereunder, (a) all
Eurodollar Loans of such Lender that are then the subject of any Notice of
Borrowing and that cannot be lawfully funded shall be funded as ABR Loans of
such Lender, (b) all Eurodollar Loans of such Lender shall be Converted
automatically to ABR Loans of such Lender on the respective last days of the
then current Interest Periods with respect to such Eurodollar Loans or within
such earlier period as required by such change in circumstances, and (c) the
right of the Borrower to select Eurodollar Loans from such Lender for any
subsequent Revolving Borrowing shall be suspended until such Lender shall notify
the Borrower that the circumstances causing such suspension no longer exist.
Each Lender agrees to use commercially reasonable efforts (consistent with its
internal policies and legal and regulatory restrictions) to designate a
different Lending Office if the making of such designation would avoid the
effect of this paragraph and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender.

Section 2.9. Breakage Costs. In the event of (a) the payment of any principal of
any Eurodollar Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (b) the conversion of
any Eurodollar Loan other than on the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar
Loan on the date specified in any notice delivered pursuant hereto (regardless
of whether such notice may be revoked under

 

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Section 2.4(b) and is revoked in accordance therewith) or (d) the assignment of
any Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.13, then,
in any such event, the Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event. In the case of a Eurodollar Loan, such
loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar market. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.

Section 2.10. Increased Costs.

(a) Eurodollar Loans. If any Change in Law shall:

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

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

(iii) impose on any Lender or Issuing Lender or the London interbank market any
other condition, cost or expense (other than Taxes) affecting this Agreement or
Loans made by such Lender or any Letter of Credit or participation therein; or

(iv) impose on financial institutions generally, including such Lender (or its
applicable Lending Office), or on the London interbank market any other
condition affecting this Agreement or its Revolving Notes or any of such
extensions of credit or liabilities or commitments;

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

 

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

(c) Mitigation. Each Lender shall promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Lender to compensation pursuant to this
Section 2.10 and will designate a different Lending Office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the reasonable judgment of such Lender, be otherwise disadvantageous to
it and the Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation. Any Lender
claiming compensation under this Section 2.10 shall furnish to the Borrower and
the Administrative Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder which shall be determined by such Lender in
good faith and which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.

(d) Delay in Requests. Failure or delay on the part of any Lender or Issuing
Lender to demand compensation pursuant to this Section 2.10 shall not constitute
a waiver of such Lender’s or such Issuing Lender’s right to demand such
compensation, provided that the Borrower shall not be required to compensate a
Lender or Issuing Lender pursuant to this Section 2.10 for any increased costs
incurred or reductions suffered more than 180 days prior to the date that such
Lender or Issuing Lender, as the case may be, notifies the Borrower and the
Administrative Agent of the Change in Law giving rise to such increased costs or
reductions and of such Lender’s or Issuing Lender’s intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the 180-day period referred
to above shall be extended to include the period of retroactive effect thereof).

(e) A certificate of a Lender or Issuing Lender setting forth the amount or
amounts necessary to compensate such Lender or Issuing Lender or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section 2.10 shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or Issuing Lender, as the
case may be, the amount shown as due on any such certificate within 10 days
after receipt thereof.

Section 2.11. Payments and Computations.

(a) Payments. All payments of principal, interest, and other amounts to be made
by the Borrower under this Agreement and other Credit Documents shall be made to
the Administrative Agent in Dollars and in immediately available funds, without
setoff, deduction, or counterclaim; provided that, the Borrower may setoff
amounts owing to any Lender that is at such time a Defaulting Lender against
Loans that such Defaulting Lender failed to fund to the Borrower under this
Agreement (the “Unfunded Loans”) so long as (i) the Borrower shall have
delivered prior written notice of such setoff to the Administrative Agent and
such Defaulting Lender, (ii) the Loans made by the Non-Defaulting Lenders as
part of the original Revolving Borrowing to which the Unfunded Loans applied
shall still be outstanding, (iii) if such Defaulting Lender failed to fund Loans
under more than one Revolving Borrowing, such setoff shall be applied in a
manner satisfactory to the Administrative Agent, and (iv) upon the application
of such setoff, the Unfunded Loans shall be deemed to have been made by such
Defaulting Lender on the effective date of such setoff.

 

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(b) Payment Procedures. The Borrower shall make each payment under this
Agreement and under the Revolving Notes not later than 1:00 p.m. (Chicago,
Illinois time) on the day when due in Dollars to the Administrative Agent at the
location referred to in the Revolving Notes (or such other location as the
Administrative Agent shall designate in writing to the Borrower) in same day
funds. The Administrative Agent will promptly thereafter, and in any event prior
to the close of business on the day any timely payment is made, cause to be
distributed like funds relating to the payment of principal, interest or fees
ratably (other than amounts payable solely to the Administrative Agent or a
specific Lender pursuant to Sections 2.8. 2.9, 2.10, 2.12, 2.13, and 9.2 and
such other provisions herein which expressly provide for payments to a specific
Lender, but after taking into account payments effected pursuant to Section 9.1)
in accordance with each Lender’s Pro Rata Share to the Lenders for the account
of their respective applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such Lender for the account
of its applicable Lending Office, in each case to be applied in accordance with
the terms of this Agreement. Upon receipt of other amounts due solely to the
Administrative Agent, a specific Issuing Lender or a specific Lender, the
Administrative Agent shall distribute such amounts to the appropriate party to
be applied in accordance with the terms of this Agreement.

(c) Non Business Day Payments. Whenever any payment shall be stated to be due on
a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be;
provided that if such extension would cause payment of interest on or principal
of Eurodollar Loans to be made in the next following calendar month, such
payment shall be made on the next preceding Business Day.

(d) Computations. All computations of interest for ABR Loans based upon the
Alternate Base Rate shall be made by the Administrative Agent on the basis of a
year of 365/366 days and all computations of all other interest and fees shall
be made by the Administrative Agent on the basis of a year of 360 days, in each
case for the actual number of days (including the first day, but excluding the
last day) occurring in the period for which such interest or fees are payable.
Each determination by the Administrative Agent of an amount of interest or fees
shall be conclusive and binding for all purposes, absent manifest error.

(e) Sharing of Payments, Etc. If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set off, or
otherwise) on account of the Loans made by it in excess of its ratable share of
payments on account of the Loans or Letter of Credit Obligations obtained by the
Lenders (other than as a result of a termination of a Defaulting Lender’s
Commitment under Section 2.14, the setoff right of the Borrower under clause
(a) above, or the non-pro rata application of payments provided in the last
sentence of this clause (e)), such Lender shall notify the other Lenders and
forthwith purchase from the other Lenders such participations in the Loans made
by it or the Letter of Credit Obligations held by it as shall be necessary to
cause such purchasing Lender to share the excess payment ratably with the other
Lenders; provided that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from the other
Lenders shall be rescinded and each such Lender shall repay to the purchasing
Lender the purchase price to the extent of such Lender’s ratable share, but
without interest. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.11(e) may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set off) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation. If a Lender fails to fund a Loan with respect to a Revolving
Borrowing as and when required hereunder and the Borrower subsequently makes a
repayment of any Loans, then, after taking into account any setoffs made
pursuant to Section 2.11(a) above, such payment shall be applied among the
Non-Defaulting Lenders ratably in accordance with their respective Commitment
percentages until each Lender (including any Lender that is at such time a
Defaulting Lender) has its percentage of all of the outstanding Loans and the
balance of such repayment shall be applied among the Lenders in accordance with
their Pro Rata Share. The provisions of this Section

 

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2.11(e) shall not be construed to apply to any payment made by the Borrower
pursuant to and in accordance with the express terms of this Agreement or to any
payment obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in Letter of Credit Exposure
to any assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this Section 2.11(e) shall
apply).

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

Section 2.12. Taxes.

(a) No Deduction for Certain Taxes. Any and all payments by or account of any
obligation of any Credit Party under any of the Credit Documents shall be made
free and clear of and without deduction or withholding for any Taxes, except as
required by applicable Legal Requirements. If any applicable Legal Requirement
(as determined in the good faith discretion of an applicable Withholding Agent)
requires the deduction or withholding of any Tax from any such payment by an
applicable Withholding Agent, then such Withholding Agent shall be entitled to
make such deduction or withholding and shall timely pay the full amount deducted
or withheld to the relevant Governmental Authority in accordance with applicable
Legal Requirements and, if such Tax is an Indemnified Tax, then the sum payable
by the applicable Credit Party shall be increased as necessary so that after
such deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

(b) Other Taxes. The Credit Parties shall timely pay to the relevant
Governmental Authority in accordance with applicable Legal Requirements, or at
the option of the Administrative Agent timely reimburse it for the payment of,
any Other Taxes.

(c) Indemnification The Borrower will indemnify each Recipient, within 10 days
after written demand therefor, for the full amount of Indemnified Taxes
(including, without limitation, any Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section 2.12(c)) payable or paid by
such Recipient or required to be withheld or deducted from a payment to such
Recipient and any interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower by a Lender
(with a copy to the Administrative Agent) or by the Administrative Agent on its
own behalf or on behalf of a Lender shall be conclusive absent manifest error.
Notwithstanding anything herein to the contrary, a Recipient shall not be
indemnified for any Indemnified Taxes under this Section 2.12 unless such
Recipient shall make written demand on Borrower for such reimbursement no later
than one year after the date on which a court of competent jurisdiction rules in
a final, non-appealable judgment that the relevant payment related to such
Indemnified Tax is required be paid by such Recipient.

 

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(d) Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within 10 days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that any
Credit Party has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of Credit Parties to do
so), (ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 9.7(d) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any
Credit Document, and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to any Lender by the Administrative Agent shall
be conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Credit Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (d).

(e) Evidence of Tax Payments. As soon as practicable after any payment of Taxes
by any Credit Party to a Governmental Authority, the Borrower shall deliver to
the Administrative Agent the original or a certified copy of any receipt issued
by such Governmental Authority evidencing such payment, a copy of the return
reporting such payment, or other evidence of such payment reasonably
satisfactory to the Administrative Agent.

(f) Withholding Reduction or Exemption. (i) Each Lender that is entitled to an
exemption from, or a reduction of, withholding Tax with respect to payments
under this Agreement or under any other Credit Document shall, to the extent
that it is legally entitled to do so, deliver to the Borrower (with a copy to
the Administrative Agent), on or before the date it becomes a party to this
Agreement and from time to time thereafter at the time or times prescribed by
applicable Legal Requirements or reasonably requested by the Borrower or the
Administrative Agent, such properly completed and executed documentation
prescribed by applicable Legal Requirements or reasonably requested by the
Borrower or the Administrative Agent as will permit such payments to be made
without, or at a reduced rate of, withholding. In addition, any Lender shall, if
reasonably requested by the Borrower and to the extent that it is legally
entitled to do so, deliver to Borrower (with a copy to the Administrative
Agent), on or before the date it becomes a party to this Agreement and from time
to time thereafter at the time or times prescribed by applicable Legal
Requirements or reasonably requested by the Borrower or the Administrative Agent
as will enable the Borrower or the Administrative Agent to determine whether or
not such Lender is subject to backup withholding or information reporting
requirements. Notwithstanding anything to the contrary in the preceding two
sentences, the completion, execution and submission of such documentation (other
than such documentation set forth in Section 2.12(f)(ii)(A), (B) and, (D) below)
shall not be required if in the Lender’s reasonable judgment such completion,
execution or submission would subject such Lender to any material unreimbursed
cost or expense or would materially prejudice the legal or commercial position
of such Lender

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

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

 

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

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

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

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

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

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

 

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

(g) Mitigation. Each Lender shall use reasonable efforts (consistent with its
internal policies and legal and regulatory restrictions) to select a
jurisdiction for its applicable Lending Office or change the jurisdiction of its
applicable Lending Office, as the case may be, so as to avoid the imposition of
any Indemnified Taxes or to eliminate or reduce the payment of any additional
sums under this Section 2.12; provided, that no such selection or change of
jurisdiction for its applicable Lending Office shall be made if, in the
reasonable judgment of such Lender, such selection or change would be
disadvantageous to such Lender and the Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
selection or change.

(h) Tax Credits and Refunds. If any party determines, in its sole discretion
exercised in good faith, that it has received a refund of any Taxes as to which
it has been indemnified pursuant to this Section 2.12 (including by the payment
of additional amounts pursuant to this Section 2.12), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section with respect to the Taxes giving rise
to such refund), net of all out-of-pocket expenses (including Taxes) of such
indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this paragraph (h) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this paragraph (h), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this paragraph (h) the payment
of which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This paragraph shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

(i) Survival. Each party’s obligations under this Section 2.12 shall survive the
resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all obligations under any Credit
Document.

(j) Definitions. For purposes of this Section 2.12, the term “Lender” includes
the Issuing Lenders and the term “applicable Legal Requirements” includes FATCA.

 

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Section 2.13. Replacement of Lenders. If (a) the Borrower is required pursuant
to Section 2.10 or 2.12 to make any additional payment to any Lender, (b) any
Lender’s obligation to make or continue, or to Convert ABR Loans into,
Eurodollar Loans shall be suspended pursuant to Section 2.3(d)(iii) or Section
2.8, or (c) any Lender is a Defaulting Lender (any such Lender described in any
of the preceding clauses (a) — (c), being a “Subject Lender”), then (i) in the
case of a Defaulting Lender, the Administrative Agent may, upon notice to the
Subject Lender and the Borrower, require such Defaulting Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 9.7), all of its interests,
rights and obligations under this Agreement and the related Credit Documents as
a Lender to an Eligible Assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment) and (ii) in
the case of any Subject Lender, the Borrower may, upon notice to the Subject
Lender and the Administrative Agent and at the Borrower’s sole cost and expense,
require such Subject Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents
required by, Section 9.7), all of its interests, rights and obligations under
this Agreement and the related Credit Documents to an Eligible Assignee that
shall assume such obligations (which Eligible Assignee may be another Lender, if
a Lender accepts such assignment), provided that, in any event:

(A) as to assignments required by the Borrower, the Borrower shall have paid to
the Administrative Agent the assignment fee specified in Section 9.7;

(B) such Subject Lender shall have received payment of an amount equal to the
outstanding principal of its applicable Loans and participations in outstanding
Letter of Credit Obligations, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder and under the other Credit Documents
(including any amounts under Section 2.9) from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts);

(C) in the case of any such assignment resulting from a claim for compensation
under Section 2.12, such assignment will result in a reduction in such
compensation or payments thereafter; and

(D) such assignment does not conflict with applicable Legal Requirements.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower or the Administrative Agent to require such
assignment and delegation cease to apply. Solely for purposes of effecting any
assignment involving a Defaulting Lender under this Section 2.13 and to the
extent permitted under applicable Legal Requirements, each Lender hereby
designates and appoints the Administrative Agent as true and lawful agent and
attorney-in-fact, with full power and authority, for and on behalf of and in the
name of such Lender to execute, acknowledge and deliver the Assignment and
Acceptance required hereunder if such Lender is a Defaulting Lender and such
Lender shall be bound thereby as fully and effectively as if such Lender had
personally executed, acknowledged and delivered the same. In lieu of the
Borrower or the Administrative Agent replacing a Defaulting Lender as provided
in this the Borrower may terminate such Defaulting Lender’s Commitment as
provided in Section 2.14.

Section 2.14. Defaulting Lenders. Notwithstanding any provision of this
Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the
following provisions shall apply for so long as such Lender is a Defaulting
Lender:

(a) fees shall cease to accrue on the unfunded portion of the Commitment of such
Defaulting Lender pursuant to Section 2.6;

 

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(b) such Defaulting Lender shall not have the right to vote on any issue on
which voting is required (other than to the extent expressly provided in
Sections 9.3(a) and 9.3(b)) and the Commitment and Revolving Credit Exposure of
such Defaulting Lender shall not be included in determining whether the Required
Lenders have taken or may take any action hereunder (including any consent to
any amendment, waiver or other modification pursuant to Section 9.3) or under
any other Credit Document; provided, that, except as otherwise provided in
Section 9.3, this clause (b) shall not apply to the vote of a Defaulting Lender
in the case of an amendment, waiver or other modification requiring the consent
of such Lender or each Lender directly affected thereby.

(c) if any Letter of Credit Exposure exists at the time such Lender becomes a
Defaulting Lender then:

(i) all or any part of the Letter of Credit Exposure of such Defaulting Lender
shall be reallocated among the non-Defaulting Lenders in accordance with their
respective Pro Rata Share but only to the extent that such reallocation does
not, as to any non-Defaulting Lender, cause such non-Defaulting Lender’s
Revolving Credit Exposure to exceed its Commitment;

(ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrower shall within one Business Day following
notice by the Administrative Agent cash collateralize for the benefit of the
Issuing Lenders only the Borrower’s obligations corresponding to such Defaulting
Lender’s Letter of Credit Exposure (after giving effect to any partial
reallocation pursuant to clause (i) above) in accordance with the procedures set
forth in Section 2.2(h) for so long as such Letter of Credit Exposure is
outstanding ;

(iii) if the Borrower cash collateralizes any portion of such Defaulting
Lender’s Letter of Credit Exposure pursuant to clause (ii) above, the Borrower
shall not be required to pay any fees to such Defaulting Lender pursuant to
Section 2.6(b) with respect to such Defaulting Lender’s Letter of Credit
Exposure during the period such Defaulting Lender’s Letter of Credit Exposure is
cash collateralized;

(iv) if the Letter of Credit Exposure of the non-Defaulting Lenders is
reallocated pursuant to clause (i) above, then the fees payable to the Lenders
pursuant to Section 2.6(a) and Section 2.6(b) shall be adjusted in accordance
with such non-Defaulting Lenders’ respective Pro Rata Shares; and

(v) if all or any portion of such Defaulting Lender’s Letter of Credit Exposure
is neither reallocated nor cash collateralized pursuant to clause (i) or (ii)
above, then, without prejudice to any rights or remedies of any Issuing Lender
or any other Lender hereunder, all letter of credit fees payable under
Section 2.6(b) with respect to such Defaulting Lender’s Letter of Credit
Exposure shall be payable to the Issuing Lenders until and to the extent that
such Letter of Credit Exposure is reallocated and/or cash collateralized; and

(d) so long as such Lender is a Defaulting Lender, no Issuing Lender shall be
required to issue, amend or increase any Letter of Credit, unless it is
satisfied that the related exposure and the Defaulting Lender’s then outstanding
Letter of Credit Exposure will be 100% covered by the Commitments of the
non-Defaulting Lenders and/or cash collateral will be provided by the Borrower
in accordance with Section 2.14(c), and Letter of Credit Exposure related to any
newly issued or increased Letter of Credit shall be allocated among
non-Defaulting Lenders in a manner consistent with Section 2.14(c)(i) (and such
Defaulting Lender shall not participate therein).

 

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If (i) Bankruptcy Event or a Bail-In Action with respect to a Lender Parent
shall occur following the date hereof and for so long as such event shall
continue or (ii) any Issuing Lender has a good faith belief that any Lender has
defaulted in fulfilling its obligations under one or more other agreements in
which such Lender commits to extend credit, no Issuing Lender shall be required
to issue, amend or increase any Letter of Credit, unless the Issuing Lenders
shall have entered into arrangements with the Borrower or such Lender,
satisfactory to such Issuing Lender to defease any risk to it in respect of such
Lender hereunder.

In the event that each of the Administrative Agent, the Borrower and each
Issuing Lender agrees that a Defaulting Lender has adequately remedied all
matters that caused such Lender to be a Defaulting Lender, then the Letter of
Credit Exposure of the Lenders shall be readjusted to reflect the inclusion of
such Lender’s Commitment and on such date such Lender shall purchase at par such
of the Loans of the other Lenders as the Administrative Agent shall determine
may be necessary in order for such Lender to hold such Loans in accordance with
its Pro Rata Share.

Section 2.15. [Reserved].

Section 2.16. Alternate Rate of Interest.

(a) If prior to the commencement of any Interest Period for a Eurodollar
Revolving Borrowing:

(i) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable (including,
without limitation, because the LIBO Screen Rate is not available or published
on a current basis), for such Interest Period; or

(ii) the Administrative Agent is advised by the Required Lenders that the
Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such Revolving
Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (A) any Notice of
Continuation or Conversion that requests the conversion of any Revolving
Borrowing to, or continuation of any Revolving Borrowing as, a Eurodollar
Revolving Borrowing shall be ineffective and (B) if any Notice of Borrowing
requests a Eurodollar Revolving Borrowing, such Revolving Borrowing shall be
made as an ABR Revolving Borrowing.

(b) Notwithstanding anything to the contrary herein or in any other Credit
Document, upon the occurrence of a Benchmark Transition Event or an Early Opt-in
Election, as applicable, the Administrative Agent and the Borrower may amend
this Agreement to replace the LIBO Rate with a Benchmark Replacement. Any such
amendment with respect to a Benchmark Transition Event will become effective at
5:00 p.m. on the fifth (5th) Business Day after the Administrative Agent has
posted such proposed amendment to all Lenders and the Borrower, so long as the
Administrative Agent has not received, by such time, written notice of objection
to such proposed amendment from Lenders comprising the Required Lenders;
provided that, with respect to any proposed amendment containing any SOFR-Based
Rate, the Lenders shall be entitled to object only to the Benchmark Replacement
Adjustment contained therein. Any such amendment with respect to an Early Opt-in
Election will become effective on the date that Lenders comprising the Required
Lenders have delivered to the Administrative Agent written notice that such
Required Lenders accept such amendment. No replacement of LIBO Rate with a
Benchmark Replacement will occur prior to the applicable Benchmark Transition
Start Date.

 

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(c) In connection with the implementation of a Benchmark Replacement, the
Administrative Agent will have the right to make Benchmark Replacement
Conforming Changes from time to time and, notwithstanding anything to the
contrary herein or in any other Credit Document, any amendments implementing
such Benchmark Replacement Conforming Changes will become effective without any
further action or consent of any other party to this Agreement.

(d) The Administrative Agent will promptly notify the Borrower and the Lenders
of (i) any occurrence of a Benchmark Transition Event or an Early Opt-in
Election, as applicable, (ii) the implementation of any Benchmark Replacement,
(iii) the effectiveness of any Benchmark Replacement Conforming Changes and
(iv) the commencement or conclusion of any Benchmark Unavailability Period. Any
determination, decision or election that may be made by the Administrative Agent
or Lenders pursuant to this Section 2.16, including any determination with
respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of
an event, circumstance or date and any decision to take or refrain from taking
any action, will be conclusive and binding absent manifest error and may be made
in its or their sole discretion and without consent from any other party hereto,
except, in each case, as expressly required pursuant to this Section 2.16.

(e) Upon the Borrower’s receipt of notice of the commencement of a Benchmark
Unavailability Period, (i) any Notice of Continuation/Conversion that requests
the conversion of any Revolving Borrowing to, or continuation of any Revolving
Borrowing as, a Eurodollar Revolving Borrowing shall be ineffective and (ii) if
any Borrowing Request requests a Eurodollar Revolving Borrowing, such Borrowing
shall be made as an ABR Revolving Borrowing.

Section 2.17. Cash Dominion. At all times subject to the following sentence, all
Deposit Accounts, Securities Accounts and Commodities Accounts (other than any
Excluded Deposit Account for so long as such account is an Excluded Deposit
Account) of the Credit Parties shall be Controlled Accounts. The Credit Parties
will, in connection with any Deposit Account, Securities Account or Commodity
Account (other than any Excluded Deposit Account for so long as such account is
an Excluded Deposit Account) established after the Effective Date, enter into
and deliver to the Administrative Agent an Account Control Agreement and/or
lockbox agreement, in each case in form and substance acceptable to the
Administrative Agent, concurrently with the establishment of such Deposit
Account, Securities Account or Commodity Account. Each Credit Party shall be
subject to cash dominion at all times. Cash on hand and collections which are
received into any Controlled Account and to the extent necessary any securities
held in any Securities Account shall be liquidated and the cash proceeds
thereof, shall be swept on a daily basis into the Concentration Account and used
to prepay Loans outstanding under this Agreement in accordance with Section 2.4.
All proceeds of any Loans shall be deposited into a Deposit Account that is a
Controlled Account and maintained with the Administrative Agent.

Section 2.18. Priority and Liens. The Credit Parties hereby covenant, represent
and warrant that, upon entry of the DIP Order, the Secured Obligations of the
Credit Parties hereunder and under the other Credit Documents and the DIP Order,
shall have the priority and liens set forth in the DIP Order and the
Intercreditor Agreement, subject to the Carve-Out as described therein.

Section 2.19. No Discharge; Survival of Claims. Subject to Section 2.20, the
Borrower and each Guarantor agrees that (a) any Confirmation Order entered in
the Chapter 11 Cases shall not discharge or otherwise affect in any way any of
the Secured Obligations of the Credit Parties to the Secured Parties under this
Agreement and the related Credit Documents, other than after the payment in full
in cash to the Secured Parties of all Secured Obligations under the DIP Facility
(and the cash collateralization of all outstanding Letters of Credit in an
amount equal to 105% of the Letter of Credit Exposure for such Letters of Credit
and subject to documentation reasonably satisfactory to the Issuing Lenders) and
the related Credit Documents on or before the effective date of a plan of
reorganization and termination of the Commitments and (b) to the extent its
Secured Obligations hereunder and under the other Credit Documents are not

 

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satisfied in full, (i) its Secured Obligations arising hereunder shall not be
discharged by the entry of a Confirmation Order (and each Loan Party, pursuant
to Section 1141(d)(4) of the Bankruptcy Code, hereby waives any such discharge)
and (ii) the Superpriority Claim granted to the Administrative Agent, the
Lenders pursuant to the DIP Order and the Liens granted to the Administrative
Agent pursuant to the DIP Order shall not be affected in any manner by the entry
of a Confirmation Order.

Section 2.20. Conversion to Exit Facility Agreement. Upon the satisfaction or
waiver of the Exit Conversion Conditions set forth on Schedule 2.20,
automatically and without any further consent or action required by the
Administrative Agent or any Lender, (a) each Loan and Letter of Credit hereunder
shall be deemed refinanced, replaced and issued as a Loan or Letter of Credit,
as applicable, under the Exit Facility Agreement, (b) in connection therewith
the Borrower, in its capacity as reorganized Hi-Crush Inc., and each Guarantor,
in its capacity as a reorganized Debtor, to the extent such Person is required
under the Exit Facility Agreement to continue to be a guarantor in respect
thereof, shall assume all obligations in respect of the Loans and Letters of
Credit hereunder and all other obligations in respect hereof, (c) each Lender
hereunder shall be a Lender under the Exit Facility Agreement and (d) this
Agreement shall terminate and be superseded, refunded, refinanced and replaced
by, and deemed amended and restated in its entirety substantially in the form
of, the Exit Facility Agreement (with such changes and insertions reasonably
satisfactory to the Administrative Agent, the Lenders and the Borrower thereto
incorporated as necessary to make such technical changes necessary to effectuate
the intent of this Section 2.20 or otherwise), and the Commitments hereunder
shall terminate. Notwithstanding the foregoing, all obligations of the Borrower
and the other Credit Parties to the Administrative Agent, the Issuing Lenders
and the Lenders under this Agreement and any other Credit Document (except, for
the avoidance of doubt, the Exit Facility Agreement) which are expressly stated
in this Agreement or such other Credit Document as surviving such agreement’s
termination shall, as so specified, survive without prejudice and remain in full
force and effect. Each of the Credit Parties, the Administrative Agent, the
Lenders and the Issuing Lenders shall take such actions and execute and deliver
such agreements, instruments or other documents as the Administrative Agent may
reasonably request to give effect to the provisions of this Section 2.20 and as
are required to complete the Schedules to the Exit Facility Agreement.

ARTICLE 3

CONDITIONS OF LENDING

Section 3.1. Conditions Precedent to Effectiveness. The obligations of the
Lenders to make Loans and of the Issuing Lenders to issue Letters of Credit
hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 9.3)
(such date, the “Effective Date”):

(a) Documentation. The Administrative Agent shall have received the following
and, if applicable, they shall be duly executed by all the parties thereto, in
form and substance reasonably satisfactory to the Administrative Agent and the
Lenders (which, subject to Section 9.14, may include any Electronic Signatures
transmitted by telecopy, emailed pdf. or any other electronic means that
reproduces an image of an actual executed signature page):

(i) this Agreement and all attached Exhibits and Schedules and the Revolving
Notes payable to the order of each applicable Lender;

(ii) the Guaranty;

(iii) the Security Agreement, together with appropriate UCC-1 financing
statements, if any, necessary or desirable for filing with the appropriate
authorities and any other documents, agreements, or instruments necessary to
create, perfect or maintain an Acceptable Security Interest in the Collateral
described in the Security Agreement;

 

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(iv) the DIP Term Loan Documents;

(v) the Intercreditor Agreement;

(vi) [reserved];

(vii) a certificate from an authorized officer of the Borrower dated as of the
Effective Date stating that as of such date (A) all representations and
warranties of the Borrower set forth in this Agreement are true and correct,
(B) no Default has occurred and is continuing; and (C) the conditions precedent
set forth in Section 3.1(b) and (e) have been met;

(viii) a secretary’s certificate from each Credit Party certifying such Person’s
(A) officers’ incumbency, (B) resolutions of its Board of Directors, members,
general partner or other body authorizing the execution, delivery and
performance of the Credit Documents to which it is a party, and (C) Organization
Documents;

(ix) certificates of good standing (or the substantive equivalent available) for
each Credit Party from the appropriate governmental officer in each jurisdiction
in which each such Person is organized or qualified to do business, which
certificate shall be (A) dated a date not earlier than 30 days prior to
Effective Date or (B) otherwise effective on the Effective Date;

(x) [Reserved]; and

(xi) such other documents, governmental certificates, agreements, and lien
searches as the Administrative Agent or any Lender may reasonably request.

(b) Consents; Authorization; Conflicts. The Borrower shall have received any
consents, licenses and approvals required in accordance with applicable law, or
in accordance with any document, agreement, instrument or arrangement to which
the Borrower or any Subsidiary is a party, in connection with the execution,
delivery, performance, validity and enforceability of this Agreement and the
other Credit Documents. In addition, the Borrower and the Subsidiaries shall
have all such material consents, licenses and approvals required in connection
with the continued operation of the Borrower and the Subsidiaries, and such
approvals shall be in full force and effect, and all applicable waiting periods
shall have expired without any action being taken or threatened by any competent
authority which would restrain, prevent or otherwise impose adverse conditions
on this Agreement and the actions contemplated hereby. Any consents or
authorizations received pursuant to this Section 3.1(b) shall be on reasonably
satisfactory terms and shall be in full force and effect on the Effective Date.

(c) Representations and Warranties. The representations and warranties contained
in Article 4 and in each other Credit Document shall be true and correct in all
material respects or, with respect to representations and warranties qualified
by materiality, in all respects, on and as of the Effective Date, on and as of
the Effective Date, except to the extent such representations and warranties
expressly relate to an earlier date, in which case they shall be true and
correct in all material respects or, with respect to representations and
warranties qualified by materiality, in all respects as of such earlier date
before and after giving effect to the deemed issuance of the Letters of Credit
on the Effective Date.

 

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(d) Fees. The Lenders and the Administrative Agent shall have received all fees
required to be paid, and all expenses for which invoices have been presented
(including the reasonable and documented fees and expenses of legal counsel), on
or before the Effective Date. All such amounts will be paid with proceeds of the
DIP Term Loans made on the Effective Date and will be reflected in the funding
instructions given by the Borrower to the Administrative Agent on or before the
Effective Date.

(e) Other Proceedings. There shall exist no unstayed action, suit,
investigation, litigation or proceeding pending or threatened in writing in any
court or before any arbitrator or governmental instrumentality (other than the
Chapter 11 Cases) that could reasonably be expected to cause a Material Adverse
Change.

(f) DIP Term Loan Facility Conditions Precedent. The DIP Term Loan Facility
shall become effective substantially contemporaneously with the effectiveness of
this Agreement.

(g) Material Adverse Change. Since the RSA Effective Date, there shall not have
occurred any event, change, condition, or circumstance that has caused, or that
could reasonably be expected to cause, a Material Adverse Change, other than as
a result of those events leading up to and following commencement of the Chapter
11 Cases.

(h) Liquidity. The Administrative Agent shall have received a certificate in
form and substance reasonably satisfactory to the Administrative Agent from a
senior financial officer or such other officer acceptable to the Administrative
Agent of the Borrower and each Guarantor certifying that, after giving effect to
the deemed issuance of the Letters of Credit on the Effective Date made
hereunder, the incurrence of the DIP Term Facility and any payments required to
be made on the Effective Date, Liquidity of the Borrower and its Subsidiaries is
not less than $12,500,000.

(i) Restructuring Support Agreement. The RSA shall have been executed and shall
be in full force and effect, and shall not have been amended in a manner
materially adverse to the Administrative Agent, the Existing Administrative
Agent, the Lenders or the Existing Lenders.

(j) Chapter 11 Cases. (i) The Chapter 11 Cases shall have been commenced and
(ii) the motion to approve the Interim Order, and all “first day orders” entered
at the time of commencement of the Chapter 11 Cases shall be satisfactory in
form and substance to the Required Lenders in their reasonable discretion.

(k) Interim Order. The Administrative Agent shall have received a signed copy of
the Interim Order which shall have been entered by the Bankruptcy Court on or
before the third Business Day after the Petition Date and shall be satisfactory
in form and substance to the Required Lenders in their sole discretion, and such
Interim Order shall not have been vacated, reversed, modified amended or stayed.

(l) Acceptable Security Interest. The Administrative Agent for the benefit of
the Secured Parties shall have an Acceptable Security Interest in substantially
all of the assets of the Credit Parties pursuant to the Interim Order.

(m) USA Patriot Act. The Administrative Agent shall have received all
documentation and other information that is required by bank regulatory
authorities under applicable “know your customer” and anti-money-laundering
rules and regulations, including, without limitation, the Patriot Act, for each
Credit Party, in each case no later than three (3) Business Days prior to the
Effective Date to the extent reasonably requested by the Lenders at least ten
(10) Business Days in advance of the Effective Date. To the extent the Borrower
qualifies as a “legal entity customer” under the Beneficial Ownership
Regulation, at least three (3) days prior to the Effective Date, the
Administrative Agent and any Lenders who have provided a written request
therefor shall have received a Beneficial Ownership Certification with respect
to the Borrower.

 

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(n) Initial Budget. The Administrative Agent shall have received the initial
Budget, which shall be in a form and substance satisfactory to the Required
Lenders, together with the Budget Certificate.

(o) Borrowing Base Certificate. The Administrative Agent shall have received a
Borrowing Base Certificate which calculates the Borrowing Base as of the end of
the Business Day immediately preceding the Effective Date.

(p) [Reserved].

(q) Other Debt. On the Effective Date, neither the Borrower nor any of its
Subsidiaries shall have any Debt other than (i) Debt in respect of Letters of
Credit issued hereunder, (ii) Senior Notes outstanding on the Petition Date,
(iii) any Debt in respect of the DIP Term Loan Facility, and (iv) Debt incurred
in the ordinary course in respect of (x) existing Capital Leases, (y) trade
payables (including any notes issued in respect thereof), and (x) existing
Banking Services Obligations.

(r) Liens. The Administrative Agent shall have received evidence satisfactory to
it that there are no Liens encumbering any of the Credit Parties’ respective
Property other than Permitted Liens.

(s) Eligible Cash. The amount of the Credit Parties’ Eligible Cash on the
Effective Date shall be not less than $14,454,279.43.

(t) Regulatory Matters. No part of the proceeds of any Revolving Loans or
Letters of Credit will be used for any purpose that would violate the applicable
requirements of Regulations U, T and X of the Board of Governors of the Federal
Reserve System.

(u) [Reserved].

(v) Event of Default. No Default or Event of Default shall exist, and the deemed
issuance of each Letter of Credit would not cause a Default or Event of Default.

(w) Pledged Stock; Stock Powers; Pledged Notes. Subject to the Intercreditor
Agreement, the Administrative Agent shall have received (i) the certificates
representing the shares of Equity Interests pledged under the Security
Agreement, together with an undated stock power for each such certificate
executed in blank by a duly authorized Responsible Officer of the pledgor
thereof, other than the certificate and stock power for Hi-Crush Investments
Inc. and the certificate and stock power for the 35% interest in Hi-Crush Canada
Distribution Corp., which in each case shall be delivered within ten
(10) Business Days of the Effective Date (or such later date as may be agreed by
the Administrative Agent) and (ii) each promissory note (if any) pledged to the
Administrative Agent pursuant to the Security Agreement endorsed (without
recourse) in blank (or accompanied by an executed transfer form in blank) by the
pledgor thereof.

Section 3.2. Conditions Precedent to Each Revolving Borrowing and to Each
Issuance. Extension or Renewal of a Letter of Credit. The obligation of each
Lender to make a Loan on the occasion of each Revolving Borrowing (including the
initial Revolving Borrowing), the obligation of each Issuing Lender to issue,
increase, renew or extend a Letter of Credit (including the deemed issuance of
Letters of Credit) and of any reallocation of Letter of Credit Exposure provided
in Section 2.14, shall be subject to the further conditions precedent that on
the date of such Revolving Borrowing or such issuance, increase, renewal or
extension:

 

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(a) Representations and Warranties. After giving effect to any Loan or issuance,
increase, renewal or extension of any Letter of Credit to be made on such date,
the representations and warranties made by any Credit Party or any officer or
employee of any Credit Party contained in the Credit Documents shall be true and
correct in all material respects (except that such materiality qualifier shall
not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) on such date, except
that any representation and warranty which by its terms is made as of a
specified date shall be required to be true and correct only as of such
specified date and each request for the making of any Loan or issuance,
increase, renewal or extension of any Letter of Credit and the making of such
Loan or the issuance, increase, renewal or extension of such Letter of Credit
shall be deemed to be a reaffirmation of such representations and warranties.

(b) Event of Default. No Default shall exist, and the making of such Loan or
issuance, increase, renewal or extension of such Letter of Credit, or the
relocation of the Letter of Credit Exposure would not cause a Default.

(c) Loan Limit. On the date of and after giving effect to any Loan to be made on
such date, the Aggregate Revolving Credit Exposure shall not exceed the Loan
Limit.

(d) Facility Limit. On the date of and after giving effect to any issuance of
Letters of Credit to be made on such date, the Aggregate Revolving Credit
Exposure shall not exceed the Facility Limit.

(e) Entry of Final Order. Other than in connection with (i) the extension or
renewal of an Existing Letter of Credit, (ii) the issuance of any Wisconsin
Letter(s) of Credit, or (iii) the replacement of an Existing Letter of Credit
that has expired or terminated without being drawn, the Final Order shall have
been entered and shall be in full force and effect and shall not have been
vacated, reversed, modified, amended or stayed in any respect without the
consent of the Required Lenders.

(f) Violation of Law. The making of such Loan or issuance, increase, renewal or
extension of such Letter of Credit, or the relocation of the Letter of Credit
Exposure would not contravene any law and shall not be enjoined, temporarily,
preliminarily or permanently.

(g) Prior to Final Order. In connection with an extension or renewal of an
Existing Letter of Credit or issuance of any Wisconsin Letter(s) of Credit, the
Interim Order shall have been entered and shall be in full force and effect and
shall not have been vacated, reversed, modified, amended or stayed in any
respect without the consent of the Required Lenders.

(h) Liquidity. After giving effect to any Loan or issuance, increase, renewal or
extension of any Letter of Credit to be made on such date, Liquidity shall not
be less than $12,500,000.

Each of the giving of the applicable Notice of Borrowing or Letter of Credit
Application, the acceptance by the Borrower of the proceeds of such Revolving
Borrowing, the issuance, increase, or extension of such Letter of Credit, and
the reallocation of the Letter of Credit Exposure, shall constitute a
representation and warranty by the Borrower that on the date of such Revolving
Borrowing, such issuance, increase, or extension of such Letter of Credit or
such reallocation, as applicable, the foregoing conditions have been met.

Section 3.3. Determinations Under Sections 3.1 and 3.2. For purposes of
determining compliance with the conditions specified in Sections 3.1 and 3.2
each Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Administrative Agent responsible for the transactions contemplated by the
Credit Documents shall have received written notice from such Lender prior to
the Revolving Borrowings hereunder specifying its objection thereto and such
Lender shall not have made available to the Administrative Agent such Lender’s
ratable portion of such Revolving Borrowings.

 

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ARTICLE 4

REPRESENTATIONS AND WARRANTIES

Each Credit Party hereto represents and warrants as follows:

Section 4.1. Organization. Subject to any restrictions arising on account of any
Credit Party’s status as a “debtor” under the Bankruptcy Code and the entry of
the DIP Order, each Credit Party is duly and validly organized and existing and
in good standing under the laws of its jurisdiction of incorporation or
formation. Each Credit Party is authorized to do business and is in good
standing in all jurisdictions in which such qualifications or authorizations are
necessary except where the failure to be so qualified or authorized could not
reasonably be expected to result in a Material Adverse Change. As of the
Effective Date, each Credit Party’s type of organization and jurisdiction of
incorporation or formation are set forth on Schedule 4.1.

Section 4.2. Authorization. Subject to any restrictions arising on account of
any Credit Party’s status as a “debtor” under the Bankruptcy Code and the entry
of the DIP Order, the execution, delivery, and performance by each Credit Party
of each Credit Document to which such Credit Party is a party and the
consummation of the transactions contemplated thereby, (a) are within such
Credit Party’s powers, (b) have been duly authorized by all necessary corporate,
limited liability company or partnership action, (c) do not contravene any
articles or certificate of incorporation or bylaws, partnership or limited
liability company agreement binding on or affecting such Credit Party, (d) do
not contravene any law or any contractual restriction binding on or affecting
such Credit Party, (e) do not result in or require the creation or imposition of
any Lien prohibited by this Agreement, and (f) do not require any authorization
or approval or other action by, or any notice or filing with, any Governmental
Authority except, in the case of (d) and (f), to the extent such contravention
or the failure to obtain authorization, approval or notice or take other action
could not reasonably be expected to have a Material Adverse Change.

Section 4.3. Enforceability. The Credit Documents have each been duly executed
and delivered by each Credit Party that is a party thereto and each Credit
Document, upon entry of the applicable DIP Order, constitutes the legal, valid,
and binding obligation of each Credit Party that is a party thereto enforceable
against such Credit Party in accordance with its terms, except as limited by the
DIP Order and subject to any restrictions arising on account of any Credit
Party’s status as a “debtor” under the Bankruptcy Code, and further subject to
other applicable bankruptcy, insolvency, reorganization, moratorium, or similar
laws at the time in effect affecting the rights of creditors generally and by
general principles of equity whether applied by a court of law or equity.

Section 4.4. Financial Condition.

(a) The Borrower has heretofore furnished to the Administrative Agent (i) the
audited financial statements of the Borrower for the fiscal year ended
December 31, 2019 and (ii) the unaudited balance sheet and statements of income,
members’ equity and cash flows as of and for the fiscal quarters ended March 31,
2020.

(b) Each of the foregoing financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
entities for which such financial statements have been provided as of such date
and for such period in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the unaudited quarterly
financial statements.

(c) Since the Petition Date, there has been no Material Adverse Change.

 

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Section 4.5. Ownership and Liens; Real Property. Other than as a result of the
Chapter 11 Cases and subject to any necessary order or authorization of the
Bankruptcy Court, each Credit Party (a) has good and marketable title to, or a
valid and subsisting leasehold interest in, all real property, and good title to
all personal Property, in each case necessary for its business, and (b) none of
the Property owned by the Borrower or a Subsidiary of the Borrower is subject to
any Lien except for minor defects in title that do not materially interfere with
its ability to conduct its business or to utilize such assets for their intended
purpose and Permitted Liens. As of the Effective Date, the Borrower and its
Subsidiaries own no real property other than that listed on Schedule 4.5 and all
equipment (other than office equipment and equipment located on jobsites, in
transit or off location for servicing, repairs or modifications) owned by the
Borrower and its Subsidiaries are located at the fee owned or leased real
property listed on Schedule 4.5.

Section 4.6. True and Complete Disclosure. All written factual information
(whether delivered before or after the date of this Agreement) prepared by or on
behalf of the Borrower and its Subsidiaries and furnished to the Administrative
Agent or the Lenders for purposes of or in connection with this Agreement, any
other Credit Document or any transaction contemplated hereby or thereby does not
contain any material misstatement of fact or omits to state any material fact
necessary to make the statements therein not misleading. There is no fact known
to any Responsible Officer of any Credit Party on the date of this Agreement
that has not been disclosed to the Administrative Agent that could reasonably be
expected to result in a Material Adverse Change. All projections, estimates,
budgets, and pro forma financial information furnished by the Borrower or any of
its Subsidiaries (or on behalf of the Borrower or any such Subsidiary), were
prepared on the basis of assumptions, data, information, tests, or conditions
(including current and reasonably foreseeable business conditions) believed to
be reasonable at the time such projections, estimates, budgets and pro forma
financial information were furnished; it being understood that actual results
may vary and such variances may be material.

Section 4.7. Litigation. Subject to any restrictions arising on account of any
Credit Party’s status as a “debtor” under the Bankruptcy Code, except as
otherwise provided in Schedule 4.7 and the Chapter 11 Cases, (a) there are no
actions, suits, or proceedings pending or, to any Credit Party’s knowledge,
threatened against the Borrower or any Subsidiary, at law, in equity, or in
admiralty, or by or before any Governmental Authority, which could reasonably be
expected to result in a Material Adverse Change or is not otherwise subject to
the automatic stay as a result of the Chapter 11 Cases; provided that this
Section 4.7 does not apply with respect to environmental claims.

Section 4.8. [Reserved].

Section 4.9. Pension Plans. Except to the extent excused by the Bankruptcy Code
or as a result of the filing of the Chapter 11 Cases, (a) except for matters
that could not reasonably be expected to result in a Material Adverse Change,
all Plans are in compliance with all applicable provisions of ERISA, (b) no
Termination Event has occurred with respect to any Plan that would result in an
Event of Default under Section 7.1(h), and, except for matters that could not
reasonably be expected to result in a Material Adverse Change, each Plan has
complied with and been administered in accordance with applicable provisions of
ERISA and the Code, (c) there has been no failure to satisfy the “minimum
funding standards”, whether or not waived, under Sections 412 or 430 of the Code
or Sections 302 or 303 of ERISA with respect to any Plan, and there has been no
excise tax imposed under Section 4971 of the Code, (d) to the knowledge of
Credit Parties, no Reportable Event has occurred with respect to any
Multiemployer Plan, and each Multiemployer Plan has complied with and been
administered in accordance with applicable provisions of ERISA and the Code,
(e) the present value of all benefits vested under each Plan (based on the
assumptions used to fund such Plan) did not, as of the last annual valuation
date applicable thereto, exceed the value of the assets of such Plan allocable
to such vested benefits in an amount that could reasonably be expected to result
in a Material Adverse Change, (f) neither the Borrower nor any member of the
Controlled Group has had a complete or partial withdrawal from any Multiemployer
Plan for which there is any unsatisfied

 

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withdrawal liability that could reasonably be expected to result in a Material
Adverse Change or an Event of Default under Section 7.1(i), and (g) except for
matters that could not reasonably be expected to result in a Material Adverse
Change, as of the most recent valuation date applicable thereto, neither the
Borrower nor any member of the Controlled Group would become subject to any
liability under ERISA if the Borrower or any Subsidiary has received notice that
any Multiemployer Plan is insolvent. Based upon GAAP existing as of the date of
this Agreement and current factual circumstances, no Credit Party has any reason
to believe that the annual cost during the term of this Agreement to the
Borrower or any Subsidiary for post-retirement benefits to be provided to the
current and former employees of the Borrower or any Subsidiary under Plans that
are welfare benefit plans (as defined in Section 3(1) of ERISA) could, in the
aggregate, reasonably be expected to cause a Material Adverse Change.

Section 4.10. Environmental Condition.

(a) Permits, Etc. Each Credit Party (i) has obtained all material Environmental
Permits necessary for the ownership and operation of its Properties and the
conduct of its businesses; (ii) has at all times since the date six months prior
to the Effective Date been and is currently in material compliance with all
terms and conditions of such Environmental Permits and with all other material
requirements of applicable Environmental Laws; (iii) has not received written
notice of any material violation or alleged material violation of any
Environmental Law or Environmental Permit; and (iv) is not subject to any actual
or contingent Environmental Claim which could reasonably be expected to cause a
Material Adverse Change.

(b) Certain Liabilities. Except as disclosed on Schedule 4.10. to such Credit
Parties’ knowledge, none of the present or previously owned or operated Property
of any such Credit Party or of any Subsidiary thereof, wherever located, (i) has
been placed on or proposed to be placed on the National Priorities List, the
Comprehensive Environmental Response Compensation Liability Information System
list, the Superfund Enterprise Management System list, or their state or local
analogs, or have been otherwise investigated, designated, listed, or identified
as a potential site for removal, remediation, cleanup, closure, restoration,
reclamation, or other response activity under any Environmental Laws; (ii) is
subject to a Lien, arising under or in connection with any Environmental Laws,
that attaches to any revenues or to any Property owned or operated by any Credit
Party, wherever located, which could reasonably be expected to cause a Material
Adverse Change; or (iii) has been the site of any Release of Hazardous
Substances or Hazardous Wastes from present or past operations which has caused
at the site or at any third party site any condition that has resulted in or
could reasonably be expected to result in the need for Response that could cause
a Material Adverse Change.

(c) Certain Actions. Without limiting the foregoing and except as disclosed on
Schedule 4.10. (i) all necessary material notices have been properly filed, and
no further action is required under current applicable Environmental Law as to
each Response or other restoration or remedial project undertaken by the
Borrower, any of its Subsidiaries or any of the Borrower’s or such Subsidiary’s
former Subsidiaries on any of their presently or formerly owned or operated
Property and (ii) the present and, to the Credit Parties’ knowledge, future
liability, if any, of the Borrower or of any Subsidiary which could reasonably
be expected to arise in connection with requirements under Environmental Laws
will not reasonably be expected to result in a Material Adverse Change.

Section 4.11. Subsidiaries. As of the Effective Date, the Borrower has no
Subsidiaries other than those listed on Schedule 4.11.

Section 4.12. Investment Company Act. Neither the Borrower nor any Subsidiary is
an “investment company” or a company “controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as amended. Neither
the Borrower nor any Subsidiary is subject to regulation under any Federal or
state statute, regulation or other Legal Requirement which limits its ability to
incur Debt.

 

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Section 4.13. Taxes. Proper and accurate (in all material respects), federal,
state, local and foreign tax returns, reports and statements required to be
filed (after giving effect to any extension granted in the time for filing) by
the Borrower and each Subsidiary (hereafter collectively called the “Tax Group”)
have been filed with the appropriate Governmental Authorities, and all taxes and
other impositions due and payable, in each case, which are material in amount,
except to the extent such payment is excluded by, or is otherwise prohibited by
the provisions of the Bankruptcy Code or order of the Bankruptcy Court, have
been timely paid prior to the date on which any fine, penalty, interest, late
charge or loss may be added thereto for non-payment thereof except where
contested in good faith by appropriate proceeding and for which adequate
reserves have been established in compliance with GAAP. Neither the Borrower nor
any member of the Tax Group has given, or been requested to give, a waiver of
the statute of limitations relating to the payment of any federal, state, local
or foreign taxes or other impositions. Except to the extent such payment is
excluded by, or is otherwise prohibited by the provisions of the Bankruptcy Code
or order of the Bankruptcy Court, proper and accurate amounts have been withheld
by the Borrower and all other members of the Tax Group from their employees for
all periods to comply in all material respects with the tax, social security and
unemployment withholding provisions of applicable federal, state, local and
foreign law.

Section 4.14. Permits. Licenses. etc. Each of the Borrower and its Subsidiaries
possesses all permits, licenses, patents, patent rights or licenses, trademarks,
trademark rights, trade names rights, and copyrights which are material to the
conduct of its business. Each of the Borrower and its Subsidiaries manages and
operates its business in accordance with all applicable Legal Requirements
except where the failure to so manage or operate could not reasonably be
expected to result in a Material Adverse Change; provided that this Section 4.14
does not apply with respect to Environmental Permits.

Section 4.15. Use of Proceeds. The proceeds of the Loans will be used by the
Borrower for the purposes described in Section 5.20. No Credit Party nor any
Subsidiary thereof is engaged principally or as one of its activities in the
business of extending credit for the purpose of “purchasing” or “carrying” any
“margin stock” (as each such term is defined or used, directly or indirectly, in
Regulation U). No part of the proceeds of any of the Loans or Letters of Credit
will be used for purchasing or carrying margin stock or for any purpose which
violates, or which would be inconsistent with, the provisions of Regulation T, U
or X. Following the application of the proceeds of each Loan or Letter of
Credit, not more than twenty-five percent (25%) of the value of the assets
(either of the Borrower only or of the Borrower and its Subsidiaries on a
consolidated basis) subject to the provisions of Section 6.2 or Section 6.8 or
subject to any restriction contained in any agreement or instrument between the
Borrower and any Lender or any Affiliate of any Lender relating to Debt will be
“margin stock”.

Section 4.16. Condition of Property; Casualties. The material Properties used or
to be used in the continuing operations of the Borrower and each Subsidiary, are
in good working order and condition, normal wear and tear and casualty and
condemnation (excluding casualty and condemnation which could, individually or
in the aggregate, reasonably be expected to cause a Material Adverse Change)
excepted. Neither the business nor the material Properties of the Borrower or
any Subsidiary has been affected as a result of any fire, explosion, earthquake,
flood, drought, windstorm, accident, strike or other labor disturbance, embargo,
requisition or taking of Property or cancellation of contracts, permits or
concessions by a Governmental Authority, riot, activities of armed forces or
acts of God or of any public enemy, which effect could reasonably be expected to
cause a Material Adverse Change.

Section 4.17. Insurance. Each of the Borrower and its Subsidiaries carry
insurance (which may be carried by the Borrower on a consolidated basis) with
reputable insurers in respect of such of their respective Properties, in such
amounts and against such risks as is customarily maintained by other Persons of
similar size engaged in similar businesses.

 

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Section 4.18. [Reserved].

Section 4.19. Sanctions; Anti-Terrorism; Patriot Act; Anti-Corruption Laws.

(a) Neither the Borrower nor any Subsidiary of the Borrower is in violation of
any of the country or list based economic and trade sanctions administered and
enforced by OFAC.

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

(c) The operations of the Borrower and each of its Subsidiaries are and have
been conducted at all times in material compliance with all applicable financial
recordkeeping and reporting requirements, including those of the Bank Secrecy
Act, as amended by Title III of the Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (USA PATRIOT Act), and the applicable anti-money laundering statutes of
jurisdictions where the Borrower and each of its Subsidiaries conduct business,
the rules and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any governmental
agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Borrower or any of its subsidiaries with respect to
the Anti-Money Laundering Laws is pending or, to the best knowledge of the
Borrower, threatened, which could reasonably be expected to result in a Material
Adverse Change.

(d) The Borrower and each of its Subsidiaries is in compliance with all
Anti-Corruption Laws.

Section 4.20. [Reserved].

Section 4.21. EEA Financial Institutions. No Credit Party is an EEA Financial
Institution.

Section 4.22. Borrowing Base Certificate. At the time of delivery of each
Borrowing Base Certificate, assuming that any eligibility criteria that requires
the approval of the Administrative Agent has been approved by or is satisfactory
to the Administrative Agent, each Account reflected therein as eligible for
inclusion in the Borrowing Base is an Eligible Account.

ARTICLE 5

AFFIRMATIVE COVENANTS

So long as any Obligation (other than (a) Letter of Credit Obligations which are
not yet due and payable in connection with Letters of Credit which have been
cash collateralized in accordance with this Agreement and (b) contingent
indemnification obligations which are not due and payable and which by their
terms survive the termination or expiration of this Agreement and the other
Credit Documents) shall remain unpaid, any Lender shall have any Commitment
hereunder, or there shall exist any Letter of Credit Exposure (other than Letter
of Credit exposure which has been cash collateralized in accordance with this
Agreement), each Credit Party agrees to comply with the following covenants.

 

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Section 5.1. Organization. Each Credit Party shall, and shall cause each of its
respective Subsidiaries to, (a) preserve and maintain its partnership, limited
liability company or corporate existence, rights, franchises and privileges in
the jurisdiction of its organization, and (b) qualify and remain qualified as a
foreign business entity in each jurisdiction in which qualification is necessary
in view of its business and operations or the ownership of its Properties and
where failure to qualify could reasonably be expected to cause a Material
Adverse Change; provided, however, that nothing herein contained shall prevent
any transaction permitted by Section 6.7 or Section 6.8.

Section 5.2. Reporting.

(a) Annual Financial Reports. The Borrower shall provide, or shall cause to be
provided, to the Administrative Agent, as soon as available, but in any event
within 150 days after the end of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Subsidiaries as at the end of
such fiscal year, and the related consolidated statements of income or
operations, shareholder’s equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all in reasonable detail and prepared in accordance with GAAP, such consolidated
statements to be audited and accompanied by a report and opinion of an
independent certified public accountant of nationally recognized standing
reasonably acceptable to the Administrative Agent, which report and opinion
shall be prepared in accordance with generally accepted auditing standards and
shall not be subject to any qualification or exception as to the scope of such
audit, and such statements to be certified by the chief executive officer or a
financial officer of the Borrower, to the effect that (i) such statements
fairly, in all material respects, present the financial condition, results of
operations, shareholder’s equity and cash flows of the Borrower and its
Subsidiaries in accordance with GAAP and (ii) there were no material contingent
obligations, material unaccrued liabilities for taxes, material unusual forward
or long-term commitments, or material unrealized or anticipated losses of the
Borrower and its Subsidiaries, except as disclosed therein or as otherwise
disclosed in writing to the Administrative Agent and adequate reserves for such
items have been made in accordance with GAAP;

(b) Quarterly Financial Reports. The Borrower shall provide, or shall cause to
be provided, to the Administrative Agent, as soon as available, but in any event
within 45 days after the end of each of the first three fiscal quarters of each
fiscal year of the Borrower, commencing with the fiscal quarter ended June 30,
2020, (i) consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such fiscal quarter, and the related consolidated statements of
income or operations, shareholder’s equity and cash flows for such fiscal
quarter and for the portion of the Borrower’s fiscal year then ended, setting
forth in each case in comparative form the figures for the corresponding fiscal
quarter of the previous fiscal year and the corresponding portion of the
previous fiscal year, all in reasonable detail, such consolidated statements to
be certified by the chief executive officer or a financial officer of the
Borrower as (A) fairly presenting, in all material respects, the financial
condition, results of operations, stockholders’ or shareholder’s equity and cash
flows of the Borrower and its Subsidiaries in accordance with GAAP, subject only
to normal year-end audit adjustments and the absence of footnotes, and
(B) showing that there were no material contingent obligations, material
unaccrued liabilities for taxes, material unusual forward or long term
commitments, or material unrealized or anticipated losses of the Borrower and
its Subsidiaries, except as disclosed therein or as otherwise disclosed in
writing to the Administrative Agent and adequate reserves for such items have
been made in accordance with GAAP, and (ii) a copy of the management discussion
and analysis with respect to such financial statements;

 

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(c) Monthly Financial Reports. The Borrower shall provide, or shall cause to be
provided, to the Administrative Agent, as soon as available, but in any event
within 30 days after the end of each calendar month, commencing with the
calendar month ended June 30, 2020 (i) consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such calendar month, and the
related consolidated statements of income or operations, shareholder’s equity
and cash flows for such calendar month and for the portion of the Borrower’s
fiscal year then ended, such consolidated statements to be certified by the
chief executive officer or financial officer of the Borrower as (A) fairly
presenting, in all material respects, the financial condition, results of
operations, stockholders’ or shareholder’s equity and cash flows of the Borrower
and its Subsidiaries in accordance with GAAP, subject only to normal year-end
audit adjustments and the absence of footnotes, and (B) showing that there were
no material contingent obligations, material unaccrued liabilities for taxes,
material unusual forward or long term commitments, or material unrealized or
anticipated losses of the Borrower and its Subsidiaries, except as disclosed
therein or as otherwise disclosed in writing to the Administrative Agent and
adequate reserves for such items have been made in accordance with GAAP and
(ii) an operational report including, in each case, for the preceding calendar
month (A) the volume of sand sold, (B) the revenue and tonnage of sand contracts
sold, (C) the revenue and tonnage of sand spot sales, (D) the amount of sand
produced and delivered, (E) the percentage of sold volume that was sold to
exploration and production companies, (F) the percentage of sold volume that was
sold FOB, (G) the percentage of sold volume sold in-basin and (H) the percentage
of sold volume that was sold at the wellsite;

(d) Compliance Certificate. Concurrently with the delivery of the financial
statements referred to in Section 5.2(a), (b), and (c) above, the Borrower shall
provide to the Administrative Agent a duly completed Compliance Certificate
signed by the chief executive officer or financial officer of the Borrower;

(i) certifying, in the case of the financial statements delivered under
Section 5.2(a) 5.2(b) or 5.2(c), as presenting fairly in all material respects
the financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;

(ii) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto;

(iii) certifying that the Borrower has been in compliance with Section 6.16 and
Section 6.20 as required therein since the last date on which a Compliance
Certificate was delivered; and

(iv) stating whether any change in GAAP or in the application thereof has
occurred since the date of the financial statements referred to in Sections
5.2(a), 5.2(b) or 5.2(c) and, if any such change has occurred, specifying the
effect of such change on the financial statements accompanying such certificate
.

(e) Variance and Liquidity Reports. Beginning with the second Friday following
the Closing Date and on each Friday thereafter, the Borrower shall provide to
the Administrative Agent a Variance and Liquidity Report.

(f) 13-Week Projections. Beginning on the Effective Date, and on each four week
anniversary thereafter, the Borrower shall provide to the Administrative Agent a
13-week cash flow forecast in form and substance reasonably satisfactory to the
Administrative Agent (the “13-Week Forecast”), which 13-Week Forecast and any
amendments thereto shall reflect, for the periods covered thereby, projected
weekly disbursements, cash receipts, and ending cash for each week covered by
the 13-Week Forecast.

 

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(g) Annual Budget; Projections. As soon as available and in any event within 60
days after the end of each fiscal year of the Borrower, the Borrower shall
provide to the Administrative Agent (i) an annual operating, capital and cash
flow budget for the immediately following fiscal year and detailed on a
quarterly basis and (ii) a copy of the plan and forecast (including a projected
consolidated balance sheet, income statement and cash flow statement) of the
Borrower for each quarter of the upcoming fiscal year (the “Projections”) in
form reasonably satisfactory to the Administrative Agent;

(h) Defaults. The Credit Parties shall provide to the Administrative Agent
promptly, but in any event within five (5) Business Days after the occurrence
thereof, a notice of each Default known to the Responsible Officer of the
Borrower or to any of its Subsidiaries, together with a statement of a
Responsible Officer of the Borrower setting forth the details of such Default
and the actions which the Credit Parties have taken and proposes to take with
respect thereto;

(i) Other Creditors. The Credit Parties shall provide to the Administrative
Agent promptly after the giving or receipt thereof, copies of any default
notices given or received by the Borrower or by any of its Subsidiaries pursuant
to the terms of the DIP Term Loan Facility, or any other indenture, loan
agreement, credit agreement, royalty agreement or similar agreement;

(j) Litigation. The Credit Parties shall provide to the Administrative Agent
promptly after the commencement thereof, notice of all actions, suits, and
proceedings before any Governmental Authority, in each case, arising
post-petition or not otherwise previously addressed pursuant to Section 4.7
hereof, affecting the Borrower or any of its Subsidiaries or any of their
respective assets that has a claim for damages in excess of $1,000,000 or that
could otherwise result in a cost, expense or loss to the Borrower or any of its
Subsidiaries in excess of $1,000,000, in each case, other than the Chapter 11
Cases;

(k) Environmental Notices. (i) Promptly upon, and in any event no later than
thirty (30) days after, the receipt thereof, or the acquisition of knowledge
thereof, by any Credit Party, the Credit Parties shall provide the
Administrative Agent with a copy of any form of request, claim, complaint,
order, notice, summons or citation received from any Governmental Authority or
any other Person, (A) concerning violations or alleged violations of
Environmental Laws, which seeks to impose liability therefore in excess of
$1,000,000, (B) concerning any action or omission on the part of any of the
Credit Parties or any of their former Subsidiaries in connection with Hazardous
Waste or Hazardous Substances which could reasonably result in the imposition of
liability in excess of $1,000,000 or requiring that action be taken to respond
to or clean up a Release of Hazardous Substances or Hazardous Waste into the
environment and such action or clean-up could reasonably be expected to exceed
$1,000,000, including without limitation any information request related to, or
notice of, potential responsibility under CERCLA, or (C) concerning the filing
of a Lien securing liabilities in excess of $1,000,000 described in clause
(A) or (B) above upon, against or in connection with the Borrower, any
Subsidiary, or any of their respective former Subsidiaries, or any of their
material leased or owned Property, wherever located and (ii) promptly upon the
reasonable request of the Administrative Agent, the Credit Parties shall provide
all existing environmental reports (including all available Phase I
Environmental Site Assessment reports and Phase II Environmental Site Assessment
reports) and any such other report, audit or certification in the possession of
the Credit Parties;

(l) Material Changes. The Credit Parties shall provide to the Administrative
Agent prompt written notice of any event, development of circumstance that has
had or would reasonably be expected to give rise to a Material Adverse Change;

(m) Termination Events. As soon as possible and in any event (i) within thirty
(30) days after the Borrower or any member of the Controlled Group knows or has
reason to know that any Termination Event described in clause (a) of the
definition of Termination Event with respect to any Plan has occurred, and
(ii) within ten (10) days after the Borrower or any member of the Controlled
Group knows or has reason to know that any other Termination Event with respect
to any Plan has occurred, the Credit Parties shall provide to the Administrative
Agent a statement of a Responsible Officer of the Borrower describing such
Termination Event and the action, if any, which the Borrower or any member of
the Controlled Group proposes to take with respect thereto;

 

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(n) Termination of Plans. Promptly and in any event within five (5) Business
Days after receipt thereof by the Borrower or any member of the Controlled Group
from the PBGC, the Credit Parties shall provide to the Administrative Agent
copies of each notice received by the Borrower or any such member of the
Controlled Group of the PBGC’s intention to terminate any Plan or to have a
trustee appointed to administer any Plan;

(o) Other ERISA Notices. Promptly and in any event within five (5) Business Days
after receipt thereof by the Borrower or any member of the Controlled Group from
a Multiemployer Plan sponsor, the Credit Parties shall provide to the
Administrative Agent a copy of each notice received by the Borrower or any
member of the Controlled Group concerning the imposition or amount of withdrawal
liability imposed on the Borrower or any member of the Controlled Group pursuant
to Section 4202 of ERISA;

(p) Other Governmental Notices. Promptly and in any event within five
(5) Business Days after receipt thereof by the Borrower or any Subsidiary, the
Credit Parties shall provide to the Administrative Agent a copy of any notice,
summons, citation, or proceeding seeking to modify in any material respect,
revoke, or suspend any material contract, license, permit, or agreement with any
Governmental Authority (other than the Chapter 11 Cases);

(q) Disputes; etc. The Credit Parties shall provide to the Administrative Agent
prompt written notice of (i) any claims, legal or arbitration proceedings,
proceedings before any Governmental Authority, or disputes, or to the knowledge
of any Credit Party, any such actions threatened, or affecting the Borrower or
any Subsidiary, which could reasonably be expected to cause a Material Adverse
Change, or any material labor controversy of which the Borrower or any of its
Subsidiaries has knowledge resulting in or reasonably considered to be likely to
result in a strike against the Borrower or any Subsidiary, and (ii) any claim,
judgment, Lien or other encumbrance (other than a Permitted Lien) affecting any
Property of the Borrower or any Subsidiary, if the value of the claim, judgment,
Lien, or other encumbrance affecting such Property shall exceed $1,000,000, in
each case, other than the Chapter 11 Cases;

(r) Management Letters; Other Accounting Reports. Promptly upon receipt thereof,
the Credit Parties shall provide to the Administrative Agent a copy of any final
management letter submitted to the Borrower or any Subsidiary by its independent
accountants, and a copy of any response by the Borrower or any Subsidiary of the
Borrower, or the board of directors or managers (or other applicable governing
body) of the Borrower or any Subsidiary of the Borrower, to such letter;

(s) Material Contracts. Promptly upon receipt thereof, the applicable Credit
Party shall provide to the Administrative Agent a copy of any amendment of or
notice of default under any Material Contract to which it is a party;

(t) Securities Law Filings and other Public Information. The Borrower shall
provide to the Administrative Agent promptly after the same are available,
copies of each annual report, proxy or financial statement or other material
report or communication sent to the equityholders of the Borrower, and copies of
all annual, regular, periodic and special reports and registration statements
which the Borrower may file or be required to file with the SEC under Section 13
or 15(d) of the Securities Exchange Act of 1934 or any other securities
Governmental Authority, and not otherwise required to be delivered to the
Administrative Agent pursuant hereto;

 

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(u) Borrowing Base Certificates. As soon as available but in any event within
three (3) Business Days of the end of each calendar week, and at such other
times as are required by Section 2.4(c)(ii) or as may be requested by the
Administrative Agent, the Borrower shall furnish a Borrowing Base Certificate
calculated as of the close of business on the last Business Day of the
immediately preceding calendar week;

(v) Collateral Reporting. Prior to or concurrently with the delivery of each
Borrowing Base Certificate from and after the Effective Date, and at such other
times as may be requested by the Administrative Agent, as of the period then
ended, all delivered electronically in a text formatted file acceptable to the
Administrative Agent, the Borrower shall deliver to the Administrative Agent:

(i) a detailed aging of the Borrower’s Accounts, including all invoices aged by
invoice date and due date (with an explanation of the terms offered), prepared
in a manner reasonably acceptable to the Administrative Agent, together with the
name and balance due for each Account Debtor;

(ii) a worksheet of calculations prepared by the Borrower to determined Eligible
Accounts, such worksheets detailing the Accounts excluded from Eligible Accounts
and the reason for such exclusion.

(w) After-Acquired Property. If, subsequent to the Effective Date, a Credit
Party shall acquire any intellectual property, securities, instruments, chattel
paper or other personal property required to be delivered to the Administrative
Agent as Collateral hereunder or any of the Security Documents, the Borrower
shall promptly (and in any event within ten (10) Business Days after any
Responsible Officer of any Credit Party acquires knowledge of the same) notify
the Administrative Agent of the same. Each of the Credit Parties shall adhere to
the covenants regarding the location of personal property as set forth in the
Security Documents; and

(x) Motions. To the extent reasonably practicable at least two (2) days prior to
filing (or such shorter period as the Administrative Agent may agree), the
Borrower shall use commercially reasonable efforts to provide the Administrative
Agent copies of all material pleadings and motions (other than “first day”
motions and proposed orders, and other than emergency pleadings or motions
where, despite such Borrower’s commercially reasonable efforts, such two (2) day
notice is not possible) to be filed by or on behalf of the Borrower or any of
the other Loan Parties with the Bankruptcy Court in the Chapter 11 Cases, or to
be distributed by or on behalf of the Borrower or any of the other Credit
Parties to any official committee appointed in the Chapter 11 Cases, which such
pleadings shall include the Administrative Agent as a notice party.

(y) Notice of Make-Whole Request. If, subsequent to the Effective Date, (i) a
Credit Party makes a request for any “make-whole”, “minimum volume” or other
similar payment referred to in clause (w) of the definition of “Eligible
Accounts”, where such request is made in respect of an Account Debtor who has
failed to take delivery of greater than 30% of the volume for which delivery is
required to be taken during any three-month period under the applicable sales
contract or (ii) a Credit Party receives a request from an Account Debtor for
any “make-whole”, “minimum volume” or other similar payment referred to in
clause (w) of the definition of “Eligible Accounts”, where such request is made
in respect of such Credit Party who has failed to deliver the volume for which
delivery is required to be made under the applicable sales contract, in each
case the Borrower will provide prompt written notice of such request to the
Administrative Agent (but in any event no later than five (5) Business Days
after the date of such request), which written notice shall include a reasonably
detailed description of the circumstances surrounding such request and the
contemplated amount of such requested payment.

 

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(z) Information Provided Under DIP Term Loan Documents: The Credit Parties shall
provide to the Administrative Agent copies of all certificates, reports, notices
and other information provided to the DIP Term Loan Agent or the DIP Term Loan
Lenders pursuant to the DIP Term Loan Documents.

(aa) Other Information. Subject to the confidentiality provisions of
Section 9.8, the Credit Parties shall provide to the Administrative Agent such
other information respecting the business, operations, or Property of the
Borrower or any Subsidiary, financial or otherwise, as any Lender through the
Administrative Agent may reasonably request including, but not limited to, a
list of customers of the Credit Parties.

The Borrower hereby acknowledges that (i) the Administrative Agent will make
available to the Lenders materials and/or information provided by or on behalf
of the Borrower and its Subsidiaries hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another similar
electronic system (the “Platform”) and (ii) certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Borrower or its securities) (each, a
“Public Lender”). The Borrower hereby agrees that (A) all Borrower Materials
that are to be made available to Public Lenders shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof; (B) by marking
Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the
Administrative Agent, the Issuing Lenders and the Lenders to treat such Borrower
Materials as not containing any material non-public information with respect to
the Borrower, its Subsidiaries or their securities for purposes of United States
Federal and state securities laws; (C) all Borrower Materials marked “PUBLIC”
are permitted to be made available through a portion of the Platform designated
“Public Investor;” and (D) the Administrative Agent shall be entitled to treat
any Borrower Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not designated “Public Investor.”

Documents required to be delivered pursuant to Section 5.2 may be delivered
electronically and if so delivered, shall be deemed to have been delivered on
the date (i) on which the Borrower posts such documents, or provides a link
thereto on the Borrower’s website on the Internet and (ii) on which such
documents are posted on the Borrower’s behalf on an Internet or intranet
website, if any, to which each Lender and the Administrative Agent have access
(whether a commercial, third-party website or whether sponsored by the
Administrative Agent); provided, however, that (A) the Borrower shall deliver
paper copies of such documents to the Administrative Agent or any Lender that
requests the Borrower to deliver such paper copies until a written request to
cease delivering paper copies is given by the Administrative Agent or such
Lender and (B) the Borrower shall notify the Administrative Agent and each
Lender (by electronic mail) of the posting of any such documents;

Section 5.3. Insurance.

(a) Each Credit Party shall, and shall cause each of its Subsidiaries to, carry
and maintain all such other insurance in such amounts and against such risks as
is customarily maintained by other Persons of similar size engaged in similar
businesses and reasonably acceptable to the Administrative Agent and with
reputable insurers reasonably acceptable to the Administrative Agent.

(b) If requested by the Administrative Agent, copies of all policies of
insurance or certificates thereof covering the property or business of the
Credit Parties, and endorsements and renewals thereof, certified as true and
correct copies of such documents by a Responsible Officer of the Borrower shall
be delivered by Borrower to and retained by the Administrative Agent. Subject to
the terms of the DIP Order, all policies of property insurance with respect to
the Collateral either shall have attached thereto a lender’s loss payable
endorsement in favor of the Administrative Agent for its benefit and the ratable
benefit of the

 

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Secured Parties or name the Administrative Agent as lender’s loss payee for its
benefit and the ratable benefit of the Secured Parties, in either case, in form
reasonably satisfactory to the Administrative Agent, and all policies of
liability insurance with respect to the Credit Parties shall name the
Administrative Agent for its benefit and the ratable benefit of the Secured
Parties as an additional insured and shall provide for a waiver of subrogation
in favor of the Administrative Agent for its benefit and the ratable benefit of
the Secured Parties. All policies or certificates of insurance shall set forth
the coverage, the limits of liability, the name of the carrier, the policy
number, and the period of coverage. All such policies shall contain a provision
that notwithstanding any contrary agreements between the Borrower, its
Subsidiaries, and the applicable insurance company, such policies will not be
canceled or allowed to lapse without renewal without at least thirty (30) days’
(or ten (10) days in the case of non-payment) prior written notice to the
Administrative Agent.

(c) If at any time the area in which any real property constituting Collateral
is located is designated a “flood hazard area” in any Flood Insurance Rate Map
published by the Federal Emergency Management Agency (or any successor agency),
the Borrower shall, and shall cause each of its Subsidiaries to, obtain flood
insurance in such total amount as required by Regulation H of the Federal
Reserve Board, as from time to time in effect and all official rulings and
interpretations thereunder or thereof, and otherwise comply with the National
Flood Insurance Program as set forth in the Flood Disaster Protection Act of
1973, as it may be amended from time to time.

(d) Notwithstanding Section 2.4(c)(ii) of this Agreement, after the occurrence
and during the continuance of an Event of Default, subject to the DIP Order and
the Intercreditor Agreement, unless waived by the Administrative Agent in
writing in its sole discretion, all proceeds of insurance, including any
casualty insurance proceeds, property insurance proceeds, proceeds from actions,
and any other proceeds, shall be paid directly to the Administrative Agent and
if necessary, assigned to the Administrative Agent, to be applied in accordance
with Section 7.5 of this Agreement, whether or not the Secured Obligations are
then due and payable.

(e) In the event that any insurance proceeds are paid to any Credit Party in
violation of clause (d), such Credit Party shall, subject to the Intercreditor
Agreement, hold the proceeds in trust for the Administrative Agent, segregate
the proceeds from the other funds of such Credit Party, and promptly pay the
proceeds to the Administrative Agent with any necessary endorsement. Upon the
request of the Administrative Agent, each of the Borrower and its Subsidiaries
shall execute and deliver to the Administrative Agent any additional assignments
and other documents as may be necessary or desirable to enable the
Administrative Agent to directly collect the proceeds as set forth herein.

Section 5.4. Compliance with Laws. Other than violations arising as a result of
the Chapter 11 Cases and except as otherwise excused by the Bankruptcy Court,
each Credit Party shall, and shall cause each of its Subsidiaries to, comply
with all federal, state, and local laws and regulations (including Environmental
Laws, Sanctions, Anti-Corruption Laws, and the Patriot Act) which are applicable
to the operations and Property of any Credit Party and maintain all related
permits necessary for the ownership and operation of each Credit Party’s
Property and business, except in any case where the failure to so comply could
not reasonably be expected to result in a Material Adverse Change; provided that
this Section 5.4 shall not prevent any Credit Party from, in good faith and with
reasonable diligence, contesting the validity or application of any such laws or
regulations by appropriate legal proceedings for which adequate reserves have
been established in compliance with GAAP.

Section 5.5. Taxes. Each Credit Party shall, and shall cause each of its
Subsidiaries to pay and discharge all taxes, assessments, and other charges and
claims related thereto, in each case, which are material in amount, imposed on
the Borrower or any of its Subsidiaries prior to the date on which penalties
attach other than any tax, assessment, charge, or claims which is being
contested in good faith and for which adequate reserves have been established in
compliance with GAAP.

 

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Section 5.6. [Reserved].

Section 5.7. Security. Each Credit Party agrees that at all times before the
termination of this Agreement, payment in full of the Obligations, the
termination and return of all Letters of Credit (other than Letters of Credit as
to which arrangements satisfactory to the applicable Issuing Lender in such
Issuing Lender’s sole discretion have been made) and termination in full of the
Commitments, the Administrative Agent shall have an Acceptable Security Interest
in the Collateral to secure the performance and payment of the Secured
Obligations. Each Credit Party shall, and shall cause each of its Domestic
Subsidiaries to, grant to the Administrative Agent a Lien in any Collateral of
such Credit Party or such Domestic Subsidiary now owned or hereafter acquired
promptly and to take such actions as may be required under the Security
Documents to ensure that the Administrative Agent has an Acceptable Security
Interest in such Property.

Section 5.8. Deposit Accounts. Each Credit Party shall, and shall cause each of
its Subsidiaries to, maintain their principal operating accounts and other
deposit accounts with a Lender or any other bank that is reasonably acceptable
to the Administrative Agent. Each Credit Party shall, and shall cause each of
its Subsidiaries to, ensure such deposit accounts and all securities accounts
are subject to Account Control Agreements in accordance with the terms of
Section 2.17; provided that, notwithstanding anything to the contrary contained
in this Agreement or the other Credit Documents, the requirements of this
Section 5.8 shall not apply to Excluded Deposit Accounts or any deposit accounts
that constituted “Excluded Deposit Accounts” (as defined in the Existing Credit
Agreement) on the Petition Date.

Section 5.9. Records; Inspection. Each Credit Party shall, and shall cause each
of its Subsidiaries to maintain proper, complete and consistent books of record
with respect to such Person’s operations, affairs, and financial condition in
accordance with GAAP in all material respects. From time to time upon reasonable
prior notice (without limiting the provisions of Section 5.12), each Credit
Party shall permit any Lender and shall cause each of its Subsidiaries to permit
any Lender, at such reasonable times and intervals and to a reasonable extent
and under the reasonable guidance of officers of or employees delegated by
officers of such Credit Party or such Subsidiary, to, subject to any applicable
confidentiality considerations, examine and copy the books and records of such
Credit Party or such Subsidiary, to visit and inspect the Property of such
Credit Party or such Subsidiary, and to discuss the business operations and
Property of such Credit Party or such Subsidiary with the officers and directors
thereof; provided that, unless an Event of Default shall have occurred and be
continuing, (a) only the Administrative Agent on behalf of the Lenders may
exercise inspection, examination or audit rights under this Section 5.9 and
(b) the Borrower shall bear the cost of only two (2) such inspections per fiscal
year.

Section 5.10. Maintenance of Property. Except where compliance is excluded by,
or is otherwise prohibited by the provisions of the Bankruptcy Code or order of
the Bankruptcy Court, each Credit Party shall, and shall cause each of its
Subsidiaries to, maintain their material owned, leased, or operated Property
necessary in the operation of its business in good condition and repair, normal
wear and tear and casualty and condemnation (excluding casualty and condemnation
which could, individually or in the aggregate, reasonably be expected to cause a
Material Adverse Change) excepted; and shall abstain from, and cause each of its
Subsidiaries to abstain from, knowingly or willfully permitting the commission
of waste or other injury, destruction, or loss of natural resources, or the
occurrence of pollution, contamination, or any other condition in, on or about
the owned or operated Property involving the Environment that could reasonably
be expected to result in Response activities and that could reasonably be
expected to cause a Material Adverse Change; provided, however, that no Credit
Party shall be required to maintain any property if the preservation thereof is
no longer desirable in the conduct of the business of such Credit Party and the
loss thereof is not adverse in any material respect to such Credit Party or the
Lenders.

 

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Section 5.11. Royalty Agreements. Except where such payment is excluded by, or
is otherwise prohibited by the provisions of the Bankruptcy Code or order of the
Bankruptcy Court, the Borrower shall, and shall cause each of its Subsidiaries
to, timely pay all amounts owing pursuant to any royalty agreement to which the
Borrower or any of its Subsidiaries is a party except where the failure to do so
(a) does not materially impair the ability of the Borrower and its Subsidiaries
to use the Property subject to any Lien created by such royalty agreement in its
business and (b) could not reasonably be expected to result in a Material
Adverse Change.

Section 5.12. Field Examinations.

(a) The Borrower shall, and shall cause each of its Subsidiaries to, permit the
Administrative Agent or a third party selected by the Administrative Agent to,
upon the Administrative Agent’s request in the Administrative Agent’s Permitted
Discretion, conduct field examinations, with respect to any Accounts included in
the calculation of the Borrowing Base, at reasonable business times and upon
reasonable prior notice to the Borrower; provided that (i) if no Availability
Trigger Period has occurred and is continuing, the Borrower shall bear the costs
of only one such field examination in any fiscal year and (ii) if an
Availability Trigger Period has occurred and is continuing, the Borrower shall
bear the costs of up to two such field examinations in any fiscal year.

(b) [Reserved].

(c) If an Event of Default has occurred and is continuing, the Administrative
Agent may perform any additional field examinations, and all such field
examinations shall be performed at the Borrower’s sole cost and expense.

(d) Notwithstanding anything herein to the contrary, (i) no Credit Party nor any
Affiliate thereof nor any of the foregoing’s respective equity holders are
intended to, and no such Person shall be, third party beneficiaries of any
audits, appraisals, field examinations, or collateral audit conducted by any
Secured Party or any other Person at the direction of any Secured Party, (ii) no
Secured Party is obligated to share any such material or information with any
Person other than the directly intended and express beneficiary thereof and
(iii) as a condition to any disclosure of such material or information which a
Secured Party may, but is not obligated to, provide, the applicable Secured
Party may require that the Borrower execute and deliver a confidential,
non-reliance, or other disclosure agreement in form and substance acceptable to
the disclosing Secured Party (which agreement would not go into effect until the
delivery of the applicable audit, appraisal, field exam, or collateral audit).

Section 5.13. [Reserved].

Section 5.14. Further Assurances. Subject to the Intercreditor Agreement, the
Borrower shall, and shall cause each of its Subsidiaries to, execute and
deliver, or cause to be executed and delivered, to the Administrative Agent any
and all further documents, financing statements, agreements and instruments, and
take all further action (including filing Uniform Commercial Code and other
financing statements, fixture filings, notice, mortgages, deeds of trust and
other documents and such other actions or deliveries of the type required by
Section 3.1, as applicable) that may be required under applicable law, or that
the Required Lenders or the Administrative Agent may reasonably request, in
order to effectuate the transactions contemplated by the Credit Documents and in
order to grant, preserve, protect and perfect the validity of the security
interests created or intended to be created by the Security Documents in the
Collateral, all in form and substance reasonably satisfactory to the
Administrative Agent and all at the expense of the Credit Parties.

 

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Section 5.15. Compliance with Anti-Corruption Laws and Sanctions. Each Credit
Party will maintain in effect and enforce policies and procedures designed to
ensure compliance by each Credit Party, their Subsidiaries, and their respective
directors, officers, employees and agents with Anti-Corruption Laws and
Sanctions.

Section 5.16. Accuracy of Information. The Credit Parties will ensure that any
information, including financial statements or other documents, furnished to the
Administrative Agent or the Lenders in connection with this Agreement or any
other Credit Document or any amendment or modification hereof or thereof or
waiver hereunder or thereunder contains no material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
the furnishing of such information shall be deemed to be a representation and
warranty by the Borrower on the date thereof as to the matters specified in this
Section 5.16; provided that, with respect to projected financial information,
the Credit Parties will only ensure that such information was prepared in good
faith based upon assumptions believed to be reasonable at the time.

Section 5.17. Casualty and Condemnations. The Borrower will (a) furnish to the
Administrative Agent and the Lenders prompt written notice of any casualty or
other insured damage to any material portion of the Collateral or the
commencement of any action or proceeding for the taking of any material portion
of the Collateral or interest therein under power of eminent domain or by
condemnation or similar proceeding and (b) ensure that the Net Cash Proceeds of
any such event (whether in the form of insurance proceeds, condemnation awards
or otherwise) are collected and applied in accordance with the applicable
provisions of this Agreement and the Credit Documents.

Section 5.18. Payment of Obligations. Each Credit Party will, and will cause
each Subsidiary to, pay or discharge all Debt and all other material liabilities
and obligations, including Taxes, before the same shall become delinquent or in
default, except where (a) such payment is excluded by, or is otherwise
prohibited by the provisions of the Bankruptcy Code or order of the Bankruptcy
Court or (b)(i) the validity or amount thereof is being contested in good faith
by appropriate proceedings, (ii) such Credit Party or Subsidiary has set aside
on its books adequate reserves with respect thereto in accordance with GAAP and
(iii) the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Change; provided, however, that each
Credit Party will, and will cause each Subsidiary to, remit withholding taxes
and other payroll taxes to appropriate Governmental Authorities as and when
claimed to be due, notwithstanding the foregoing exceptions, except where such
payment is excluded by, or is otherwise prohibited by the provisions of the
Bankruptcy Code or order of the Bankruptcy Court.

Section 5.19. Beneficial Ownership Certificate. If at any time any information
contained in the most recent Beneficial Ownership Certification delivered
hereunder becomes untrue, inaccurate, incorrect or incomplete, the Borrower will
promptly provide an updated Beneficial Ownership Certification to the
Administrative Agent correcting such information.

Section 5.20. Use of Proceeds. The proceeds of the Loans and Letters of Credit
shall be used (a) to pay related transaction costs, fees and expenses; (b) to
provide working capital and for other general corporate purposes of the Credit
Parties in accordance with the Budget; (c) to pay obligations arising from or
related to the Carve-Out; (d) to pay restructuring costs incurred in connection
with the Chapter 11 Cases. Notwithstanding anything to the contrary, no portion
of the Loans or the Collateral (including any cash collateral) shall be used
(i) to challenge the validity, perfection, priority, extent or enforceability of
the obligations under the DIP Facility, the Exit Facility or the facility under
the Existing Credit Agreement, (ii) to investigate or assert any other claims or
causes of action against the Administrative Agent, the Lead Arranger, any other
agent or any Lender with respect to any holder of any such obligations, except
as agreed by the Administrative Agent and provided in the DIP Order with respect
to any investigation regarding the facility under the Existing Credit Agreement
or (iii) for any act which has the effect of materially or adversely modifying
or compromising the rights and remedies of the Administrative Agent or the
Lenders or any such party with respect to the DIP Facility, the Exit Facility or
any Credit Document (as defined in the Existing Credit Agreement).

 

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ARTICLE 6

NEGATIVE COVENANTS

So long as any Obligation (other than (a) Letter of Credit Obligations which are
not yet due and payable in connection with Letters of Credit which have been
cash collateralized in accordance with this Agreement and (b) contingent
indemnification obligations which are not due and payable and which by their
terms survive the termination or expiration of this Agreement and the other
Credit Documents) shall remain unpaid, any Lender shall have any Commitment
hereunder, or there shall exist any Letter of Credit Exposure (other than Letter
of Credit Exposure which has been cash collateralized in accordance with this
Agreement), each Credit Party agrees to comply with the following covenants.

Section 6.1. Debt. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, create, assume, incur, suffer to exist, or in any manner become
liable, directly, indirectly, or contingently in respect of, any Debt other than
the following (collectively, the “Permitted Debt”):

(a) the Obligations;

(b) unsecured intercompany Debt incurred in the ordinary course of business owed
by any Credit Party to any other Credit Party;

(c) Debt in the form of accounts payable to trade creditors for goods or
services and current operating liabilities (other than for borrowed money) which
in each case are not more than 90 days past due, in each case incurred in the
ordinary course of business, as presently conducted, unless contested in good
faith by appropriate proceedings and adequate reserves for such items have been
made in accordance with GAAP;

(d) purchase money indebtedness or Capital Leases incurred prior to the Petition
Date and any Debt issued to refinance, refund, extend, renew or replace such
Debt (“Refinancing Indebtedness”) so long as the principal amount of such
Refinancing Indebtedness is not greater than the outstanding principal amount of
such existing Debt plus the amount of any premiums or penalties and accrued and
unpaid interest thereof and reasonable fees and expenses in connection
therewith;

(e) Hedging Arrangements permitted under Section 6.15;

(f) Debt arising from the endorsement of instruments for collection in the
ordinary course of business;

(g) the Senior Notes;

(h) Debt in respect of the DIP Term Loan Facility;

(i) Debt under performance, stay, appeal and surety bonds or with respect to
workers’ compensation or other like employee benefit claims, in each case
incurred in the ordinary course of business;

(j) guarantees of Debt of any Credit Party permitted under this Section 6.1;

 

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(k) Debt arising from royalty agreements on customary terms entered into by the
Borrower and its Subsidiaries in the ordinary course of business in connection
with the purchase of Sand Reserves; and

(l) Debt existing on the Petition Date and set forth on Schedule 6.1.

Section 6.2. Liens. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, create, assume, incur, or suffer to exist any Lien on the
Property of any Credit Party or any Subsidiary, whether now owned or hereafter
acquired, or assign any right to receive any income, other than the following
(collectively, the “Permitted Liens”):

(a) Liens securing the Secured Obligations;

(b) Liens securing obligations under the DIP Term Loan Facility;

(c) Liens imposed by law, such as landlord’s, materialmen’s, mechanics’,
carriers’, workmen’s and repairmen’s liens, and other similar liens arising in
the ordinary course of business securing obligations which if overdue for a
period of more than 30 days are being contested in good faith by appropriate
procedures or proceedings and for which adequate reserves have been established;

(d) Liens arising in the ordinary course of business out of pledges or deposits
under workers compensation laws, unemployment insurance, old age pensions, or
other social security or retirement benefits, or similar legislation to secure
public or statutory obligations;

(e) Liens for Taxes, assessment, or other governmental charges which are not yet
delinquent and payable or, if overdue, which are being actively contested in
good faith by appropriate proceedings and adequate reserves for such items have
been made in accordance with GAAP;

(f) Liens securing purchase money debt or Capital Lease obligations permitted
under Section 6.1(d); provided that each such Lien encumbers only the Property
purchased in connection with the creation of any such purchase money debt or the
subject of any such Capital Lease, and all proceeds and products thereof
(including insurance proceeds) and accessions thereto, and the amount secured
thereby is not increased;

(g) encumbrances consisting of minor easements, zoning restrictions, or other
restrictions on the use of real property that do not (individually or in the
aggregate) materially affect the value of the assets encumbered thereby or
materially impair the ability of any Credit Party to use such assets in its
business, and none of which is violated in any material aspect by existing or
proposed structures or land use;

(h) Liens arising solely by virtue of any statutory or common law provision
relating to banker’s liens, rights of set-off or similar rights and remedies and
burdening only deposit accounts or other funds maintained with a depository
institution;

(i) Liens on cash, deposit accounts or securities pledged or encumbered to
secure performance of tenders, surety and appeal bonds, government contracts,
performance and return of money bonds, bids, trade contracts, leases, statutory
obligations, regulatory obligations and other obligations of a like nature
incurred in the ordinary course of business;

(j) judgment and attachment Liens not giving rise to an Event of Default;

 

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(k) Liens in favor a banking institution arising by operation of law encumbering
deposits in accounts held by such banking institution incurred in the ordinary
course of business and which are within the general parameters customary in the
banking industry;

(l) Any interest or title of a lessor, sublessor, licensor or sublicensor under
any lease or license entered into in the ordinary course of business and
covering only the asset so leased or licensed;

(m) Defects and irregularities in title to any Property which in the aggregate
do not materially impair the fair market value or use of the Property for the
purposes for which it is or may reasonably be expected to be held;

(n) Liens on advance of cash or earnest money deposits in favor of the seller of
any property to be acquired in connection with Capital Expenditures permitted
hereunder, which advances shall be applied against the purchase price for such
permitted Capital Expenditures; and

(o) Liens on Property of the Borrower or its Subsidiaries existing on the
Petition Date and set forth in Schedule 6.2 and refinancing, extensions renewals
and replacements thereof permitted hereunder; provided that such Liens shall
secure only those obligations which they secure on the date hereof and such
Liens shall not be extended to cover any additional Property not subject thereto
on the Petition Date.

Section 6.3. Investments. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, make or hold any direct or indirect investment (each, an
“Investment”) in any other Person, including capital contributions to the
Person, investments in or the acquisition of the debt or equity securities of
the Person, or any loans, guaranties, trade credit, or other extensions of
credit to any Person, other than the following (collectively, the “Permitted
Investments”):

(a) investments in the form of trade credit to customers of a Credit Party
arising in the ordinary course of business and represented by accounts from such
customers;

(b) Liquid Investments;

(c) loans, advances, or capital contributions to, or investments in, or
purchases or commitments to purchase any stock or other securities or evidences
of indebtedness of or interests in any Person and existing on the Petition Date,
in each case as specified in the attached Schedule 6.3; provided that, the
respective amounts of such loans, advances, capital contributions, investments,
purchases and commitments shall not be increased (other than appreciation);

(d) Investments by a Credit Party in or to any other Credit Party;

(e) [Reserved];

(f) Investments received in connection with the bankruptcy or reorganization of,
or settlement of delinquent accounts and disputes with, customers and suppliers,
in each case, arising in the ordinary course of business;

(g) guarantees of obligations (not in respect of Debt) of the Credit Parties
incurred in the ordinary course of business;

(h) Investments consisting of Debt or Acquisitions permitted by Article 6; and

 

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(i) Investments existing on the Petition Date in wholly-owned Subsidiaries and
as otherwise set forth on Schedule 6.3.

Section 6.4. Acquisitions. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, make any Acquisition.

Section 6.5. Agreements Restricting Liens. No Credit Party shall, nor shall it
permit any of its Subsidiaries to, create, incur, assume or permit to exist any
contract, agreement or understanding (other than (a) this Agreement, or the
other Credit Documents, (b) the DIP Term Loan Facility, (c) agreements governing
Debt permitted by Sections 6.1(d) to the extent such restrictions govern only
the Property (and all proceeds and products thereof and accessions thereto)
financed pursuant to such Debt, (d) any prohibition or limitation that exists
pursuant to applicable requirements of a Governmental Authority, (e) any
prohibition or limitation that restricts subletting or assignment of leasehold
interests contained in any lease governing a leasehold interest of Borrower or
its Subsidiaries and customary provisions in other contracts restricting
assignment thereof, (f) agreements in connection with a sale of assets permitted
by Section 6.8, and (g) any prohibition or limitation that exists in any
contract to which a Credit Party is a party on the date hereof so long as
(i) such prohibition or limitation is generally applicable and does not
specifically prohibit any of the Debt or the Liens granted under the Credit
Documents, and (ii) the noncompliance of such prohibition or limitation would
not reasonably be expected to be adverse to the Administrative Agent or the
Lenders) which in any way prohibits or restricts the granting, conveying,
creation or imposition of any Lien on any of its Property (including (A) any fee
owned real property of any Credit Party and (B) any Certificated Equipment of
any Credit Party), whether now owned or hereafter acquired, to secure the
Secured Obligations or restricts any Subsidiary from paying Restricted Payments
to the Borrower, or which requires the consent of or notice to other Persons in
connection therewith, which consent or notice has not been obtained or given on
a permanent and irrevocable basis such that no further consent of or notice to
such other Person is required to be given in connection with any such Lien or
Restricted Payment.

Section 6.6. Use of Proceeds.

(a) No Credit Party shall, nor shall it permit any of its Subsidiaries to use
the proceeds of the Loans or the Letters of Credit for any purposes other than
the purposes set forth in Section 5.20 and in accordance with the Budget. No
Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or
indirectly, use any part of the proceeds of Loans or Letters of Credit for any
purpose which violates, or is inconsistent with, Regulations T, U, or X.

(b) The Borrower will not request any Loans or Letter of Credit, and the
Borrower shall not use, and shall procure that its Subsidiaries and its or their
respective directors, officers, employees and agents shall not use, the proceeds
of any Loan or Letter of Credit (i) in furtherance of an offer, payment, promise
to pay, or authorization of the payment or giving of money, or anything else of
value, to any person in violation of any Anti-Corruption Laws, (ii) for the
purposes of funding, financing or facilitation of any activities, business or
transaction of or with any Sanctioned Person, or in any Sanctioned Country, to
the extent such activities, business or transaction would be prohibited by
Sanctions if conducted by a corporation incorporated in the United States or in
a European Union member state or the United Kingdom or (iii) in any manner that
would result in the violation of any Sanctions applicable to any party hereto.
No Credit Party will use the proceeds of any Loan or Letter of Credit in any way
that will violate any Anti-Corruption Laws or Sanctions.

 

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Section 6.7. Corporate Actions; Accounting Changes.

(a) No Credit Party shall, nor shall it permit any of its Subsidiaries to, merge
or consolidate with or into any other Person.

(b) No Credit Party shall, nor shall it permit any of its Subsidiaries to
(i) change its name, change its state of incorporation, formation or
organization, change its organizational identification number or reorganize in
another jurisdiction, (ii) create or suffer to exist any Subsidiary not existing
on the Petition Date, (iii) amend, supplement, modify or restate their articles
or certificate of incorporation or formation, limited partnership agreement,
bylaws, limited liability company agreements, or other equivalent organizational
documents in a manner that could reasonably be expected to be materially adverse
to the interests of the Administrative Agent and the Lenders, or (iv) change the
method of accounting employed in the preparation of the Initial Financial
Statements except in accordance with GAAP or change the fiscal year end of the
Borrower unless, in each case, approved in writing by the Required Lenders.

Section 6.8. Sale of Assets. No Credit Party shall, nor shall it permit any of
its Subsidiaries to, sell, convey, or otherwise transfer or dispose of (in one
transaction or in a series of related transactions and whether effected pursuant
to a division or otherwise) any of its assets except that (a) any Credit Party
may sell Inventory in the ordinary course of business; (b) any Credit Party may
sell, convey, dispose or otherwise transfer any of its assets to any other
Credit Party; (c) any Credit Party may make dispositions of obsolete or worn out
Property in the ordinary course of business, and dispositions of Property no
longer useful or used by the Borrower and its Subsidiaries in the conduct of its
business; (d) any Credit Party may make dispositions of equipment to the extent
that such Property is exchanged for credit against the purchase price of similar
replacement Property or the proceeds of which are reasonably promptly applied to
the purchase price of such replacement Property; (e) any Credit Party may make
dispositions of Liquid Investments; (f) any Credit Party may make dispositions
of Accounts in connection with the collection or compromise thereof in the
ordinary course of business; (g) any Credit Party may enter into leases,
subleases, licenses or sublicenses or Property in the ordinary course of
business and which do not materially interfere with the business of the Borrower
and its Subsidiaries; (h) any Credit Party may make transfers of property
subject to Casualty Events, subject to the Borrower’s compliance with
Section 2.4(c)(ii) and (i) to the extent constituting dispositions, any Credit
Party may make dispositions permitted by Sections 6.3, 6.7 and 6.9.

Section 6.9. Restricted Payments. No Credit Party shall, nor shall it permit any
of its Subsidiaries to make any Restricted Payments except that the Subsidiaries
of the Borrower may make Restricted Payments to the Borrower or any other Credit
Party that is a Subsidiary of the Borrower.

Section 6.10. Affiliate Transactions. No Credit Party shall, nor shall it permit
any of its Subsidiaries to, directly or indirectly, enter into or permit to
exist any transaction or series of transactions (including, but not limited to,
the purchase, sale, lease or exchange of Property, the making of any investment,
the giving of any guaranty, the assumption of any obligation or the rendering of
any service) with any of their Affiliates which are not Credit Parties unless
such transaction or series of transactions is on terms no less favorable to the
Borrower or any Subsidiary, as applicable, than those that could be obtained in
a comparable arm’s length transaction with a Person that is not such an
Affiliate except for reasonable and customary director, officer and employee
compensation, including bonuses and severance (which compensation may be paid to
affiliates of such directors, officers and employees at the direction of the
applicable director, officer or employee), indemnification and other benefits
(including retirement, health, stock option and other benefit plans).

Section 6.11. Line of Business. No Credit Party shall, and shall not permit any
of its Subsidiaries to, change the character of the Borrower’s and its
Subsidiaries collective business as conducted on the Petition Date, or engage in
any type of business not reasonably related to the Borrower’s and its
Subsidiaries collective business as presently and normally conducted.

 

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Section 6.12. Hazardous Materials. No Credit Party (a) shall, nor shall it
permit any of its Subsidiaries to, create, handle, transport, use, or dispose of
any Hazardous Substance or Hazardous Waste, except in the ordinary course of its
business and except in compliance with Environmental Law other than to the
extent that such non-compliance could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change or in any
liability to the Lenders or the Administrative Agent, and (b) shall, nor shall
it permit any of its Subsidiaries to, Release any Hazardous Substance or
Hazardous Waste into the Environment and shall not permit any Credit Party’s or
any Subsidiary’s Property to be subjected to any Release of Hazardous Substance
or Hazardous Waste, except in compliance with Environmental Law other than to
the extent that such non-compliance could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change or in any
liability on the Lenders or the Administrative Agent.

Section 6.13. Compliance with ERISA. Except for matters that individually or in
the aggregate could not reasonably be expected to cause a Material Adverse
Change, no Credit Party shall, nor shall it permit any of its Subsidiaries to,
directly or indirectly: (a) engage in any transaction in connection with which
the Borrower or any Subsidiary could be subjected to either a civil penalty
assessed pursuant to Section 502(c), (i) or (1) of ERISA or a tax imposed by
Chapter 43 of Subtitle D of the Code; (b) terminate, or permit any member of the
Controlled Group to terminate, any Plan in a manner, or take any other action
with respect to any Plan, which could result in any liability of the Borrower,
any Subsidiary or any member of the Controlled Group to the PBGC; (c) fail to
make, or permit any member of the Controlled Group to fail to make, full payment
when due of all amounts which, under the provisions of any Plan, agreement
relating thereto or applicable law, the Borrower, a Subsidiary or member of the
Controlled Group is required to pay as contributions thereto; (d) permit to
exist, or allow any Subsidiary or any member of the Controlled Group to permit
to exist, any failure to satisfy the “minimum funding standards” under Sections
302 or 303 of ERISA or Sections 412 or 430 of the Code with respect to any Plan;
(e) permit, or allow any member of the Controlled Group to permit, the actuarial
present value of the benefit liabilities (as “actuarial present value of the
benefit liabilities” shall have the meaning specified in Section 4041 of ERISA)
under any Plan that is regulated under Title IV of ERISA to exceed the current
value of the assets (computed on a plan termination basis in accordance with
Title IV of ERISA) of such Plan allocable to such benefit liabilities;
(f) contribute to or assume an obligation to contribute to, or permit any member
of the Controlled Group to contribute to or assume an obligation to contribute
to, any multiemployer plan (as defined in Section 4001(a)(3) of ERISA); (g)
acquire, or permit any member of the Controlled Group to acquire, an interest in
any Person that causes such Person to become a member of the Controlled Group if
such Person sponsors, maintains or contributes to, or at any time in the
six-year period preceding such acquisition has sponsored, maintained, or
contributed to, (i) any multiemployer plan (as defined in Section 4001(a)(3) of
ERISA), or (ii) any other employee benefit plan that is subject to Title IV of
ERISA under which the actuarial present value of the benefit liabilities under
such plan exceeds the current value of the assets (computed on a plan
termination basis in accordance with Title IV of ERISA) of such plan allocable
to such benefit liabilities; (h) incur, or permit any member of the Controlled
Group to incur, a liability to or on account of a Plan under sections 515, 4062,
4063, 4064, 4201 or 4204 of ERISA; or (i) contribute to or assume an obligation
to contribute to any employee welfare benefit plan, as defined in section 3(1)
of ERISA, including, without limitation, any such plan maintained to provide
benefits to former employees of such entities, that may not be terminated by
such entities in their sole discretion at any time without any liability.

Section 6.14. Sale and Leaseback Transactions. No Credit Party shall, nor shall
it permit any of its Subsidiaries to, sell or transfer to a Person any Property,
whether now owned or hereafter acquired, if at the time or thereafter the
Borrower or a Subsidiary shall lease as lessee such Property or any part thereof
or other Property which the Borrower or a Subsidiary intends to use for
substantially the same purpose as the Property sold or transferred.

 

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Section 6.15. Limitation on Hedging. No Credit Party shall, nor shall it permit
any of its Subsidiaries to, (a) purchase, assume, or hold a speculative position
in any commodities market or futures market or enter into any Hedging
Arrangement for speculative purposes; or (b) be party to or otherwise enter into
any Hedging Arrangement which (i) is entered into for reasons other than as a
part of its normal business operations as a risk management strategy and/or
hedge against changes resulting from market conditions related to the Borrower’s
or its Subsidiaries’ operations, or (ii) obligates the Borrower or any of its
Subsidiaries to any margin call requirements or otherwise requires the Borrower
or any of its Subsidiaries to put up money, assets or other security (other than
unsecured letters of credit). Furthermore, no Credit Party shall, nor shall it
permit any of its Subsidiaries be party to or otherwise enter into any Hedging
Arrangement which relate to interest rates if such Hedging Arrangement relate to
payment obligations on Debt which is not permitted to be incurred under
Section 6.1 above, the aggregate notional amount of all such Hedging
Arrangements exceeds 100% of the outstanding principal balance of the Debt to be
hedged by such Hedging Arrangements or an average of such principal balances
calculated using a generally accepted method of matching interest swap contracts
to declining principal balances, the floating rate index of each such contract
generally matches the index used to determine the floating rates of interest on
the corresponding indebtedness to be hedged by such contract, such Hedging
Arrangement is with a counterparty or has a guarantor of the obligation of the
counterparty who (unless such counterparty is a Lender or one of its Affiliates)
at the time the Hedging Arrangement is made is rated lower than A by S & P or A2
by Moody’s, or the floating rate index of such Hedging Arrangement does not
generally match the index used to determine the floating rates of interest on
the corresponding Debt to be hedged by such Hedging Arrangement.

Section 6.16. Minimum Liquidity. The Credit Parties shall not permit Liquidity
at any time to be less than $12,500,000.

Section 6.17. Landlord Agreements. No Credit Party shall, nor shall it permit
any of its Subsidiaries to (a) hold, store or otherwise maintain any equipment
or Inventory that is intended to constitute Collateral pursuant to the Security
Documents at premises which are not owned by a Credit Party and located in the
U.S. unless (i) such equipment is located at the job site under which such
equipment is then currently under contract, (ii) such equipment or Inventory is
located at premises within the U.S. that are not owned by a Credit Party and
with respect to which such Credit Party has used commercially reasonable efforts
to obtain a lien waiver or subordination agreement in form and substance
satisfactory to the Administrative Agent, (iii) such equipment is office
equipment, (iv) such equipment or Inventory is in transit or being temporarily
stored for the purposes of being transported, (v) such equipment is off location
for servicing, repairs or modification, (vi) such equipment is being held for
delivery, or (vii) the aggregate value of all equipment and Inventory located at
premises which are not owned by a Credit Party and with respect to which a
Credit Party has not used commercially reasonable efforts to obtain a lien
waiver or subordination agreement in form and substance satisfactory to the
Administrative Agent does not exceed $500,000, or (b) after the date hereof,
enter into any new verbal or written leases for premises with any Person who has
not executed a lien waiver or subordination agreement in form and substance
satisfactory to the Administrative Agent unless the equipment or Inventory
located on such premises would fall under any of the provisions in the foregoing
clause (a).

Section 6.18. Operating Leases. The Credit Parties and their Subsidiaries, taken
as a whole, shall not at any time have obligations as lessee with respect to
Operating Leases (including all lease payments with respect to all Operating
Leases entered into by any Credit Party or Subsidiary but excluding payments for
taxes, insurance, and other non-rental expenses to the extent not included
within the stated amount of the rental payments under Operating Leases)
exceeding $25,000,000 during any fiscal year.

 

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Section 6.19. Amendment of Material Contracts. No Credit Party shall, nor shall
it permit any of its Subsidiaries to, amend, restate, supplement or otherwise
modify any Material Contract and any agreement or documentation relating
thereto, in each case in a manner materially adverse to the interests of the
Administrative Agent or the Lenders, without the prior written consent of the
Required Lenders; provided that the modification of prepetition Railcar Leases
to reject and/or replace such Railcar Leases with Railcar Leases providing for,
inter alia, reduced rates and fleet sizes shall not be a modification materially
adverse to the interests of the Administrative Agent or the Lenders.

Section 6.20. Budget Variance. As of the Friday after the fourth full calendar
week ending after the Petition Date and on each fourth Friday thereafter (each a
“Testing Date” and each such period, commencing on the Petition Date or such
immediately preceding Testing Date and ending on the relevant Testing Date, a
“Testing Period”; provided that the initial Testing Period shall be deemed to
include the full calendar week in which the Petition Date occurs), the Borrower
shall not permit the aggregate actual cash expenses and disbursements other than
Professional Fees made by the Borrower and its Subsidiaries during such Testing
Period to be greater than 115% of the projected aggregate cash expenses and
disbursements other than Professional Fees as set forth in the Budget for such
Testing Period.

Section 6.21. Capital Expenditures. No Credit Party shall, nor shall it permit
any of its Subsidiaries to, incur or commit to incur any Capital Expenditures
other than Capital Expenditures set forth in the Budget.

Section 6.22. Key Employee Plans. No Credit Party shall (a)(i) enter into any
key employee or executive incentive or retention plan, other than such plans in
effect as of the Petition Date or (ii) amend or modify any existing key employee
retention plan and incentive plan in a manner that increases benefits payable
thereunder, unless such plan, amendment or modification, as applicable, is
either consistent with the terms of the RSA or reasonably satisfactory to the
Required Lenders and (b) other than (i) the payments of salary or wages and
(ii) the retention payments made by certain Credit Parties prior to the
Effective Date, in each case to managers, officers, and management- or
executive-level employees of any of the Credit Parties, make any grant or
payment after the Effective Date (including pursuant to a key employee or
executive incentive or retention plan or other similar agreement or arrangement)
to any director, manager, officer, or management- or executive-level employee of
any of the Credit Parties.;

Section 6.23. Superpriority Claims. No Credit Party shall create or permit to
exist any Superpriority Claim other than Superpriority Claims permitted by the
DIP Order (including the Carve-Out).

Section 6.24. Repayment of DIP Term Loan Credit Agreement. No Credit Party shall
use or permit the use of any Net Cash Proceeds from a Prepayment Event with
respect to ABL Priority Collateral to repay obligations under the DIP Term Loan
Facility.

ARTICLE 7

DEFAULT AND REMEDIES

Section 7.1. Events of Default. The occurrence of any of the following events
shall constitute an “Event of Default” under this Agreement and any other Credit
Document:

(a) Payment Failure. Any Credit Party fails to pay any principal, interest or
any other amount (including fees, reimbursements and indemnifications) when due
under this Agreement or any other Credit Document;

(b) False Representation or Warranties. Any representation or warranty made or
deemed to be made by any Credit Party, the Canadian Subs or any officer thereof
in this Agreement, in any other Credit Document or in any certificate delivered
in connection with this Agreement or any other Credit Document is incorrect,
false or otherwise misleading in any material respect at the time it was made or
deemed made;

 

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(c) Breach of Covenant. (i) Any breach by any Credit Party or the Canadian Subs
of any of the covenants in Section 5.1(a), Section 5.2(d), Section 5.2(h),
Section 5.3(a), Section 5.11, Section 5.15, Section 5.20 or Article 6 (other
than Sections 6.11, 6.12 or 6.17) of this Agreement or (ii) any breach by any
Credit Party or the Canadian Subs of any other covenant contained in this
Agreement or any other Credit Document and such breach shall remain unremedied
for a period of five (5) days following the earlier of (A) the date on which
Administrative Agent gave notice of such failure to Borrower and (B) the date
any Responsible Officer of the Borrower or any Subsidiary acquires actual
knowledge of such failure (such grace period to be applicable only in the event
such Default can be remedied by corrective action of the Borrower or any
Subsidiary);

(d) Guaranties. Any provisions in the Guaranties shall at any time (before its
expiration according to its terms) and for any reason cease to be in full force
and effect and valid and binding on the Guarantors party thereto or shall be
contested by any party thereto; any Guarantor shall deny it has any liability or
obligation under such Guaranties;

(e) Security Documents. Any Security Document shall at any time and for any
reason cease to create an Acceptable Security Interest in Collateral with a fair
value in excess of $500,000 in the aggregate purported to be subject to such
agreement in accordance with the terms of such agreement or any material
provisions thereof shall cease to be in full force and effect and valid and
binding on the Credit Party that is a party thereto or any such Person shall so
state in writing (unless released or terminated pursuant to the terms of such
Security Document), except as a result of the Administrative Agent’s failure to
maintain possession of any stock certificates, promissory notes or other
instruments delivered to it under the Security Documents;

(f) Cross-Default. (i) The Borrower, the Canadian Subs or any Guarantor shall
fail to pay any principal of or premium or interest (A) under the DIP Term Loan
Credit Agreement or (B) on its other Debt incurred after the Petition Date which
is outstanding in a principal amount of at least $1,000,000 individually or when
aggregated with all such Debt of the Borrower and the Subsidiaries so in default
(but excluding Debt hereunder) when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Debt; or (ii) any other event
shall occur or condition shall exist under any agreement or instrument relating
to (A) the DIP Term Loan Credit Agreement or (B) to its other Debt incurred
after the Petition Date which is outstanding in a principal amount of at least
$1,000,000 individually or when aggregated with all such Debt of the Borrower
and the Subsidiaries so in default (other than Debt hereunder), and shall
continue after the applicable grace period, if any, specified in such agreement
or instrument, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Debt prior to the stated
maturity thereof; provided that for purposes of this paragraph (f), the
“principal amount” of the obligations in respect of Hedging Arrangements at any
time shall be the maximum aggregate amount (giving effect to any netting
agreements) that would be required to be paid if such Hedging Arrangements were
terminated at such time;

(g) Settlements; Adverse Judgment. The Borrower or any of its Subsidiaries
enters into a settlement of any claim against any of them when a suit has been
filed or suffers final judgments against any of them since the Petition Date in
an aggregate amount, less (i) any insurance proceeds covering such settlements
or judgments which are received or as to which the insurance carriers have not
denied liability and (ii) with respect to settlements, any portion of such
settlement not required to be paid in cash during the term of this Agreement,
greater than $1,000,000 and, in the case of final judgments, there shall be any
period of 30 consecutive days during which a stay of enforcement of such
judgments, by reason of a pending appeal or otherwise, shall not be in effect
(including as a result of the automatic stay under the Chapter 11 Cases);

 

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(h) Termination Events. Any Termination Event with respect to a Plan shall have
occurred, and, 30 days after notice thereof shall have been given to the
Borrower by the Administrative Agent, such Termination Event shall not have been
corrected and shall have created and caused to be continuing a material risk of
Plan termination or liability for withdrawal from the Plan as a “substantial
employer” (as defined in Section 4001(a)(2) of ERISA), which termination could
reasonably be expected to result in a liability of, or liability for withdrawal
could reasonably be expected to be, greater than $500,000;

(i) Plan Withdrawals. The Borrower or any member of the Controlled Group as
employer under a Multiemployer Plan shall have made a complete or partial
withdrawal from such Multiemployer Plan and such withdrawing employer shall have
incurred a withdrawal liability in an annual amount exceeding $500,000;

(j) Credit Documents. (i) Any material provision of any Credit Document, except
to the extent permitted by the terms thereof, shall for any reason cease to be
valid and binding on the Borrower or a Guarantor or any of their respective
Subsidiaries or any such Person shall so state in writing or (ii) the occurrence
of any “default”, as defined in any Credit Document (other than this Agreement),
or the breach of any of the terms or provisions of any Credit Document (other
than this Agreement), which default or breach continues beyond any grace period
therein provided;

(k) Material Contracts. The occurrence of any breach or nonperformance by any
Person under a Material Contract or any early termination of any Material
Contract, which breach, nonperformance or early termination could reasonably be
expected to cause a Material Adverse Change; provided that the Credit Parties’
exercise of rights with respect to executory contracts pursuant to Section 365
of the Bankruptcy Code, including inter alia rejection or cure and assumption of
Material Contracts, shall not, and shall not be expected to, cause a Material
Adverse Change; or

(l) Change in Control. The occurrence of a Change in Control.

(m) Bankruptcy Related Events. The occurrence of any of the following:

(i) (A) The entry of an order dismissing the Chapter 11 Cases or converting the
Chapter 11 Cases to a case under chapter 7 of the Bankruptcy Code, (B) the entry
of an order appointing a chapter 11 trustee in the Chapter 11 Cases, (C) the
entry of an order in the Chapter 11 Case appointing an examiner having expanded
powers (beyond those set forth under Sections 1106(a)(3) and (4) of the
Bankruptcy Code) and (D) the filing of any pleading by any Credit Party seeking,
or otherwise consenting to, any of the matters set forth in clauses (A) through
(C) above.

(ii) (A) An amendment, supplement or other modification shall have been made to,
or a consent or waiver shall have been granted with respect to any departure by
any person from the provisions of, the Approved Plan (without giving effect to
such amendment, supplement, modification, consent or waiver), in each case, in a
manner that is not permitted pursuant to the definition thereof (it being agreed
an amendment, supplement or other modification to the Approved Plan to provide
for both the payment in full and in cash of all Secured Obligations under this
Agreement (including the cash collateralization of any Letters of Credit) and
the termination of all Commitments hereunder, and all claims under the Existing
Credit Agreement on the Effective Date and for third party releases in favor of
the Administrative Agent, the Lenders and any other secured parties under the
Existing Credit Agreement, this Agreement or other Credit Documents (such a plan
of reorganization, a “Cash Pay Plan”) shall not constitute an Event of Default),
(B) any plan other than the Approved Plan or a Cash Pay Plan is filed by, or
with the support of, a Loan Party without the consent of the Required Lenders,
(C) the Loan Parties shall have commenced or participated in furtherance of any
solicitation in respect of a proposed plan or reorganization other

 

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than the Approved Plan or a Cash Pay Plan, (D) the Bankruptcy Court shall
terminate or reduce the period pursuant to Section 1121 of the Bankruptcy Code
during which the Credit Parties have the exclusive right to file a plan of
reorganization and solicit acceptances thereof, (E) the Bankruptcy Court shall
grant relief that is inconsistent with the Approved Plan in any material respect
and that is adverse to the Administrative Agent’s or the Secured Parties’
interests or inconsistent with the Credit Documents or (F) any of the Credit
Parties or any of their affiliates shall file any motion or pleading with the
Bankruptcy Court that is inconsistent in any material respect with the Approved
Plan and such motion or pleading has not been withdrawn prior to the earlier of
(y) three (3) Business Days of the Borrower receiving notice from the
Administrative Agent and (z) entry of an order of the Bankruptcy Court approving
such motion or pleading.

(iii) The entry of the Final Order shall not have occurred on or before the
Final Order Entry Deadline, or there shall be a breach by any Loan Party of any
material provisions of the Interim Order (prior to entry of the Final Order) or
the Final Order, or the Interim Order (prior to entry of the Final Order) or
Final Order shall cease to be in full force and effect or shall have been
reversed, modified, amended, stayed, vacated or subject to stay pending appeal,
in the case of any modification or amendment, without the prior written consent
of Administrative Agent and Required Lenders.

(iv) Other than the DIP Order in respect of the Carve-Out, the entry of an order
in the Chapter 11 Cases charging any of the Collateral under Section 506(c) of
the Bankruptcy Code against the Lenders under which any person takes action
against the Collateral or that becomes a final non-appealable order, or the
commencement of other actions that is adverse to the Administrative Agent or the
Lenders or their respective rights and remedies under the DIP Facility in any of
the Chapter 11 Cases or inconsistent with the Credit Documents.

(v) The entry of an order granting relief from any stay of proceeding
(including, without limitation, the automatic stay) so as to allow a third party
to proceed with foreclosure (or granting of a deed in lieu of foreclosure)
against any asset with a value in excess of $250,000.

(vi) The payment of any pre-Petition Date claims (other than (i) in respect of
accrued payroll and related expenses as of the Petition Date) or (ii) as
permitted by the RSA, the Interim Order, the Final Order, or pursuant to an
order entered in the Chapter 11 Cases that is supported, or not objected to, by
the Required Lenders.

(vii) Any lien securing or Superpriority Claim in respect of the obligations
under the DIP Facility shall cease to be valid, perfected (if applicable) and
enforceable in all respects or to have the priority granted under the Interim
Order and the Final Order, as applicable.

(viii) The existence of any claims or charges (including any grant of adequate
protection), or the entry of any order of the Bankruptcy Court authorizing any
claims or charges (including any grant of adequate protection), other than in
respect of the DIP Facility, the DIP Term Loan Facility and the Carve-Out or as
otherwise permitted under the Credit Documents and the DIP Term Loan Documents,
entitled to superpriority under Section 364(c)(1) of the Bankruptcy Code pari
passu or senior to the DIP Facility or the DIP Term Loan Facility (other than in
respect of claims or charges to the DIP Term Loan Priority Collateral in respect
of the DIP Term Loan Documents), or there shall arise or be granted by the
Bankruptcy Court (A) any claim having priority over any or all administrative
expenses of the kind specified in clause (b) of Section 503 or clause (b) of
Section 507 of the Bankruptcy Code (other than the Carve Out and the DIP Term
Loan Documents) that is pari passu or senior to the Superpriority Claim or
(B) any Lien on the Collateral having a priority senior to or pari passu with
the liens and security interests granted pursuant to the DIP Order and the
Credit Documents, except as expressly provided herein or in the Interim Order or
the Final Order, whichever is in effect.

 

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(ix) The Credit Parties or any of their Subsidiaries, shall obtain court
authorization to commence, or shall commence, join in, assist or otherwise
participate as an adverse party in any suit or other proceeding against the
Administrative Agent or any of the Lenders relating to the DIP Facility or the
Existing Credit Agreement.

(x) Failure to satisfy any of the Milestones in accordance with the terms
relating to such Milestone.

(xi) After the entry thereof by the Bankruptcy Court, the Confirmation Order
shall cease to be in full force and effect, or any Credit Party shall fail to
satisfy in full all obligations under the DIP Facility (or convert the DIP
Facility into the Exit Facility) on or prior to the effective date of the
Approved Plan or fail to comply in any material respect with the Confirmation
Order, or the Confirmation Order shall have been revoked, remanded, vacated,
reversed, rescinded or modified or amended in any manner that (a) is adverse to
the Secured Parties’ interests, rights or treatment or inconsistent with the
Credit Documents, (b) alters the debt capital structure of the Credit Parties as
set forth in the Approved Plan, (c) allows for the incurrence of indebtedness
upon or in conjunction with the effective date of the Approved Plan not
otherwise contemplated under the Approved Plan (without giving effect to any
such modification or supplement) or (d) changes the priority or treatment of any
indebtedness from that set forth in the Approved Plan (without giving effect to
any such modification or supplement).

(xii) Except as otherwise consented to by the Required Lenders, any sale,
conveyance, disposition or other transfer of all or a material portion of the
Collateral pursuant to the Bankruptcy Code other than as permitted pursuant
(x) the Interim Order or the Final Order, (y) the Approved Plan or (z) the
Credit Documents.

(xiii) [Reserved].

(xiv) The RSA is terminated or ceases to be in full force and effect.

(xv) The Backstop Agreement is terminated or ceases to be in full force and
effect.

(xvi) The Credit Parties (A) file any motion or application, including in
connection with a plan of reorganization, seeking authority to reject, assume,
assume and assign, amend, supplement, or modify any Railcar Lease, or (B) amend,
modify, supplement, extend, terminate, or otherwise enter into a modified
arrangement with respect to any Railcar Lease, in each case, without the prior
written consent of the Required Lenders.

(xvii) The Credit Parties, taken as a whole, cease to conduct substantially all
of their business operations without the prior written consent of the Required
Lenders.

(xviii) The Interim Order or the Final Order shall be vacated, reversed or
stayed in any respect, or modified or amended in any material respect, without
the consent of the Required Lenders.

(xix) Any Credit Party fail to comply with the Interim Order or the Final Order
in any material respect.

 

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(xx) At any time after the entry of the Final Order, the sum of (A) aggregate
principal amount of outstanding loans under the DIP Term Loan Facility and
(B) the unfunded commitments under the DIP Term Loan Facility shall be (1) less
than $40,000,000 or (2) more than $60,000,000.

(xxi) Any Credit Party shall commence, join in, assist or otherwise participate
(or attempt to commence, join in, assist or otherwise participate) as an adverse
party in any suit or other proceeding against the Administrative Agent or any of
the Lenders to (A) contest the validity or enforceability of any Credit Document
or (B) contest the validity or perfection of any Lien securing the Obligations.

(n) Change in CEO. At any time prior to the Effective Date (as defined in the
RSA), Mr. Robert Rasmus shall cease to serve as Chief Executive Officer of the
Borrower for any reason; provided, that an Event of Default shall not occur
under this Section 7.1(n) if, within three (3) Business Days of the date that
Mr. Rasmus ceases to serve as Chief Executive Officer of the Borrower for any
reason, the board of directors, managing member or other governing body of the
Borrower and each of its Subsidiaries, as applicable, appoints Mr. Ryan
Omohundro, of Alvarez & Marsal North America, LLC (or such other person
reasonably acceptable to the Required Lenders), to the position of Chief
Restructuring Officer (the “CRO”) of the Borrower and each of its Subsidiaries
and bestows upon the CRO all duties and responsibilities customarily associated
with such position, including, without limitation, the duties and
responsibilities exercised by Mr. Rasmus as of the Effective Date.

Section 7.2. Optional Acceleration of Maturity. If any Event of Default shall
have occurred and be continuing, then, and in any such event,

(a) the Administrative Agent (i) shall at the request, and may with the consent,
of the Required Lenders, by notice to the Borrower, declare that the obligation
of each Lender to make Loans and the obligation of the Issuing Lenders to issue
Letters of Credit shall be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, and may with the consent, of the
Required Lenders, by notice to the Borrower, declare the Revolving Notes, all
accrued and unpaid interest thereon, and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Revolving Notes, all
such interest, and all such amounts shall become and be forthwith due and
payable in full, without presentment, demand, protest or further notice of any
kind (including, without limitation, any notice of intent to accelerate or
notice of acceleration), all of which are hereby expressly waived by each of the
Credit Parties,

(b) the Borrower shall, on demand of the Administrative Agent at the request or
with the consent of the Required Lenders, deposit with the Administrative Agent
into the Cash Collateral Account an amount of cash equal to the outstanding
Letter of Credit Exposure as security for the Secured Obligations to the extent
the Letter of Credit Obligations are not otherwise paid or cash collateralized
at such time, and

(c) the Administrative Agent shall at the request of, and may with the consent
of, the Required Lenders proceed to enforce its rights and remedies under the
Security Documents, the Guaranty, or any other Credit Document for the ratable
benefit of the Secured Parties by appropriate proceedings.

Section 7.3. Set-off. Upon (a) the occurrence and during the continuance of any
Event of Default and (b) the making of the request or the granting of the
consent, if any, specified by Section 7.2 to authorize the Administrative Agent
to declare the Revolving Notes and any other amount payable hereunder due and
payable pursuant to the provisions of Section 7.2, the Administrative Agent,
each Lender, and each of their respective Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by the
Administrative Agent, such

 

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Lender, or any such Affiliate to or for the credit or the account of any Credit
Party against any and all of the obligations of the Borrower now or hereafter
existing under this Agreement, the Revolving Notes held by the Administrative
Agent, such Lender, or such Affiliate, and the other Credit Documents,
irrespective of whether or not the Administrative Agent, such Lender, or such
Affiliate shall have made any demand under this Agreement, such Revolving Note,
or such other Credit Documents, and although such obligations may be unmatured.
Each Lender agrees to promptly notify the Borrower and the Administrative Agent
after any such set off and application made by such Lender or its Affiliate,
provided that the failure to give such notice shall not affect the validity of
such set off and application. The rights of the Administrative Agent and each
Lender under this Section 7.3 are in addition to any other rights and remedies
(including, without limitation, other rights of set off) which the
Administrative Agent or such Lender may have.

Section 7.4. Remedies Cumulative. No Waiver. No right, power, or remedy
conferred to any Lender in this Agreement or the Credit Documents, or now or
hereafter existing at law, in equity, by statute, or otherwise shall be
exclusive, and each such right, power, or remedy shall to the full extent
permitted by law be cumulative and in addition to every other such right, power
or remedy. No course of dealing and no delay in exercising any right, power, or
remedy conferred to any Lender in this Agreement and the Credit Documents or now
or hereafter existing at law, in equity, by statute, or otherwise shall operate
as a waiver of or otherwise prejudice any such right, power, or remedy. Any
Lender may cure any Event of Default without waiving the Event of Default. No
notice to or demand upon the Borrower or any other Credit Party shall entitle
the Borrower or any other Credit Party to similar notices or demands in the
future.

Section 7.5. Application of Payments. Prior to an Event of Default, all payments
made hereunder shall be applied by the Administrative Agent as directed by the
Borrower, but subject to the terms of this Agreement, including the application
of prepayments according to Section 2.4 and Section 2.11. During the existence
of an Event of Default, subject to the applicable DIP Order and the
Intercreditor Agreement, all payments and collections received by the
Administrative Agent shall be applied to the Secured Obligations in accordance
with Section 2.11 and otherwise in the following order (other than funds held in
the Cash Collateral Account, which shall be applied in accordance with
Section 2.2(h)):

FIRST, to the payment of that portion of the Secured Obligations constituting
fees, indemnities, expenses and other amounts, including attorney fees, payable
to the Administrative Agent in its capacity as such, the Issuing Lenders in
their respective capacities as such, ratably among the Administrative Agent and
the Issuing Lenders in proportion to the respective amounts described in this
clause First payable to them;

SECOND, to the payment of that portion of the Secured Obligations constituting
fees, indemnities and other amounts (other than principal and interest) payable
to the Lenders in their respective capacities as such, ratably among the Lenders
in proportion to the respective amounts described in this clause Second payable
to them;

THIRD, to the payment of all accrued and unpaid interest on the Loans and any
borrowed amounts in respect of Letters of Credit, ratably among the Lenders and
the Issuing Lenders in proportion to the respective amounts described in this
clause Third payable to them;

FOURTH, to the payment of any then due and owing principal of the Loans and any
borrowed amounts in respect of Letters of Credit (the amounts so applied to be
distributed ratably among the Lenders (and to the extent applicable to the
payment of any Secured Obligations in respect of Hedging Arrangements, the Swap
Counterparties and to the extent applicable to Banking Services Obligations, the
Lenders or their Affiliates that are owed such obligations, with respect to
Hedging Arrangements and Banking Services Obligations, to the extent that
Reserves have been established with respect to such amounts) pro rata in
accordance with the principal amounts of the Secured Obligations owed to them on
the date of any such distribution), and when applied to make distributions by
the Administrative Agent to pay the principal amount of the outstanding Loans,
pro rata to the Lenders;

 

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FIFTH, to the Administrative Agent to deposit into the Cash Collateral Account
for the account of the Issuing Lenders, to cash collateralize any Letter of
Credit Exposure then outstanding;

SIXTH, to the payment of any amounts owing in respect of Hedging Arrangements,
the Swap Counterparties and to the extent applicable to Banking Service
Obligations, the Lenders or their Affiliates that are owed such obligations, to
the extent not paid pursuant to clause Fourth above; and

SEVENTH, the balance, if any, after all of the Secured Obligations have been
indefeasibly paid in full, to the Credit Parties, their successors or assigns,
or as a court of competent jurisdiction may otherwise direct.

Excluded Swap Obligations with respect to any Guarantor shall not be paid with
amounts received from such Guarantor or its assets, but appropriate adjustments
shall be made with respect to payments from other Credit Parties to preserve the
allocation to Secured Obligations otherwise set forth above in this Section 7.6.

ARTICLE 8

THE ADMINISTRATIVE AGENT

Section 8.1. Appointment, Powers and Immunities. Each Lender hereby irrevocably
appoints and authorizes the Administrative Agent to act as its agent under this
Agreement and the other Credit Documents with such powers and discretion as are
specifically delegated to the Administrative Agent by the terms of this
Agreement and the other Credit Documents, together with such other powers as are
reasonably incidental thereto. The Administrative Agent (which term as used in
this sentence and in Section 8.5 and the first sentence of Section 8.6 shall
include its Affiliates and its own and its Affiliates’ officers, directors,
employees, and agents): (a) shall not have any duties or responsibilities except
those expressly set forth in this Agreement and shall not be a trustee or
fiduciary for any Lender; (b) shall not be responsible to the Lenders for any
recital, statement, representation, or warranty (whether written or oral) made
in or in connection with any Credit Document or any certificate or other
document referred to or provided for in, or received by any of them under, any
Credit Document, or for the value, validity, effectiveness, genuineness,
enforceability, or sufficiency of any Credit Document, or any other document
referred to or provided for therein or for any failure by any Credit Party or
any other Person to perform any of its obligations thereunder; (c) shall not be
responsible for or have any duty to ascertain, inquire into, or verify the
performance or observance of any covenants or agreements by any Credit Party or
the satisfaction of any condition or to inspect the Property (including the
books and records) of any Credit Party or any of its Subsidiaries or Affiliates;
(d) shall not be required to initiate or conduct any litigation or collection
proceedings under any Credit Document unless requested by the Required Lenders
in writing and it receives indemnification satisfactory to it from the Lenders;
and (e) shall not be responsible for any action taken or omitted to be taken by
it under or in connection with any Credit Document, except for its own gross
negligence or willful misconduct. The Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by the Administrative Agent
with reasonable care.

The Lead Arranger, in its capacity as such, shall have no right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, the
Lead Arranger shall not have nor be deemed to have a fiduciary relationship with
any Lender. Each Lender hereby makes the same acknowledgments with respect to
the Lead Arranger as it makes with respect to the Administrative Agent in the
preceding paragraph.

 

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Section 8.2. Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon any certification, notice, instrument, writing, or other
communication (including, without limitation, any thereof by telephone or
electronic mail) believed by it to be genuine and correct and to have been
signed, sent or made by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel (including counsel for any Credit Party),
independent accountants, and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Revolving Notes as
the holder thereof for all purposes hereof unless and until the Administrative
Agent receives and accepts an Assignment and Acceptance executed in accordance
with Section 9.7. As to any matters not expressly provided for by this
Agreement, the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions shall be
binding on all of the Lenders; provided, however, that the Administrative Agent
shall not be required to take any action that exposes the Administrative Agent
to personal liability or that is contrary to any Credit Document or applicable
law or unless it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking any such action.

Section 8.3. Defaults. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default unless the Administrative
Agent has received written notice from a Lender or the Borrower specifying such
Default and stating that such notice is a “Notice of Default”. In the event that
the Administrative Agent receives such a notice of the occurrence of a Default,
the Administrative Agent shall give prompt notice thereof to the Lenders. The
Administrative Agent shall (subject to Section 8.2) take such action with
respect to such Default as shall reasonably be directed by the Required Lenders,
provided that, unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable in the best interest of the Lenders.

Section 8.4. Rights as Lender. With respect to its Commitments and the Loans
made by it, JPMCB (and any successor acting as Administrative Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Administrative Agent, and the term “Lender” or “Lenders” shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity. JPMCB (and any successor acting as Administrative Agent) and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any
Credit Party or any of its Subsidiaries or Affiliates as if it were not acting
as Administrative Agent, and JPMCB (and any successor acting as Administrative
Agent) and its Affiliates may accept fees and other consideration from any
Credit Party or any of its Subsidiaries or Affiliates for services in connection
with this Agreement or otherwise without having to account for the same to the
Lenders.

Section 8.5. Indemnification. THE LENDERS SEVERALLY AGREE TO INDEMNIFY THE
ADMINISTRATIVE AGENT, THE ISSUING LENDERS AND EACH OF THEIR RESPECTIVE
AFFILIATES AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS (TO
THE EXTENT NOT REIMBURSED BY THE BORROWER), RATABLY ACCORDING TO THE RESPECTIVE
PRINCIPAL AMOUNTS OF THE LOANS THEN HELD BY EACH OF THEM (OR IF NO PRINCIPAL OF
THE LOANS IS AT THE TIME OUTSTANDING, RATABLY ACCORDING TO THE RESPECTIVE
AMOUNTS OF THE COMMITMENTS THEN HELD BY EACH OF THEM, OR, IF NO SUCH PRINCIPAL
AMOUNTS ARE THEN OUTSTANDING AND NO COMMITMENTS ARE

 

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THEN EXISTING, RATABLY ACCORDING TO THE COMMITMENTS HELD BY EACH OF THEM
IMMEDIATELY PRIOR TO THE TERMINATION OR EXPIRATION THEREOF), FROM AND AGAINST
ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS OF ANY KIND OR NATURE
WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE
ADMINISTRATIVE AGENT OR ISSUING LENDERS IN ANY WAY RELATING TO OR ARISING OUT OF
THIS AGREEMENT OR ANY ACTION TAKEN OR OMITTED BY THE ADMINISTRATIVE AGENT OR THE
ISSUING LENDERS UNDER THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT (IN ALL CASES.
WHETHER OR NOT CAUSED BY OR ARISING. IN WHOLE OR IN PART. OUT OF THE
COMPARATIVE. CONTRIBUTORY OR SOLE NEGLIGENCE OF THE ADMINISTRATIVE AGENT OR THE
ISSUING LENDERS). AND INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES,
PROVIDED THAT NO LENDER SHALL BE LIABLE FOR ANY PORTION OF SUCH LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES, OR DISBURSEMENTS FOUND IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT
OF COMPETENT JURISDICTION TO HAVE RESULTED FROM THE ADMINISTRATIVE AGENT’S OR
ANY ISSUING LENDER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITATION
OF THE FOREGOING, EACH LENDER AGREES TO REIMBURSE THE ADMINISTRATIVE AGENT AND
THE ISSUING LENDERS PROMPTLY UPON DEMAND FOR ITS RATABLE SHARE (DETERMINED AS
SET FORTH ABOVE IN THIS PARAGRAPH) OF ANY OUT OF POCKET EXPENSES (INCLUDING
COUNSEL FEES) INCURRED BY THE ADMINISTRATIVE AGENT OR THE ISSUING LENDERS IN
CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION,
MODIFICATION, AMENDMENT, OR ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL
PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR
RESPONSIBILITIES UNDER, THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, TO THE
EXTENT THAT THE ADMINISTRATIVE AGENT OR THE ISSUING LENDERS IS NOT REIMBURSED
FOR SUCH BY THE BORROWER.

Section 8.6. Non-Reliance on Administrative Agent, Lead Arranger and Other
Lenders.

(a) Each Lender agrees that it has, independently and without reliance on the
Administrative Agent, the Lead Arranger or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis of the Borrower and the other Credit Parties and decision to enter into
this Agreement and that it will, independently and without reliance upon the
Administrative Agent, the Lead Arranger or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking action under the
Credit Documents. Except for notices, reports, and other documents and
information expressly required to be furnished to the Lenders by the
Administrative Agent or the Lead Arranger hereunder and for other information in
the Administrative Agent’s or the Lead Arranger’s possession which has been
requested by a Lender and for which such Lender pays the Administrative Agent’s
or the Lead Arranger’s expenses in connection therewith, the Administrative
Agent and the Lead Arranger shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the affairs,
financial condition, or business of any Credit Party or any of its Subsidiaries
or Affiliates that may come into the possession of the Administrative Agent or
the Lead Arranger or any of their respective Affiliates.

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

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

Section 8.7. Resignation of Administrative Agent and Issuing Lenders. The
Administrative Agent or any Issuing Lender may resign at any time by giving
written notice thereof to the Lenders and the Borrower. Upon receipt of notice
of any such resignation, the Required Lenders shall have the right to appoint a
successor Administrative Agent or Issuing Lender with, so long as no Event of
Default has occurred and is continuing, the consent of the Borrower, which
consent shall not be unreasonably withheld. If no successor Administrative Agent
or Issuing Lender shall have been so appointed by the Required Lenders with the
consent of the Borrower, and shall have accepted such appointment, within thirty
(30) days after the retiring Administrative Agent’s or Issuing Lender’s giving
of notice of resignation, then the retiring Administrative Agent or Issuing
Lender may, on behalf of the Lenders and the Borrower (subject to consultation
with the Borrower), appoint a successor Administrative Agent or Issuing Lender,
which shall be, in the case of a successor agent, a commercial bank organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $250,000,000 and, in the case
of an Issuing Lender, a Lender; provided that, if the Administrative Agent or
applicable Issuing Lender shall notify the Borrower and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (a) the retiring
Administrative Agent or Issuing Lender shall be discharged from its duties and
obligations hereunder and under the other Credit Documents (except that (i) in
the case of any collateral security held by the Administrative Agent on behalf
of the Lenders or such Issuing Lender under any of the Credit Documents, the
retiring Administrative Agent shall continue to hold such collateral security
until such time as a successor Administrative Agent is appointed and (ii) the
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Lender with respect to any Letters of Credit outstanding on the effective date
of its resignation or removal and the provisions affecting such Issuing Lender
with respect to such Letters of Credit shall inure to the benefit of the
retiring Issuing Lender until the termination of all such Letters of Credit) and
(b) all payments, communications and determinations provided to be made by, to
or through the retiring Administrative Agent shall instead be made by or to each
Lender and the applicable Issuing Lender directly, until such time as the
Required Lenders appoint a successor Administrative Agent or Issuing Lender, as
applicable, as provided for above in this paragraph. Upon the acceptance of any
appointment as Administrative Agent or Issuing Lender by a successor
Administrative Agent or Issuing Lender, such successor Administrative Agent or
Issuing Lender shall thereupon succeed to and become vested with all the rights,
powers, privileges, and duties of the retiring Administrative Agent or Issuing
Lender, and the retiring Administrative Agent or Issuing Lender shall be
discharged from its duties and obligations under this Agreement and the other
Credit Documents, except that the retiring Issuing Lender shall remain an
Issuing Lender with respect to any Letters of Credit outstanding on the
effective date of its resignation or removal and the provisions affecting such
Issuing Lender with respect to such Letters of Credit shall inure to the benefit
of the retiring Issuing Lender until the termination of all such Letters of
Credit. After any retiring Administrative Agent’s or Issuing Lender’s
resignation as Administrative Agent or Issuing Lender, the provisions of this
Article 8 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent or Issuing Lender under this
Agreement and the other Credit Documents.

Section 8.8. Collateral Matters.

(a) The Administrative Agent is authorized on behalf of the Secured Parties,
without the necessity of any notice to or further consent from such Secured
Parties, from time to time, to take any actions with respect to any Collateral
or Security Documents which may be necessary to perfect and maintain the Liens
upon the Collateral granted pursuant to the Security Documents. The
Administrative Agent is further authorized (but not obligated) on behalf of the
Secured Parties, without the necessity of any notice to or further consent from
the Secured Parties, from time to time, to take any action in exigent
circumstances as may be reasonably necessary to preserve any rights or
privileges of the Secured Parties under the Credit Documents or applicable Legal
Requirements. By accepting the benefit of the Liens granted pursuant to the
Security Documents, each Secured Party hereby agrees to the terms of this
paragraph (a).

(b) The Lenders hereby, and any other Secured Party by accepting the benefit of
the Liens granted pursuant to the Security Documents, irrevocably authorize the
Administrative Agent to (i) release any Lien granted to or held by the
Administrative Agent upon any Collateral (A) upon termination of this Agreement,
termination of all Hedging Agreements with such Persons (other than Hedging
Agreements as to which arrangements satisfactory to the applicable counterparty
in its sole discretion have been made), termination of all Letters of Credit
(other than Letters of Credit as to which arrangements satisfactory to the
applicable Issuing Lender in its sole discretion have been made), and the
payment in full of all outstanding Loans, Letter of Credit Obligations and all
other Secured Obligations payable under this Agreement and under any other
Credit Document; (B) constituting property sold or to be sold or disposed of as
part of or in connection with any disposition permitted under this Agreement or
any other Credit Document; (C) constituting property in which no Credit Party
owned an interest at the time the Lien was granted or at any time thereafter; or
(D) constituting property leased to any Credit Party under a lease which has
expired or has been terminated in a transaction permitted under this Agreement
or is about to expire and which has not been, and is not intended by such Credit
Party to be, renewed or extended; and (ii) release a Guarantor from its
obligations under a Guaranty and any other applicable Credit Document if such
Person ceases to be a Subsidiary as a result of a transaction permitted under
this Agreement. Upon the request of the Administrative Agent at any time, the
Secured Parties will confirm in writing the Administrative Agent’s authority to
release particular types or items of Collateral pursuant to this Section 8.8.

 

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(c) Notwithstanding anything contained in any of the Credit Documents to the
contrary, the Credit Parties, the Administrative Agent, and each Secured Party
hereby agree that no Secured Party shall have any right individually to realize
upon any of the Collateral or to enforce the Guaranty, it being understood and
agreed that all powers, rights and remedies hereunder and under the Security
Documents may be exercised solely by Administrative Agent on behalf of the
Secured Parties in accordance with the terms hereof and the other Credit
Documents. By accepting the benefit of the Liens granted pursuant to the
Security Documents, each Secured Party not party hereto hereby agrees to the
terms of this paragraph (c).

Section 8.9. No Other Duties, etc. Anything herein to the contrary
notwithstanding, the Lead Arranger and Sole Bookrunner listed on the cover page
hereof shall not have any powers, duties or responsibilities under this
Agreement or any of the other Credit Documents, except in its capacity, as
applicable, as the Administrative Agent, a Lender or an Issuing Lender
hereunder.

Section 8.10. Flood Laws. JPMCB has adopted internal policies and procedures
that address requirements placed on federally regulated lenders under the
National Flood Insurance Reform Act of 1994 and related legislation (the “Flood
Laws”). JPMCB, as administrative agent or collateral agent on a syndicated
facility, will post on the applicable electronic platform (or otherwise
distribute to each Lender in the syndicate) documents that it receives in
connection with the Flood Laws. However, JPMCB reminds each Lender and
participant in the facility that, pursuant to the Flood Laws, each federally
regulated Lender (whether acting as a Lender or participant in the facility) is
responsible for assuring its own compliance with the flood insurance
requirements.

Section 8.11. Credit Bidding.

(a) The Administrative Agent, on behalf of itself and the Secured Parties, shall
have the right to credit bid and purchase for the benefit of the Administrative
Agent and the Secured Parties, on terms acceptable to the Required Lenders, all
or any portion of Collateral at any sale thereof conducted by the Administrative
Agent under the provisions of the UCC, including pursuant to Sections 9-610 or
9-620 of the UCC, at any sale thereof conducted under the provisions of the
United States Bankruptcy Code, including Section 363 thereof, or a sale under a
plan of reorganization, or at any other sale or foreclosure conducted by the
Administrative Agent (whether by judicial action or otherwise) in accordance
with applicable Legal Requirements. Such credit bid or purchase may be completed
through one or more acquisition vehicles formed by the Administrative Agent to
make such credit bid or purchase and, in connection therewith, the
Administrative Agent is authorized, on behalf of itself and the other Secured
Parties, to adopt documents providing for the governance of the acquisition
vehicle or vehicles, and assign the applicable Secured Obligations to any such
acquisition vehicle in exchange for Equity Interests and/or debt issued by the
applicable acquisition vehicle (which shall be deemed to be held for the ratable
account of the applicable Secured Parties on the basis of the Secured
Obligations so assigned by each Secured Party).

(b) Each Lender hereby agrees, on behalf of itself and each of its Affiliates
that is a Secured Party, that, except as otherwise provided in any Credit
Document or with the written consent of the Administrative Agent and the
Required Lenders, it will not take any enforcement action, accelerate
obligations under any of the Credit Documents, or exercise any right that it
might otherwise have under applicable Legal Requirement to credit bid at
foreclosure sales, UCC sales or other similar dispositions of Collateral.

 

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Section 8.12. Not Partners or Co-Venturers; Administrative Agent as
Representative of the Secured Parties.

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

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

Section 8.13. Certain ERISA Matters.

(a) Each Lender (x) represents and warrants, as of the date such Person became a
Lender party hereto, to, and (y) covenants, from the date such Person became a
Lender party hereto to the date such Person ceases being a Lender party hereto,
for the benefit of, the Administrative Agent, the Lead Arranger and their
respective Affiliates, and not, for the avoidance of doubt, to or for the
benefit of the Borrower or any other Credit Party, that at least one of the
following is and will be true:

(i) such Lender is not using “plan assets” (within the meaning of the Plan Asset
Regulations) of one or more Benefit Plans in connection with the Loans, the
Letters of Credit or the Commitments;

(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14
(a class exemption for certain transactions determined by independent qualified
professional asset managers), PTE 95-60 (a class exemption for certain
transactions involving insurance company general accounts), PTE 90-1 (a class
exemption for certain transactions involving insurance company pooled separate
accounts), PTE 91-38 (a class exemption for certain transactions involving bank
collective investment funds) or PTE 96-23 (a class exemption for certain
transactions determined by in-house asset managers), is applicable with respect
to such Lender’s entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement, and the conditions for exemptive relief thereunder are and will
continue to be satisfied in connection therewith;

(iii) (A) such Lender is an investment fund managed by a “Qualified Professional
Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified
Professional Asset Manager made the investment decision on behalf of such Lender
to enter into, participate in, administer and perform the Loans, the Letters of
Credit, the Commitments and this Agreement, (C) the entrance into, participation
in, administration of and performance of the Loans, the Letters of Credit, the
Commitments and this Agreement satisfies the requirements of sub-sections
(b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such
Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied
with respect to such Lender’s entrance into, participation in, administration of
and performance of the Loans, the Letters of Credit, the Commitments and this
Agreement, and (E) all of the conditions for exemptive relief thereunder are and
will continue to be satisfied in connection therewith; or

 

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(iv) such other representation, warranty and covenant as may be agreed in
writing between the Administrative Agent, in its sole discretion, and such
Lender.

(b) In addition, unless sub-clause (i) in the immediately preceding clause
(a) is true with respect to a Lender or such Lender has not provided another
representation, warranty and covenant as provided in sub-clause (iv) in the
immediately preceding clause (a), such Lender further (x) represents and
warrants, as of the date such Person became a Lender party hereto, to, and
(y) covenants, from the date such Person became a Lender party hereto to the
date such Person ceases being a Lender party hereto, for the benefit of, the
Administrative Agent, the Lead Arranger and their respective Affiliates, and
not, for the avoidance of doubt, to or for the benefit of the Borrower or any
other Credit Party, that:

(i) none of the Administrative Agent or the Lead Arranger or any of their
respective Affiliates is a fiduciary with respect to the assets of such Lender
(including in connection with the reservation or exercise of any rights by the
Administrative Agent under this Agreement, any Credit Document or any documents
related to hereto or thereto);

(ii) the Person making the investment decision on behalf of such Lender with
respect to the entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement is independent (within the meaning of 29 CFR § 2510.3-21, as amended
from time to time) and is a bank, an insurance carrier, an investment adviser, a
broker-dealer or other person that holds, or has under management or control,
total assets of at least $50,000,000, in each case as described in 29 CFR §
2510.3-21(c)(1)(i)(A)-(E);

(iii) the Person making the investment decision on behalf of such Lender with
respect to the entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement is capable of evaluating investment risks independently, both in
general and with regard to particular transactions and investment strategies
(including in respect of the obligations);

(iv) the Person making the investment decision on behalf of such Lender with
respect to the entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement is a fiduciary under ERISA or the Code, or both, with respect to the
Loans, the Letters of Credit, the Commitments and this Agreement and is
responsible for exercising independent judgment in evaluating the transactions
hereunder; and

(v) no fee or other compensation is being paid directly to the Administrative
Agent, the Lead Arranger or any their respective Affiliates for investment
advice (as opposed to other services) in connection with the Loans, the Letters
of Credit, the Commitments or this Agreement.

(c) The Administrative Agent and the Lead Arranger hereby informs the Lenders
that each such Person is not undertaking to provide impartial investment advice,
or to give advice in a fiduciary capacity, in connection with the transactions
contemplated hereby, and that such Person has a financial interest in the
transactions contemplated hereby in that such Person or an Affiliate thereof
(i) may receive interest or other payments with respect to the Loans, the
Letters of Credit, the Commitments and this Agreement, (ii) may recognize a gain
if it extended the Loans, the Letters of Credit or the Commitments for an amount
less than the amount being paid for an interest in the Loans, the Letters of
Credit or the Commitments by such Lender or (iii) may receive fees or other
payments in connection with the transactions contemplated hereby, the Credit
Documents or otherwise, including structuring fees, commitment fees,

 

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arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees,
agency fees, administrative agent or collateral agent fees, utilization fees,
minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate
transaction fees, amendment fees, processing fees, term out premiums, banker’s
acceptance fees, breakage or other early termination fees or fees similar to the
foregoing.

(d) The above representations in Section 8.13(b)(ii) are intended to comply with
the Department of Labor’s regulation 29 CFR §§ 2510.3-21(a) and (c)(1) as
promulgated on April 8, 2016 (81 Fed. Reg. 20,997), and if these regulations are
revoked, repealed or no longer effective, SUCH representations shall be deemed
to be no longer required or in effect.

ARTICLE 9

MISCELLANEOUS

Section 9.1. Costs and Expenses. The Borrower agrees to pay promptly (and in any
event within ten (10) days after written demand therefor (accompanied by
detailed invoices)):

(a) all reasonable and documented out-of-pocket costs and expenses of
Administrative Agent and the Lead Arranger (but not of other Lenders) in
connection with the preparation, execution, delivery, administration,
modification, and amendment of this Agreement, the Revolving Notes, and the
other Credit Documents (and any amendment or waiver with respect thereto)
including, to the extent provided for in this Agreement, costs associated with
field examinations, appraisals, and the reasonable fees and out of pocket
expenses of one outside counsel for Administrative Agent and the Lead Arranger
(but not of other Lenders) and one local counsel for Administrative Agent and
the Lead Arranger (but not of other Lenders) in each relevant jurisdiction;

(b) all reasonable and documented out-of-pocket costs and expenses of the
Lenders, taken as a whole, in connection with the preparation, execution,
delivery, administration, modification, and amendment of this Agreement, the
Revolving Notes, and the other Credit Documents (and any amendment or waiver
with respect thereto) including costs associated with field examinations,
appraisals, and the reasonable fees and out of pocket expenses of one outside
counsel for the Lenders and one local counsel for the Lenders in each relevant
jurisdiction;

(c) all documented out-of-pocket costs and expenses, if any, of the
Administrative Agent and each Lender in connection with the enforcement (whether
through negotiations, legal proceedings, or otherwise) of this Agreement, the
Revolving Notes, and the other Credit Documents; and

(d) to the extent required pursuant to Section 5.12, all reasonable and
documented fees and expenses associated with collateral monitoring, collateral
reviews and field examinations, including the reasonable fees and expenses of
other advisors and professionals engaged by the Administrative Agent or the Lead
Arranger in connection therewith.

(e) Without prejudice to the survival of any other agreement of the Credit
Parties hereunder, the agreements and obligations of the Credit Parties
contained in this Section 9.1 shall survive the termination of this Agreement,
the termination of all Commitments, and the payment in full of the Loans and all
other amounts payable under this Agreement.

 

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Section 9.2. Indemnification; Waiver of Damages.

(a) INDEMNIFICATION. EACH CREDIT PARTY HERETO AGREES TO, JOINTLY AND SEVERALLY,
INDEMNIFY AND HOLD HARMLESS THE ADMINISTRATIVE AGENT, EACH ISSUING LENDER AND
EACH LENDER AND EACH RELATED PARTY OF EACH OF THE FOREGOING PERSONS (EACH, AN
“INDEMNITEE”) FROM AND AGAINST ANY AND ALL CLAIMS, DAMAGES, LOSSES, LIABILITIES,
PENALTIES, INCREMENTAL TAXES, COSTS, AND EXPENSES (INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS’ FEES, CHARGES AND DISBURSEMENTS OF COUNSEL TO
ANY INDEMNITEE) THAT MAY BE INCURRED BY OR ASSERTED OR AWARDED AGAINST ANY
INDEMNITEE, IN EACH CASE ARISING OUT OF OR IN CONNECTION WITH OR BY REASON OF
(INCLUDING, WITHOUT LIMITATION, IN CONNECTION WITH ANY INVESTIGATION,
LITIGATION, OR PROCEEDING OR PREPARATION OF DEFENSE IN CONNECTION THEREWITH) (i)
THE CREDIT DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THE ACTUAL
OR PROPOSED USE OF THE PROCEEDS OF THE LOANS, (ii) ANY LOAN OR LETTER OF CREDIT
OR THE USE OF THE PROCEEDS THEREFROM (INCLUDING ANY REFUSAL BY ANY ISSUING
LENDER TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF THE DOCUMENTS
PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS
OF SUCH LETTER OF CREDIT), (iii) ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF
HAZARDOUS SUBSTANCE ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE BORROWER OR
ANY OF ITS SUBSIDIARIES, OR ANY ENVIRONMENTAL CLAIM RELATED IN ANY WAY TO THE
BORROWER OR ANY OF ITS SUBSIDIARIES, IN ALL CASES, WHETHER OR NOT CAUSED BY OR
ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE. CONTRIBUTORY OR SOLE
NEGLIGENCE OF THE APPLICABLE INDEMNITEE, (iv) THE FAILURE OF A CREDIT PARTY TO
DELIVER TO THE ADMINISTRATIVE AGENT THE REQUIRED RECEIPTS OR OTHER REQUIRED
DOCUMENTARY EVIDENCE WITH RESPECT TO A PAYMENT MADE BY A CREDIT PARTY FOR TAXES
PURSUANT TO SECTION 2.12, OR (v) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION,
INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER OR NOT
SUCH CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING IS BROUGHT BY ANY CREDIT
PARTY OR THEIR RESPECTIVE EQUITY HOLDERS, AFFILIATES, CREDITORS OR ANY OTHER
THIRD PERSON AND WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO; PROVIDED THAT SUCH
INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH
LOSSES, CLAIMS, DAMAGES, PENALTIES, LIABILITIES OR RELATED EXPENSES ARE
DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NON-APPEALABLE
JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
SUCH INDEMNITEE. IN THE CASE OF AN INVESTIGATION, LITIGATION OR OTHER PROCEEDING
TO WHICH THE INDEMNITY IN THIS SECTION 9.2 APPLIES, SUCH INDEMNITY SHALL BE
EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION, LITIGATION OR PROCEEDING IS BROUGHT
BY ANY CREDIT PARTY, ITS DIRECTORS, SHAREHOLDERS OR CREDITORS OR AN INDEMNITEE
OR ANY OTHER PERSON OR ANY INDEMNITEE IS OTHERWISE A PARTY THERETO AND WHETHER
OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED. THE FOREGOING
INDEMNITY AND HOLD HARMLESS PROVISIONS SHALL NOT APPLY TO ANY CLAIMS, DAMAGES,
LOSSES, LIABILITIES, COSTS OR EXPENSES THAT IS INCURRED BY OR ASSERTED OR
AWARDED AGAINST ANY INDEMNITEE DIRECTLY FOR, OR AS A DIRECT CONSEQUENCE OF, SUCH
INDEMNITEE BEING A DEFAULTING LENDER UNDER CLAUSE (A) OR (B) OF THE DEFINITION
OF “DEFAULTING LENDER”, WHETHER ASSERTED BY ANY CREDIT PARTY, THE ADMINISTRATIVE
AGENT OR ANY ISSUING LENDER NO CREDIT PARTY SHALL, WITHOUT THE PRIOR WRITTEN
CONSENT OF EACH INDEMNITEE AFFECTED THEREBY (WHICH CONSENT WILL NOT BE
UNREASONABLY WITHHELD), SETTLE ANY THREATENED OR PENDING CLAIM OR ACTION THAT
WOULD GIVE RISE TO THE RIGHT OF ANY INDEMNITEE TO CLAIM INDEMNIFICATION
HEREUNDER UNLESS SUCH SETTLEMENT (X) INCLUDES A FULL AND UNCONDITIONAL RELEASE
OF ALL LIABILITIES ARISING OUT OF SUCH CLAIM OR ACTION AGAINST SUCH INDEMNITEE
AND

 

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(Y) DOES NOT INCLUDE ANY STATEMENT AS TO OR AN ADMISSION OF FAULT, CULPABILITY
OR FAILURE TO ACT BY OR ON BEHALF OF ANY INDEMNITEE. THIS SECTION 9.2(a) SHALL
NOT APPLY WITH RESPECT TO TAXES OTHER THAN ANY TAXES THAT REPRESENT LOSSES,
CLAIMS, DAMAGES, ETC. ARISING FROM ANY NON-TAX CLAIM.

(b) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, no Credit Party shall assert, agrees not to assert, and hereby
waives, any claim against any Indemnitee on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Credit Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof. No Indemnitee referred to in
subsection (a) above shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed to such
unintended recipients by such Indemnitee through telecommunications, electronic
or other information transmission systems in connection with this Agreement or
the other Credit Documents or the transactions contemplated hereby or thereby
other than for direct or actual damages resulting from the gross negligence or
willful misconduct of such Indemnitee as determined by a final and nonappealable
judgment of a court of competent jurisdiction.

(c) Payments. All payments required to be made under this Section 9.2 shall be
made within ten (10) days of demand therefor.

(d) Survival. Without prejudice to the survival of any other agreement of the
Credit Parties hereunder, the agreements and obligations of the Credit Parties
contained in this Section 9.2 shall survive the termination of this Agreement,
the termination of all Commitments, and the payment in full of the Loans and all
other amounts payable under this Agreement.

Section 9.3. Waivers and Amendments. No amendment or waiver of any provision of
this Agreement, the Revolving Notes, or any other Credit Document (other than
the Fee Letter), nor consent to any departure by the Borrower or any Guarantor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Required Lenders and the Borrower, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided that:

(a) no amendment, waiver, or consent shall, unless in writing and signed by all
the affected Lenders and the Borrower, do any of the following: (i) waive any of
the conditions specified in Section 3.1, (ii) reduce any principal, interest,
fees or other amounts payable hereunder or under any other Credit Document
(provided that the waiver of default interest shall only require the consent of
the Required Lenders), (iii) postpone or extend any date fixed for any payment
of any principal, interest, fees or other amounts payable hereunder, including,
without limitation, the Scheduled Maturity Date (it being understood and agreed
that a waiver of a mandatory prepayment shall only require the consent of the
Required Lenders), (iv) amend Section 2.11(e), Section 7.5. this Section 9.3 or
any other provision in any Credit Document which expressly requires the consent
of, or action or waiver by, all of the Lenders, amend the definition of
“Required Lenders”, or change the number of Lenders which shall be required for
the Lenders to take any action hereunder or under any other Credit Document,
(v) except as specifically provided in the Credit Documents and as a result of
transactions permitted by the terms of this Agreement, release any Guarantor
from its obligation under any Guaranty or release all or substantially all of
the Collateral, (vi) make any amendment to the definition of “Borrowing Base” or
(vii) make any amendment to the definitions of “Eligible Accounts” or “Eligible
Cash”;

(b) no Commitment of a Lender or any obligations of a Lender may be increased
without such Lender’s written consent;

 

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(c) no amendment, waiver, or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Administrative Agent under this
Agreement or any other Credit Document;

(d) no amendment, waiver or consent shall, unless in writing and signed by an
Issuing Lender in addition to the Lenders required above to take such action,
affect the rights or duties of such Issuing Lender under this Agreement or any
other Credit Document;

(e) for the avoidance of doubt, amendments made pursuant to Section 2.16 may be
made pursuant to agreement or agreements in writing entered into by the Borrower
and the Required Lenders or by the Borrower and the Administrative Agent with
the consent of the Required Lenders.

(f) Notwithstanding anything to the contrary contained in the Credit Documents,
the Administrative Agent and the Borrower, may amend, modify or supplement any
Credit Document without the consent of any Lender in order to (i) correct,
amend, cure or resolve any minor ambiguity, omission, defect, typographical
error, inconsistency or other manifest error therein, (ii) add a guarantor or
collateral or otherwise enhance the rights and benefits of the Lenders,
(iii) make minor administrative or operational changes not adverse to any Lender
or (iv) adhere to any local Legal Requirement or advice of local counsel.

Section 9.4. Severability. In case one or more provisions of this Agreement or
the other Credit Documents shall be invalid, illegal or unenforceable in any
respect under any applicable law, the validity, legality, and enforceability of
the remaining provisions contained herein or therein shall not be affected or
impaired thereby.

Section 9.5. Survival of Representations and Obligations. All representations
and warranties contained in this Agreement or made in writing by or on behalf of
the Credit Parties in connection herewith shall survive the execution and
delivery of this Agreement and the other Credit Documents, the making of the
Loans or the issuance of any Letters of Credit and any investigation made by or
on behalf of the Lenders, none of which investigations shall diminish any
Lender’s right to rely on such representations and warranties. All obligations
of the Borrower or any other Credit Party provided for in Sections 2.9, 2.10,
2.12(c), 9.1 and 9.2 and all of the obligations of the Lenders in Section 8.5
shall survive any termination of this Agreement and repayment in full of the
Obligations.

Section 9.6. Binding Effect. This Agreement shall become effective when it shall
have been executed by the Borrower and the Administrative Agent, and when the
Administrative Agent shall have, as to each Lender, either received a
counterpart hereof executed by such Lender or been notified by such Lender that
such Lender has executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent, and each Lender and their
respective successors and permitted assigns, except that neither the Borrower
nor any other Credit Party shall have the right to assign its rights or delegate
its duties under this Agreement or any interest in this Agreement without the
prior written consent of each Lender.

Section 9.7. Lender Assignments and Participations.

(a) Each Lender may assign to one or more Eligible Assignees all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Loans, its Revolving Notes, and its Commitments);
provided. however, that (i) each such assignment shall be to an Eligible
Assignee; (ii) each assignment of a Lender’s rights and obligations with respect
to Loans and its Commitments shall be of a constant, and not varying, percentage
of all of its rights and obligations under this Agreement as a Lender and the
Revolving Notes (other than rights of reimbursement and indemnity arising before
the effective date of such assignment); and (iii) the parties to such assignment
shall execute

 

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and deliver to the Administrative Agent for its acceptance an Assignment and
Acceptance, together with any Revolving Notes subject to such assignment and the
assignor or assignee Lender shall pay a processing fee of $3,500; provided that
such processing fee may be waived at the sole discretion of the Administrative
Agent. Upon execution, delivery, and acceptance of such Assignment and
Acceptance and payment of the processing fee, the assignee thereunder shall be a
party hereto and, to the extent of such assignment, have the obligations,
rights, and benefits of a Lender hereunder and the assigning Lender shall, to
the extent of such assignment, relinquish its rights and be released from its
obligations under this Agreement. Upon the consummation of any assignment
pursuant to this Section 9.7, the assignor, the Administrative Agent and the
Borrower shall make appropriate arrangements so that, if requested, new
Revolving Notes are issued to the assignor and the assignee. The assignee shall
deliver to the Borrower and the Administrative Agent any applicable forms or
certifications in accordance with Section 2.12(f).

(b) The Administrative Agent, acting solely for this purpose as a non-fiduciary
agent of the Borrower for Tax purposes, shall maintain at its address referred
to in Section 9.9 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitments of, and principal amount (and stated interest)
of the Loans owing to, each Lender from time to time (the “Register”). The
entries in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Credit Parties, the Administrative Agent and the Lenders
shall treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.

(c) Upon its receipt of an Assignment and Acceptance executed by the parties
thereto, together with any Revolving Notes subject to such assignment and
payment of the processing fee, the Administrative Agent shall, if such
Assignment and Acceptance has been completed, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register, and
(iii) give prompt notice thereof to the parties thereto.

(d) Each Lender may sell participations to one or more Persons in all or a
portion of its rights and/or obligations under this Agreement (including all or
a portion of its Commitments or its Loans) provided. however, that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participant shall be entitled to the
benefit of the yield protection provisions contained in Sections 2.9, 2.10 and
2.12 (subject to the requirements and limitations therein, including the
requirements under Section 2.12(f) (it being understood that the documentation
required under Section 2.12(f) shall be delivered to the participating Lender)),
but with respect to any particular participant, to no greater extent than the
Lender that sold the participation to such participant except to the extent such
entitlement to receive a greater payment results from a Change in Law that
occurs after the participant acquired the applicable participation, and the
right of set-off contained in Section 7.4, and (iv) the Borrower shall continue
to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement, and such Lender shall retain the
sole right to enforce the obligations of the Borrower relating to its Loans and
its Revolving Notes and to approve any amendment, modification, or waiver of any
provision of this Agreement (other than amendments, modifications, or waivers
decreasing the amount of principal of or the rate at which interest is payable
on such Loans or Revolving Notes, extending any scheduled principal payment date
or date fixed for the payment of interest on such Loans or Revolving Notes, or
extending its Commitment). Each Lender that sells a participation shall, acting
solely for this purpose as a non-fiduciary agent of the Borrower, maintain a
register on which it enters the name and address of each participant and the
principal amounts (and stated interest) of each participant’s interest in the
Loans or other obligations under the Credit Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any
participant or any information relating to a participant’s interest in any
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letters of credit or its other obligations under any Credit Document) to any
Person except to the extent that such disclosure is necessary to establish that
such commitment, loan, letter of credit or other obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations. The
entries in the Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary. For the avoidance of
doubt, the Administrative Agent (in its capacity as Administrative Agent) shall
have no responsibility for maintaining a Participant Register.

(e) Notwithstanding any other provision set forth in this Agreement, any Lender
may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including
any pledge or assignment to secure obligations to a Federal Reserve Bank or any
other central bank having jurisdiction over such Lender; provided that no such
pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

(f) Any Lender may furnish any information concerning the Borrower or any of its
Subsidiaries in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants), subject,
however, to the provisions of the following Section 9.8.

Section 9.8. Confidentiality. Each of the Administrative Agent, the Issuing
Lenders and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any Governmental Authority
(including any self-regulatory authority, such as the National Association of
Insurance Commissioners), (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or under any other Credit Document or any suit, action or proceeding relating to
this Agreement or the enforcement of rights hereunder of under any other Credit
Document, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any assignee of or participant in, or any
prospective assignee of or participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Borrower and its
obligations, (g) on a confidential basis to (1) any rating agency in connection
with rating the Borrower or its Subsidiaries or the credit facilities provided
for herein, (2) the CUSIP Service Bureau or any similar agency in connection
with the issuance and monitoring of identification numbers with respect to the
credit facilities provided for herein or (3) to market data collectors, (h) with
the consent of the Borrower or (i) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or
(ii) becomes available to the Administrative Agent, any Issuing Lender or any
Lender on a non-confidential basis from a source other than the Borrower. For
the purposes of this Section, “Information” means all information received from
the Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent, any Issuing Lender or
any Lender on a non-confidential basis prior to disclosure by the Borrower and
other than information pertaining to this Agreement routinely provided by
arrangers to data service providers, including league table providers, that
serve the lending industry; provided that, in the case of information received
from the Borrower after the date hereof, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information. The Borrower hereby
authorizes JPMCB and its Affiliates, at their respective sole expense, but
without any prior approval by the Borrower, to publish such tombstones and give
such other publicity to this Agreement as each may from time to time determine
in its sole discretion. The foregoing authorization shall remain in effect
unless and until the Borrower notifies JPMCB in writing that such authorization
is revoked.

 

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Section 9.9. Notices. Etc.

(a) Except as provided in paragraph (b) below, all notices and other
communications (other than Notices of Borrowing and Notices of Continuation or
Conversion, which are governed by Article 2 of this Agreement) shall be in
writing and hand delivered with written receipt, sent by a nationally recognized
overnight courier, or sent by certified mail, return receipt requested as
follows: if to a Credit Party, as specified on Schedule 9.9, if to the
Administrative Agent or an Issuing Lender, at its credit contact specified under
its name on Schedule 9.9, and if to any Lender at is credit contact specified in
its Administrative Questionnaire. Each party may change its notice address by
written notification to the other parties. All such notices and communications
shall be effective when delivered, except that notices and communications to any
Lender or an Issuing Lender pursuant to Article 2 shall not be effective until
received notices delivered through electronic communications to the extent
provided in paragraph (b) below, shall be effect as provided in said paragraph
(b).

(b) Notices and other communications to the Administrative Agent and each Lender
hereunder may be delivered or furnished by electronic communication (including
e-mail, internet or intranet websites) pursuant to procedures approved by the
Administrative Agent; provided that (i) such communication is followed promptly
by an original delivered in accordance with paragraph (a) above and (ii) the
foregoing shall not apply to notices to the Administrative Agent or any Lender
pursuant to Article 2 if such Person has notified the Borrower that it is
incapable of receiving notices under such article by electronic communication.
Unless the Administrative Agent otherwise prescribes, (A) notices and other
communications sent to an e-mail address shall be deemed received upon sender’s
receipt of an acknowledgment from the recipient (such as by the “Return Receipt
Requested” function, as available, return e-mail or other written
acknowledgment), and (B) notices or communications posted to an internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing clause
(1) of notification that such notice or communication is available and
identifying the website address therefor.

Section 9.10. Usury Not Intended. It is the intent of each Credit Party and each
Lender in the execution and performance of this Agreement and the other Credit
Documents to contract in strict compliance with applicable usury laws, including
conflicts of law concepts, governing the Loans of each Lender including such
applicable laws of the State of New York, if any, and the United States of
America from time to time in effect. In furtherance thereof, the Lenders and the
Credit Parties stipulate and agree that none of the terms and provisions
contained in this Agreement or the other Credit Documents shall ever be
construed to create a contract to pay, as consideration for the use, forbearance
or detention of money, interest at a rate in excess of the Maximum Rate and that
for purposes of this Agreement “interest” shall include the aggregate of all
charges which constitute interest under such laws that are contracted for,
charged or received under this Agreement; and in the event that, notwithstanding
the foregoing, under any circumstances the aggregate amounts taken, reserved,
charged, received or paid on the Loans, include amounts which by applicable law
are deemed interest which would exceed the Maximum Rate, then such excess shall
be deemed to be a mistake and each Lender receiving same shall credit the same
on the principal of its Revolving Notes (or if such Revolving Notes shall have
been paid in full, refund said excess to the Borrower). In the event that the
maturity of the Revolving Notes are accelerated by reason of any election of the
holder thereof resulting from any Event of Default under this Agreement or
otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest may never include more than the Maximum
Rate, and excess interest, if any, provided for in this Agreement or otherwise
shall be canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall

 

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be credited on the applicable Revolving Notes (or, if the applicable Revolving
Notes shall have been paid in full, refunded to the Borrower of such interest).
In determining whether or not the interest paid or payable under any specific
contingencies exceeds the Maximum Rate, the Credit Parties and the Lenders shall
to the maximum extent permitted under applicable law amortize, prorate, allocate
and spread in equal parts during the period of the full stated term of the
Revolving Notes all amounts considered to be interest under applicable law at
any time contracted for, charged, received or reserved in connection with the
Obligations. The provisions of this Section 9.10 shall control over all other
provisions of this Agreement or the other Credit Documents which may be in
apparent conflict herewith.

Section 9.11. Usury Recapture. In the event the rate of interest chargeable
under this Agreement at any time is greater than the Maximum Rate, the unpaid
principal amount of the Loans shall bear interest at the Maximum Rate until the
total amount of interest paid or accrued on the Loans equals the amount of
interest which would have been paid or accrued on the Loans if the stated rates
of interest set forth in this Agreement had at all times been in effect. In the
event, upon payment in full of the Loans, the total amount of interest paid or
accrued under the terms of this Agreement and the Loans is less than the total
amount of interest which would have been paid or accrued if the rates of
interest set forth in this Agreement had, at all times, been in effect, then the
Borrower shall, to the extent permitted by applicable law, pay the
Administrative Agent for the account of the Lenders an amount equal to the
difference between (i) the lesser of (A) the amount of interest which would have
been charged on its Loans if the Maximum Rate had, at all times, been in effect
and (B) the amount of interest which would have accrued on its Loans if the
rates of interest set forth in this Agreement had at all times been in effect
and (ii) the amount of interest actually paid under this Agreement on its Loans.
In the event the Lenders ever receive, collect or apply as interest any sum in
excess of the Maximum Rate, such excess amount shall, to the extent permitted by
law, be applied to the reduction of the principal balance of the Loans, and if
no such principal is then outstanding, such excess or part thereof remaining
shall be paid to the Borrower.

Section 9.12. Governing Law; Service of Process. The Credit Documents (other
than those containing a contrary express choice of law provision) shall be
governed by and construed in accordance with the laws of the State of New York
and, to the extent applicable, the Bankruptcy Code. Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices in
Section 9.9. Nothing in this Agreement or any other Credit Document will affect
the right of any party to this Agreement to serve process in any other manner
permitted by law.

Section 9.13. Submission to Jurisdiction. Each Credit Party hereby irrevocably
and unconditionally submits, for itself and its property, to the exclusive
jurisdiction of the Bankruptcy Court or, if the Bankruptcy Court does not have
(or abstains from) jurisdiction, any U.S. Federal or New York State court
sitting in New York, New York in any action or proceeding arising out of or
relating to any Credit Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Credit Document shall affect any right
that the Administrative Agent, any Issuing Lender or any Lender may otherwise
have to bring any action or proceeding relating to this Agreement or any other
Credit Document against any Credit Party or its properties in the courts of any
jurisdiction. Each Credit Party hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Credit
Document in any court referred to in this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

 

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Section 9.14. Execution in Counterparts; Electronic Execution. (a) This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement and (b) delivery of an executed counterpart of a signature page
of (x) this Agreement, (y) any other Credit Document and/or (z) any document,
amendment, approval, consent, information, notice (including, for the avoidance
of doubt, any notice delivered pursuant to Section 9.9), certificate, request,
statement, disclosure or authorization related to this Agreement, any other
Credit Document and/or the transactions contemplated hereby and/or thereby (each
an “Ancillary Document”) that is an Electronic Signature transmitted by
telecopy, emailed pdf. or any other electronic means that reproduces an image of
an actual executed signature page shall be effective as delivery of a manually
executed counterpart of this Agreement, such other Credit Document or such
Ancillary Document, as applicable. The words “execution,” “signed,” “signature,”
“delivery,” and words of like import in or relating to this Agreement, any other
Credit Document and/or any Ancillary Document shall be deemed to include
Electronic Signatures, deliveries or the keeping of records in any electronic
form (including deliveries by telecopy, emailed pdf. or any other electronic
means that reproduces an image of an actual executed signature page), each of
which shall be of the same legal effect, validity or enforceability as a
manually executed signature, physical delivery thereof or the use of a
paper-based recordkeeping system, as the case may be; provided that nothing
herein shall require the Administrative Agent to accept Electronic Signatures in
any form or format without its prior written consent and pursuant to procedures
approved by it; provided, further, without limiting the foregoing, (i) to the
extent the Administrative Agent has agreed to accept any Electronic Signature,
the Administrative Agent and each of the Lenders shall be entitled to rely on
such Electronic Signature purportedly given by or on behalf of the Borrower or
any other Credit Party without further verification thereof and without any
obligation to review the appearance or form of any such Electronic signature and
(ii) upon the request of the Administrative Agent or any Lender, any Electronic
Signature shall be promptly followed by a manually executed counterpart. Without
limiting the generality of the foregoing, the Borrower and each Credit Party
hereby (i) agree that, for all purposes, including without limitation, in
connection with any workout, restructuring, enforcement of remedies, bankruptcy
proceedings or litigation among the Administrative Agent, the Lenders, the
Borrower and the Credit Parties, Electronic Signatures transmitted by telecopy,
emailed pdf. or any other electronic means that reproduces an image of an actual
executed signature page and/or any electronic images of this Agreement, any
other Credit Document and/or any Ancillary Document shall have the same legal
effect, validity and enforceability as any paper original, (ii) the
Administrative Agent and each of the Lenders may, at its option, create one or
more copies of this Agreement, any other Loan Document and/or any Ancillary
Document in the form of an imaged electronic record in any format, which shall
be deemed created in the ordinary course of such Person’s business, and destroy
the original paper document (and all such electronic records shall be considered
an original for all purposes and shall have the same legal effect, validity and
enforceability as a paper record), (iii) waives any argument, defense or right
to contest the legal effect, validity or enforceability of this Agreement, any
other Credit Document and/or any Ancillary Document based solely on the lack of
paper original copies of this Agreement, such other Credit Document and/or such
Ancillary Document, respectively, including with respect to any signature pages
thereto and (iv) waives any claim against any Related Party for any liabilities
arising solely from the Administrative Agent’s and/or any Lender’s reliance on
or use of Electronic Signatures and/or transmissions by telecopy, emailed pdf.
or any other electronic means that reproduces an image of an actual executed
signature page, including any liabilities arising as a result of the failure of
the Borrower and/or any Credit Party to use any available security measures in
connection with the execution, delivery or transmission of any Electronic
Signature.

Section 9.15. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
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CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, OTHER AGENT (INCLUDING ANY ATTORNEY) OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

Section 9.16. [Reserved].

Section 9.17. USA Patriot Act. Each Lender that is subject to the Patriot Act
and the Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies each Credit Party that pursuant to the requirements of the Patriot Act
it is required to obtain, verify and record information that identifies such
Credit Party, which information includes the name and address of such Credit
Party and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify such Credit Party in accordance with the
Patriot Act.

Section 9.18. No Fiduciary or Agency Relationship. The Borrower acknowledges and
agrees, and acknowledges its subsidiaries’ understanding, that no Lender Party
will have any obligations except those obligations expressly set forth herein
and in the other Credit Documents and each Lender Party is acting solely in the
capacity of an arm’s length contractual counterparty to the Borrower with
respect to the Credit Documents and the transaction contemplated therein and not
as a financial advisor or a fiduciary to, or an agent of, the Borrower or any
other person. The Borrower agrees that it will not assert any claim against any
Lender Party based on an alleged breach of fiduciary duty by such Lender Party
in connection with this Agreement and the transactions contemplated hereby.
Additionally, the Borrower acknowledges and agrees that no Lender Party is
advising the Borrower as to any legal, tax, investment, accounting, regulatory
or any other matters in any jurisdiction. The Borrower shall consult with its
own advisors concerning such matters and shall be responsible for making its own
independent investigation and appraisal of the transactions contemplated hereby,
and the Lender Parties shall have no responsibility or liability to the Borrower
with respect thereto. The Borrower further acknowledges and agrees, and
acknowledges its subsidiaries’ understanding, that each Lender Party, together
with its Affiliates, is a full service securities or banking firm engaged in
securities trading and brokerage activities as well as providing investment
banking and other financial services. In the ordinary course of business, any
Lender Party may provide investment banking and other financial services to,
and/or acquire, hold or sell, for its own accounts and the accounts of
customers, equity, debt and other securities and financial instruments
(including bank loans and other obligations) of, the Borrower and other
companies with which the Borrower may have commercial or other relationships.
With respect to any securities and/or financial instruments so held by any
Lender Party or any of its customers, all rights in respect of such securities
and financial instruments, including any voting rights, will be exercised by the
holder of the rights, in its sole discretion. In addition, the Borrower
acknowledges and agrees, and acknowledges its subsidiaries’ understanding, that
each Lender Party and its affiliates may be providing debt financing, equity
capital or other services (including financial advisory services) to other
companies in respect of which the Borrower may have conflicting interests
regarding the transactions described herein and otherwise. No Lender Party will
use confidential information obtained from the Borrower by virtue of the
transactions contemplated by the Credit Documents or its other relationships
with the Borrower in connection with the performance by such Lender Party of
services for other companies, and no Lender Party will furnish any such
information to other companies. The Borrower also acknowledges that no Lender
Party has any obligation to use in connection with the transactions contemplated
by the Credit Documents, or to furnish to the Borrower, confidential information
obtained from other companies.

 

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Section 9.19. Keepwell. Each Qualified ECP Guarantor hereby jointly and
severally absolutely, unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by each other Credit
Party to honor all of its obligations under any Credit Document in respect of a
Swap Obligation (provided, however, that each Qualified ECP Guarantor shall only
be liable under this Section 9.19 for the maximum amount of such liability that
can be hereby incurred without rendering its obligations under this Section 9.19
or otherwise under any Credit Document voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater amount).
Except as otherwise provided herein, the obligations of each Qualified ECP
Guarantor under this Section 9.19 shall remain in full force and effect until
the termination of all Swap Obligations. Each Qualified ECP Guarantor intends
that this Section 9.19 constitute, and this Section 9.19 shall be deemed to
constitute, a “keepwell, support, or other agreement” for the benefit of each
other Credit Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity
Exchange Act.

Section 9.20. Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Credit Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any EEA Financial
Institution arising under any Credit Document, may be subject to the Write-Down
and Conversion Powers of an EEA Resolution Authority and agrees and consents to,
and acknowledges and agrees to be bound by:

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

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

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

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

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

Section 9.21. Integration. THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS, AS
DEFINED IN THIS AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND
SUPERSEDE ALL PRIOR UNDERSTANDINGS AND AGREEMENTS, WHETHER WRITTEN OR ORAL,
RELATING TO THE TRANSACTIONS PROVIDED FOR HEREIN AND THEREIN. ADDITIONALLY, THIS
AGREEMENT AND THE CREDIT DOCUMENTS MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. TO THE EXTENT
THERE ARE ANY INCONSISTENCIES BETWEEN THE TERMS OF THIS AGREEMENT OR ANY CREDIT
DOCUMENT AND THE DIP ORDER, THE PROVISIONS OF THE DIP ORDER SHALL GOVERN.

THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES.

IN EXECUTING THIS AGREEMENT, EACH CREDIT PARTY HEREBY WARRANTS AND REPRESENTS IT
IS NOT RELYING ON ANY STATEMENT OR REPRESENTATION OTHER THAN THOSE IN THIS
AGREEMENT AND IS RELYING UPON ITS OWN JUDGMENT AND ADVICE OF ITS ATTORNEYS.

 

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Section 9.22. Several Obligations; Nonreliance; Violation of Law. The respective
obligations of the Lenders hereunder are several and not joint and the failure
of any Lender to make any Loan or perform any of its obligations hereunder shall
not relieve any other Lender from any of its obligations hereunder. Each Lender
hereby represents that it is not relying on or looking to any margin stock (as
defined in Regulation U of the Board) for the repayment of the Revolving
Borrowings provided for herein. Anything contained in this Agreement to the
contrary notwithstanding, neither any Issuing Lender nor any Lender shall be
obligated to extend credit to the Borrower in violation of any applicable law.

Section 9.23. Disclosure. Each Credit Party, each Lender and each Issuing Lender
hereby acknowledges and agrees that the Administrative Agent and/or its
Affiliates from time to time may hold investments in, make other loans to or
have other relationships with any of the Credit Parties and their respective
Affiliates.

Section 9.24. Appointment for Perfection. Each Lender hereby appoints each other
Lender as its agent for the purpose of perfecting Liens, for the benefit of the
Administrative Agent and the other Secured Parties, in assets which, in
accordance with Article 9 of the UCC or any other applicable law can be
perfected only by possession or control. Should any Lender (other than the
Administrative Agent) obtain possession or control of any such Collateral, such
Lender shall notify the Administrative Agent thereof, and, promptly upon the
Administrative Agent’s request therefor shall deliver such Collateral to the
Administrative Agent or otherwise deal with such Collateral in accordance with
the Administrative Agent’s instructions.

Section 9.25. Acknowledgement Regarding an Supported QFCs.

(a) To the extent that the Credit Documents provide support, through a guarantee
or otherwise, for Hedging Arrangements or any other agreement or instrument that
is a QFC (such support “QFC Credit Support” and each such QFC a “Supported
QFC”), the parties acknowledge and agree as follows with respect to the
resolution power of the Federal Deposit Insurance Corporation under the Federal
Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (together with the regulations promulgated thereunder,
the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC
Credit Support (with the provisions below applicable notwithstanding that the
Credit Documents and any Supported QFC may in fact be stated to be governed by
the laws of the State of New York and/or of the United States or any other state
of the United States):

 

113

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(b) In the event a Covered Entity that is party to a Supported QFC (each, a
“Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution
Regime, the transfer of such Supported QFC and the benefit of such QFC Credit
Support (and any interest and obligation in or under such Supported QFC and such
QFC Credit Support, and any rights in property securing such Supported QFC or
such QFC Credit Support) from such Covered Party will be effective to the same
extent as the transfer would be effective under the U.S. Special Resolution
Regime if the Supported QFC and such QFC Credit Support (and any such interest,
obligation and rights in property) were governed by the laws of the United
States or a state of the United States. In the event a Covered Party or a BHC
Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S.
Special Resolution Regime, Default Rights under the Credit Documents that might
otherwise apply to such Supported QFC or any QFC Credit Support that may be
exercised against such Covered Party are permitted to be exercised to no greater
extent than such Default Rights could be exercised under the U.S. Special
Resolution Regime if the Supported QFC and the Credit Documents were governed by
the laws of the United States or a state of the United States. Without
limitation of the foregoing, it is understood and agreed that rights and
remedies of the parties with respect to a Defaulting Lender shall in no event
affect the rights of any Covered Party with respect to a Supported QFC or any
QFC Credit Support.

[Remainder of this page intentionally left blank. Signature pages follow.]

 

114

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JPMORGAN CHASE BANK, N.A., as Administrative Agent, Lender and an Issuing Lender
By:   /s/ Stephanie Balette Name: Stephanie Balette Title: Authorized Officer

Signature Page to DIP ABL Credit Agreement

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ZIONS BANCORPORATION, N.A., DBA AMEGY BANK, as a Lender and an Issuing Lender
By:   /s/ Patty Smolik Name: Patty Smolik Title: Vice President

Signature Page to DIP ABL Credit Agreement

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UBS AG, STAMFORD BRANCH,
as a Lender By:   /s/ Darlene Arias Name: Darlene Arias Title: Director By:  
/s/ Houssem Daly Name: Houssem Daly Title: Associate Director

Signature Page to DIP ABL Credit Agreement

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BORROWER: HI-CRUSH INC. By:   /s/ J. Philip McCormick, Jr. Name: J. Philip
McCormick, Jr. Title: Chief Financial Officer

Signature Page to DIP ABL Credit Agreement

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EXHIBIT A1

Restructuring Term Sheet

[SEE EXHIBIT A TO RESTRUCTURING SUPPORT AGREEMENT WHICH IS ATTACHED AS EXHIBIT
10.1 TO HI-CRUSH INC.’S CURRENT REPORT ON 8-K FILED ON JULY 13, 2020]

 

 

1 

In the event of a conflict between the terms of the Credit Agreement, on the one
hand, and these Exhibits to the Credit Agreement, on the other hand, the terms
of the Credit Agreement shall govern and control.

Exhibit A – Restructuring Term Sheet

--------------------------------------------------------------------------------

EXHIBIT F

EXIT FACILITY TERM SHEET

[See attached]

 

Exhibit F – Exit Facility Term Sheet

--------------------------------------------------------------------------------

Confidential

Subject to FRE 408

 

 

HI-CRUSH INC., ET AL .

$25,000,000 SENIOR SECURED ABL FACILITY TERM SHEET

JULY 14, 2020

 

 

Reference is made herein to (a) that certain Senior Secured Debtor-In-Possession
Credit Agreement dated as of July 14, 2020 (as amended, amended and restated,
supplement or otherwise modified, the “DIP ABL Credit Agreement”) among Hi-Crush
Inc. (the “Borrower”), the lenders and issuing lenders party thereto (the
“Lenders”) and JPMorgan Chase Bank, N.A., as administrative agent for the
Lenders (the “Administrative Agent”) and (b) that certain Credit Agreement dated
as of August 1, 2018 (as amended, amended and restated, supplement or otherwise
modified, the “Prepetition Credit Agreement”) among the Borrower, the lenders
and issuing lenders party thereto and JPMorgan Chase Bank, N.A., as
administrative agent for the Lenders. Capitalized terms used but not defined
herein have the meanings assigned to such term in the DIP ABL Credit Agreement.

 

Term

  

Description

Borrower:    The Borrower. Guarantors:    The Guarantors (the Borrower and the
Guarantors together, the “Loan Parties”); provided that, for the avoidance of
doubt, any person that guarantees the Exit Convertible Notes shall guaranty the
Exit ABL Facility.

Administrative

Agent

   JPMorgan Chase Bank, N.A. shall be the administrative agent and collateral
agent for the Exit ABL Lenders (as defined herein) (in such capacity, the “Exit
ABL Agent”). Exit ABL Lenders:    The Lenders under the DIP ABL Credit Agreement
(in such capacity, the “Exit ABL Lenders” and, together with the Exit ABL Agent,
the “Exit ABL Lender Parties”). Documentation:   

The Exit ABL Credit Agreement and the other Exit ABL Documents shall be prepared
by counsel for the Exit ABL Agent, based upon and giving due regard to the
documentation for the Borrower’s existing credit agreement, with such changes to
substantially reflect the terms and provisions of this Exit Term Sheet in all
material respects, to reflect the exit facility nature of the Exit ABL Facility,
and shall otherwise be reasonably acceptable to the Exit ABL Lenders and the
Debtors in all respects.

 

For the avoidance of doubt, the Exit Note Documents shall not contain any
representations, covenants or events of default that are less favorable to the
Borrower than the terms of the Exit ABL Documents on the Closing Date, other
than any customary terms that reflect the nature of the Exit Notes as secured
convertible notes.

Exit ABL Facility:    The Exit ABL Facility shall be a senior secured
asset—based revolving loan financing facility provided by the Exit ABL Lenders
with aggregate revolving commitments not to exceed $25 million (the “Exit ABL
Commitments”, and such loans, the “Exit ABL Loans”).

 

1

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Term

  

Description

   After the Closing Date, the Borrower may increase the amount of Exit ABL
Commitments by either (a) obtaining increased commitments from one or more
existing Exit ABL Lenders on a pro rata or non-pro rata basis and/or
(b) obtaining commitments from new lenders that are reasonably acceptable to the
Exit ABL Agent and issuing banks to the extent that consent of the Exit ABL
agent and/or issuing lender would be required for an assignment of Exit ABL
Loans or Exit ABL Commitments to such new lender; such increased Exit ABL
Commitments shall be on identical terms to the other Exit ABL Commitments under
the Exit ABL Facility. Letters of Credit:    Undrawn letters of credit
outstanding under the DIP ABL Credit Agreement as of the Closing Date (“Existing
L/Cs”) shall be deemed outstanding under the Exit ABL Facility. The Exit ABL
Facility shall provide for the issuance or renewal of letters of credit by
certain Exit ABL Lenders; provided that the Exit ABL Facility will not permit
the aggregate Letter of Credit Exposure to exceed a $25 million aggregate
sublimit and fronting limits to be agreed with each issuing lender.

Exit Convertible

Notes:

  

The “Exit Convertible Notes” shall be a senior secured convertible notes issued
by the Borrower to the lenders under the DIP Term Loan Facility (the “Exit
Noteholders”) in an aggregate principal amount not to be less than $40 million
or exceed $60 million. The definitive documents governing the Exit Convertible
Notes (the “Exit Note Documents”) shall be consistent with the terms set forth
below and otherwise be reasonably satisfactory to the Required ABL Exit Lenders
(such approval not to be unreasonably withheld, delayed or conditioned). The
“Exit Note Agent” shall be Cantor Fitzgerald Securities, and together with the
Exit Noteholders, shall be the “Exit Noteholder Parties”.

 

The Exit Convertible Notes shall be secured by (a) validly perfected first
priority security interests in and liens on all of the Exit Note Priority
Collateral (as defined herein) and (b) validly perfect second priority security
interests in and liens on the Exit ABL Priority Collateral (collectively, the
“Exit Note Collateral” and the liens and security interests thereon and therein,
the “Exit Note Liens”).

 

Notwithstanding anything to the contrary herein, the Exit Note Documents shall
not be acceptable to the Exit ABL Lenders unless (a) the interest rate
applicable to the Exit Convertible Notes is no greater than (i) 8% for interest
paid in cash and (ii) 10% for interest paid in kind, (b) the Exit Convertible
Notes shall not require any amortization or sinking fund payment, (c) cash
interest may only be required to be paid to the extent permitted under the terms
of the Exit ABL Facility and (d) the Exit Note Documents do not contain events
of default, affirmative covenants or negative covenants that are more
restrictive on the Loan Parties than the Exit ABL Documents, other than any
customary terms that reflect the nature of the Exit Notes as secured convertible
notes (the requirements in clauses (a)-(d) above, the “Exit Note Documentation
Requirements”).

 

The Exit Note Agent, Exit Noteholders, Exit ABL Agent and Exit ABL Lenders will
enter into a customary intercreditor agreement reasonably acceptable to the Exit
ABL Agent that reflects the collateral priorities set forth herein.

Purpose:    The proceeds of the Exit ABL Facility shall be used to, among other
things: (a) pay fees, interest, payments and expenses associated with the Exit
ABL Facility, (b) provide for the ongoing working capital and capital
expenditure needs of the Loan Parties and (c) for other general corporate
purposes.

 

2

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Term

  

Description

Availability:    The Exit ABL Facility shall be subject to the Borrowing Base,
and “Availability” shall be equal to the difference between (a) the lesser of
(i) the Exit ABL Commitments and (ii) the Borrowing Base (such lesser amount,
the “Line Cap”) minus (b) the sum of (i) the sum of (A) the aggregate principal
amount of Exit ABL Loans and (B) the aggregate Letter of Credit Exposure (the
amount of this clause, (i), “Revolving Exposure”) and (ii) Reserves. Available
Draw Conditions:    The availability of the Exit ABL Commitments under the Exit
ABL Facility shall be subject to conditions as are (a) included in the
Prepetition Credit Agreement, and (b) customary for exit facilities and
transactions of this type and shall include, among other conditions, that the
issuance or renewal of any requested letters of credit shall not cause
Availability to be less than $0 and customary anti-cash hoarding provisions.
Borrowing Base:   

The “Borrowing Base” shall be an amount equal to the sum of the following: (a)
90% of each Loan Party’s Eligible Accounts with respect to investment grade
counterparties, plus (b) 85% of each Loan Party’s Eligible Accounts with respect
to non-investment grade counterparties, plus (c) 100% of each Loan Party’s
Eligible Cash, minus (d) reserves that the Exit ABL Agent deems necessary in its
permitted discretion to maintain. The Borrowing Base shall be determined monthly
by reference to the most recently delivered Borrowing Base Certificate; provided
that, (i) until the earlier of (A) the date on which Borrower’s consolidated
monthly financial statements for the 6th month ending after the Closing Date
have been delivered to the Exit ABL Agent and (B) the date on which the
difference of (1) the Borrowing Base minus (2) Eligible Cash is greater than the
sum of (x) the outstanding amount of Exit ABL Loans and (y) Letter of Credit
Exposure and (ii) at any time Availability is less than the greater of (A))
$7.5 million and (B) 20% of the Line Cap, the Borrowing Base shall be determined
weekly by reference to the most recently delivered Borrowing Base

Certificate.

 

“Eligible Accounts” shall be defined in a manner substantively identical to the
Borrower’s existing credit agreement; provided that the definition of “Specified
Account Debtor” shall be amended to comprise Chevron and EOG Resources for so
long as each maintains investment grade credit ratings in a manner consistent
with the DIP ABL Facility.

 

“Eligible Cash” means the amount of unrestricted cash of the Loan Parties that
is (a) held in a segregated account with the Exit ABL Agent and subject to a
fully-blocked account control agreement and (b) not subject to liens other than
liens in favor of the Exit ABL Agent for the benefit of the secured parties
under the Exit ABL Facility, liens in favor of the Exit Note Agent for the
benefit of the secured parties under the Exit Convertible Notes that are junior
to the liens of the Exit ABL Agent and permitted liens attaching by operation of
law in favor of the Exit ABL Agent in its capacity as depository bank.

 

Eligible Cash shall be released by the Exit ABL Agent upon the request of the
Borrower in a manner consistent with the DIP ABL Facility subject to a threshold
to be agreed.

 

3

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Term

  

Description

Field Exams:    The Borrower shall, and shall cause each of its Subsidiaries to,
permit the Exit ABL Agent or a third party selected by the Exit ABL Agent to,
upon the Exit ABL Agent’s request, conduct field examinations with respect to
any accounts included in the calculation of the Borrowing Base, at reasonable
business times and upon reasonable prior notice to the Borrower; provided that
(i) the Borrower shall bear the cost of one field examination in any fiscal year
and (ii) if Availability is less than the greater of (a) $7.5 million and (b)
20% of the Line Cap, the Borrower shall bear the cost of one additional field
examination in any fiscal year; provided further that if an Event of Default has
occurred and is continuing, the Borrower shall bear the cost of all field
examinations requested by the Exit ABL Agent. Interest Rates and Fees:    As set
forth on Annex A hereto. Default Rate:    Upon the occurrence and during the
continuance of any Event of Default (each as defined in the Exit ABL Credit
Agreement), with respect to the principal amount of the outstanding Exit ABL
Loans and any overdue amount (including overdue interest), the applicable
interest rate plus 2.00% per annum. Maturity:    The earliest of (a) August 1,
2023 and (b) the date all Exit ABL Loans become due and payable under the Exit
ABL Documents, whether by acceleration or otherwise (such date, the “Maturity
Date”). Collateral   

The obligations of the Loan Parties under the Exit ABL Facility shall be secured
by (a) a validly perfected first priority security interest in and lien on the
all of the Loan Parties’ assets securing any obligations under the Prepetition
Credit Agreement (“Exit ABL Priority Collateral” and, the liens and security
interests thereon and therein, the “Exit ABL Priority Liens”) and (b) a validly
perfected second priority security interest in an lien on all of the Loan
Parties’ assets that do not constitute Exit ABL Priority Collateral (the “Exit
Note Priority Collateral” and, together the Exit ABL Priority Collateral, the
“Exit ABL Collateral” and the liens and security interests thereon and therein,
the “Exit Note Priority Liens” and, together with the Exit ABL Priority Liens,
the “Exit ABL Liens”).

 

All of the Exit ABL Liens shall be created on terms and pursuant to
documentation satisfactory to the Exit ABL Agent and the Required Exit ABL
Lenders in their reasonable discretion.

Cash Dominion:    All cash of the Borrower and its Subsidiaries will be subject
to cash dominion (a) at all times during the period beginning on the Closing
Date and ending on the date the Borrower’s consolidated monthly financial
statements for the 6th month ending after the Closing Date have been delivered
to the Exit ABL Agent and (b) at any other time that a Covenant/Dominion Trigger
Period has occurred and is continuing Mandatory Prepayments:   

The Exit ABL Documents will contain mandatory prepayment provisions customary
for exit facilities of this type. Prior to the Maturity Date, the following
mandatory prepayments, subject to any applicable intercreditor agreement, shall
be required:

 

•  Overadvances: Prepayments of the Exit ABL Loans and, to the extent that any
portion of such prepayment remains, make deposits into the Cash Collateral
Account to provide cash collateral for the Letter of Credit Exposure in an
amount equal to the overadvance upon the sum of the outstanding principal amount
of all Exit ABL Loans and Letter of Credit Exposure exceeding the Line Cap.

 

4

--------------------------------------------------------------------------------

Term

  

Description

  

•  Asset Sales: Prepayments of the Exit ABL Loans and, to the extent that any
portion of such prepayment remains, make deposits into the Cash Collateral
Account to provide cash collateral for the Letter of Credit Exposure in an
amount equal to 100% of the net cash proceeds of the sale or other disposition
of any Exit ABL Priority Collateral, except for ordinary course and de minimis
sales and additional exceptions to be agreed on in the Exit ABL Documents and,
after making any such prepayment, the Borrower shall deliver a pro forma
Borrowing Base Certificate accounting for such asset sale;

 

•  Insurance Proceeds: Prepayments of the Exit ABL Loans and, to the extent that
any portion of such prepayment remains, make deposits into the Cash Collateral
Account to provide cash collateral for the Letter of Credit Exposure in an
amount equal to 100% of the net cash proceeds of insurance paid on account of
any loss of Exit ABL Priority Collateral subject to exceptions to be agreed on
in the Exit ABL Documents and, after making any such prepayment, the Borrower
shall deliver a pro forma Borrowing Base Certificate accounting for such loss;
and

 

•  Incurrence of Indebtedness: Prepayments of the Exit ABL Loans and, to the
extent that any portion of such prepayment remains, make deposits into the Cash
Collateral Account to provide cash collateral for the Letter of Credit Exposure
in an amount equal to 100% of the net cash proceeds of any indebtedness incurred
by the Loan Parties or any of their respective subsidiaries after the Closing
Date (other than the Exit Convertible Notes and any other indebtedness otherwise
permitted under the Exit ABL Documents) to the extent such net cash proceeds are
not used to prepay the Exit Convertible Notes, payable no later than the date of
receipt.

 

•  Consolidated Cash Balance. Prepayments of the Exit ABL Loans in an amount
equal to the amount by which the aggregate amount of cash and cash equivalents
of the Borrower and its subsidiaries exceeds a threshold to be agreed.

Optional

Prepayments:

   Prior to the Maturity Date, the Borrower may, (a) upon at least three
business days’ prior written notice in the case of Eurodollar Loans and (b) upon
at least one business days’ prior written notice in the case of ABR Loans and,
in each case, at the end of any applicable interest period (or at other times
with the payment of applicable breakage costs), prepay in full or in part (other
than such breakage costs), the Exit ABL Loans.

Representations and

Warranties:

   The Exit ABL Credit Agreement shall contain such representations and
warranties as are (a) included in the Prepetition Credit Agreement and (b)
customary for exit facilities and transactions of this type.

 

5

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Term

  

Description

Other Covenants    The Exit ABL Credit Agreement shall contain such other
affirmative and negative covenants as are (a) included in the Prepetition Credit
Agreement and (b) customary for exit facilities and transactions of this type;
provided that:   

•  Indebtedness. The Loan Parties and their subsidiaries shall not be permitted:

 

•  (a) to incur debt for borrowed money other than, (i) after the conversion of
the Exit Convertible Notes and the delivery of monthly financial statements for
the first 6 months ending after the Closing Date, unsecured debt so long as
total leverage, on a pro forma basis for such incurrence (and, to the extent
such indebtedness is incurred prior to the delivery of financial statements for
four quarters following the Closing Date, to be calculated on an annualized
basis) does not exceed 1.00:1.00, (ii) a basket for capital leases and purchase
money indebtedness to be agreed, (iii) a general basket to be agreed and
(iv) other customary baskets to be agreed; or

 

•  (b) to incur secured debt other than (i) the Exit ABL Facility, (ii) the Exit
Convertible Notes, (iii) a basket for permitted capital leases and purchase
money indebtedness, and (iv) other customary baskets to be agreed.

 

•  Restricted Payments. The Loan Parties and their subsidiaries shall not be
permitted to make dividends, distributions or repurchases of equity interests,
except that Loan Parties may (i) make dividends or distributions to other Loan
Parties owning equity of such Loan Parties and subsidiaries of Loan Parties may
make dividends or distributions to other subsidiaries of Loan Parties and to
Loan Parties owning such subsidiary’s equity interests and (ii) make restricted
payments subject to customary “payment conditions” to be agreed.

 

•  Investments. The Loan Parties and their subsidiaries shall not be permitted
to make any investments, except that the Loan Parties and their subsidiaries may
(i) make investments in other Loan Parties or subsidiaries of Loan Parties, with
investments of Loan Parties in subsidiaries who are not Loan Parties subject to
a sublimit to be agreed, (ii) make investments utilizing a general investments
basket to be agreed and (iii) make investments subject to customary “payment
conditions” to be agreed.

 

•  Prepayments of Principal of Indebtedness. (a) The Loan Parties and their
subsidiaries shall not be permitted to make optional prepayments or redemptions
(including offers to redeem) in respect of principal of indebtedness, including
the Exit Convertible Notes (i) prior to the 12 month anniversary of the Closing
Date, (ii) after the 12 month anniversary of the Closing Date unless the Loan
Parties have Liquidity greater than $12.5 million and the Fixed Charge Coverage
Ratio is greater than 1.25:1.00 and (iii) the difference of (A) the Borrowing
Base minus (B) Eligible Cash is greater than the sum of (x) the outstanding
amount of Exit ABL Loans and (y) Letter of Credit Exposure, in each case, on a
pro forma basis for such mandatory prepayment. (b) The Loan Parties and their
subsidiaries shall not be permitted to make mandatory prepayment payments or
redemptions (including offers to redeem) in respect of the principal of
indebtedness unless the Loan Parties have Liquidity greater than $12.5 million
and the Fixed Charge Coverage Ratio is greater than 1.25:1.00, in each case, on
a pro forma basis for such mandatory prepayment.

 

6

--------------------------------------------------------------------------------

Term

  

Description

  

•  Payments of Cash Interest. The Loan Parties and their subsidiaries shall not
be permitted to make cash interest payments on indebtedness (including the Exit
Convertible Notes) (a) prior to the 12 month anniversary of the Closing Date or
(b) after the 12 month anniversary of the Closing Date unless (i) the Loan
Parties have Liquidity greater than $12.5 million and the Fixed Charge Coverage
Ratio is greater than 1.25:1.00 and the difference of (A) the Borrowing Base
minus (B) Eligible Cash is greater than the sum of (x) the outstanding amount of
Exit ABL Loans and (y) Letter of Credit Exposure, in each case on a pro forma
basis for such cash interest payment.

 

•  Limitations on Amendments. The Exit ABL Loan Documents shall include a
limitation on amendments to the Exit Convertible Notes that are adverse to the
Exit ABL Lender Parties.

Financial

Covenants:

  

At all times during the period beginning on the Closing Date and ending on the
date the Borrower’s consolidated monthly financial statements for the 6th month
ending after the Closing Date have been delivered to the Exit ABL Agent, the
Borrower shall not permit Liquidity to be less than $10 million (the “Liquidity
Covenant”). A financial officer of the Borrower shall certify as to compliance
with such requirement weekly concurrently with the delivery of each weekly
Borrowing Base Certificate.

 

“Liquidity” shall mean the sum of (a) Availability and (b) Cash and Cash
Equivalents for the Loan Parties (other than (i) Cash or Cash Equivalents not
held in a Controlled Account, (ii) any Cash or Cash Equivalents pledged to
secure any Loan Party’s obligations under a letter of credit and (iii) Eligible
Cash).

 

Upon the occurrence and during the continuance of a Covenant/Dominion Trigger
Period on or after the delivery of consolidated financial statements for the
sixth month ending after the Closing Date, the Borrower shall not permit the
Fixed Charge Coverage Ratio to be less than 1.00:1.00 as of the last day of the
most recent trailing twelve month period then ending for which monthly financial
statements have been delivered; provided that the Fixed Charge Coverage Ratio
for the sixth, seventh, eighth, ninth, tenth and eleventh months ending after
the Closing Date shall be calculated on an annualized basis based on all monthly
financial statements delivered after the Closing Date, but on or prior to the
date of such calculation. For example, with respect to a testing of the Fixed
Charge Coverage Ratio following the delivery of financial statements for the 6th
month ending after the Closing Date, but prior to the delivery of financial
statements for the 7th month ending after the Closing Date, Fixed Charges and
EBITDA will be calculated by multiplying such amounts for such 6 month period by
2 and with respect to a testing of the Fixed Charge Coverage Ratio following the
delivery of financial statements for the 7th month ending after the Closing
Date, but prior to the delivery of financial statements for the 8th month ending
after the Closing Date, Fixed Charges and EBITDA will be calculated by

 

7

--------------------------------------------------------------------------------

Term

  

Description

  

multiplying such amounts for such 7 month period by 12/7 and so on until the
delivery of financial statements for the 12th month ending after the Closing
Date at which time the calculation of Fixed Charges and EBITDA shall be on a
trailing 12 month basis. Once such covenant is in effect, the Borrower shall
continue to maintain such Fixed Charge Coverage Ratio as of the last date of
each month thereafter until such Covenant/Dominion Trigger Period is no longer
continuing.

 

“Covenant/Dominion Trigger Period” shall occur at any time that (a) Availability
is less than the greater of (i) $7.5 million and (ii) 15% of the Line Cap or
(b) an Event of Default has occurred and is continuing. Once commenced, a
Covenant/Dominion Trigger Period shall be deemed to be continuing until such
time as (x) no Event of Default is continuing and (y) if such Covenant/Dominion
Trigger Period resulted from an event specified in the preceding clause (a),
Availability equals or exceeds for 30 consecutive days the greater of (1)
$7.5 million and (2) 15% of the Line Cap.

 

The definitions of “Fixed Charge Coverage Ratio”, “Fixed Charges” and “EBITDA”
shall be consistent with the definitions of such terms in the DIP ABL Credit
Agreement with changes to be mutually agreed.

Reporting:   

The Borrower shall deliver to the Exit ABL Agent and the Exit ABL Lenders:

 

•  monthly unaudited consolidated financial statements of the Borrower and its
subsidiaries within 30 days after the end of each fiscal month, certified by a
financial officer of the Borrower and including an operational report consistent
with that delivered under the DIP ABL Credit Agreement;

 

•  quarterly unaudited consolidated financial statements of the Borrower and its
subsidiaries within 45 days of quarter-end for the first three fiscal quarters
of the fiscal year, certified by the Borrower’s chief financial officer and
including management discussion and analysis;

 

•  annual audited consolidated financial statements of the Borrower and its
subsidiaries within 120 days of year-end, certified with respect to such
consolidated statements by the Borrower’s independent certified public
accountants and including management discussion and analysis;

 

•  concurrently with the delivery of the monthly, quarterly, or annual financial
statements above, a Compliance Certificate; provided that each Compliance
Certificate delivered in connection with the financial statements referenced
above shall contain a reasonably detailed calculation of the Fixed Charge
Coverage Ratio as of the end of the period covered by such financial statements
regardless of whether the Fixed Charge Coverage Ratio covenant is then in
effect.

 

•  (a) an annual operating, capital and cash flow budget for the immediately
following fiscal year and detailed on a quarterly basis and (b) a copy of the
plan and forecast (including a projected consolidated balance sheet, income
statement and cash flow statement) of the Borrower for each quarter of the
upcoming fiscal year in form reasonably satisfactory to the Exit ABL Agent
within 60 days of year-end;

 

8

--------------------------------------------------------------------------------

Term

  

Description

  

•  a monthly Borrowing Base Certificate and supporting documents within 20 days
of the end of each calendar month; provided that, (a) until the earlier of
(i) the date on which Borrower’s consolidated monthly financial statements for
the 6th month ending after the Closing Date have been delivered to the Exit ABL
Agent and (ii) the date on which the difference of (A) the Borrowing Base minus
(B) Eligible Cash is greater than the sum of (x) the outstanding amount of Exit
ABL Loans and (y) Letter of Credit Exposure and (b) at any time Availability is
less than the greater of (i) $7.5 million and (ii) 20% of the Line Cap, the
Borrower shall deliver a weekly Borrowing Base Certificate and supporting
documents within 3 Business Days of the end of each calendar week calculated as
of the close of business on the last Business Day of such preceding calendar
week;

 

•  each weekly Borrowing Base Certificate delivered during the period beginning
on the Closing Date and ending on the date the Borrower’s consolidated monthly
financial statements for the 6th month ending after the Closing Date shall
contain a certification and supporting information demonstrating that the Loan
Parties have been in compliance with the Liquidity Covenant at all times during
such preceding calendar week and, to the extent that, prior to the date on which
Borrower’s consolidated monthly financial statements for the 6th month ending
after the Closing Date have been delivered to the Exit ABL Agent, the Borrower
is no longer required to deliver weekly borrowing base certificates, the
Borrower shall deliver a certification and supporting information demonstrating
that the Loan Parties have been in compliance with the Liquidity Covenant at all
times during such preceding calendar week within 3 Business Days of the end of
each calendar week; and

 

•  all other certificates, reports and notices as are (a) included in the
Prepetition Credit Agreement, (b) customary for exit facilities and transactions
of this type or (c) required to be provided under the Exit Note Documents.

Conditions Precedent to Exit ABL Facility   

The conversion of the DIP ABL Facility into the Exit ABL Facility shall be
subject to the satisfaction of conditions precedent (collectively, the
“Conditions Precedent”; the date of satisfaction of such conditions, the
“Closing Date”) including, but not limited to:

 

•  each of the Exit Note Documents shall be in form and substance consistent
with the Exit Note Documentation Requirements and otherwise reasonably
satisfactory to the Exit ABL Lenders, and shall have been executed and delivered
by each Loan Party thereto;

 

•  the Borrower and its Subsidiaries shall have Liquidity of not less than
$12.5 million,

 

•  the Borrower and its Subsidiaries shall have Availability of not less than
$0;

 

•  the conditions precedent under the Exit Note Documents for the funding of any
Exit Convertible Notes shall have been satisfied; and

 

9

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Term

  

Description

  

•  the Borrower and its Subsidiaries shall not have more than $70 million of
Debt (excluding Debt in respect of undrawn letters of credit) outstanding as of
the Closing Date.

Events of Default:   

Events of Default shall be customary for exit facilities of this type and
include, without limitation:

 

•  failure to pay principal or interest on the Exit ABL Loans or any fees under
the Exit ABL Facility when due (with a 3 business day grace period for the
failure to pay interest or fees);

 

•  failure of any representation or warranty of any Loan Party contained in any
Exit ABL Document to be true and correct in all material respects when made;

 

•  breach of any covenant, provided that certain affirmative covenants may be
subject to a thirty (30) day grace period (from the earlier of the date that
(i) any Loan Party obtains knowledge of such breach and (ii) any Loan Party
receives written notice of such default from the Exit ABL Agent or the Required
Exit ABL Lenders);

 

•  a cross-default to the Exit Note Documents;

 

•  any change in control (the definition of which is to be agreed, but shall
include any “change in control” triggering a default or event of default under
the Exit Note Documents; and

 

•  other defaults as are (a) included in the Prepetition Credit Agreement or (b)
customary for exit facilities and transactions of this type.

Remedies:    Customary for exit facilities and transactions of this type

Assignments and

Participations:

  

Customary for exit facilities and transactions of this type; provided, the
Borrower

will not have consent rights with respect to assignments and participations
during the continuance of any Event of Default.

Expenses and

Indemnification:

  

All reasonable, documented, out-of-pocket expenses (limited to (a) reasonable
legal fees and reasonable, documented, out-of-pocket expenses of one primary
counsel, and one local counsel in each relevant jurisdiction for the Exit ABL
Agent; and (b) reasonable legal fees and reasonable, documented, out-of-pocket
expenses of one primary counsel, one local counsel in each relevant jurisdiction
and one financial advisor for the Exit ABL Lenders) of the Exit ABL Lender
Parties incurred in connection with the negotiation and documentation of the
Exit ABL Facility with respect to the Loan Parties. In addition, all reasonable,
documented, out-of-pocket fees, costs and expenses (including but not limited to
reasonable legal fees and documented, out-of-pocket expenses) of the Exit ABL
Agent and the Exit ABL Lenders for workout proceedings and enforcement costs
associated with the Exit ABL Facility are to be paid by the Borrower.

 

The Borrower will indemnify the Exit ABL Lender Parties, and hold them harmless
from and against all reasonable out-of-pocket costs, expenses (including but not
limited to reasonable legal fees and expenses) and liabilities arising out of or
relating to the transactions contemplated hereby and any actual or proposed use
of the proceeds of any loans made under the Exit ABL Facility;

 

10

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Term

  

Description

   provided that no such person will be indemnified for costs, expenses or
liabilities to the extent determined by a final, non-appealable judgment of a
court of competent jurisdiction to have been incurred solely by reason of the
gross negligence, bad faith or willful misconduct of such person. Governing Law:
   The Exit ABL Documents shall be governed by, and construed in accordance
with, the laws of the State of New York, without regard to the conflict of law
principles thereof. Each party to the Exit ABL Documents will waive the rights
to trial by jury. Amendments   

All amendments, modifications and waivers of the Exit ABL Documents shall
require the consent of the Required Exit ABL Lenders, except in the case of
amendments, modifications, or waivers customarily requiring consent from all
Exit ABL Lenders, all affected Exit ABL Lenders and/or letter of credit issuing
banks.

 

“Required Exit ABL Lenders” shall mean Exit ABL Lenders holding a majority of
the aggregate outstanding principal amount of Exit ABL Loans (defined below),
Letter of Credit Exposure and any unfunded commitments in respect of the Exit
ABL Facility; provided that, as long as there are three or fewer Exit ABL
Lenders, Required Exit ABL Lenders shall mean all Exit ABL Lenders.

 

 

11

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Annex A

Specific Terms of Exit ABL Facility

 

Interest Rate:    The interest rate applicable to the Exit ABL Loans will be
(a) for Eurodollar Loans, 1-month, 2-month, 3-month or 6-month LIBOR, LIBOR
floor of 1.00% and (b) for ABR Loans, the Alternate Base Rate plus, in each
case, the applicable amount in the grid below. Interest on ABR Loans shall be
payable quarterly in arrears and interest on Eurodollar Loans shall be payable
in arrears at the end of the Interest Period applicable to such Eurodollar Loans
provided that, if the Borrower elects a 6-month interest period for Eurodollar
Loans, interest shall be payable every 3 months.

   

Level

  

Fixed Charge

Coverage Ratio

  

Eurodollar

Loan

Applicable

Margin

  

ABR Loan

Applicable

Margin

  I    <1.50:1.00    3.50%    2.50%   II   

•1.50:1.00 and

<2.00:1.00

   3.25%    2.25%   III    •2.00:1.00    3.00%    2.00%

 

  The applicable Level shall be adjusted quarterly upon delivery of quarterly
financial statements. Until the delivery of quarterly financial statements for
the first full fiscal quarter ending after the Closing Date, the Interest Rate
shall be determined by reference to Level I. Upon failure to delivery timely
quarterly financial statements, the Interest Rate shall be determined by
reference to Level I. In the event that financial statements are restated, to
the extent that additional interest would have been required in accordance with
the restated financials, the Borrower shall pay such additional interest
promptly upon demand. Letter of Credit Fees:   Letter of Credit fees equal to
the applicable margin with respect to Eurodollar Loans on the aggregate stated
amount of each letter of credit outstanding under the Exit ABL Facility payable
monthly. Commitment Fee:   0.50% of the aggregate Unused Commitment of each Exit
ABL Lender. Upfront Fee:   0.50% of the aggregate principal amount of Exit ABL
Commitments, payable on the Closing Date.