Exhibit 10.1

EXECUTION VERSION

 

 

SENIOR SECURED SUPERPRIORITY PRIMING

DEBTOR-IN-POSSESSION CREDIT AGREEMENT

dated as of

April 3, 2019

among

Southcross Energy Partners, L.P.,

a Debtor and a Debtor-in-Possession, as Borrower,

Wilmington Trust, National Association,

as DIP Agent,

The Issuing Banks Party Hereto,

and

The Lenders Party Hereto

 

 

 

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TABLE OF CONTENTS

 

ARTICLE I   

DEFINITIONS AND ACCOUNTING MATTERS

     2  

Section 1.01

  

Terms Defined Above

     2  

Section 1.02

  

Certain Defined Terms

     2  

Section 1.03

  

Types of Loans and Borrowings

     33  

Section 1.04

  

Terms Generally; Rules of Construction

     33  

Section 1.05

  

Accounting Terms and Determinations; GAAP

     34  

Section 1.06

  

Time Periods

     34   ARTICLE II   

THE CREDITS

     34  

Section 2.01

  

Commitments

     34  

Section 2.02

  

Loans and Borrowings

     37  

Section 2.03

  

Procedure for Advance of Loans

     38  

Section 2.04

  

Interest Elections

     38  

Section 2.05

  

Funding of Borrowings

     39  

Section 2.06

  

[Reserved]

     40  

Section 2.07

  

Letters of Credit

     40   ARTICLE III   

PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES

     48  

Section 3.01

  

Repayment of Loans

     48  

Section 3.02

  

Interest

     48  

Section 3.03

  

Alternate Rate of Interest

     49  

Section 3.04

  

Prepayments

     50  

Section 3.05

  

Fees

     52   ARTICLE IV   

PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS

     53  

Section 4.01

  

Payments Generally; Pro Rata Treatment; Sharing of Set-offs

     53  

Section 4.02

  

Payments by the Borrower; Presumptions by the DIP Agent

     54  

Section 4.03

  

Certain Deductions by the DIP Agent

     54  

Section 4.04

  

Defaulting Lenders

     55   ARTICLE V   

INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY

     55  

Section 5.01

  

Increased Costs

     55  

Section 5.02

  

Break Funding Payments

     56  

Section 5.03

  

Taxes

     57  

Section 5.04

  

Mitigation Obligations; Replacement of Lenders

     61  

 

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Section 5.05

  

Illegality

     61   ARTICLE VI   

CONDITIONS PRECEDENT

     62  

Section 6.01

  

Effective Date

     62  

Section 6.02

  

Each Subsequent Credit Event

     65   ARTICLE VII   

REPRESENTATIONS AND WARRANTIES

     66  

Section 7.01

  

Organization; Powers

     66  

Section 7.02

  

Authority; Enforceability

     66  

Section 7.03

  

Approvals; No Conflicts

     66  

Section 7.04

  

Financial Condition; No Material Adverse Change

     67  

Section 7.05

  

Litigation

     68  

Section 7.06

  

Environmental Matters

     68  

Section 7.07

  

Compliance with the Laws and Agreements; No Defaults

     69  

Section 7.08

  

Investment Company Act

     69  

Section 7.09

  

Taxes

     70  

Section 7.10

  

ERISA

     70  

Section 7.11

  

Disclosure; No Material Misstatements

     71  

Section 7.12

  

Insurance

     71  

Section 7.13

  

Restriction on Liens

     71  

Section 7.14

  

Subsidiaries

     72  

Section 7.15

  

Location of Business and Offices

     72  

Section 7.16

  

Properties; Titles, Etc

     72  

Section 7.17

  

Maintenance of Properties

     73  

Section 7.18

  

Hedging Agreements

     73  

Section 7.19

  

Security Instruments

     73  

Section 7.20

  

Use of Loans and Letters of Credit

     73  

Section 7.21

  

[Reserved.]

     74  

Section 7.22

  

Common Enterprise

     74  

Section 7.23

  

Material Contracts

     74  

Section 7.24

  

Broker’s Fees

     74  

Section 7.25

  

Employee Matters

     74  

Section 7.26

  

Anti-Terrorism Laws

     74  

Section 7.27

  

Foreign Corrupt Practices

     76  

Section 7.28

  

DIP Orders

     76   ARTICLE VIII   

AFFIRMATIVE COVENANTS

     76  

Section 8.01

  

Financial Statements; Ratings Change; Other Information

     76  

Section 8.02

  

Notices of Material Events

     81  

Section 8.03

  

Existence; Conduct of Business

     81  

Section 8.04

  

Payment of Tax Obligations

     81  

 

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Section 8.05

  

Performance of Obligations under Loan Documents

     82  

Section 8.06

  

Operation and Maintenance of Properties

     82  

Section 8.07

  

Insurance

     82  

Section 8.08

  

Books and Records; Inspection Rights

     83  

Section 8.09

  

Compliance with Laws

     83  

Section 8.10

  

Compliance with Agreements

     83  

Section 8.11

  

Environmental Matters

     83  

Section 8.12

  

Further Assurances

     84  

Section 8.13

  

Title Information

     85  

Section 8.14

  

[Reserved]

     85  

Section 8.15

  

[Reserved]

     85  

Section 8.16

  

Ratings

     85  

Section 8.17

  

ERISA Compliance

     86  

Section 8.18

  

[Reserved]

     86  

Section 8.19

  

[Reserved]

     86  

Section 8.20

  

Post-Closing Obligations

     86  

Section 8.21

  

Use of Proceeds

     86  

Section 8.22

  

Lender Calls

     86  

Section 8.23

  

Case Milestones

     87  

Section 8.24

  

Certain Bankruptcy Matters; Case Documents

     89   ARTICLE IX   

NEGATIVE COVENANTS

     90  

Section 9.01

  

Budget Variances

     90  

Section 9.02

  

Indebtedness

     90  

Section 9.03

  

Liens

     91  

Section 9.04

  

Restricted Payments

     92  

Section 9.05

  

Investments, Loans and Advances

     92  

Section 9.06

  

Nature of Business; International Operations

     93  

Section 9.07

  

Proceeds of Loans

     94  

Section 9.08

  

ERISA Compliance

     94  

Section 9.09

  

Sale or Discount of Receivables

     94  

Section 9.10

  

Mergers, Etc

     95  

Section 9.11

  

Sale of Properties

     95  

Section 9.12

  

Environmental Matters

     96  

Section 9.13

  

Transactions with Affiliates

     96  

Section 9.14

  

Subsidiaries

     96  

Section 9.15

  

Limitation on Issuance of Equity Interests

     96  

Section 9.16

  

Negative Pledge Agreements; Dividend Restrictions

     97  

Section 9.17

  

Hedging Agreements

     97  

Section 9.18

  

Holding Company

     97  

Section 9.19

  

Sale and Leaseback

     97  

Section 9.20

  

Amendments to Organization Documents, Material Contracts, Fiscal Year End;
Prepayments of other Indebtedness

     98  

Section 9.21

  

Anti-Terrorism Law; Anti-Money Laundering

     98  

 

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Section 9.22

  

Embargoed Person

     98  

Section 9.23

  

Deposit Accounts, Securities Accounts and Commodity Accounts

     99  

Section 9.24

  

Southcross Holdings Receivables

     99  

Section 9.25

  

Additional Bankruptcy Matters

     99  

Section 9.26

  

Other Superpriority Claims

     100   ARTICLE X   

EVENTS OF DEFAULT; REMEDIES

     100  

Section 10.01

  

Events of Default

     100  

Section 10.02

  

Remedies

     104   ARTICLE XI   

THE DIP AGENT

     105  

Section 11.01

  

Appointment and Authority

     105  

Section 11.02

     

Section 11.03

  

Rights as a Lender

     106  

Section 11.04

  

Exculpatory Provisions

     106  

Section 11.05

  

Reliance by DIP Agent

     107  

Section 11.06

  

Delegation of Duties

     108  

Section 11.07

  

Resignation of DIP Agent

     108  

Section 11.08

  

Non-Reliance on DIP Agent and Other Lenders

     109  

Section 11.09

  

[Reserved.]

     109  

Section 11.10

  

Authority of DIP Agent to Release Collateral and Liens

     109  

Section 11.11

  

Action by the DIP Agent

     110  

Section 11.12

  

Certain Secured Parties

     110   ARTICLE XII   

MISCELLANEOUS

     110  

Section 12.01

  

Notices

     110  

Section 12.02

  

Waivers; Amendments

     114  

Section 12.03

  

Expenses, Indemnity; Damage Waiver

     115  

Section 12.04

  

Assignments and Participations

     119  

Section 12.05

  

Survival; Revival; Reinstatement

     123  

Section 12.06

  

Counterparts; Integration; Effectiveness; Electronic Execution

     123  

Section 12.07

  

Severability

     124  

Section 12.08

  

Right of Setoff

     124  

Section 12.09

  

Governing Law; Jurisdiction; Consent to Service of Process

     125  

Section 12.10

  

Headings

     126  

Section 12.11

  

Confidentiality

     126  

Section 12.12

  

Interest Rate Limitation

     127  

Section 12.13

  

Exculpation Provisions

     128  

Section 12.14

  

[Reserved]

     128  

Section 12.15

  

No Third Party Beneficiaries

     128  

Section 12.16

  

USA Patriot Act Notice

     128  

 

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Section 12.17

  

[Reserved]

     128  

Section 12.18

  

Non-Recourse to the General Partner

     128  

Section 12.19

  

No Advisory or Fiduciary Responsibility

     129  

Section 12.20

  

[Reserved]

     130  

Section 12.21

  

Acknowledgement and Consent to Bail-In of EEA Financial Institutions

     130  

 

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ANNEXES, EXHIBITS AND SCHEDULES

 

Annex I    Commitments Annex II    Prepetition Letters of Credit Annex III   
Permitted Variances Annex IV    Initial Approved Budget Exhibit A    Form of
Note Exhibit B    Form of Notice of Borrowing Exhibit C    Form of Interest
Election Request Exhibit D    Form of Closing Certificate Exhibit E    Form of
Guaranty and Collateral Agreement Exhibit F    Form of Assignment and Assumption
Exhibit G-1    Form of U.S. Tax Compliance Certificate (Foreign Lenders; not
partnerships) Exhibit G-2    Form of U.S. Tax Compliance Certificate (Foreign
Participants; not partnerships) Exhibit G-3    Form of U.S. Tax Compliance
Certificate (Foreign Participants: partnerships) Exhibit G-4        Form of U.S.
Tax Compliance Certificate (Foreign Lenders; partnerships) Exhibit H    Form of
Secured Party Designation Notice Exhibit I    Form of Withdrawal Request
Exhibit J    Form of Letter of Credit Account Prepayment Notice Exhibit K   
Form of Letter of Credit Account Withdrawal Notice Exhibit L-1    Form of
Compliance Certificate (Ongoing) Exhibit L-2    Form of Compliance Certificate
(Monthly)

 

Schedule 1.02(a)        Alternate Cash Collateral Amount Schedule 7.09    Taxes
Schedule 7.14    Subsidiaries Schedule 7.18    Hedging Agreements Schedule 7.23
   Material Contracts Schedule 7.24    Broker’s Fees Schedule 8.20   
Post-Closing Obligations Schedule 9.02    Existing Indebtedness Schedule 9.03   
Existing Liens Schedule 9.05    Existing Investments Schedule 9.11    Asset
Sales

 

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THIS SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT
dated as of April 3, 2019, is among: Southcross Energy Partners, L.P., a
Delaware limited partnership and a debtor and debtor-in-possession (the
“Borrower”); each of the Issuing Banks from time to time party hereto; each of
the Lenders from time to time party hereto; and Wilmington Trust, National
Association, as agent for the Lenders (in such capacity, the “DIP Agent”);

R E C I T A L S

A. The Borrower entered into that certain Term Loan Credit Agreement dated as of
August 4, 2014 (as amended, restated, supplemented or otherwise modified from
time to time prior to the date hereof, the “Prepetition Term Loan Agreement”),
with the financial institutions from time to time party thereto as lenders
(together with their successors and assigns, collectively, the “Prepetition Term
Lenders”) and Wilmington Trust, National Association, as successor
administrative agent for the Prepetition Term Lenders (together with its
successors in such capacity, the “Prepetition Term Agent”), pursuant to which
the Prepetition Term Lenders extended to the Borrower term loans (“Prepetition
Term Loans”) and made certain other financial accommodations to the Borrower and
the other Loan Parties (as defined therein) pursuant to the terms thereof (such
credit facility, together with the Loan Documents (as defined therein), the
“Prepetition Term Loan Facility”).

B. The Borrower entered into that certain Third Amended and Restated Revolving
Credit Agreement dated as of August 4, 2014 (as amended, restated, supplemented
or otherwise modified from time to time prior to the date hereof, the
“Prepetition Revolving Loan Agreement”), with the financial institutions from
time to time party thereto as lenders (together with their successors and
assigns, collectively, the “Prepetition Revolving Lenders”), the financial
institutions acting as issuing banks for the Prepetition Letters of Credit (the
“Prepetition LC Issuers”) and Wells Fargo Bank, N.A. as administrative agent for
the Prepetition Revolving Lenders (together with its successors in such
capacity, the “Prepetition Revolving Agent”), pursuant to which the Prepetition
Revolving Lenders extended revolving loans to the Borrower (the “Prepetition
Revolving Loans”), issued Prepetition Letters of Credit and made certain other
extensions of credit to the Borrower (such credit facility, together with the
Loan Documents (as defined therein), the “Prepetition Revolving Loan Facility”
and together with the Prepetition Term Loan Facility, the “Prepetition
Facilities”).

C. On April 1, 2019 (the “Petition Date”), the Loan Parties filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code (the “Chapter 11
Cases”) in the United States Bankruptcy Court for the District of Delaware
(together with any other court having jurisdiction over the Chapter 11 Cases or
any proceeding therein from time to time, the “Bankruptcy Court”). The Loan
Parties are continuing to operate their businesses and manage their properties
as debtors and debtors-in-possession under Sections 1107 and 1108 of the
Bankruptcy Code.

E. Subject to the conditions precedent set forth herein, and the terms and
conditions set forth herein, the Borrower has requested, and the Lenders and
each Issuing Bank party hereto are willing to make available the credit
facilities provided for herein for the purposes set forth herein. The parties
hereto further agree as follows:

 

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ARTICLE I

DEFINITIONS AND ACCOUNTING MATTERS

Section 1.01 Terms Defined Above. As used in this Agreement, each term defined
above has the meaning indicated above.

Section 1.02 Certain Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

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

“Acceptable Plan” shall mean a Chapter 11 Plan that (i) provides for the
termination of the unused commitments under the Credit Facility and the Payment
in Full in cash of the Secured Obligations (and, as applicable, cash
collateralization of any issued and undrawn Letters of Credit) upon the
effective date of such plan, (ii) provides that the effective date of such plan
shall occur by a date that is within the applicable Case Milestones, and
(iii) contains customary releases and other exculpatory provisions for the DIP
Agent, the DIP Lenders, the Prepetition Revolving Agent, the Prepetition Term
Agent, and the Prepetition Lenders in form and substance reasonably satisfactory
to the DIP Agent (at the direction of the Required Lenders), and the Prepetition
Revolving Agent, and the Prepetition Term Agent.

“Additional Roll-Up Schedule” has the meaning assigned to such term in
Section 2.01(d).

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to the LIBO Rate for such Interest Period multiplied
by the Statutory Reserve Rate.

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

“Affected Loans” has the meaning assigned to such term in Section 5.05.

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

“Agency Fee Letter” means that certain Fee Letter, by and between the Borrower
and the DIP Agent, dated as of the Effective Date, as may be amended, restated,
supplemented or otherwise modified from time to time.

“Agreement” means this Senior Secured Superpriority Priming Debtor-in-Possession
Credit Agreement, as the same may from time to time be amended, modified,
supplemented or restated.

 

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“Alternate Base Rate” means, for any day, a rate per annum (rounded upward, if
necessary, to the nearest 1/100th of 1%) equal to the greatest of (a) the Prime
Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on
such day plus 0.5% 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 1.0%. If the DIP Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate or the Adjusted LIBO Rate for any
reason, including the inability or failure of the DIP Agent to obtain sufficient
quotations in accordance with the terms of the definition thereof, the Alternate
Base Rate shall be determined without regard to clause (b) or (c), as
applicable, of the preceding sentence until the circumstances giving rise to
such inability no longer exist. Any change in the Alternate Base Rate due to a
change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO
Rate shall be effective from and including the effective date of such change in
the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate,
respectively.

“Alternate Cash Collateral Amount” means up to the amount set forth on Schedule
1.02(a).

“Anti-Terrorism Law” has the meaning assigned to such term in Section 7.26(a).

“Applicable Margin” means (a) with respect to the DIP Term Loans, (i) for any
ABR Borrowing thereof, 9.00%, and (ii) for any Eurodollar Borrowing thereof,
10.00% and (b) with respect to any Roll-Up Loans, 5.25%.

“Applicable Percentage” means, with respect to any Lender, the percentage of the
aggregate Credit Exposures represented by such Lender’s Credit Exposure at such
time.

“Approved Bankruptcy Court Order” means (a) the DIP Orders and the Cash
Management Order, as each such order is in effect from time to time and (b) any
other order entered by the Bankruptcy Court regarding, relating to or impacting
(i) any rights or remedies of the DIP Agent or any Lender, (ii) the Loan
Documents, the “Loan Documents” as defined in the Prepetition Term Loan
Agreement and the “Loan Documents” as defined in the Prepetition Revolving Loan
Agreement (including the Loan Parties’ (as defined therein) obligations
thereunder), (iii) the Collateral, any Liens thereon or any superpriority claims
(including, without limitation, any sale or other disposition of Collateral or
the priority of any such Liens or superpriority claims), (iv) use of cash
collateral, (v) debtor-in-possession financing, or (vi) adequate protection or
otherwise relating to the Prepetition Facilities, (vii) any Chapter 11 Plan, or
(viii) any transaction outside of the ordinary course of business with any Loan
Party, that, in the case of each of the matters described under clauses (a) and
(b), (x) is in form and substance satisfactory (or, solely in the case of
matters referred to in clause (b)(viii), reasonably satisfactory) to the
Required Lenders (and with respect to any provision that affects the rights or
duties of the DIP Agent, the DIP Agent) in all respects, (y) once entered, has
not been vacated, reversed or stayed and (z) has not been amended or modified
except in a manner satisfactory (or, solely in the case of matters referred to
in clause (b)(viii), reasonably satisfactory) to, the Required Lenders (and with
respect to any provision that affects the rights or duties of the DIP Agent, the
DIP Agent).

 

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“Approved Budget” means, as of the Effective Date, the Initial Approved Budget
and, thereafter, any budget approved by the Required Lenders pursuant to
Section 8.01(q).

“Approved Counterparty” means (a) any Lender or any Affiliate of a Lender and
(b) any other Person whose (or whose credit support provider’s) long term senior
unsecured debt rating is A-/A3 by S&P or Moody’s (or their equivalent) or
higher.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

“Asset Sale” means any sale, transfer, assignment, conveyance or other
disposition by any Loan Party, or any of its Subsidiaries to any Person
(including by way of redemption by such Person) of any Property (including,
without limitation, any capital stock or other securities of, or Equity
Interests in, another Person), but excluding (a) dispositions resulting from
Casualty Events, and (b) sales and other dispositions of Property pursuant to
Sections 9.11(a)-(e).

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 12.04(b)), and accepted by the DIP Agent, in substantially the form
of Exhibit F or any other form approved by the DIP Agent (including electronic
documentation generated by ClearPar, Markitclear or other electronic platform).

“Availability Period” means the period from and including the Effective Date to
but excluding the Maturity Date.

“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.

“Bank Products” means any of the following bank services: (a) commercial credit
cards, (b) stored value cards, and (c) treasury or cash management services
(including, without limitation, deposit accounts, funds transfers, automated
clearinghouse services, auto-borrow services, zero balance accounts, returned
check concentration, controlled disbursement services, lockboxes, account
reconciliation and reporting service, trade finance services, overdraft
protection, and interstate depository network services).

“Bank Products Provider” means any Lender or Affiliate of a Lender that provides
Bank Products to the Borrower or any other Loan Party; provided, that such
Lender or Affiliate must have delivered a Secured Party Designation Notice to
the DIP Agent.

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

 

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“Bankruptcy Court” shall have the meaning assigned to such term in the recitals
of this Agreement.

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

“Bid Deadline” shall have the meaning assigned to such term in Section 8.24(g).

“Bid Procedures” shall have the meaning assigned to such term in
Section 8.23(f).

“Bid Procedures and Sale Motion” shall have the meaning assigned to such term in
Section 8.23(f).

“Bid Procedures Order” shall have the meaning assigned to such term in
Section 8.23(f).

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America or any successor Governmental Authority.

“Borrower” has the meaning assigned to such term in the preamble hereto.

“Borrower Materials” has the meaning assigned to such term in Section 8.01.

“Borrower Notice” has the meaning assigned to such term in the definition of
“Flood Zone Documentation”.

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

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York, New York or Dallas, Texas are authorized or
required by law to remain closed; and if such day relates to a Borrowing or
continuation of, a payment or prepayment of principal of or interest on, or a
conversion of or into, or the Interest Period for, a Eurodollar Loan or a notice
by the Borrower with respect to any such Borrowing or continuation, payment,
prepayment, conversion or Interest Period, any day which is also a day on which
banks are open for dealings in dollar deposits in the London interbank market.

“Capital Expenditures” means, in respect of any Person, for any period, the
aggregate (determined without duplication) of all expenditures and costs that
are capitalized on the balance sheet of such Person in accordance with GAAP,
exclusive of, with respect to each Loan Party, expenditures and costs incurred
by such Loan Party to the extent that an unaffiliated third Person has provided
such Loan Party with funds to pay such expenditures and costs prior to
incurrence.

“Capital Leases” means, in respect of any Person, all leases which shall have
been, or should have been, in accordance with GAAP, recorded as capital leases
on the balance sheet of the Person liable (whether contingent or otherwise) for
the payment of rent thereunder.

 

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“Carve-Out” has the meaning assigned to such term in the DIP Orders, as
applicable; provided, however, that notwithstanding any other provision of the
DIP Orders or the Loan Documents to the contrary, in no event shall the
Carve-Out apply to amounts held in the Letter of Credit Account.

“Case Milestones” shall have the meaning assigned to such term in Section 8.23.

“Cash Equivalents” means, collectively, (a) marketable direct obligations issued
or unconditionally guaranteed by the United States or any agency thereof
maturing within one year from the date of acquisition thereof, (b) commercial
paper maturing no more than six months from the date of creation thereof and
currently having the highest rating obtainable from either S&P or Moody’s,
(c) certificates of deposit maturing no more than one year from the date of
creation thereof issued by any Lender or commercial banks incorporated under the
laws of the United States, having combined capital, surplus and undivided
profits of not less than $500,000,000 and having a rating of “A” or better by a
nationally recognized rating agency, or (d) time deposits maturing no more than
thirty (30) days from the date of creation thereof with commercial banks or
savings banks or savings and loan associations each having membership either in
the FDIC or the deposits of which are insured by the FDIC and in amounts not
exceeding the maximum amounts of insurance thereunder.

“Cash Management Order” has the meaning assigned to such term in
Section 6.01(f).

“Casualty Event” means any loss, casualty or other insured damage to, or any
nationalization, taking under power of eminent domain or by condemnation or
similar proceeding of, any Property of the Loan Parties or any of their
Subsidiaries.

“Change in Control” means:

(a) the Sponsors and their Affiliates, collectively, shall cease to beneficially
own and control, directly or indirectly, Equity Interests in the General Partner
representing a majority of the aggregate ordinary voting power represented by
the issued and outstanding Equity Interests in the General Partner;

(b) 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)
other than the Sponsors and their respective Affiliates of Equity Interests
representing more than 50% of the aggregate ordinary voting power represented by
the issued and outstanding Equity Interests in the General Partner;

(c) the General Partner shall cease to be the sole general partner of the
Borrower, with substantially the same (or more expansive) powers to manage the
Borrower as are granted to the General Partner under the Organization Documents
of the Borrower as of the Effective Date;

(d) the Borrower shall cease to beneficially own and control, directly or
indirectly, all of the Equity Interests in each of the other Loan Parties; or

 

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(e) within any period of twelve (12) consecutive calendar months, individuals
who were neither (i) members of the board of managers, or similar governing
body, of the General Partner on the first day of such period, (ii) persons who
were appointed or nominated by such persons, nor (iii) persons who were
appointed or nominated by a Sponsor (or an Affiliate of a Sponsor) shall
constitute a majority of the members of the board of managers, or similar
governing body, of the General Partner.

For the avoidance of doubt, neither proposed entry into a “stalking horse”
Qualified APA, entry into (but not consummation of the transactions pursuant to)
a Qualified APA in accordance with the Bid Procedures Order nor the filing or
proposal of (but not consummation of the transactions pursuant to) an Acceptable
Plan shall constitute a Change in Control.

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority, or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority; 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 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 or issued.

“Chapter 11 Cases” shall have the meaning given to such term in the recitals to
this Agreement.

“Chapter 11 Plan” means a plan of reorganization or liquidation filed in any of
the Chapter 11 Cases under Section 1121 of the Bankruptcy Code.

“Claim” means all claims, demands, rights, actions, causes of action,
liabilities, duties, damages, losses, obligations, diminution in value,
judgments, decrees, suits, liens, undertakings, rights to property or
information, and controversies of any kind or nature whatsoever, whether
absolute or contingent, due or to become due, accrued or unaccrued, disclosed or
undisclosed, foreseen or unforeseen, apparent or not apparent, disputed or
undisputed, liquidated or unliquidated, at law or in equity, or known or
unknown, and whether existing, accrued or arising on, before or after the
Petition Date, including all claims arising under state, federal or foreign
laws, common law, statutes, rules, regulations or agreements. Without limiting
the generality of the foregoing, the term “Claim” shall include the items
described in the definition of “Claim” in 11 U.S.C. § 101(5), all claims or
causes of action under Chapter 5 of the Bankruptcy Code (including Sections 542,
544, 545, 546, 547, 548, 549 and 550 of the Bankruptcy Code), all claims or
causes of action under Sections 105 or 362 of the Bankruptcy Code, all claims or
causes of action under any other Bankruptcy Law, all claims or causes of action
arising under the Uniform Fraudulent Conveyance Act, Uniform Fraudulent Transfer
Act, or Uniform Voidable Transactions Act as in effect in any state, and all
rights of contribution, subrogation, exoneration or indemnity.

 

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“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any successor statute.

“Collateral” means any and all Property of the Loan Parties or any other Person
that is secured by a Lien under one or more Security Instruments.

“Commitment” means, (a) with respect to each applicable Lender, the Term
Commitment and/or the DIP LC Commitment of such Lender, as the context may
require, and (b) with respect to all Lenders, the aggregate Term Commitments
and/or the aggregate DIP LC Commitments of all Lenders, as the context may
require.

“Commitment Letter” means that certain Commitment Letter, dated March 31, 2019,
by and among the Borrower, certain funds or accounts managed by Solus
Alternative Asset Management LP, and certain funds or accounts managed by Sound
Point Capital Management, LP, as may be amended, restated, supplement and/or
otherwise modified from time to time.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. 1, et seq.),
as amended from time to time, any successor statute, and any rule, regulation,
or order of the Commodities Futures Trading Commission (or the application or
official interpretation of any thereof).

“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.

“Consolidated Subsidiaries” means each Subsidiary of the Borrower (whether now
existing or hereafter created or acquired) the financial statements of which
shall be (or should have been) consolidated with the financial statements of the
Borrower in accordance with GAAP.

“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.

“Credit Exposure” means, with respect to any Lender at any time, the sum of the
outstanding principal amount of such Lender’s Loans and such Lender’s unused
Delayed Draw Term Commitment.

“Credit Facility” means, individually and collectively as the context may
require, the DIP Term Loan facility, Letter of Credit facility and Roll-Up Loan
facility established under this Agreement.

“Debt Issuance” means any issuance by a Loan Party or its Subsidiaries of
Indebtedness for borrowed money to any Person that is not a Loan Party.

“Debt Issuance Proceeds” means with respect to any Debt Issuance, all cash
proceeds and Cash Equivalents received by the Borrower and its Subsidiaries from
such Debt Issuance (other

 

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than from any other Loan Party) after payment of, or provision for, all
underwriter fees and expenses, SEC and blue sky fees, printing costs, fees and
expenses of accountants, lawyers and other professional advisors, brokerage
commissions and other out-of-pocket fees and expenses actually incurred in
connection with such Debt Issuance.

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

“Defaulting Lender” means any Lender that has (a) failed to fund any portion of
its Loans within three (3) Business Days of the date required to be funded by it
hereunder, (b) notified the Borrower, the DIP Agent, any Issuing Bank or any
Lender in writing that it does not intend to comply with any of its funding
obligations under this Agreement or has made a public statement to the effect
that it does not intend or expect to comply with its funding obligations under
this Agreement or generally under other agreements in which it commits to extend
credit, (c) failed, within three (3) Business Days after request by the DIP
Agent or the Required Lenders, to confirm that it will comply with the terms of
this Agreement relating to its obligations to fund prospective Loans,
(d) otherwise failed to pay over to the DIP Agent or any Lender any other amount
required to be paid by it hereunder within three (3) Business Days of the date
when due, unless the subject of a good faith dispute, or (e) (i) become or is
insolvent or has a parent company that has become or is insolvent, (ii) become
the subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any
such proceeding or appointment or has a parent company that has become the
subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any
such proceeding or appointment or (iii) become the subject of a Bail-In Action;
provided that a Lender shall not become a Defaulting Lender solely as a result
of the acquisition or maintenance of an ownership interest in such Lender or
Person controlling such Lender or the exercise of control over a Lender or
Person controlling such Lender by a Governmental Authority or an instrumentality
thereof.

“Delayed Draw DIP Funding Date” shall mean any Business Day specified in a
Notice of Borrowing delivered by the Borrower to the DIP Agent and on which the
conditions set forth in Section 6.02 are satisfied or waived in accordance with
the terms hereof and the Delayed Draw DIP Term Loans are made by the Lenders
holding Delayed Draw Term Commitments pursuant to Section 2.01(b).

“Delayed Draw DIP Term Loan” shall mean the loan made by the Lenders to the
Borrower on the Delayed Draw DIP Funding Date pursuant to Section 2.01(b)

“Delayed Draw Term Commitment” means (a) with respect to each applicable Lender,
the commitment of such Lender to make a portion of the Delayed Draw DIP Term
Loans to the Borrower hereunder on the Delayed Draw DIP Funding Date in an
aggregate principal amount not to exceed the amount set forth opposite such
Lender’s name on Annex I hereto as of the date hereof, as such amount may be
increased, reduced or otherwise modified at any time or from time to time and
recorded on the Register pursuant to the terms hereof and (b) with respect to
all Lenders, the aggregate commitments of all Lenders to make such Loans. The
initial amount of

 

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each Lender’s Delayed Draw Term Commitment as of the Effective Date is set forth
on Annex I hereto under the heading “Delayed Draw Term Commitment”, which shall
total $42,500,000 in the aggregate for all Lenders.

“DIP Agent” has the meaning assigned to such term in the preamble hereto.

“DIP LC Commitment” means (a) with respect to each applicable Lender, the
commitment of such Lender to make a portion of the DIP LC Loans to the Borrower
hereunder on the Effective Date in an aggregate principal amount not to exceed
the amount set forth opposite such Lender’s name on Annex I hereto as of the
date hereof, as such amount may be increased, reduced or otherwise modified at
any time or from time to time and recorded on the Register pursuant to the terms
hereof and (b) with respect to all Lenders, the aggregate commitments of all
Lenders to make such Loans. The initial amount of each Lender’s DIP LC
Commitment as of the Effective Date is set forth on Annex I hereto under the
heading “DIP LC Commitment”, which shall total $55,000,000 in the aggregate for
all Lenders.

“DIP LC Loans” means the loans made by the Lenders to the Borrower on the
Effective Date pursuant to Section 2.01(c).

“DIP Order” means, collectively, the Interim DIP Order and, from and after its
entry by the Bankruptcy Court, the Final DIP Order.

“DIP Term Loans” shall mean, collectively, the Initial DIP Term Loans, the
Delayed Draw DIP Term Loans, and the DIP LC Loans.

“Disqualified Capital Stock” means 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, matures or is mandatorily
redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock), pursuant to a sinking fund
obligation or otherwise, or is convertible or exchangeable for Indebtedness or
redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock) at the option of the holder thereof,
in whole or in part, on or prior to the date that is ninety-one (91) days after
the earlier of (a) the Maturity Date and (b) the date on which there are no
Loans, LC Exposure or other obligations hereunder outstanding and all of the
Commitments are terminated.

“dollars” or “$” refers to lawful money of the United States of America.

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
the United States of America or any state thereof or the District of Columbia.

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

 

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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” means the date on which the conditions specified in
Section 6.01 are satisfied (or waived in accordance with Section 12.02) and the
Initial DIP Term Loans and the DIP LC Loans have been funded.

“Embargoed Person” has the meaning assigned to such term in Section 9.22.

“Environmental Laws” means any and all Governmental Requirements pertaining in
any way to health, safety, the environment, the preservation or reclamation of
natural resources, or the management, Release or threatened Release of any
Hazardous Materials, in effect in any and all jurisdictions in which the
Borrower or any Subsidiary is conducting, or at any time has conducted,
business, or where any Property of the Borrower or any Subsidiary is located,
including, the Oil Pollution Act of 1990 (“OPA”), as amended, the Clean Air Act,
as amended, the Comprehensive Environmental, Response, Compensation, and
Liability Act of 1980 (“CERCLA”), as amended, the Federal Water Pollution
Control Act, as amended, the Occupational Safety and Health Act of 1970, as
amended, the Resource Conservation and Recovery Act of 1976 (“RCRA”), as
amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control
Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Hazardous Materials Transportation Act, as amended, and other
environmental conservation or protection Governmental Requirements.

“Environmental Permit” means any permit, registration, license, notice,
approval, consent, exemption, variance, spill or response plan, or other
authorization required under or issued pursuant to applicable Environmental
Laws.

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

“Equity Issuance” means (a) any issuance by the Borrower of shares of its Equity
Interests to any Person that is not a Loan Party (including, without limitation,
in connection with the exercise of options or warrants or the conversion of any
debt securities to equity) and (b) any capital contribution from any Person that
is not a Loan Party into any Loan Party or any Subsidiary thereof. The term
“Equity Issuance” shall not include (A) any Asset Sale or (B) any Debt Issuance.

“Equity Issuance Proceeds” means (a) with respect to any Equity Issuance, all
cash proceeds and Cash Equivalents received by the Borrower and its Subsidiaries
from such Equity Issuance (other than from any other Loan Party) after payment
of, or provision for, all underwriter fees and expenses, SEC and blue sky fees,
printing costs, fees and expenses of accountants, lawyers and other professional
advisors, brokerage commissions and other out-of-pocket fees and expenses

 

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actually incurred in connection with such Equity Issuance, and (b) with respect
to existing Equity Interests, cash contributions made to the Borrower from the
holders of its Equity Interests on account of common equity.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute.

“ERISA Affiliate” means each trade or business (whether or not incorporated)
which together with the Borrower or a Subsidiary would be deemed to be a “single
employer” within the meaning of section 4001(b)(1) of ERISA or subsections (b),
(c), (m) or (o) of section 414 of the Code.

“ERISA Event” means (a) a “Reportable Event” described in section 4043 of ERISA
and the regulations issued thereunder, (b) the withdrawal of the Borrower, a
Subsidiary or any ERISA Affiliate from a Plan during a plan year in which it was
a “substantial employer” as defined in section 4001(a)(2) 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 of ERISA, (d) the institution of
proceedings to terminate a Plan by the PBGC, (e) receipt of a notice of
withdrawal liability pursuant to section 4202 of ERISA or (f) any other event or
condition which could reasonably be expected to constitute grounds under section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.

“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 Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.

“Event of Default” has the meaning assigned to such term in Section 10.01.

“Excepted Liens” means: (a) Liens for Taxes, assessments or other governmental
charges or levies (other than Liens imposed pursuant to Section 401(a)(29) or
412(n) of the Code or by ERISA) that arose prior to the Petition Date and which
were, as of the Petition Date, not delinquent or which were being contested in
good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP; (b) Liens arising by operation of law in
connection with workers’ compensation, unemployment insurance or other social
security, old age pension or public liability obligations which are not
delinquent or which are being contested in good faith by appropriate action and
for which adequate reserves have been maintained in accordance with GAAP; (c) to
the extent arising by operation of law, statutory landlord’s liens, operators’,
interest owners’, vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’,
suppliers’, workers’, materialmen’s, construction or other like Liens, in each
case, arising by operation of law in the ordinary course of business or incident
to the operation and maintenance of Properties each of which is in respect of
obligations that are not delinquent or which are being contested in good faith
by appropriate action and for which adequate reserves have been maintained in
accordance with GAAP; (d) subject to the Cash Management Order, Liens arising
solely by virtue of customary deposit account agreements with the creditor
depositary institution

 

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or 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 creditor depository institution, provided that no
such deposit account is a dedicated cash collateral account or is subject to
restrictions against access by the depositor in excess of those set forth by
regulations promulgated by the Board and no such deposit account is intended by
the Borrower or any of its Subsidiaries to provide collateral to the depository
institution or any other Person (other than the Secured Parties pursuant to the
Security Instruments); (e) zoning and land use requirements, easements,
restrictions, servitudes, permits, conditions, covenants, exceptions or
reservations affecting, and minor irregularities or deficiencies in title to,
any real Property of the Borrower or any Subsidiary that do not secure
Indebtedness and which in the aggregate do not materially impair the use of such
Property for the purposes of which such Property is held by the Borrower or any
Subsidiary or materially impair the value of such Property subject thereto;
(f) to the extent in accordance with the Approved Budget (subject to Permitted
Variances), Liens on cash or securities pledged to secure performance of
tenders, surety, appeal and supersedeas bonds, government contracts, performance
and return of money bonds, bids, trade contracts, leases, statutory obligations,
regulatory obligations, obligations in respect of workers’ compensation,
unemployment insurance or other forms of government benefits or insurance and
other obligations of a like nature incurred in the ordinary course of business;
(g) Liens, titles and interests of lessors of Property leased by such lessors to
the Borrower or any Subsidiary, restrictions and prohibitions on encumbrances
and transferability with respect to such Property and the Borrower’s or such
Subsidiary’s interests therein imposed by such leases, and Liens and
encumbrances encumbering such lessors’ titles and interests in such Property and
to which the Borrower’s or such Subsidiary’s leasehold interests may be subject
or subordinate, in each case, whether or not evidenced by UCC financing
statement filings or other documents of record; provided that such Liens do not
secure Indebtedness of the Borrower or any Subsidiary and do not encumber
Property of the Borrower or any Subsidiary other than the Property that is the
subject of such leases; (h) Liens, titles and interests of licensors of software
and other intangible Property licensed by such licensors to the Borrower or any
Subsidiary, restrictions and prohibitions on encumbrances and transferability
with respect to such Property and the Borrower’s or such Subsidiary’s interests
therein imposed by such licenses, and Liens and encumbrances encumbering such
licensors’ titles and interests in such Property and to which the Borrower’s or
such Subsidiary’s license interests may be subject or subordinate, in each case,
whether or not evidenced by UCC financing statement filings or other documents
of record; provided that such Liens do not secure Indebtedness of the Borrower
or any Subsidiary and do not encumber Property of the Borrower or any Subsidiary
other than the Property that is the subject of such licenses; and (i) to the
extent arising prior to the Petition Date, judgment and attachment Liens not
giving rise to an Event of Default, provided that any appropriate legal
proceedings which may have been duly initiated for the review of such judgment
shall not have been finally terminated or the period within which such
proceeding may be initiated shall not have expired and no action to enforce such
Lien has been commenced. Any Lien described in clauses (a) through (d) shall
remain an “Excepted Lien” only for so long as (A) the appropriate Loan Party
shall cause any proceeding instituted contesting such Lien to stay the sale or
forfeiture of any portion of the Collateral on account of such Lien, (B) the
appropriate Loan Party shall maintain adequate reserves related to such Lien to
the extent required by GAAP, and (C) such Lien shall in all respects be subject
and subordinate in priority to the Liens created and evidenced by the Security
Instruments, except if and to the extent that the Governmental Requirements
creating, permitting or authorizing such Lien provides that such Lien is or must
be

 

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superior to the Liens created and evidenced by the Security Instruments;
provided that no intention to subordinate the first priority Liens granted in
favor of the DIP Agent for the benefit of the Secured Parties pursuant to the
Security Instruments is to be hereby implied or expressed by the permitted
existence of such Excepted Liens.

“Excluded Taxes” means, with respect to the DIP Agent, any Lender, any Issuing
Bank or any other recipient of any payment to be made by or on account of any
obligation of the Borrower or any Guarantor hereunder or under any other Loan
Document, (a) Taxes (i) imposed on or measured by its overall net income
(however denominated), and franchise taxes imposed on it (in lieu of net income
Taxes), by the jurisdiction (or any political subdivision thereof) under the
laws of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable lending office is
located, or (ii) that are Other Connection Taxes, (b) any branch profits taxes
imposed by the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower or any Guarantor is located, (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 5.04(b)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender’s failure or inability (other than as a result of a Change
in Law) to comply with Section 5.03(f), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts with respect
to such withholding tax pursuant to Section 5.03(a) or Section 5.03(c), and
(d) any United States federal withholding taxes imposed by FATCA.

“Executive Order” has the meaning assigned to such term in Section 7.26(a).

“Exigent Circumstance” means the existence of any of the following events or
conditions, in each case as determined by DIP Agent (at the direction of
Required Lenders acting reasonably and in good faith): (i) any material portion
of Collateral threatens to decline speedily in value; (ii) DIP Agent (at the
direction of Required Lenders acting reasonably) believes that fraud,
concealment, material misrepresentation, theft or the withholding or fraudulent
removal of Collateral or proceeds of a material portion of Collateral has
occurred; (iii) to the extent constituting an Event of Default, a Person (other
than a Secured Party in their capacity as such) repossesses or forecloses upon
any material portion of Collateral, or (iv) any other event or circumstance
occurs or exists that materially and imminently threatens the value or
liquidation prospects of any material portion of Collateral, the enforceability
or priority of the Liens securing the Secured Obligations or the collectability
thereof.

“Exit Fee” has the meaning assigned to such term in Section 3.05(e).

“Extraordinary Receipts” shall mean the Net Cash Proceeds received by any Loan
Party not in the ordinary course of business (and not consisting of proceeds
from the sale of inventory sold in the ordinary course of business), including,
without limitation, (a) proceeds under any insurance policy on account of damage
or destruction of any assets or property of such Loan Party (that are not
Casualty Events), (b) indemnity payments, (d) foreign, United States, state or
local tax refunds, (c) pension plan reversions and (d) judgments, proceeds of
settlements or other consideration of any kind in connection with any cause of
action.

 

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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) and any regulations or official
interpretations thereof.

“FCPA” means the Foreign corrupt Practices Act of 1977, as amended.

“FDIC” means the Federal Deposit Insurance Corporation.

“Federal Flood Insurance” means federally backed Flood Insurance available under
the National Flood Insurance Program to owners of real property improvements
located in Special Flood Hazard Area in a community participating in the
National Flood Insurance Program.

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

“FEMA” means the Federal Emergency Management Agency, an agency of the United
States Department of Homeland Security that administers the National Flood
Insurance Program.

“Final DIP Order” means a Final Order of the Bankruptcy Court in substantially
the form of the Interim DIP Order (with only such modifications thereto as are
necessary to convert the Interim DIP Order to a Final Order and to authorize and
approve the Roll-Up in the full amount set forth in the Initial Roll-Up Schedule
and the Additional Roll-Up Schedule and such other modifications as are
satisfactory in form and substance to the DIP Agent and the Required Lenders in
their discretion), which order shall not have been vacated, reversed, modified
or stayed, and as the same may be amended, supplemented or modified from time to
time after entry thereof in accordance with the terms hereof but only with the
written consent of the DIP Agent or the Required Lenders.

“Final Order” means an order or judgment of the Bankruptcy Court as entered on
its docket that has not, in whole or in part, been reversed, vacated, modified,
amended or stayed pursuant to any applicable Federal Rule of Bankruptcy
Procedure or any other applicable rule of civil or appellate procedure, and as
to which the time to appeal, petition for certiorari, or seek re-argument or
rehearing has expired, or as to which any right to appeal, petition for
certiorari or seek re-argument or rehearing has been waived in writing in a
manner satisfactory to the parties in interest, or if a notice of appeal,
petition for certiorari, or motion for re-argument or rehearing was timely
filed, the order or judgment has been affirmed by the highest court to which the
order or judgment was appealed or from which the re-argument or rehearing was
sought, or a certiorari has been denied, and the time to file any further appeal
or to petition for certiorari or to seek further re-argument has expired.

“Financial Officer” means, for any Person, the chief financial officer,
principal accounting officer, treasurer or controller of such Person. Unless
otherwise specified, all references herein to

 

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a Financial Officer means a Financial Officer of the Borrower or of the General
Partner acting on behalf of the Borrower.

“Financial Statements” means the Borrower and its Consolidated Subsidiaries’
audited consolidated balance sheet and related statements of income or
operations (and, as to balance sheets and statements of income or operations,
accompanied by consolidating schedules), stockholders’ equity and cash flows as
of the end of and for the fiscal year ending December 31, 2018, setting forth in
each case in comparative form the figures for the previous fiscal year.

“Flood Insurance” means, for any owned real Property improved by one or more
buildings located in a Special Flood Hazard Area, Federal Flood Insurance or
private insurance that meets or exceeds the requirements set forth by FEMA in
its Mandatory Purchase of Flood Insurance Guidelines. Flood Insurance shall be
in commercially reasonable amounts at least up to the maximum policy limits set
under the National Flood Insurance Program.

“Flood Insurance Laws” means (a) the National Flood Insurance Act of 1968 as now
or hereafter in effect or any successor statute thereto, (b) the Flood Disaster
Protection Act of 1973 as now or hereafter in effect or any successor statute
thereto, (c) the National Flood Insurance Reform Act of 1994 (amending 42 USC §
4001, et seq.), as the same may be amended or recodified from time to time, and
(d) the Flood Insurance Reform Act of 2004 and any regulations promulgated
thereunder.

“Flood Zone Documentation” means with respect to any fee interest in any real
property improved by a Building or Mobile (Manufactured ) Home located in the
United States of any Loan Party, to the extent required to comply with Flood
Laws: (1) a completed standard flood hazard determination form, (2) if the real
property is located in a special flood hazard area, a notification to the
applicable Loan Party (“Borrower Notice”) and, if applicable, notification to
such Loan Party that flood insurance coverage under the National Flood Insurance
Program is not available because the community does not participate in the
National Flood Insurance Program, (3) documentation evidencing the applicable
Loan Party’s receipt of the Borrower Notice and (4) if the Borrower Notice is
required to be given and flood insurance is available in the community in which
the real property is located, evidence of applicable flood insurance in such
form, on such terms and in such amounts as required by the Flood Insurance Laws
and as required by the Required Lenders.

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes.
For purposes of this definition, the United States of America, each State
thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.

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

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

 

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“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time subject to the terms and conditions set
forth in Section 1.05.

“General Partner” means Southcross Energy Partners GP, LLC, a Delaware limited
liability company and the sole general partner of the Borrower.

“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 (including
any supranational bodies, such as the European Union or the European Central
Bank).

“Governmental Requirement” means any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, rules of common law, authorization or other
directive or requirement, whether now or hereinafter in effect, of any
Governmental Authority.

“Guarantors” means, collectively, each Subsidiary of the Borrower.

“Guaranty and Collateral Agreement” means that Debtor-in-Possession Guaranty and
Collateral Agreement executed by the Borrower and the Guarantors in
substantially the form of Exhibit E granting and confirming security interests
in certain Collateral and unconditionally guarantying on a joint and several
basis, payment of the Secured Obligations, as the same may be amended, modified
or supplemented from time to time.

“Hazardous Material” means any substance regulated or as to which liability
might arise under any applicable Environmental Law including: (a) any chemical,
compound, material, product, byproduct, substance or waste defined as or
included in the definition or meaning of “hazardous substance,” “hazardous
material,” “hazardous waste,” “solid waste,” “toxic waste,” “extremely hazardous
substance,” “toxic substance,” “contaminant,” “pollutant,” or words of similar
meaning or import found in any applicable Environmental Law; (b) Hydrocarbons,
petroleum products, petroleum substances, natural gas, oil, oil and gas waste,
crude oil, and any components, fractions, or derivatives thereof; and
(c) radioactive materials, explosives, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon, infectious or medical wastes.

“Hedging Agreement” means any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement, whether
exchange traded, “over-the-counter” or otherwise, involving, or settled by
reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions (including any agreement, contract or
transaction that constitutes a “swap” within the meaning of section 1a(47) of
the Commodity Exchange Act); provided that no phantom stock or similar plan
providing for payments only on account of services provided by current or former
directors, officers, employees, or consultants of the Borrower or the
Subsidiaries shall be a Hedging Agreement.

 

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“Hedging Termination Value” means, in respect of any one or more Hedging
Agreements, after taking into account the effect of any legally enforceable
netting agreement relating to such Hedging Agreements, (a) for any date on or
after the date such Hedging Agreements have been closed out and termination
value(s) determined in accordance therewith, such termination value(s), and
(b) for any date prior to the date referenced in clause (a), the amount(s)
determined as the mark-to-market value(s) for such Hedging Agreements, as
determined by the counterparties to such Hedging Agreements.

“Highest Lawful Rate” means, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Loans or on other
Secured Obligations under laws applicable to such Lender which are presently in
effect or, to the extent allowed by law, under such applicable laws which may
hereafter be in effect and which allow a higher maximum nonusurious interest
rate than applicable laws allow as of the date hereof.

“Hydrocarbons” means oil, gas, casinghead gas, drip gasoline, natural gasoline,
condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all
products refined or separated therefrom.

“Immaterial Real Property” means any real Property designated by the Borrower as
Immaterial Real Property, if and for so long as the fair market value (as
reasonably determined by the Borrower and approved by the Required Lenders) of
such Immaterial Real Property, together with all other Immaterial Real Property
so designated by the Borrower, does not exceed $1,000,000 at any time.

“Indebtedness” means, for any Person, the sum of the following (without
duplication): (a) all obligations of such Person for borrowed money or evidenced
by bonds, bankers’ acceptances, debentures, notes or other similar instruments;
(b) all obligations of such Person (whether contingent or otherwise) in respect
of letters of credit, surety or other bonds and similar instruments; (c) all
accounts payable and all accrued expenses, liabilities or other obligations of
such Person to pay the deferred purchase price of Property or services, except
(i) trade accounts payable of such Person arising in the ordinary course of
business if and to the extent that such trade accounts payable are not past due
by more than ninety (90) days or that are being contested in good faith by
appropriate proceedings diligently pursued and for which adequate reserves have
been established or are subject to an offset in favor of such Person as a result
of accounts receivable owed to such Person and (ii) non-cash purchase price
adjustments or non-cash earnouts and the portion of any cash purchase price
adjustments or cash earnouts that is not determinable; (d) all obligations under
Capital Leases; (e) all obligations under Synthetic Leases; (f) all Indebtedness
(as defined in the other clauses of this definition) of others secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) a Lien on any Property of such Person, whether or
not such Indebtedness is assumed by such Person, provided, however, that the
amount of such Indebtedness of any Person described in this clause (f) shall,
for purposes of this Agreement, be deemed to be equal to the lesser of (i) the
aggregate unpaid amount of such Indebtedness or (ii) the fair market value of
the Property encumbered; (g) all Indebtedness (as defined in the other clauses
of this definition) of others guaranteed by such Person or in which such Person
otherwise assures a creditor against loss of the Indebtedness (howsoever such

 

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assurance shall be made) to the extent of the lesser of the amount of such
Indebtedness and the maximum stated amount of such guarantee or assurance
against loss; (h) all obligations or undertakings of such Person to maintain or
cause to be maintained the financial position or covenants of others or to
purchase the Indebtedness or Property of others; (i) obligations to pay for
electricity, natural gas, other Hydrocarbons and other commodities under
contracts having an initial term in excess of one (1) year even if such
electricity, natural gas, other Hydrocarbons, and other commodities are not
actually taken, received or utilized by such Person; (j) any Indebtedness of a
partnership for which such Person is liable either by agreement, by operation of
law or by a Governmental Requirement but only to the extent of such liability;
and (k) Disqualified Capital Stock.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Indemnitee” has the meaning assigned to such term in Section 12.03(b).

“Information” has the meaning assigned to such term in Section 12.11.

“Initial Approved Budget” has the meaning assigned to such term in
Section 6.01(d).

“Initial DIP Term Loan” shall mean the loan made by the Lenders on the Effective
Date pursuant to Section 2.01(a).

“Initial Roll-Up Loans” has the meaning given to such term in Section 2.01(d).

“Initial Roll-Up Schedule” has the meaning assigned to such term in
Section 2.01(d).

“Initial Term Commitment” means (a) with respect to each Lender, the commitment
of such Lender to make a portion of the Initial DIP Term Loans to the Borrower
hereunder on the Effective Date in an aggregate principal amount not to exceed
the amount set forth opposite such Lender’s name on Annex I hereto as of the
date hereof, as such amount may be increased, reduced or otherwise modified at
any time or from time to time and recorded on the Register pursuant to the terms
hereof and (b) with respect to all Lenders, the aggregate commitments of all
Lenders to make such Loans. The initial amount of each Lender’s Initial Term
Commitment as of the Effective Date is set forth on Annex I hereto under the
heading “Initial Term Commitment”, which shall total $30,000,000 in the
aggregate for all Lenders.

“Intellectual Property” shall have the meaning assigned to such term in
Section 7.16(d).

“Interest Election Request” means a written request by the Borrower to convert
or continue a Borrowing in accordance with Section 2.04, substantially in the
form of Exhibit C.

“Interest Payment Date” means (a) with respect to any ABR Loan, the last
Business Day of each calendar month and (b) with respect to any Eurodollar Loan,
the last day of the Interest Period applicable to the Borrowing of which such
Loan is a part and, following an Event of Default and during the continuance
thereof, upon demand by the Required Lenders.

 

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“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one or three months thereafter,
as the Borrower may elect in its applicable Notice of Borrowing or Interest
Election Request; provided that (a) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day, (b) any Interest Period pertaining to a Eurodollar
Borrowing that commences on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the last calendar
month of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period and (c) no Interest Period for any
Borrowing shall extend beyond the Maturity Date. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

“Interim DIP Order” means an interim order authorizing and approving, among
other things, (a) the DIP Facilities and the extensions of credit thereunder
including the incurrence by the Loan Parties of secured indebtedness in
accordance with this Agreement, (b) the form of this Agreement and the other
Loan Documents, (c) the granting of liens and claims in favor of the DIP Agent
and Lenders, (d) the payment by the Loan Parties of the fees contemplated by
this Agreement, (e) the provision of adequate protection to the Prepetition Term
Lenders and the Prepetition Revolving Lenders in a manner satisfactory to the
Required Lenders, (f) the other obligations of the Loan Parties under this
Agreement and the other Loan Documents, and (g) such other matters as are usual
and customary for orders of this kind, which order shall be in form and
substance satisfactory to the Required Lenders (and with respect to any
provision that affects the rights or duties of the DIP Agent, the DIP Agent) in
all respects and shall not have been vacated, reversed, modified or stayed, and
as the same may be amended, supplemented or modified from time to time after
entry thereof in accordance with the terms hereof but only with the prior
written consent of the Required Lenders (and with respect to any provision that
affects the rights or duties of the DIP Agent, the DIP Agent).

“Investment” means, for any Person: (a) the acquisition (whether for cash,
Property, services or securities or otherwise) of Equity Interests of any other
Person (including, without limitation, any “short sale” or any sale of any
securities at a time when such securities are not owned by the Person entering
into such short sale); (b) the making of any deposit with, or advance, loan or
capital contribution to, assumption of Indebtedness of, purchase or other
acquisition of any other Indebtedness or equity participation or interest in, or
other extension of credit to, any other Person (including the purchase of
Property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such Property to such Person, but excluding
any such advance, loan or extension of credit having a term not exceeding ninety
(90) days representing the purchase price of inventory or supplies sold by such
Person in the ordinary course of business); (c) the purchase or acquisition (in
one or a series of transactions) of Property of another Person that constitutes
a business unit or (d) the entering into of any guarantee of, or other
contingent obligation (including the deposit of any Equity Interests to be sold)
with respect to, Indebtedness or other liability of any other Person and
(without duplication) any amount committed to be advanced, lent or extended to
such Person.

 

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“ISP” means, with respect to any Letter of Credit, the “International Standby
Practices” published by the Institute of International Banking Law & Practice,
Inc. (or such later version thereof as may be in effect at the time of
issuance).

“Issuing Banks” means, individually or collectively as the context requires,
each of Wells Fargo, RBC and UBS AG, in their respective capacities as issuers
of Letters of Credit hereunder (but limited, in the case of Wells Fargo, to
Prepetition Letters of Credit deemed issued hereunder (and all amendments,
replacements and extensions thereof)), their respective successors in such
capacity as provided in Section 2.07(i), and, if requested by the Borrower and
consented to by the DIP Agent (acting at the direction of the Required Lenders),
any other Person who accepts such appointment and executes a joinder to this
Agreement, in form and substance reasonably satisfactory to the Borrower and the
DIP Agent, to act as an Issuing Bank under this Agreement. Each Issuing Bank
may, in its discretion, arrange for one or more Letters of Credit to be issued
by Affiliates of such Issuing Bank, in which case the term “Issuing Bank” shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.

“LC Cash Collateralization Amount” means an amount equal to 103% multiplied by
the amount of all LC Obligations existing at such time.

“LC Commitment” means, with respect to each Issuing Bank, the LC Commitment of
such Issuing Bank as set forth in Annex I hereto (under the heading “LC
Commitments”) as of the date hereof, as such amount may be reduced or otherwise
modified at any time or from time to time in accordance with the terms of this
Agreement.

“LC Disbursement” means a payment made by any Issuing Bank pursuant to a Letter
of Credit.

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time.

“LC Obligations” means, at any time, the aggregate maximum amount then available
to be drawn under all issued and outstanding Letters of Credit, as calculated in
accordance with Section 2.07(l).

“LC Participant” shall have the meaning assigned to such term in
Section 2.07(d).

“LC Sublimit” means, at any time, $52,597,087.38.

“Lender Counsel” means Willkie Farr & Gallagher LLP.

“Lender Financial Advisor” means Houlihan Lokey, Inc.

“Lender Professionals” means the Lender Financial Advisor and the Lender
Counsel.

 

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“Lenders” means the Persons listed on Annex I and any Person that shall have
become a party hereto pursuant to an Assignment and Assumption, other than any
such Person that ceases to be a party hereto pursuant to an Assignment and
Assumption.

“Letter of Credit” means any standby letter of credit issued (or deemed issued)
pursuant to this Agreement or any Letter of Credit Agreement, including without
limitation, the Prepetition Letters of Credit deemed issued hereunder upon the
Effective Date.

“Letter of Credit Account” means a blocked, non-interest bearing trust account
maintained by the DIP Agent in which the proceeds of the DIP LC Loans shall be
deposited and held as provided in this Agreement. Neither the Borrower nor any
of the other Loan Parties shall have any property interest of any kind in the
Letter of Credit Account or the funds held therein.

“Letter of Credit Account Prepayment Notice” means a written notice delivered by
the Borrower and signed by a Responsible Officer thereof to the DIP Agent
substantially in the form of Exhibit J hereto requesting a withdrawal of funds
from the Letter of Credit Account and disbursement of such funds to the DIP
Agent to be applied to prepay Loans, which notice shall set forth (i) the date
of such withdrawal (which shall be a Business Day), (ii) the amount of such
withdrawal and (iii) the LC Cash Collateral Amount (after giving effect to such
withdrawal).

“Letter of Credit Account Withdrawal Notice” means a written notice delivered by
the Borrower and signed by a Responsible Officer thereof to the DIP Agent
substantially in the form of Exhibit K hereto requesting a withdrawal of funds
from the Letter of Credit Account and disbursement of such funds to an account
of the Borrower, which notice shall set forth (i) the date of such withdrawal
(which shall be a Business Day), (ii) the amount of such withdrawal, (iii) the
identity of the customers and/or suppliers whose obligations will be cash
collateralized and (iv) other information requested by the DIP Agent (at the
direction of the Required Lenders) that is necessary or appropriate (as
determined by the Required Lenders) to determine pro forma compliance with the
Loan Documents (including, without limitation, any proposed or existing
arrangements under the proviso to Section 9.03(j)).

“Letter of Credit Agreements” means all letter of credit applications and other
agreements (including any amendments, modifications or supplements thereto)
submitted by the Borrower, or entered into by the Borrower, with any Issuing
Bank relating to any Letter of Credit.

“Letter of Credit Deposit Amount” means, at any time, the total amount on
deposit in the Letter of Credit Account at such time that is then available for
disbursement by the Issuing Banks in the event of an LC Disbursement as provided
in Section 2.07(e).

“Lewis Contract” means that certain Gas Transportation, Processing and Purchase
Agreement dated October 1, 2012, by and among Southcross Marketing Company Ltd.,
Lewis Petro Properties, Inc., and BP America Production Company, as amended.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period therefor, the rate per annum (rounded to the nearest 1/100th of 1%)
determined by the DIP Agent by reference to the ICE Benchmark Administration
London Interbank Offered Rate for deposits in Dollars (as set forth on the
applicable Bloomberg screen page or by or such other commercially

 

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available source providing such quotations as may be designated by the DIP Agent
from time to time) at approximately 11:00 a.m., London, England time, on the
second full Business Day preceding the first day of such Interest Period;
provided, however, that to the extent that an interest rate is not ascertainable
pursuant to the foregoing provisions of this definition, the LIBO Rate shall be
the interest rate per annum determined by the DIP Agent to be the average of the
rates per annum at which the DIP Agent is offered deposits in Dollars by major
banks in the London interbank market in London, England at approximately 11:00
a.m., London, England time, two Business Days prior to the first day of such
Interest Period. Notwithstanding anything to the contrary contained in this
definition, the LIBO Rate shall be deemed not to be less than one percent (1.0%)
at any time.

“Lien” means any interest in Property securing an obligation owed to, or a claim
by, a Person other than the owner of the Property, whether such interest is
based on the common law, statute or contract, and whether such obligation or
claim is fixed or contingent, and including but not limited to the lien or
security interest arising from a mortgage, deed of trust, encumbrance, pledge,
security agreement, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes. The term “Lien” shall include easements,
restrictions, servitudes, permits, conditions, covenants, exceptions or
reservations. For the purposes of this Agreement, the Borrower and its
Subsidiaries shall be deemed to be the owner of any Property which they have
acquired or hold subject to a conditional sale agreement, or leases under a
financing lease or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person in a transaction intended to
create a financing.

“Loan” or “Loans” means the DIP Term Loans and the Roll-Up Loans.

“Loan Documents” means, collectively, this Agreement, the Notes, the Letter of
Credit Agreements, the Letters of Credit, the Agency Fee Letter, and the
Security Instruments.

“Loan Parties” and “Loan Party” mean, collectively or individually as the
context requires, the Borrower and the Guarantors.

“Material Adverse Change” means any circumstance or event that has had a
Material Adverse Effect.

“Material Adverse Effect” means any event, condition or circumstance (other than
as a result of (i) the commencement of the Chapter 11 Cases by the Loan Parties,
the events and conditions related and/or leading up thereto and the effect of
bankruptcy conditions in the industry in which the Borrower operates as of the
Effective Date, each as disclosed in materials provided to the Prepetition Term
Lenders prior to the Petition Date or in the “first day” motions or declarations
filed in the Chapter 11 Cases, and (ii) any defaults under agreements that have
no effect under the terms of the Bankruptcy Code as a result of the commencement
of a proceeding under chapter 11 of the Bankruptcy Code and the Chapter 11
Cases) that, individually or in the aggregate, (a) has had or would reasonably
be expected to have, a material adverse effect on the business, operations,
properties, assets or condition of the Borrower and its Subsidiaries, taken as a
whole or (b) has resulted in, or would reasonably be expected to result in, a
material impairment of the validity or enforceability of, or a material
impairment of the material rights, remedies or

 

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benefits available to the Lenders, the Issuing Banks, the DIP Agent or the
collateral agent under any Loan Document.

“Material Contracts” means, collectively, (a) the Lewis Contract, (b) the
Services Agreements, (c) the Shared Services Agreement, and (d) each other
contract for which the breach, nonperformance, cancellation or failure to renew
could reasonably be expected to have a Material Adverse Effect.

“Material Indebtedness” means, to the extent incurred on or after the Petition
Date, Indebtedness (other than the Loans and Letters of Credit), or obligations
in respect of one or more Hedging Agreements, of any one or more of the Borrower
and its Subsidiaries in an aggregate principal amount equals or exceeds
$4,000,000. For purposes of determining Material Indebtedness, the “principal
amount” of the obligations of the Borrower or any Subsidiary in respect of any
Hedging Agreement at any time shall be the Hedging Termination Value.

“Material Real Property” means any real Property which is not Immaterial Real
Property.

“Maturity Date” means the date that is the earliest to occur of: (a) the
Scheduled Maturity Date; (b) the effective date of any confirmed Acceptable Plan
or any other Chapter 11 Plan of the Loan Parties; (c) the date on which all or
substantially all of the assets of the Loan Parties are sold in a sale under a
chapter 11 plan or pursuant to Section 363 of the Bankruptcy Code and (d) the
acceleration of the maturity of the Loans upon the occurrence of any Event of
Default.

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

“Mortgage” means each mortgage, deed of trust or any other document (if any)
creating and/or evidencing a Lien on real or immovable Property and other
Property in favor of the DIP Agent for the benefit of the Secured Parties, which
shall be in a form reasonably satisfactory to the DIP Agent, as the same may be
amended, modified, supplemented or restated from time to time in accordance with
the Loan Documents.

“Mortgaged Property” means any real Property owned by the Borrower or any of its
Subsidiaries that is subject to a Lien pursuant to the DIP Orders and/or a
Mortgage.

“National Flood Insurance Program” means the program created by the United
States Congress pursuant to the Flood Insurance Laws, that mandates the purchase
of flood insurance to cover real property improvements located in Special Flood
Hazard Areas in participating communities and provides protection to property
owners through a federal insurance program.

“Net Cash Proceeds” means, for any event requiring a repayment of Loans pursuant
to Section 3.04(b), the gross cash proceeds (including any such proceeds
received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise, but
only as and when received) from such event, net of reasonable attorneys’ fees,
accountants’ fees, amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted hereunder on any asset which
is the subject of such event (other than any Lien pursuant to a Security
Instrument) and other customary fees and expenses

 

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actually incurred in connection therewith, and net of taxes paid or reasonably
estimated to be payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements), in each
case, to the extent included in the Approved Budget (subject to Permitted
Variances).

“Net Sale Proceeds” means for any sale or other disposition of Property pursuant
to an Asset Sale, the gross cash proceeds (including any cash received by way of
deferred payment pursuant to a promissory note, receivable or otherwise, but
only as and when received) received from such Asset Sale, net of (a) reasonable
transaction costs (including, without limitation, any underwriting, brokerage or
other customary selling commissions, reasonable legal, advisory and other fees
and expenses (including title and recording expenses), associated therewith and
sales, VAT and transfer taxes arising therefrom), (b) the amount of such gross
cash proceeds required to be used to permanently repay any Indebtedness (other
than the Secured Obligations) which is permitted hereunder and which is secured
by the respective Property which was sold or otherwise disposed of, (c) the
estimated net marginal increase in income taxes which will be payable by the
Borrower or any Subsidiary with respect to the fiscal year of the Borrower in
which the Asset Sale occurs as a result of such Asset Sale, and (d) the amount
of all reserves required to be maintained by the Borrower or any Subsidiary in
accordance with GAAP for any potential indemnity obligations that may be
required to be made by the Borrower or any Subsidiary of as a result of such
Asset Sale; provided, however, that (i) such gross proceeds shall not include
any portion of such gross cash proceeds which the Borrower determines in good
faith should be reserved for post-closing adjustments (to the extent the
Borrower delivers to the DIP Agent a certificate signed by a Responsible Officer
as to such determination), it being understood and agreed that on the day that
all such post-closing adjustments have been determined (which shall not be later
than thirteen (13) months following the date of the respective Asset Sale), the
amount (if any) by which the reserved amount in respect of such Asset Sale
exceeds the actual post-closing adjustments payable by the Borrower or any
Subsidiary shall constitute Net Sale Proceeds on such date received by the
Borrower and/or any Subsidiary from such Asset Sale, and (ii) at such time as
the Borrower and the Subsidiaries are no longer required to maintain any
indemnity reserves in accordance with GAAP as a result of any Asset Sale, the
amount (if any) by which such reserved amount in respect of such Asset Sale
exceeds the actual amount of indemnity payments made by the Borrower or any
Subsidiary for which such reserves were required to be maintained in respect of
such Asset Sale shall constitute Net Sale Proceeds at such time, in each case,
to the extent included in the Approved Budget (subject to Permitted Variances).

“Notes” means the promissory notes of the Borrower described in Section 2.02(d)
and being substantially in the form of Exhibit A, together with all amendments,
modifications, replacements, extensions and rearrangements thereof.

“Notice of Borrowing” means a written request by the Borrower in accordance with
the terms of Section 2.03 and substantially in the form of Exhibit B, or such
other form as shall be approved by the DIP Agent.

“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.

 

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“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non US jurisdiction); (b)
with respect to any limited liability company, the certificate or articles of
formation or organization and operating agreement; and (c) with respect to any
partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

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

“Other Taxes” means all present or future stamp or documentary taxes or any
other excise or Property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document, except any such Taxes that are Other Connection Taxes
imposed with respect to an assignment (other than an assignment made pursuant to
Section 5.04).

“Participant” has the meaning assigned to such term in Section 12.04(d)(i).

“Participant Register” has the meaning assigned to such term in
Section 12.04(d)(ii).

“Partnership Agreement” means that certain Third Amended and Restated Limited
Partnership Agreement of the Borrower dated as of August 4, 2014, as the same
may be amended, restated, supplemented or otherwise modified from time to time.

“Payment in Full” means the Secured Obligations hereunder have been indefeasibly
paid in full in cash and the Commitments have been reduced to zero (0) (other
than (i) contingent indemnification obligations for which no Claim has been
asserted and (ii) any Letters of Credit outstanding that (A) have been cash
collateralized pursuant to Section 2.07(j) or (B) have had other arrangements
made with respect to them that are reasonably satisfactory to the applicable
Issuing Bank).

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

“Permitted Variances” has the meaning assigned to such term in Section 9.01.

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

 

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

“Plan” means any employee pension benefit plan, as defined in section 3(2) of
ERISA, which (a) is currently or hereafter sponsored, maintained or contributed
to by the Borrower, a Subsidiary or an ERISA Affiliate or (b) was at any time
during the six (6) calendar years preceding the date hereof, sponsored,
maintained or contributed to by the Borrower or a Subsidiary or an ERISA
Affiliate.

“Platform” has the meaning assigned to such term in Section 8.01.

“Prepetition Agent” means, individually or collectively as the context may
require, the Prepetition Revolving Agent and the Prepetition Term Agent.

“Prepetition Collateral” means the “Collateral” under (and as such term is
defined in) the Prepetition Loan Agreements.

“Prepetition Facility” has the meaning assigned to such term in the recitals to
this Agreement.

“Prepetition LC Issuers” has the meaning assigned to such term in the recitals
to this Agreement.

“Prepetition Lenders” means, individually or collectively as the context may
require, the Prepetition Revolving Lenders and the Prepetition Term Lenders.

“Prepetition Letters of Credit” means, collectively, letters of credit issued by
the Prepetition LC Issuers under the Prepetition Revolving Loan Facility, which,
as of the Effective Date, were issued and undrawn, and which are listed on Annex
II hereto.

“Prepetition Loan Facility” means, individually or collectively as the context
may require, the Prepetition Revolving Facility and the Prepetition Term
Facility.

“Prepetition Obligations” means, collectively, (i) the “Secured Obligations” as
such term is defined in the Prepetition Revolving Loan Agreement and (ii) the
“Secured Obligations” as such term is defined in the Prepetition Term Loan
Agreement.

“Prepetition Revolving Agent” has the meaning assigned to such term in the
recitals to this Agreement.

“Prepetition Revolving Lenders” has the meaning assigned to such term in the
recitals to this Agreement.

“Prepetition Revolving Loan Agreement” has the meaning assigned to such term in
the recitals to this Agreement.

“Prepetition Revolving Loan Facility” has the meaning assigned to such term in
the recitals to this Agreement.

 

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“Prepetition Revolving Loans” has the meaning assigned to such term in the
recitals to this Agreement.

“Prepetition Secured Parties” means the “Secured Parties” as such term is
defined in the Prepetition Credit Agreements.

“Prepetition Term Agent” has the meaning assigned to such term in the recitals
to this Agreement.

“Prepetition Term Lenders” has the meaning assigned to such term in the recitals
to this Agreement.

“Prepetition Term Loan Agreement” has the meaning assigned to such term in the
recitals to this Agreement.

“Prepetition Term Loan Facility” has the meaning assigned to such term in the
recitals to this Agreement.

“Prepetition Term Loans” has the meaning assigned to such term in the recitals
to this Agreement.

“Prime Rate” means, for any day, the prime lending rate published in The Wall
Street Journal for such day; provided that if The Wall Street Journal ceases to
publish for any reason such rate of interest, “Prime Rate” shall mean the prime
lending rate as set forth on the Bloomberg page PRIMBB Index (or successor page)
for such day (or such other service as determined by the DIP Agent from time to
time for purposes of providing quotations of prime lending interest rates); each
change in the Prime Rate shall be effective on the date such change is
effective. The prime rate is not necessarily the lowest rate charged by any
financial institution to its customers.

“Professional Fees” has the meaning assigned to such term in the DIP Orders.

“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible (including, without limitation,
cash, securities, accounts, contract rights and, with respect to any Person,
Equity Interests or other ownership interests of any other Person), whether now
in existence or owned or hereafter acquired.

“Proposed Budget” has the meaning assigned to such term in Section 8.01(q).

“Public Lender” has the meaning assigned to such term in Section 8.01.

“Purchase Money Indebtedness” means Indebtedness, the proceeds of which are used
to finance the acquisition, construction, installation, transport and/or
improvement of inventory, equipment or other Property in the ordinary course of
business.

“Qualified APA” means an asset purchase agreement, stock purchase agreement or
any similar agreements or documents in respect of a Qualified Sale Transaction.

 

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“Qualified Sale Transaction” means a Section 363 Sale which provides for Payment
in Full concurrently with the consummation of such sale and is in form and
substance reasonably satisfactory to the Required Lenders.

“RBC” means Royal Bank of Canada – New York Branch.

“Recovery Event” means the receipt by the Borrower or any Subsidiary of any cash
insurance proceeds or condemnation awards payable by reason of a Casualty Event.

“Redemption” means with respect to any Indebtedness, the repurchase, redemption,
prepayment, repayment, or defeasance or any other acquisition or retirement for
value (or the segregation of funds with respect to any of the foregoing) of such
Indebtedness. “Redeem” has the correlative meaning thereto.

“Register” has the meaning assigned to such term in Section 12.04(c).

“Regulation D” means Regulation D of the Board, as the same may be amended,
supplemented or replaced from time to time.

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

“Release” means any depositing, spilling, leaking, pumping, pouring, placing,
emitting, discarding, abandoning, emptying, discharging, migrating, injecting,
escaping, leaching, dumping, or disposing.

“Remedial Work” has the meaning assigned to such term in Section 8.11(a).

“Required Lenders” means, at any time one or more Lenders having greater than
fifty percent (50%) of the aggregate Credit Exposure; provided that the total
Credit Exposure of the Defaulting Lenders (if any) shall be excluded from the
determination of Required Lenders.

“Responsible Officer” means, as to any Person, the Chief Executive Officer, the
President, any Financial Officer or any Vice President of such Person. Unless
otherwise specified, all references to a Responsible Officer herein shall mean a
Responsible Officer of the Borrower or of the General Partner acting on behalf
of the Borrower.

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

“Roll-Up” has the meaning given to such term in Section 2.01(d).

 

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“Roll-Up Loans” has the meaning given to such term in Section 2.01(d).

“Sanctions” has the meaning assigned to such term in Section 7.26(d).

“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill
Companies, Inc., and any successor thereto that is a nationally recognized
rating agency.

“Scheduled Maturity Date” means October 1, 2019; provided that the Borrower
shall have the right to extend the Scheduled Maturity Date for a period of
ninety (90) days subject to satisfaction of the following conditions precedent:
(i) the Borrower shall have provided the DIP Agent with not less than five
(5) Business Days’ prior written notice of its request for such extension;
(ii) the Required Lenders shall have consented to such extension; and (iii) the
Borrower shall have paid to the DIP Agent for the benefit of each Lender that
consents to the extension within four (4) Business Days of the Borrower’s
request, an extension premium in an amount equal to 1.00% of such Lender’s Loans
then outstanding, which fee shall be payable on the date of such extension and
shall be paid in cash unless the Required Lenders in their sole discretion elect
that such premium be paid-in-kind.

“SEC” means the Securities and Exchange Commission or any successor Governmental
Authority.

“Section 363 Sale” means a sale of all or substantially all of the assets and
business of the Loan Parties conducted pursuant to Section 363 of the Bankruptcy
Code (it being understood, for the avoidance of doubt, that the Loan Parties may
sell Properties listed on Schedule 9.11 pursuant to Section 9.11(j) and the Net
Sale Proceeds thereof shall be applied in accordance with Section 3.04(b)(ii)).

“Secured Obligations” means any and all obligations of and amounts owing or to
be owing by the Borrower, any Subsidiary or any other Loan Party (whether direct
or indirect (including those acquired by assumption), absolute or contingent,
due or to become due, now existing or hereafter arising): (a) to the DIP Agent,
any Issuing Bank, any trustee or any Lender under any Loan Document; (b)
[reserved]; (c) to any Bank Products Provider in respect of any Bank Products;
and (d) all renewals, extensions and/or rearrangements of any of the above. For
the avoidance of doubt, the “Secured Obligations” shall include all Loans,
Initial DIP Term Loans, Delayed Draw DIP Term Loans, Roll-Up Loans, and all fees
hereunder or under any other Loan Document.

“Secured Parties” means, collectively, the DIP Agent, each Issuing Bank, each
Lender, and each Bank Products Provider.

“Secured Party Designation Notice” means a notice from any Lender or an
Affiliate of a Lender substantially in the form of Exhibit H.

“Security Instruments” means the DIP Orders, the Guaranty and Collateral
Agreement, the Mortgages, the other agreements, instruments or certificates
described or referred to in Schedule 1.02(a), and any and all other agreements,
instruments, consents, or certificates now or hereafter executed and delivered
by the Borrower or any other Person (other than Bank Products

 

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agreements or participation or similar agreements between any Lender and any
other lender or creditor with respect to any Secured Obligations pursuant to
this Agreement) in connection with, or as security for the payment or
performance of the Secured Obligations, the Notes, this Agreement, or
reimbursement obligations under the Letters of Credit, as such agreements may be
amended, modified, supplemented or restated from time to time.

“Services Agreements” means, collectively, (a) that certain Transportation
Services Agreement dated as of May 7, 2015 and effective as of May 1, 2015,
between Southcross NGL Pipeline Ltd. and Frio LaSalle Pipeline, LP, (b) that
certain Gas Gathering and Treating Agreement dated and effective as of May 1,
2015, between FL Rich Gas Services, LP and Frio LaSalle Pipeline, LP, and
(c) that certain Master Compression Services Agreement dated as of May 7, 2015
and effective as of May 1, 2015, between FL Rich Gas Services, LP and Frio
LaSalle Pipeline, L.P.

“Shared Services Agreement” means that certain Shared Services Agreement, dated
March 31, 2019, among the Borrower, Southcross Energy GP LLC, Southcross
Holdings and Southcross Holdings GP, LLC.

“Southcross Holdings” means Southcross Holdings LP, a Delaware limited
partnership.

“Sponsors” means one or more funds, accounts, or other entities managed or
advised by either Tailwater Capital LLC or EIG Management Company, LLC.

“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 percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the DIP Agent is subject for eurocurrency
funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of
the Board). Such reserve percentages shall include those imposed pursuant to
such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D 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.

“Structuring Fee” has the meaning assigned to such term in Section 3.05(a).

“Subsidiary” means: (a) any Person of which at least a majority of the
outstanding Equity Interests having by the terms thereof ordinary voting power
to elect a majority of the board of directors, manager or other governing body
of such Person (irrespective of whether or not at the time Equity Interests of
any other class or classes of such Person shall have or might have voting power
by reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by (i) another Person, (ii) one or more of such
other Person’s Subsidiaries, or (iii) collectively, such other Person and one or
more of such other Person’s Subsidiaries, and (b) any partnership of which such
other Person or any of such other Person’s Subsidiaries is a general partner.
Unless otherwise indicated herein, each reference to the term “Subsidiary” means
a Subsidiary of the Borrower.

 

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“Superpriority Claim” shall mean a claim against any Loan 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 post-petition claims
of the kind specified in, or otherwise arising or ordered under, any section of
the Bankruptcy Code (including, without limitation, Sections 105, 326, 328, 330,
331, 503(b), 507(a), 507(b), 546(c), 726 (to the extent permitted by law), 1113
and/or 1114 thereof), whether or not such claim or expenses may become secured
by a judgment lien or other non-consensual lien, levy or attachment, other than
the Carve-Out.

“Synthetic Leases” means, in respect of any Person, all leases which shall have
been, or should have been, in accordance with GAAP, treated as operating leases
on the financial statements of the Person liable (whether contingently or
otherwise) for the payment of rent thereunder and which were properly treated as
indebtedness for borrowed money for purposes of U.S. federal income taxes, if
the lessee in respect thereof is obligated to either purchase for an amount in
excess of, or pay upon early termination an amount in excess of, 80% of the
residual value of the Property subject to such operating lease upon expiration
or early termination of such lease.

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

“Term Commitment” means (a) with respect to each Lender, the Initial Term
Commitment or Delayed Term Commitment of such Lender, as the context may
require, in each case, as set forth in Annex I hereto as of the date hereof, as
such amount may be reduced or otherwise modified at any time or from time to
time in accordance with the terms of this Agreement and (b) the aggregate Term
Commitments of all Lenders. The aggregate Term Commitments of all Lenders as of
the Effective Date shall total $72,500,000.

“Testing Period” means (a) for each Variance Testing Date that is prior to the
date that is four weeks after the Petition Date, the period from the Petition
Date through the immediately preceding calendar week (ending on a Friday) and
(b) for each Variance Test Date that is on or after the date that is four weeks
after the Petition Date, the rolling four-week period most recently ended on the
last Friday prior to the delivery thereof.

“Transactions” means (a) with respect to the Borrower, the execution, delivery
and performance by the Borrower of this Agreement and each other Loan Document
to which it is a party, the borrowing of Loans, the use of the proceeds thereof
(including, without limitation, the Roll-Up), the issuance or deemed issuance of
Letters of Credit hereunder, and the grant of Liens by the Borrower on
Collateral pursuant to the Security Instruments, and (b) with respect to each
Guarantor, the execution, delivery and performance by such Guarantor of each
Loan Document to which it is a party, the guaranteeing of the Secured
Obligations and the other obligations under the Guaranty and Collateral
Agreement by such Guarantor and such Guarantor’s grant of the security interests
and provision of Collateral under the Security Instruments, and the grant of
Liens by such Guarantor on Collateral pursuant to the Security Instruments.

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

 

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“UBS AG” means UBS AG, Stamford Branch.

“USA Patriot Act” has the meaning assigned to such term in Section 12.16.

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 5.03(f).

“Variance Report” has the meaning assigned to such term in Section 8.01(q)(ii).

“Variance Testing Date” has the meaning assigned to such term in
Section 8.01(q)(ii).

“Wells Fargo” means Wells Fargo Bank, N.A.

“Wholly-Owned Subsidiary” means any Subsidiary of which all of the outstanding
Equity Interests (other than any directors’ qualifying shares mandated by
applicable law), on a fully-diluted basis, are owned by the Borrower and/or one
or more of the Wholly-Owned Subsidiaries.

“Wind-Down Budget” has the meaning assigned to such term in Section 8.23(c).

“Withdrawal” shall mean a disbursement of funds from the Letter of Credit
Account in accordance with Section 2.07(e).

“Withdrawal Request” shall mean a written request by an Issuing Bank for a
Withdrawal, substantially in the form of Exhibit I.

“Withholding Agent” means any Loan Party or the DIP 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.

Section 1.03 Types of Loans and Borrowings. For purposes of this Agreement,
Loans may be classified and referred to by Type (e.g., a “Eurodollar Loan”), and
Borrowings may be classified and referred to by Type (e.g., a “Eurodollar
Borrowing”).

Section 1.04 Terms Generally; Rules of Construction. The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same meaning and
effect as the word “shall”. Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, restated, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth in the Loan Documents), (b) any reference herein to any law or
regulation shall be construed,

 

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unless otherwise specified, as referring to such law or regulation as amended,
modified, supplemented, codified or reenacted, in whole or in part, and in
effect from time to time, (c) any reference herein to any Person shall be
construed to include such Person’s successors and assigns (subject to the
restrictions contained in the Loan Documents), (d) the words “herein”, “hereof”
and “hereunder”, and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof,
(e) with respect to the determination of any time period, the word “from” means
“from and including” and the word “to” means “to and including” and (f) any
reference herein to Articles, Sections, Annexes, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Annexes, Exhibits and
Schedules to, this Agreement. No provision of this Agreement or any other Loan
Document shall be interpreted or construed against any Person solely because
such Person or its legal representative drafted such provision.

Section 1.05 Accounting Terms and Determinations; GAAP. (a) Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the DIP Agent or the Lenders hereunder shall be
prepared, in accordance with GAAP, applied on a basis consistent with the
Financial Statements except for changes in which the Borrower’s independent
certified public accountants concur and which are disclosed to the DIP Agent on
the next date on which financial statements are required to be delivered to the
Lenders pursuant to Section 8.01(a); provided that unless the Borrower and the
Required Lenders shall otherwise agree in writing, no such change shall modify
or affect the manner in which compliance with the covenants contained herein is
computed such that all such computations shall be conducted utilizing financial
information presented consistently with prior periods.

(b) Notwithstanding anything to the contrary contained in paragraph (a) above of
the definition of “Capital Lease,” all obligations of any Person that are or
would have been treated as operating leases for purposes of GAAP prior to the
issuance of the Financial Accounting Standards Board on February 25, 2016 or an
Accounting Standards Update (“ASU”) shall continue to be accounted for as
operating leases for purposes of this agreement (whether or not such operating
lease obligations were in effect on such date) notwithstanding the fact that
such obligations are required in accordance with the ASU (on a prospective or
retroactive basis or otherwise) to be treated as capitalized Lease Obligations
in the Company’s financial statements.

Section 1.06 Time Periods. Unless otherwise specified, in the event any time
period or any date provided in this Agreement ends or falls on a day other than
a Business Day, then such time period shall be deemed to end and such date shall
be deemed to fall on the immediately preceding Business Day, and performance
herein may be made on such Business Day, with the same force and effect as if
made on such other day.

ARTICLE II

THE CREDITS

Section 2.01 Commitments.

 

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(a) Initial DIP Term Loan. Subject to the terms and conditions of this
Agreement, each Lender having an Initial Term Commitment severally agrees to
make its portion of the Initial DIP Term Loan to the Borrower on the Effective
Date in a principal amount equal to such Lender’s Initial Term Commitment as of
the Effective Date. Notwithstanding anything to the contrary contained herein
(and without affecting any other provisions hereof), the funded portion of the
Initial DIP Term Loan to be made on the Effective Date (i.e., the amount
advanced to Borrower on the Effective Date) shall be equal to 98.5% of the
principal amount of the Initial DIP Term Loan (it being agreed that the full
principal amount of the Initial DIP Term Loan shall be the “initial” principal
amount of such Loan and deemed outstanding on the Effective Date and the
Borrower shall be obligated to repay 100% of the principal amount of each such
Loan as provided hereunder). Once the Initial Term Loan has been borrowed, in
any amount, the Initial Term Commitment shall be reduced to $0.

(b) Delayed Draw DIP Term Loan. Subject to the terms and conditions of this
Agreement, each Lender having a Delayed Draw Term Commitment severally agrees to
make its portion of the Delayed Draw DIP Term Loan to the Borrower on the
Delayed Draw DIP Funding Date in a principal amount equal to such Lender’s
Delayed Draw Term Commitment as of such date; provided that, the aggregate
amount of DIP Term Loans shall not exceed the amount the Borrower is authorized
to borrow pursuant to the terms of the Final DIP Order. Notwithstanding anything
to the contrary contained herein (and without affecting any other provisions
hereof), the funded portion of the DIP Term Loan to be made on such Delayed Draw
DIP Funding Date (i.e., the amount advanced to Borrower on such dates) shall be
equal to 98.5% of the principal amount of the Delayed Draw DIP Term Loan (it
being agreed that the full principal amount of the Delayed Draw DIP Term Loan
shall be the “initial” principal amount of such Loan and deemed outstanding on
such date and the Borrower shall be obligated to repay 100% of the principal
amount of each such Loan as provided hereunder). The Delayed Draw Term
Commitment shall be reduced to $0 upon the earlier of (a) the date the Delayed
Draw Term Loan has been borrowed, in any amount, and (b) the date that is thirty
(30) days after the date the Final DIP Order is entered.

(c) DIP LC Loan. Subject to the terms and conditions of this Agreement, each
Lender having a DIP LC Commitment severally agrees to make its portion of the
DIP LC Loan to the Borrower on the Effective Date in a principal amount equal to
such Lender’s DIP LC Commitment as of the Effective Date. Notwithstanding
anything to the contrary contained herein (and without affecting any other
provisions hereof), the funded portion of the DIP LC Loan to be made on the
Effective Date (i.e., the amount advanced to Borrower on the Effective Date)
shall be equal to 98.5% of the principal amount of the DIP LC Loan (it being
agreed that the full principal amount of the DIP LC Loan shall be the “initial”
principal amount of such Loan and deemed outstanding on the Effective Date and
the Borrower shall be obligated to repay 100% of the principal amount of each
such Loan as provided hereunder). The Borrower hereby directs the applicable
Lenders and the DIP Agent to cause the proceeds of the DIP LC Loan (net of the
original issue discount set forth above) to be deposited in the Letter of Credit
Account on the Effective Date. Once the DIP LC Loan has been borrowed, in any
amount, the DIP LC Commitment shall be reduced to $0.

 

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(d) Roll-Up Loans. Subject to the terms and conditions set forth herein,
(i) upon entry of the Final DIP Order, Prepetition Term Loans held by
Prepetition Term Lenders, as set forth on the Initial Roll-Up Schedule (as
defined below), which are also Lenders or Affiliates of Lenders hereunder, shall
be automatically substituted and exchanged for (and prepaid by) loans hereunder
(the “Initial Roll-Up Loans”), on a pro rata basis (based on the Initial DIP
Term Loans and DIP LC Loans that such Prepetition Term Lender or its Affiliate
funded to the Borrower pursuant to Section 2.01(a) or (c)), in a principal
amount equal to $1.00 of Prepetition Term Loans of such Lender or such Affiliate
of such Lender for each $1.00 of Initial DIP Term Loans and DIP LC Loan funded
hereunder on the Effective Date by such Lender and (ii) on the Delayed Draw DIP
Funding Date, Prepetition Term Loans held by Prepetition Term Lenders, as set
forth on the Additional Roll-Up Schedule (as defined below), which are also
Lenders or Affiliates of Lenders hereunder, shall be automatically substituted
and exchanged for (and prepaid by) loans hereunder (together with the Initial
Roll-Up Loans, the “Roll-Up Loans”), on a pro rata basis (based on the Delayed
Draw DIP Term Loans that such Prepetition Term Lender or its Affiliate funded to
the Borrower pursuant to Section 2.01(b)) in a principal amount equal to $1.00
of Prepetition Term Loans of such Lender or Affiliate of such Lender for each
$1.00 of Delayed Draw DIP Term Loans funded hereunder by such Lender on the
Delayed Draw DIP Funding Date (and such Roll-Up Loans shall be deemed funded on
the date the Final DIP Order is entered or the Delayed Draw DIP Funding Date, as
applicable, and shall constitute and shall be deemed to be Loans hereunder) (the
foregoing substitution and exchange of Prepetition Term Loans into Roll-Up Loans
shall be defined herein, generally, as the “Roll-Up”). The parties hereto hereby
agree that (i) set forth on the Initial Roll-Up Schedule will be (x) the name of
each Lender or Affiliate of a Lender whose Prepetition Term Loans will be
exchanged for (and prepaid by) Initial Roll-Up Loans on the date of entry of the
Final DIP Order, and the amount of Initial Roll-Up Loans to be received by each
Lender or Affiliate of a Lender upon entry of the Final Order and (ii) set forth
on the Additional Roll-Up Schedule will be the name of each Lender or Affiliate
of a Lender whose Prepetition Term Loans will be exchanged for (and prepaid by)
Roll-Up Loans hereunder on the Delayed Draw DIP Funding Date, and the amount of
Roll-Up Loans to be received by each Lender or Affiliate of a Lender on the
Delayed Draw DIP Funding Date. No later than three (3) Business Days prior to
the scheduled hearing date to consider approval of the Final DIP Order (in the
case of the Initial Roll-Up Schedule) and no later than three (3) Business Days
prior to Delayed Draw DIP Funding Date (in the case of the Additional Roll-Up
Schedule), the Lender Financial Advisor shall deliver to the DIP Agent a
schedule setting forth the name of each Lender whose Prepetition Term Loans will
be exchanged for (and prepaid by) Roll-Up Loans hereunder upon entry of the
Final DIP Order (the “Initial Roll-Up Schedule”) or on the Delayed Draw DIP
Funding Date (the “Additional Roll-Up Schedule”), as applicable, and the amount
of Roll-Up Loans to be received by such Lender upon entry of the Final DIP Order
or on the Delayed Draw DIP Funding Date, as applicable (and the parties hereto
hereby agree that the DIP Agent and the Prepetition Term Agent may each
conclusively rely on each of the Initial Roll-Up Schedule and the Additional
Roll-Up Schedule in adjusting the Register and the Register (as defined in the
Prepetition Term Loan Agreement) to reflect the cancellation of Prepetition Term
Loans and the Roll-Up Loans to be received by the Lenders upon entry of the
Final DIP Order or on the Delayed Draw DIP Funding Date, as applicable, as a
result of the Roll-Up). Furthermore, the parties agree that each Affiliate of a
Lender that will receive Roll-Up Loans hereunder and that is not already a
Lender hereunder at the time thereof must become a Lender hereunder, by
executing a joinder to this Agreement in form and substance reasonably
satisfactory to the DIP Agent, on or prior to the entry of the Final

 

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DIP Order or the Delayed Draw DIP Funding Date, as applicable, in order to
receive its portion of the Roll-Up.

(e) For the avoidance of doubt, solely with respect to the applicable
calculations in determining the Lenders constituting “Required Lenders”
hereunder, Initial DIP Term Loans, Delayed Draw DIP Term Loans, the DIP LC
Loans, and the Roll-Up Loans shall constitute a single class of Loans.

Section 2.02 Loans and Borrowings.

(a) Borrowings; Several Obligations. The DIP Term Loans shall be made by the
Lenders ratably in accordance with their respective applicable 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 are several and no Lender shall be responsible for any other
Lender’s failure to make Loans as required.

(b) Types of Loans. Subject to Section 3.03, each Borrowing of Initial DIP Term
Loans or Delayed Draw DIP Term Loans 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. The Roll-Up Loans and the
DIP LC Loans shall be deemed Borrowings entirely of ABR Loans.

(c) Minimum Amounts; Limitation on Number of Borrowings. 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 four (4) Eurodollar Borrowings outstanding.
Notwithstanding any other provision of this Agreement, the Borrower shall not be
entitled to request, or to elect to convert or continue, any Borrowing if the
Interest Period requested with respect thereto would end after the Maturity
Date.

(d) Notes. The Loans made by each Lender, if requested by such Lender, shall be
evidenced by one or more promissory notes of the Borrower in substantially the
form of Exhibit A, dated, in the case of (i) any Lender party hereto as of the
date of this Agreement, as of the date of this Agreement, or (ii) any Lender
that becomes a party hereto pursuant to an Assignment and Assumption, as of the
effective date of such Assignment and Assumption, payable to such Lender in a
principal amount equal to its Commitments (or Loans, if applicable), and
otherwise duly completed. In the event that any Lender’s Commitment or Loans
increases or decreases for any reason (whether pursuant to Section 12.04(b) or
otherwise), if requested by such Lender, the Borrower shall deliver or cause to
be delivered on the effective date of such increase or decrease, a new Note
payable to such Lender in a principal amount equal to its Commitment or Loans,
as applicable, after giving effect to such increase or decrease, and otherwise
duly completed. The date, amount, Type, interest rate and, if applicable,
Interest Period of each Loan made by each Lender, and all payments made on
account of the principal thereof, shall be recorded by such Lender on its books
for its applicable Note, and, prior to any transfer, may be endorsed by such
Lender on a schedule attached to such Note or any continuation thereof or on any
separate record maintained by such Lender. Failure to make any such notation or
to attach a schedule shall not

 

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affect any Lender’s or the Borrower’s rights or obligations in respect of such
Loans or affect the validity of such transfer by any Lender of its Note.

Section 2.03 Procedure for Advance of Loans. To request a Borrowing of DIP Term
Loans, the Borrower shall give the DIP Agent an irrevocable Notice of Borrowing
(provided that any Notice of Borrowing may be conditioned upon the entry of the
Interim DIP Order or the Final DIP Order) prior to (a) in the case of a
Eurodollar Borrowing 11:00 a.m., New York City time, three (3) Business Days
before (or one (1) Business Day before in the case of a Eurodollar Borrowing on
the Effective Date) the proposed Borrowing (or such shorter period approved by
DIP Agent prior to the date of such Borrowing) or (b) in the case of an ABR
Borrowing, not later than 11:00a.m, New York City Time, one (1) Business Day
before the date of the proposed Borrowing, requesting that the Lenders make the
applicable DIP Term Loans on such date. The Borrowing of DIP LC Loans shall be
of ABR Loans. In the case of Initial DIP Term Loans and Delayed Draw DIP Term
Loans, if no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be an ABR Borrowing. If no Interest Period is
specified with respect to any requested Eurodollar Borrowing, then the Borrower
shall be deemed to have selected an Interest Period of one month’s duration.

Section 2.04 Interest Elections.

(a) Conversion and Continuance. The Borrower may elect to convert a Borrowing of
Initial DIP Term Loans or Delayed Draw DIP Term Loans to a different Type or to
continue a Eurodollar Borrowing of Initial DIP Term Loans or Delayed Draw DIP
Term Loans as the same Type and, in the case of a Eurodollar Borrowing of
Initial DIP Term Loans or Delayed Draw DIP Term Loans, may elect Interest
Periods therefor, all as provided in this Section 2.04. The Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing. Notwithstanding anything to
the contrary, the Borrower shall not be entitled to request any conversion or
continuation that, if made, would result in more than four (4) Eurodollar
Borrowings outstanding hereunder at any one time.

(b) Interest Election Requests. To make an election pursuant to this
Section 2.04, the Borrower shall deliver to the DIP Agent an Interest Election
Request by the time that a Notice of Borrowing would be required under
Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting
from such election to be made on the effective date of such election. Each such
Interest Election Request shall be irrevocable.

(c) Information in Interest Election Requests. Each Interest Election Request
shall specify the following information in compliance with Section 2.02:

(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to Sections 2.04(c)(iii) and (iv) shall
be specified for each resulting Borrowing);

 

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

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

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

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one (1) month’s duration.

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

(e) Effect of Failure to Deliver Timely Interest Election Request and Events of
Default on Interest Election. If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing: (i) no outstanding Borrowing
may be converted to or continued as a Eurodollar Borrowing (and any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective)
and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto.

(f) Notwithstanding anything to the contrary herein, Roll-Up Loans and DIP LC
Loans shall only be borrowed as ABR Loans, and may not be converted to
Eurodollar Loans.

Section 2.05 Funding of Borrowings.

(a) Funding by Lenders. Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 12:00 noon, New York City time, to the account of the DIP Agent most
recently designated by it for such purpose by notice to the Lenders. The
Borrower hereby irrevocably authorizes the DIP Agent to disburse the proceeds of
the DIP Term Loan in immediately available funds by wire transfer to such Person
or Persons as may be designated by the Borrower in writing (or in the case of
proceeds of the DIP LC Loans, to the Letter of Credit Account). Nothing herein
shall be deemed to obligate any Lender to obtain the funds for its Loan in any
particular place or manner or to constitute a representation by any Lender that
it has obtained or will obtain the funds for its Loan in any particular place or
manner.

(b) Funding by the Lenders; Presumption by the DIP Agent. Unless the DIP Agent
shall have received notice from a Lender prior to the proposed date of any
Borrowing that

 

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such Lender will not make available to the DIP Agent such Lender’s share of such
Borrowing, the DIP Agent may assume that such Lender has made such share
available on such date in accordance with Section 2.05(a) 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
Borrowing available to the DIP Agent, then the applicable Lender and the
Borrower severally agree to pay to the DIP 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 DIP Agent, at (i) in the case of a payment to be made by such
Lender, the greater of the Federal Funds Effective Rate and a rate determined by
the DIP Agent in accordance with banking industry rules on interbank
compensation and (ii) in the case of a payment to be made by the Borrower, the
interest rate applicable to ABR Loans. If the Borrower and such Lender shall pay
such interest to the DIP Agent for the same or an overlapping period, the DIP
Agent shall promptly remit to the Borrower the amount of such interest paid by
the Borrower for such period. If such Lender pays its share of the applicable
Borrowing to the DIP Agent, then the amount so paid shall constitute such
Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be
without prejudice to any claim the Borrower may have against a Lender that shall
have failed to make such payment to the DIP Agent.

Section 2.06 [Reserved].

Section 2.07 Letters of Credit.

(a) General. Subject to the terms and conditions set forth herein, the Borrower
may request the issuance of dollar denominated Letters of Credit for its own
account or for the account of any of its Subsidiaries, in a form reasonably
acceptable to the applicable Issuing Bank, at any time and from time to time
during the Availability Period; provided that the Borrower may not request the
issuance, amendment, renewal or extension of Letters of Credit hereunder, if,
after giving effect to such issuance, amendment, renewal or extension, (i) the
LC Cash Collateralization Amount would exceed the Letter of Credit Deposit
Amount, (ii) the LC Exposure would exceed the LC Sublimit, or (iii) the
aggregate LC Exposure for any Issuing Bank would exceed its applicable LC
Commitment. In the event of any inconsistency between the terms and conditions
of this Agreement and the terms and conditions of any Letter of Credit
Agreement, the terms and conditions of this Agreement shall control.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. The
Prepetition Letters of Credit shall be deemed to have been cancelled and
re-issued hereunder as of the Effective Date. To request the issuance of any
other Letter of Credit (or the amendment, renewal or extension of an outstanding
Letter of Credit), the Borrower shall fax (or transmit by electronic
communication, if arrangements for doing so have been approved by the applicable
Issuing Bank) to the applicable Issuing Bank and the DIP Agent (not less than
three (3) Business Days in advance of the requested date of issuance, amendment,
renewal or extension) a notice:

(i) requesting the issuance of a Letter of Credit or identifying the Letter of
Credit to be amended, renewed or extended;

(ii) specifying the date of issuance, amendment, renewal or extension (which
shall be a Business Day);

 

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(iii) specifying the date on which such Letter of Credit is to expire (which
shall comply with Section 2.07(c));

(iv) specifying the amount of such Letter of Credit;

(v) specifying 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;

(vi) specifying the current total LC Exposures (without regard to the requested
Letter of Credit or the requested amendment, renewal or extension of an
outstanding Letter of Credit) and the pro forma total LC Exposures (giving
effect to the requested Letter of Credit or the requested amendment, renewal or
extension of an outstanding Letter of Credit); and

(vii) specifying the current Letter of Credit Deposit Amount and calculating the
pro forma LC Cash Collateralization Amount (giving effect to the requested
Letter of Credit or the requested amendment, renewal or extension of an
outstanding Letter of Credit).

Each notice shall constitute a representation and warranty with respect to the
information set forth therein and that after giving effect to the requested
issuance, amendment, renewal or extension, as applicable, (x) the LC Cash
Collateralization Amount shall not exceed the Letter of Credit Deposit Amount,
(y) the LC Exposure shall not exceed the LC Sublimit, and (z) each condition
precedent set forth in Section 6.02 has been satisfied with respect to such
Letter of Credit.

If requested by the applicable Issuing Bank in connection with any request for a
Letter of Credit (other than the Prepetition Letters of Credit deemed to be
issued hereunder on the Effective Date), the Borrower also shall submit an
appropriately completed letter of credit application on such Issuing Bank’s
standard form as in effect from time to time, which application may require the
inclusion of draft language for such Letter of Credit that is reasonably
acceptable to such Issuing Bank and may be required to be signed by a
Responsible Officer of the Borrower.

No Issuing Bank will be required to: (A) issue any Letter of Credit if (1) any
order, judgment or decree of any Governmental Authority or arbitrator shall by
its terms purport to enjoin or restrain such Issuing Bank from issuing such
Letter of Credit, or any law applicable to such Issuing Bank or any request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over such Issuing Bank shall prohibit, or request
that such Issuing Bank refrain from, the issuance of letters of credit generally
or such Letter of Credit in particular or shall impose upon such Issuing Bank
with respect to such Letter of Credit any restriction, reserve or capital
requirement (for which such Issuing Bank is not otherwise compensated hereunder)
not in effect on the Effective Date, or shall impose upon such Issuing Bank any
unreimbursed loss, cost or expense which was not applicable on the Effective
Date and which such Issuing Bank in good faith deems material to it, (2) the
issuance of such Letter of Credit would violate one or more policies of such
Issuing Bank applicable to letters of credit generally, (3) except as otherwise
agreed by such Issuing Bank, such Letter of Credit is in an initial stated
amount less than $10,000, (4) such Letter of Credit is to be denominated in a
currency other

 

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than Dollars, or (5) such Letter of Credit contains any provisions for automatic
reinstatement of the stated amount after any drawing thereunder; or (B) amend or
extend any Letter of Credit if such Issuing Bank would not be required at such
time to issue the Letter of Credit in its amended form under the terms hereof or
if the beneficiary of such Letter of Credit does not accept the proposed
amendment thereto.

(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close
of business on the earlier of (i) the date one (1) year after the date of the
issuance of such Letter of Credit (or, in the case of any renewal or extension
thereof, one year after such renewal or extension) and (ii) the date that is ten
(10) Business Days prior to the Maturity Date. Each Letter of Credit with a one
(1) year term may provide for the renewal thereof for additional one (1) year
periods; provided that no such period shall extend beyond the date described in
clause (ii) above. Notwithstanding the foregoing, Letters of Credit may be
issued with an expiration date that extends past the date set forth in clause
(ii) above so long as such Letter of Credit is cash collateralized pursuant to
Section 2.07(j).

(d) LC Participations. Any Issuing Bank may at any time, without the consent of,
or notice to the Borrower, the DIP Agent or any other Issuing Bank, sell
participations in Letters of Credit (up to the aggregate amount available to be
drawn under such Letter of Credit) or LC Disbursements that have not been
reimbursed by the Borrower as provided in Section 2.07(e) to any Person (other
than a natural Person or the Borrower or any of the Borrower’s Affiliates or
Subsidiaries) (each, an “LC Participant”); provided that (A) such Issuing Bank’s
obligations under this Agreement shall remain unchanged, (B) such Issuing Bank
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (C) the Borrower, the DIP Agent, the Lenders and any
other Issuing Banks shall continue to deal solely and directly with such Issuing
Bank in connection with such Issuing Banks’s rights and obligations under this
Agreement. Notwithstanding the foregoing, any agreement or instrument pursuant
to which an Issuing Bank sells such a participation may provide such LC
Participant with the right to subrogate to the Issuing Bank’s rights hereunder
or the right to direct the Issuing Bank with respect to its rights (x) to
enforce this Agreement, (y) to approve any amendment, modification or waiver of
any provision of this Agreement with respect to the Issuing Bank’s participated
interests in a Letter of Credit or LC Disbursement, or (z) to deliver any
notices or exercise any other rights of the Issuing Bank hereunder.

(e) Reimbursement. (i) If any Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement
by paying to the DIP Agent for the account of such Issuing Bank an amount equal
to such LC Disbursement not later than 11:00 a.m., New York time, on the date
that such LC Disbursement is made, if the Borrower shall have received notice of
such LC Disbursement prior to 9:00 a.m., New York time, on such date, or, 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., New York time, on (x) the Business Day
that the Borrower receives such notice, if such notice is received prior to 9:00
a.m., New York time, on the day of receipt, or (y) 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; provided that the Borrower’s
obligation to reimburse such Issuing Bank with respect to such LC Disbursement
shall first be satisfied by funds disbursed to such Issuing Bank from the Letter
of Credit Account and

 

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applied to such reimbursement obligations in accordance with clauses
(ii) through (iv) of this Section 2.07(e) (and the Borrower hereby irrevocably
authorizes and instructs such Issuing Bank to request such withdrawals and
applications without notice of any kind or further order or action by the
Bankruptcy Court) Promptly following receipt by the DIP Agent of any payment
from the Borrower pursuant to this Section 2.07(e), the DIP Agent shall
distribute such payment to the applicable Issuing Bank.

(ii) If any Issuing Bank shall make any LC Disbursement in respect of a Letter
of Credit, such Issuing Bank may request that the DIP Agent disburse funds from
the Letter of Credit Account to such Issuing Bank to reimburse such Issuing Bank
for such LC Disbursement, by delivering to the DIP Agent a Withdrawal Request
specifying (A) the amount of the disbursement to be made to such Issuing Bank,
(B) the Letter of Credit to which such disbursement relates and (C) the wiring
information of the bank account of such Issuing Bank to which such funds are to
be sent. Promptly following its receipt of a Withdrawal Request, the DIP Agent
shall disburse funds from the Letter of Credit Account in an aggregate amount
equal to the amount specified in such Withdrawal Request to the account of the
Issuing Bank specified in such Withdrawal Request. All proceeds of the DIP LC
Loans shall be held in the Letter of Credit Account at all times until such
proceeds are disbursed or otherwise applied in accordance with this Agreement.

(iii) With respect to any disbursement, withdrawal, transfer, or application of
funds from the Letter of Credit Account hereunder, the DIP Agent shall be
entitled to conclusively rely upon, and shall be fully protected in relying
upon, any Withdrawal Request submitted by an Issuing Bank as evidence that
(A) an LC Disbursement has been made by such Issuing Bank in the amount
specified in such Withdrawal Request and (B) such Issuing Bank is entitled to
receipt funds from the Letter of Credit Account in the amount specified in such
Withdrawal Request. Notwithstanding anything herein to the contrary, the DIP
Agent shall have no obligation to disburse any amount from the Letter of Credit
Account in excess of the amounts then held in the Letter of Credit Account. The
DIP Agent shall have no duty to inquire or investigate whether any Issuing Bank
is entitled to receive the funds requested in the applicable Withdrawal Request,
and shall not be deemed to have any knowledge as to whether or not any such
Withdrawal Request is permitted to be given.

(iv) For the avoidance of doubt, all DIP LC Loans shall be Loans for all
purposes hereunder and, notwithstanding that the proceeds of such DIP LC Loans
are held in the Letter of Credit Account, shall bear interest in accordance with
this Agreement and shall be subject to all other terms and provisions of this
Agreement and the other Loan Documents to the same extent as all other Loans.
The Borrower shall pay to the DIP Agent upon demand therefor from time to time
all customary account opening, activity and other administrative fees and
charges in connection with the maintenance of the Letter of Credit Account

 

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(f) Obligations Absolute. The Borrower’s obligation to reimburse LC
Disbursements as provided in Section 2.07(e) shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit, any Letter
of Credit Agreement or this Agreement, or any term or provision therein,
(ii) any draft or other document presented under a Letter of Credit proving to
be forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by any Issuing Bank under a
Letter of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit or any Letter of Credit
Agreement, or (iv) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section 2.07(f), constitute a legal or equitable discharge of, or provide a
right of setoff against, the Borrower’s obligations hereunder. Neither the DIP
Agent, the Lenders nor any Issuing Bank, nor any of their Related Parties shall
have any liability or responsibility by reason of or in connection with 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), or 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), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the applicable Issuing
Bank; provided that the foregoing shall not be construed to excuse any Issuing
Bank from liability to the Borrower to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby waived
by the Borrower to the extent permitted by applicable law) suffered by the
Borrower that are caused by such Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of an
Issuing Bank (as finally determined by a court of competent jurisdiction), such
Issuing Bank shall be deemed to have exercised all requisite care in each such
determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, each Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents 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.

(g) Disbursement Procedures. Each Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. Each Issuing Bank shall promptly notify the
Borrower by telephone (confirmed by facsimile (with a copy to the Agent)) of
such demand for payment and whether such Issuing Bank has made or will make an
LC 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 Bank and the Lenders with respect to any such LC Disbursement.

(h) Interim Interest. If any Issuing Bank shall make any LC Disbursement, then,
until the Borrower shall have reimbursed such Issuing Bank for such LC
Disbursement (either with its own funds or funds withdrawn from the Letter of
Credit Account), the unpaid

 

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amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Borrower
reimburses such LC Disbursement, at the rate per annum then applicable to ABR
Loans. Interest accrued pursuant to this Section 2.07(h) shall be for the
account of the applicable Issuing Bank.

(i) Replacement of any Issuing Bank. Any Issuing Bank may be replaced at any
time by written agreement among the Borrower, the DIP Agent (acting at the
direction of the Required Lenders), the replaced Issuing Bank and the successor
Issuing Bank. The DIP Agent shall notify the Lenders of any such replacement of
any Issuing Bank. At the time any such replacement becomes effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 3.05(a). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the replaced Issuing Bank under this Agreement with respect
to Letters of Credit to be issued thereafter and (ii) references herein to the
term “Issuing Bank” shall be deemed to refer to such successor or to any
previous or existing Issuing Bank, or to such successor and all previous and
existing Issuing Banks, as the context shall require. After the replacement of
any Issuing Bank hereunder, the replaced Issuing Bank shall remain a party
hereto and shall continue to have all the rights and obligations of an Issuing
Bank under this Agreement with respect to Letters of Credit issued by it prior
to such replacement, but shall not be required to issue additional Letters of
Credit.

(j) Cash Collateralization.

(i) Establishment of Letter of Credit Account. The DIP Agent shall establish the
Letter of Credit Account.

(ii) Deposits in Letter of Credit Account. The Letter of Credit Account shall be
funded by the Borrower on the Effective Date from the proceeds of the DIP LC
Loans advanced pursuant to Section 2.01(c).

(iii) Withdrawals from and Closing of Letter of Credit Account. Amounts on
deposit in the Letter of Credit Account shall be withdrawn and distributed as
follows:

(A) in accordance with Section 2.07(e) above;

(B) in accordance with Section 2.07(m) below;

(C) [reserved];

(D) upon the Maturity Date, unless otherwise specified by an order rendered by
the Bankruptcy Court: (1) if the DIP Agent has received written notice from each
Issuing Bank that all Letters of Credit issued by such Issuing Bank have expired
or been cancelled (or that a “backstop” letter of credit or other cash
collateralization thereof at 103% pursuant to arrangements reasonably
satisfactory to such Issuing Bank has been provided to such Issuing Bank) (such
written notice, an “LC Termination Notice”), the DIP Agent shall, unless
otherwise directed by the Required

 

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Lenders, withdraw from the Letter of Credit Account the aggregate amount then on
deposit therein and apply such amounts to repayment of the Secured Obligations
as set forth in Section 10.02(c) or (2) if the DIP Agent has not received such
LC Termination Notice, the DIP Agent shall withdraw from the Letter of Credit
Account the aggregate amount then on deposit therein that is equal to 103% of
the face amount of Letters of Credit then outstanding and disburse such amounts
in accordance with a written direction from the Issuing Banks (or, in the
absence of such written direction, the DIP Agent may request that the Bankruptcy
Court make such determination).

Except as otherwise provided in clause (iii) above amounts in the Letter of
Credit Account may not be withdrawn by the Borrower or used for any purpose
other than the reimbursement of the Issuing Banks or repayment of the Secured
Obligations hereunder.

(iv) The Borrower hereby grants to the DIP Agent, for the benefit of the Issuing
Banks and the other Secured Parties, an exclusive superpriority and continuing
perfected security interest in and Lien on such account and all cash, checks,
drafts, certificates and instruments, if any, from time to time deposited or
held in such account, all deposits or wire transfers made thereto, any and all
proceeds, products, accessions, rents, profits, income and benefits therefrom,
and any substitutions and replacements therefor.

(v) The Borrower’s obligation to deposit amounts pursuant to this
Section 2.07(j) shall be absolute and unconditional, without regard to whether
any beneficiary of any Letter of Credit has attempted to draw down all or a
portion of such amount under the terms of a Letter of Credit, and, to the
fullest extent permitted by applicable law, shall not be subject to any defense
or be affected by a right of set-off, counterclaim or recoupment which the
Borrower or any of its Subsidiaries may now or hereafter have against any such
beneficiary, any Issuing Bank, the DIP Agent, the Lenders or any other Person
for any reason whatsoever. Such deposit shall be held as collateral securing the
payment and performance of the Borrower’s and the Guarantors’ obligations under
this Agreement and the other Loan Documents. Subject to Sections 2.07(m), the
DIP Agent shall have exclusive dominion and control, including the exclusive
right of withdrawal, over such account. Such deposits shall not bear interest.

(k) Applicability of ISP. Unless otherwise expressly agreed by any Issuing Bank
and the Borrower when a Letter of Credit is issued (including any such agreement
applicable to an Existing Letter of Credit), the rules of the ISP shall apply to
each Letter of Credit. Notwithstanding the foregoing, no Issuing Bank shall be
responsible to the Borrower for, and such Issuing Bank’s rights and remedies
against the Borrower shall not be impaired by, any action or inaction of such
Issuing Bank required or permitted under any law, order, or practice that is
required or permitted to be applied to any Letter of Credit or this Agreement,
including the law or any order of a jurisdiction where such Issuing Bank or the
beneficiary is located, the practice stated

 

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in the ISP or in the decisions, opinions, practice statements, or official
commentary of the ICC Banking Commission, the Bankers Association for Finance
and Trade –International Financial Services Association (BAFT-IFSA), or the
Institute of International Banking Law & Practice, whether or not any Letter of
Credit chooses such law or practice.

(l) Calculation of Maximum Stated Amount. For all purposes of this Agreement,
the amount of a Letter of Credit that, by its terms or the terms of any document
related thereto, provides for one or more automatic increases in the stated
amount thereof shall be deemed to be the maximum stated amount of such Letter of
Credit after giving effect to all such increases, whether or not such maximum
stated amount is in effect at the time of determination.

(m) Withdrawals of funds from the Letter of Credit Account by the Borrower.

(i) By delivery of a Letter of Credit Account Withdrawal Notice to the DIP Agent
at least four (4) Business Days prior to the date of a requested withdrawal from
the Letter of Credit Account, the Borrower may request that the amount set forth
in such Letter of Credit Account Withdrawal Notice (which amount the Borrower
agrees will not exceed in the aggregate, together with all other withdrawals
made pursuant to Letter of Credit Account Withdrawal Notices, the Alternate Cash
Collateral Amount) be withdrawn from the Letter of Credit Account and sent to
the account of the Borrower specified in such Letter of Credit Account
Withdrawal Notice; provided that the Borrower agrees that in no event shall the
LC Cash Collateralization Amount exceed the Letter of Credit Deposit Amount
after giving effect to such withdrawal. The Borrower agrees that the proceeds of
any such withdrawal from the Letter of Credit Account shall be used by the
Borrower and the other Loan Parties solely to cash collateralize the obligations
of the vendors and suppliers of the Loan Parties in accordance with
Section 9.03(j); provided, further, that the Borrower agrees that in no event
shall the LC Cash Collateralization Amount exceed the Letter of Credit Deposit
Amount after giving effect to such withdrawal. The Borrower agrees that together
with any delivery to the DIP Agent of a Letter of Credit Account Withdrawal
Notice, it will deliver a copy thereof to each Issuing Bank.

(ii) The Borrower may from time to time, by delivery of a Letter of Credit
Account Prepayment Notice to the DIP Agent for delivery to each Issuing Bank at
least four (4) Business Days prior to the date of the requested withdrawal,
request the release of cash collateral from the Letter of Credit Account to be
applied in the manner set forth in such Letter of Credit Account Prepayment
Notice. The Borrower agrees that (I) any prepayment pursuant to this clause
shall be applied in accordance with Section 3.04(c) and (II) in no event shall
the LC Cash Collateralization Amount exceed the Letter of Credit Deposit Amount
after giving effect to such release. The Borrower agrees that together with any
delivery to the DIP Agent of a Letter of Credit Account Prepayment Notice, it
will deliver a copy thereof to each Issuing Bank.

 

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(iii) On the date set forth in the applicable Letter of Credit Account
Withdrawal Notice, the DIP Agent shall disburse funds from the Letter of Credit
Account in an aggregate amount equal to the amount specified in such Letter of
Credit Account Withdrawal Notice to the account of the Borrower specified in
such Withdrawal Request. On the date set forth in the applicable Letter of
Credit Account Prepayment Notice, the DIP Agent shall apply funds in the Letter
of Credit Account to the Secured Obligations and other applicable obligations in
an aggregate amount equal to the amount specified in such Letter of Credit
Account Prepayment Notice and in the manner specified in such Letter of Credit
Account Prepayment Notice.

(iv) With respect to any disbursement, withdrawal, transfer, or application of
funds from the Letter of Credit Account under this Section 2.07(m), the DIP
Agent shall be entitled to conclusively rely upon, and shall be fully protected
in relying upon, any Letter of Credit Account Withdrawal Notice or Letter of
Credit Account Prepayment Notice submitted by the Borrower as evidence that
(i) the withdrawal requested therein is permitted to be made, (ii) all
conditions or requirements to such withdrawal have been satisfied (including, if
applicable, those set forth in Section 6.02) and (iii) in the case of a Letter
of Credit Account Prepayment Notice, the application of funds set forth therein
complies with Section 3.04(c). Notwithstanding anything herein to the contrary,
the DIP Agent shall have no obligation to disburse any amount from the Letter of
Credit Account in excess of the amounts then held in the Letter of Credit
Account. The DIP Agent shall have no duty to inquire or investigate whether the
Borrower is entitled to receive the funds requested (or have the funds applied
in the manner requested) in the applicable Letter of Credit Account Withdrawal
Notice or Letter of Credit Account Prepayment Notice, as applicable, and shall
not be deemed to have any knowledge as to whether or not any such Letter of
Credit Account Withdrawal Notice or Letter of Credit Account Prepayment Notice
is permitted to be given.

ARTICLE III

PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES

Section 3.01 Repayment of Loans. If not sooner paid (pursuant to Section 3.04),
the Borrower shall pay the DIP Term Loan and all other Secured Obligations, in
full and in cash, together with accrued interest thereon (or, in the case of
Letters of Credit, cash collateralize such Letters of Credit in accordance with
Section 2.07(j)), on the Maturity Date.

Section 3.02 Interest.

(a) ABR Loans. The Loans comprising each ABR Borrowing shall bear interest at an
annual rate equal to the sum of (i) the Alternate Base Rate plus (ii) the
Applicable Margin, but in no event to exceed the Highest Lawful Rate.

(b) Eurodollar Loans. The Loans comprising each Eurodollar Borrowing shall bear
interest at an annual rate equal to the sum of (i) the Adjusted LIBO Rate for
the Interest Period

 

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in effect for such Borrowing plus (ii) the Applicable Margin, but in no event to
exceed the Highest Lawful Rate.

(c) Post-Default Rate. Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing, or if any principal of or interest on any Loan or
any fee or other amount payable by the Borrower or any other Loan Party
hereunder or under any other Loan Document is not paid when due, whether at
stated maturity, upon acceleration or otherwise, then all Loans outstanding, in
the case of an Event of Default, and such overdue amount, in the case of a
failure to pay amounts when due, shall bear interest, after as well as before
judgment, at a rate per annum equal to two percent (2.0%) plus (i) when used
with respect to obligations other than Loans, an interest rate equal to the rate
applicable to ABR Loans as provided in Section 3.02(a), and (ii) when used with
respect to Loans the rate otherwise applicable to such Loans.

(d) Interest Payment Dates. Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and on the Maturity Date;
provided that (i) interest accrued pursuant to Section 3.02(c) shall be payable
on demand, (ii) in the event of any repayment or prepayment of any Loan (other
than an optional prepayment of an ABR Loan prior to the Maturity Date), accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment, and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.

(e) Interest Rate Computations. All interest hereunder shall be computed on the
basis of a year of 360 days, unless such computation would exceed the Highest
Lawful Rate, in which case interest shall be computed on the basis of a year of
365 days (or 366 days in a leap year), except that interest computed by
reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 365 days (or
366 days in a leap year), and in each case shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). The
applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be
determined by the DIP Agent, and such determination shall be conclusive absent
manifest error, and be binding upon the parties hereto.

Section 3.03 Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:

(a) the DIP 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 for such Interest Period; or

(b) the DIP Agent is advised by the Required Lenders that the Adjusted LIBO Rate
or LIBO Rate, as applicable, for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making or maintaining their Loans
included in such Borrowing for such Interest Period; then the DIP Agent shall
give notice thereof to the Borrower and the Lenders as promptly as practicable
thereafter and, until the DIP Agent notifies the Borrower and the Lenders that
the circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Notice of Borrowing requests a

 

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Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing (without
giving effect to clause (c) of the definition of Alternate Base Rate).

Section 3.04 Prepayments.

(a) Optional Prepayments.

(i) The Borrower shall have the right at any time and from time to time to
prepay any Borrowing in whole or in part, without premium or penalty (other than
the Exit Fee), subject to prior notice in accordance with Section 3.04(a)(ii).

(ii) The Borrower shall notify the DIP Agent (by facsimile or e-mail) of any
prepayment hereunder (A) in the case of prepayment of a Eurodollar Borrowing,
not later than 11:00 a.m., New York City time, three (3) Business Days before
the date of prepayment, or (B) in the case of prepayment of an ABR Borrowing,
not later than 11:00 a.m., New York City time, one (1) Business Day before the
date of prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date (which shall be a Business Day) and the principal amount of each
Borrowing or portion thereof to be prepaid; provided, that a notice of
prepayment may state that such notice is conditioned upon the effectiveness of
other credit facilities, in which case such notice may be revoked (by written
notice to the DIP Agent on or prior to the specified effective date) if such
condition is not satisfied (provided that the failure of such condition shall
not relieve the Borrower from its obligations under Section 5.02 in respect
thereof). Promptly following receipt of any such notice relating to a Borrowing,
the DIP Agent shall advise the Lenders of the contents thereof. Each partial
prepayment of any Borrowing shall be in an aggregate amount that is an integral
multiple of $500,000 and not less than $1,000,000. Each optional prepayment made
pursuant this Section 3.04(a) shall be applied ratably to the Loans in
accordance with Section 3.04(c).

(b) Mandatory Prepayments. Subject to the Carve-Out and the Wind-Down Budget (if
any):

(i) On each date on or after the Effective Date upon which the Borrower or any
Subsidiary receives any cash proceeds from any Extraordinary Receipt, an amount
equal to 100% of the Net Cash Proceeds from such Extraordinary Receipt shall be
applied on such date as a mandatory repayment in accordance with the
requirements of Section 3.04(c).

(ii) On each date on or after the Effective Date upon which the Borrower or any
Subsidiary receives any cash proceeds from any Asset Sale made pursuant to
Section 9.11(f), Section 9.11(j) or Section 9.11(k) (after giving effect to the
proviso thereto), an amount equal to 100% of the Net Sale Proceeds therefrom
(and in the case of Section 9.11(k), after giving effect to the proviso thereto)
shall be applied by the Borrower on such date as a mandatory repayment in
accordance with Section 3.04(c).

 

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(iii) On each date on or after the Effective Date upon which the Borrower or any
Subsidiary receives any cash proceeds from any Recovery Event, an amount equal
to 100% of the Net Cash Proceeds from such Recovery Event shall be applied on
such date as a mandatory repayment in accordance with the requirements of
Section 3.04(c).

(iv) On each date on or after the Effective Date upon which the Borrower or any
Subsidiary receives any cash proceeds from any issuance of Indebtedness (other
than Indebtedness permitted by Section 9.02), an amount equal to 100% of the Net
Cash Proceeds from such issuance shall be applied on such date as a mandatory
repayment in accordance with the requirements of Section 3.04(c).

(v) On each date on or after the Effective Date upon which the Borrower or any
Subsidiary receives any Equity Issuance Proceeds, an amount equal to 100% of the
Net Cash Proceeds from such issuance shall be applied on such date as a
mandatory repayment in accordance with the requirements of Section 3.04(c).

(vi) Each optional prepayment made pursuant this Section 3.04(b) shall be
applied ratably to the Loans in accordance with Section 3.04(c).

(vii) If the Borrower is required to make a mandatory prepayment of Eurodollar
Borrowings under this Section 3.04, the Borrower shall have the right, in lieu
of making such prepayment in full, to deposit an amount equal to such mandatory
prepayment with the DIP Agent in a non-interest bearing cash collateral account
maintained by and in the sole dominion and control of the DIP Agent. Any amounts
so deposited shall be held by the DIP Agent as collateral for the prepayment of
such Eurodollar Rate Loans and shall be applied to the prepayment of the
applicable Eurodollar Rate Loans at the end of the current Interest Periods
applicable thereto.

(c) Prepayments Waterfall. All Prepayments pursuant to this Section 3.04 shall
be accompanied by accrued interest to the extent required by Section 3.02.
Subject to the Carve-Out and the Wind-Down Budget (if any), each prepayment of
Borrowings pursuant to this Section 3.04 shall be applied by the Borrower, in
accordance with the DIP Order, and to the extent not in contravention with the
DIP Order: (i) first, ratably to pay the Exit Fee, if applicable, (ii) second,
to be remitted by the Borrower to the DIP Agent and applied by the DIP Agent
ratably to repay the DIP Term Loans then outstanding, (iii) third, to be
remitted by the Borrower to each of the Prepetition Term Agent and the
Prepetition Revolver Agent, to be used by such Prepetition Agent to pay any
superpriority adequate protection claims of the Prepetition Secured Parties on a
pro rata basis; and (iv) thereafter, to be remitted by the Borrower to the
Prepetition Revolving Agent, the Prepetition Term Agent and the DIP Agent, in
such amounts to repay ratably the Prepetition Revolving Loans then outstanding,
on the one hand, and the Roll-Up Loans and Prepetition Term Loans then
outstanding, on the other hand (provided that funds allocated to the Roll-Up
Loans and Prepetition Term Loans shall be applied to repay the Roll-Up Loans in
full prior to the Prepetition Terms Loans); provided that, each repayment of
Borrowings made under each tranche shall be applied, first ratably to any ABR
Borrowings then outstanding under such tranche, and, second, to

 

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any Eurodollar Borrowings then outstanding under such tranche; provided further,
if more than one Eurodollar Borrowing is outstanding under such tranche, such
repayments shall be made to each such Eurodollar Borrowing in order of priority
beginning with the Eurodollar Borrowing with the least number of days remaining
in the Interest Period applicable thereto and ending with the Eurodollar
Borrowing with the most number of days remaining in the Interest Period
applicable thereto.

(d) No Premium or Penalty. Prepayments permitted or required under this
Section 3.04 shall be without premium or penalty (other than the Exit Fee),
except as required under Section 5.02.

(e) Notice of Prepayment. The Borrower shall notify the DIP Agent by written
notice of any mandatory prepayment under Section 3.04(b) not later than 11:00
a.m., New York City time, two Business Days before the date of such prepayment.
Each such notice shall specify the prepayment date (which shall be a Business
Day), the principal amount of each Borrowing or portion thereof to be prepaid
and a reasonably detailed calculation of the amount of such prepayment. Promptly
following receipt of any such notice, the DIP Agent shall advise the Lenders of
the contents thereof.

(f) No Reborrowings. Amounts prepaid pursuant to this Section 3.04 may not be
reborrowed.

Section 3.05 Fees.

(a) Structuring Fees. The Borrower agrees to pay to the DIP Agent, for the
benefit of each Lender, a structuring fee (the “Structuring Fee”) equal to 1.00%
of the aggregate amount of such Lender’s Commitment in respect of DIP Term
Loans, which shall be due and payable on the Effective Date either in cash, or
at the option of the Required Lenders, as “original issue discount” from the
funded amounts advanced to Borrower on the Effective Date.

(b) Letter of Credit Fees. The Borrower agrees to pay (i) to each Issuing Bank,
for its own account, (x) a fronting fee equal to 0.125% of the stated amount of
each Prepetition Letter of Credit deemed issued by it hereunder, and (y) a
fronting fee equal to 0.50% of the stated amount of each other Letter of Credit
issued by it, provided that, in each case, in no event shall such fronting fee
be less than $750.00 for any Letter of Credit, and (ii) to each Issuing Bank,
for its own account, its standard fees with respect to the issuance, amendment,
transfer, renewal or extension of any Letter of Credit issued by it or
processing of drawings thereunder payable upon the effectiveness thereof.
Fronting fees shall be payable in advance (1) with respect to any Prepetition
Letters of Credit deemed issued hereunder, on the Effective Date, and (2) with
respect to any other Letter of Credit, on the date of issuance of such Letter of
Credit. Any other fees payable to any Issuing Bank pursuant to this
Section 3.05(b) shall be payable within ten (10) days after demand.

(c) Commitment Premiums. The Borrower agrees to pay to the DIP Provider Parties
(as defined in the Commitment Letter), for their own account, the premiums
payable in the amounts and at the times set forth in the Commitment Letter.

 

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(d) DIP Agent Fees. The Borrower agrees to pay to the DIP Agent, for its own
account, fees payable in the amounts and at the times set forth in the Agency
Fee Letter.

(e) Exit Fees. The Borrower shall pay to the DIP Agent, for the ratable benefit
of each Lender, an exit fee (the “Exit Fee”) equal to 1.50% of the aggregate
amount of such Lender’s DIP Term Loans and unused Delayed Draw Term Commitment,
if any. The Exit Fee (or portion thereof, as applicable) shall be paid in cash
(i) on the date of any prepayment or repayment of DIP Term Loans pursuant to
Section 3.04 or otherwise, (ii) in the case of any unused Delayed Draw Term
Commitment, on the date of termination of such Commitment without funding
thereunder, and (iii) on the Maturity Date. The Exit Fee, when paid, shall be
paid to the DIP Agent for the benefit of each DIP Term Lender, ratably based on
its Applicable Percentage.

ARTICLE IV

PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS

Section 4.01 Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a) Payments by the Borrower. The Borrower shall make each payment required to
be made by it hereunder (whether of principal, interest, fees or reimbursement
of LC Disbursements, or of amounts payable under Section 5.01, Section 5.02,
Section 5.03 or otherwise) prior to 11:00 a.m., New York City time, on the date
when due, in immediately available funds, without defense, deduction,
recoupment, set-off or counterclaim. Fees, once paid, shall be fully earned and
shall not be refundable under any circumstances. Any amounts received after such
time on any date may, in the discretion of the DIP Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the DIP Agent to the
account of the DIP Agent specified from time to time for receipt of payments,
except payments to be made directly to the applicable Issuing Bank as expressly
provided herein and except that payments pursuant to Section 5.01, Section 5.02,
Section 5.03 and Section 12.03 shall be made directly to the Persons entitled
thereto. The DIP Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.

(b) Application of Insufficient Payments. If at any time insufficient funds are
received by and available to the DIP Agent to pay fully all amounts of
principal, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of fees then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of fees then due to such
parties, (ii) second, towards payment of interest then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
then due to such parties and (iii) third, towards payment of principal then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal then due to such parties.

(c) Sharing of Payments by Lenders. If any Lender shall, by exercising any right
of setoff or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans or other obligations hereunder
resulting in such Lender receiving

 

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payment of a proportion of the aggregate amount of its Loans and other such
obligations greater than its pro rata share thereof as provided herein, then the
Lender receiving such greater proportion shall (i) notify the DIP Agent of such
fact, and (ii) purchase (for cash at face value) participations in the Loans and
such other obligations of the other Lenders, or make such other adjustments as
shall be equitable, so that the benefit of all such payments shall be shared by
the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and other amounts owing them;
provided that (A) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (B) the provisions of this Section 4.01 shall
not be construed to apply to (1) any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or (2) any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans to any assignee or participant. Each Loan
Party consents to the foregoing and agrees, to the extent it may effectively do
so under applicable law, that any Lender acquiring a participation pursuant to
the foregoing arrangements may exercise against each Loan Party rights of setoff
and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of each Loan Party in the amount of such participation.

Section 4.02 Payments by the Borrower; Presumptions by the DIP Agent. Unless the
DIP Agent shall have received notice from the Borrower prior to the date on
which any payment is due to the DIP Agent for the account of the Lenders or any
Issuing Bank hereunder that the Borrower will not make such payment, the DIP
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 any Issuing Bank, 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 Banks, as the case may be, severally agrees to repay to the DIP
Agent forthwith on demand the amount so distributed to such Lender or such
Issuing Bank, 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 DIP
Agent, at the greater of the Federal Funds Effective Rate and a rate determined
by the DIP Agent in accordance with banking industry rules on interbank
compensation.

Section 4.03 Certain Deductions by the DIP Agent. If any Lender shall fail to
make any payment required to be made by it pursuant to Section 2.05(a),
Section 4.02, Section 12.03(c) or otherwise hereunder then the DIP Agent may, in
its discretion (notwithstanding any contrary provision hereof), (a) apply any
amounts thereafter received by the DIP Agent for the account of such Lender and
for the benefit of the DIP Agent or the Issuing Banks to satisfy such Lender’s
obligations hereunder until all such unsatisfied obligations are fully paid
and/or (b) hold any such amounts in a segregated account as cash collateral for,
and application to, any future funding obligations of such Lender hereunder, in
the case of each of (a) and (b) above, in any order as determined by the DIP
Agent in its discretion. If at any time prior to the acceleration or maturity of
the Loans, the DIP Agent receives any payment in respect of principal of a Loan
while one or more Defaulting Lenders is a party to this Agreement, the DIP Agent
shall apply such payment first to the Borrowing(s) for which any such Defaulting
Lender has failed to fund its pro rata share until such time as such
Borrowing(s) are paid in full or each Lender (including each Defaulting Lender)
is owed its Applicable Percentage of all Loans then outstanding. After
acceleration or maturity of the Loans, all principal will be applied ratably as
provided in Section 10.02(c).

 

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Section 4.04 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) [reserved]; and

(b) the Commitment and the Credit Exposure of such Defaulting Lender shall not
be included in determining whether all Lenders or the Required Lenders have
taken or may take any action hereunder (including any consent to any amendment
or waiver pursuant to Section 12.02), provided that any waiver, amendment or
modification requiring the consent of all Lenders or each adversely affected
Lender which affects such Defaulting Lender differently than all other Lenders
or all other adversely affected Lenders, as the case may be, shall require the
consent of such Defaulting Lender.

ARTICLE V

INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY

Section 5.01 Increased Costs.

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

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

(ii) subject any Lender or any Issuing Bank to any Tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit , or any Eurodollar Loan
made by it (except for Indemnified Taxes, Other Taxes covered by Section 5.03 or
Connection Income Taxes and the imposition of, or any change in the rate of, any
Excluded Tax payable by such Lender or any Issuing Bank); or

(iii) impose on any Lender or any Issuing Bank or the London interbank market
any other condition, cost or expense affecting this Agreement or Eurodollar
Loans made by such Lender or any Letter of Credit; and the result of any of the
foregoing shall be to increase the cost to such Lender of making or maintaining
any Eurodollar Loan (or of maintaining its obligation to make any such Loan), or
to increase the cost to such Issuing Bank of issuing or maintaining any Letter
of Credit (or of maintaining its obligation to issue any Letter of Credit), or
to reduce the amount of any sum received or receivable by such Lender or such
Issuing Bank hereunder (whether of principal, interest or any other amount),
then, upon request of such Lender or such Issuing Bank, the Borrower will pay to
such Lender or such Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Lender or such Issuing Bank, as the case may be,
for such additional costs incurred or reduction suffered.

 

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

(c) Certificates for Reimbursement. A certificate of a Lender or any Issuing
Bank setting forth the amount or amounts necessary to compensate such Lender or
such Issuing Bank or its holding company, as the case may be, as specified in
Sections 5.01(a) or (b) and delivered to the Borrower (with a copy to the DIP
Agent) shall be conclusive absent manifest error. The Borrower shall pay such
Lender or such Issuing Bank, as the case may be, the amount shown as due on any
such certificate within ten (10) days after receipt thereof.

(d) Effect of Failure or Delay in Requesting Compensation. Failure or delay on
the part of any Lender or any Issuing Bank to demand compensation pursuant to
this Section 5.01 shall not constitute a waiver of such Lender’s or such Issuing
Bank’s right to demand such compensation; provided that the Borrower shall not
be required to compensate a Lender or such Issuing Bank pursuant to this
Section 5.01 for any increased costs incurred or reductions suffered more than
365 days prior to the date that such Lender or such Issuing Bank, as the case
may be, notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of such Lender’s or such Issuing Bank’s intention to
claim compensation therefor; provided, further, that, if the Change in Law
giving rise to such increased costs or reductions is retroactive, then the
365-day period referred to above shall be extended to include the period of
retroactive effect thereof.

Section 5.02 Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan into an ABR 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, 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 5.04(b), 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,

 

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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 5.02 shall be delivered to the
Borrower (with a copy to the DIP Agent) and shall be conclusive absent manifest
error. The Borrower shall pay such Lender the amount shown as due on any such
certificate within ten (10) days after receipt thereof.

Section 5.03 Taxes.

(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower or any Guarantor under any Loan Document shall be
made free and clear of and without deduction or withholding for any Indemnified
Taxes or Other Taxes; provided that if the Borrower or any Guarantor shall be
required by applicable law to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 5.03(a)), the DIP Agent, Lender or
Issuing Bank, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower or such
Guarantor shall make such deductions and (iii) the Borrower or such Guarantor
shall timely pay the full amount deducted to the relevant Governmental Authority
in accordance with applicable law.

(b) Payment of Other Taxes by the Borrower. Without limiting the provisions of
Section 5.03(a), the Borrower shall timely pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

(c) Indemnification by the Borrower. The Borrower shall indemnify the DIP Agent,
each Lender and each Issuing Bank, within ten (10) days after demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section 5.03) payable or paid by the DIP Agent, such
Lender or such Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrower hereunder, and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability under this
Section 5.03 delivered to the Borrower by a Lender or an Issuing Bank (with a
copy to the DIP Agent), or by the DIP Agent on its own behalf or on behalf of a
Lender or an Issuing Bank, shall be conclusive absent manifest error.

(d) Indemnification by the Lenders. Each Lender shall severally indemnify the
DIP Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes
attributable to such Lender (but only to the extent that Borrower has not
already indemnified the DIP Agent for such Indemnified Taxes and without
limiting the obligation of the Borrower to do so), (ii) any

 

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Taxes attributable to such Lender’s failure to comply with the provisions of
Section 12.04(d)(ii) 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 DIP Agent in connection with any Loan Document, and any
reasonable expenses arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to any Lender by the DIP Agent shall be conclusive absent
manifest error. Each Lender hereby authorizes the DIP Agent to set off and apply
any and all amounts at any time owing to such Lender under any Loan Document or
otherwise payable by the DIP Agent to the Lender from any other source against
any amount due to the DIP Agent under this paragraph (d).

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

(f) Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
tax with respect to payments made under this Agreement or any other Loan
Document shall deliver to the Withholding Agent (with a copy to the DIP Agent),
at the time or times prescribed by applicable law or reasonably requested by the
Withholding Agent, such properly completed and executed documentation prescribed
by applicable law as will permit such payments to be made without withholding or
at a reduced rate of withholding. In addition, any Lender, if requested by the
Withholding Agent, shall deliver such other documentation prescribed by
applicable law or reasonably requested by the Withholding Agent as will enable
the Withholding 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 Sections 5.03(f)(ii)(A) and 5.03(f)(ii)(B) and Section 5.03(g)
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 “United States person” as defined in section 7701(a)(30) of the
Code,

(A) any Lender that is a “United States person” as defined in section
7701(a)(30) of the Code shall deliver to the Withholding 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 request of the

 

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Withholding Agent), executed originals of IRS Form W-9 certifying that such
Lender is exempt from United States federal backup withholding tax;

(B) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Withholding 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 request
of the Withholding Agent, but only if such Foreign Lender is legally entitled to
do so), whichever of the following is applicable:

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

(2) executed originals of IRS Form W-8ECI;

(3) in the case of a 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 G-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
871(h)(3)(B) of the Code, or a “controlled foreign corporation” described in
section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”), and
(y) executed originals of IRS Form W-8BEN; or

(4) to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a
U.S. Tax Compliance Certificate substantially in the form of Exhibit G-2 or
Exhibit G-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 G-4 on
behalf of each such direct and indirect partner; and

(5) any Foreign Lender shall, to the extent it is legally

 

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entitled to do so, deliver to the Withholding 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 Withholding Agent), executed
originals of any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in United States federal withholding tax, duly
completed, together with such supplementary documentation as may be prescribed
by applicable law to permit the Withholding Agent to determine the withholding
or deduction required to be made.

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

(g) Treatment of Certain Refunds. If the DIP Agent, a Lender or an Issuing Bank
determines, in its sole discretion, that it has received a refund of any
Indemnified Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section 5.03, it shall pay to the Borrower an amount equal to
such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section 5.03 with respect to the
Indemnified Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the DIP Agent, such Lender or such Issuing Bank, as
the case may be, and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided that the
Borrower, upon the request of the DIP Agent, such Lender or such Issuing Bank,
agrees to repay the amount paid over to the Borrower (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to the
DIP Agent, such Lender or such Issuing Bank in the event the DIP Agent, such
Lender or such Issuing Bank is required to repay such refund to such
Governmental Authority. This Section 5.03 shall not be construed to require the
DIP Agent, any Lender or any Issuing Bank to make available its tax returns (or
any other information relating to its taxes that it deems confidential) to the
Borrower or any other Person.

(h) FATCA. If a payment made to a Lender under this Agreement would be subject
to United States federal withholding tax imposed by FATCA if such Lender fails
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 Withholding Agent, at the time or times prescribed by law
and at such time or times reasonably requested by the Withholding 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 Withholding Agent as may be necessary for the Withholding Agent
to comply with its obligations under FATCA, 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 the purposes of this
Section 5.03(h), “FATCA” shall include any amendments made to FATCA after the
date of this Agreement. For purposes of determining withholding Taxes imposed
under FATCA, the Borrower and the DIP Agent shall treat (and the DIP Agent is
authorized to

 

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treat) this Agreement as not qualifying as a “grandfathered obligation” within
the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

Section 5.04 Mitigation Obligations; Replacement of Lenders.

(a) Designation of Different Lending Office. If any Lender requests compensation
under Section 5.01, or requires the Borrower to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 5.03, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(i) would eliminate or reduce amounts payable pursuant to Section 5.01 or
Section 5.03, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.

(b) Replacement of Lenders. If any Lender requests compensation under
Section 5.01, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 5.03, or if any Lender is a Defaulting Lender, then the Borrower may, at
its sole expense and effort, upon notice to such Lender and the DIP Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in, and consents required by,
Section 12.04(b)), all of its interests, rights and obligations under this
Agreement and the related Loan Documents to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have paid to the DIP Agent the
processing and recordation fee specified in Section 12.04(b)(iv), (ii) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Credit Exposure in respect of Loans, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder and under the other
Loan Documents (including any amounts under Section 3.04(c) or Section 5.02),
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), (iii) in
the case of any such assignment resulting from a claim for compensation under
Section 5.01 or payments required to be made pursuant to Section 5.03, such
assignment will result in a reduction in such compensation or payments
thereafter, and (iv) such assignment does not conflict with applicable law. 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 to require such assignment and delegation cease to apply.

Section 5.05 Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its applicable lending
office to honor its obligation to make or maintain Eurodollar Loans either
generally or having a particular Interest Period hereunder, then (a) such Lender
shall promptly notify the Borrower and the DIP Agent thereof and such Lender’s
obligation to make such Eurodollar Loans shall be suspended (the “Affected
Loans”) until such time as such Lender may again make and maintain such
Eurodollar Loans and (b) all Affected Loans which would otherwise be made by
such Lender shall be made

 

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instead as ABR Loans (without giving effect to clause (c) of the definition of
Alternate Base Rate) (and, if such Lender so requests by notice to the Borrower
and the DIP Agent, all Affected Loans of such Lender then outstanding shall be
automatically converted into ABR Loans on the date specified by such Lender in
such notice) and, to the extent that Affected Loans are so made as (or converted
into) ABR Loans, all payments of principal which would otherwise be applied to
such Lender’s Affected Loans shall be applied instead to its ABR Loans.

ARTICLE VI

CONDITIONS PRECEDENT

Section 6.01 Effective Date. The obligations of the Lenders to make Loans and of
each Issuing Bank to issue Letters of Credit hereunder (exclusive of the
Prepetition Letters of Credit) shall not become effective until the Business Day
on which each of the following conditions is satisfied (or waived in accordance
with Section 12.02):

(a) The Petition Date will have occurred, and each Loan Party will be a debtor
and a debtor-in-possession in the Chapter 11 Cases. All “first day orders”
entered by the Bankruptcy Court in connection with the commencement of the
Chapter 11 Cases (other than the Cash Management Order or the Interim DIP
Order), will be satisfactory in form and substance to the Required Lenders;

(b) Not later than five (5) Business Days following the Petition Date, the
Bankruptcy Court shall have entered the Interim DIP Order, in form and substance
satisfactory to the Required Lenders (and with respect to any provision that
affects the rights or duties of the DIP Agent, the DIP Agent), which Interim DIP
Order shall be in full force and effect and has not been vacated, reversed,
modified, amended or stayed;

(c) All fees, costs and expenses required to be have been paid or reimbursed, as
set forth herein and in the Loans Documents, the Commitment Letter and the
Agency Fee Letter shall have been paid or reimbursed or will be paid or
reimbursed contemporaneously with the Effective Date;

(d) The Required Lenders and the DIP Agent shall have received and the Required
Lenders shall be satisfied with a cash flow forecast for the 13-week period
commencing on the Effective Date dated as of a date not more than 2 Business
Days prior to the Effective Date (the “Initial Approved Budget”);

(e) One or more orders, in form and substance satisfactory to the Required
Lenders in all respects, approving such cash management systems and arrangements
(as the same may be amended, supplemented or modified from time to time after
entry thereof in accordance with the terms hereof, the “Cash Management Order”)
(it being understood and agreed that (i) an order substantially in a form
approved by Lender Counsel shall, if entered by the Bankruptcy Court, be deemed
acceptable to the Required Lenders and (ii) for the avoidance of doubt, the
Borrower’s cash management systems and arrangements in effect on the Effective
Date in accordance with the Prepetition Revolving Credit Agreement shall be
deemed acceptable to the Required Lenders) shall have been entered by the
Bankruptcy Court, which Cash Management Order shall be in full force and effect
and shall not have been (x) stayed, vacated or reversed, or

 

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(y) amended or modified except as otherwise agreed to in writing by Lender
Counsel or Required Lenders in their sole discretion;

(f) Since December 31, 2018, there shall not have occurred or there shall not
exist any event, condition or circumstance that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect; and

(g) The DIP Agent and the Required Lenders shall have received a certificate of
the Secretary or an Assistant Secretary of each Loan Party setting forth
(i) resolutions of its board of directors (or its equivalent) with respect to
the authorization of such Loan Party to execute and deliver the Loan Documents
to which it is a party and to enter into the Transactions contemplated in those
documents, (ii) the officers of such Loan Party (A) who are authorized to sign
the Loan Documents to which such Loan Party is a party and (B) who will, until
replaced by another officer or officers duly authorized for that purpose, act as
its representative for the purposes of signing documents and giving notices and
other communications in connection with this Agreement and the Transactions
contemplated hereby, (iii) specimen signatures of such authorized officers, and
(iv) the Organization Documents of such Loan Party, certified as being true and
complete. The DIP Agent and the Lenders may conclusively rely on such
certificate until the DIP Agent receives notice in writing from such Loan Party
to the contrary.

(h) The DIP Agent and the Required Lenders shall have received certificates of
the appropriate state agencies with respect to the existence, qualification and
good standing of each Loan Party in its state of formation.

(i) The DIP Agent and the Required Lenders shall have received a customary
closing certificate substantially in the form of Exhibit D, duly and properly
executed by a Financial Officer and dated as of the Effective Date.

(j) The DIP Agent and the Required Lenders shall have received counterparts of
this Agreement, the Guaranty and Collateral Agreement and the Agency Fee Letter,
signed on behalf of each party thereto.

(k) The DIP Agent and the Required Lenders shall have received the Financial
Statements.

(l) The DIP Agent and the Required Lenders shall have received from each party
thereto duly executed counterparts of the Security Instruments. In connection
with the execution and delivery of the Security Instruments, the Required
Lenders shall:

(i) be satisfied that the Interim DIP Order or Security Instruments required to
be executed on the Effective Date create (or will create, upon proper filing,
recording or registration thereof, or upon entry of, the Interim DIP Order)
perfected Liens having the priorities set forth in the Interim DIP Order
(subject only to Excepted Liens on all of the tangible and intangible Property
of the Loan Parties other than de minimis Property excluded in the DIP Agent’s
sole discretion); and

 

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(ii) have received (or its bailee pursuant to the Interim DIP Order has
received) certificates (if any), together with undated, blank stock powers for
each such certificate, representing all of the issued and outstanding Equity
Interests of each of the Loan Parties (other than the Borrower), to the extent
certificated.

(iii) The DIP Agent shall have received an opinion of Davis Polk & Wardwell LLP,
special counsel to the Borrower in form and substance satisfactory to the DIP
Agent, the Required Lenders and their counsel.

(m) [Reserved].

(n) Subject to Section 8.20, the DIP Agent and the Required Lenders shall have
received appropriate UCC search results satisfactory to DIP Lenders or the
Required Lenders reflecting no prior Liens encumbering the Properties of the
Borrower and the Subsidiaries; other than those being assigned or released on or
prior to the Effective Date or Liens permitted by Section 9.03.

(o) Subject to Section 8.20, each document (including any Uniform Commercial
Code financing statement) required by this Agreement or under law or reasonably
requested by the DIP Agent or the Required Lenders to be filed, registered or
recorded in order to create in favor of the DIP Agent, for the benefit of the
Secured Parties, a perfected Lien on the Collateral described therein having the
priorities set forth in the DIP Orders, shall be in proper form for filing,
registration or recordation.

(p) The DIP Agent and the Lenders shall have received from the Loan Parties, to
the extent requested by the Lenders or the DIP Agent, all documentation and
other information required by regulatory authorities under applicable “know your
customer” and anti-money laundering rules and regulations, including the USA
Patriot Act.

(q) The DIP Agent shall have received a Notice of Borrowing in accordance with
Section 2.03.

Without limiting the generality of the provisions of Section 11.04, for purposes
of determining compliance with the conditions specified in this Section 6.01,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required under this Section 6.01 to be consented to or approved by or acceptable
or satisfactory to a Lender unless the DIP Agent shall have received notice from
such Lender prior to the Effective Date specifying its objection thereto. At the
request of the Required Lenders, the DIP Agent shall notify the Borrower and the
Lenders of the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans and
of each Issuing Bank to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 12.02) at or prior to 5:00 p.m., New York City time, on
April 3, 2019 (and, in the event such conditions are not so satisfied or waived,
the Commitments shall terminate at such time).

 

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Section 6.02 Each Subsequent Credit Event. The obligation of each Lender to make
a Loan on the occasion of any Borrowing, extend the Scheduled Maturity Date in
accordance with the definition thereof or allow the withdrawal of cash from the
Letter of Credit Account pursuant to a Letter of Credit Account Withdrawal
Notice, and each Issuing Bank to issue, amend, renew or extend any Letter of
Credit, in each case, after the Effective Date, is subject to the satisfaction
of the following conditions:

(a) At the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit or the
withdrawal from the Letter of Credit Account, as applicable, no Default shall
have occurred and be continuing.

(b) The representations and warranties of the Borrower and the Guarantors set
forth in this Agreement and in the other Loan Documents shall be true and
correct in all material respects on and as of the date of such Borrowing,
extension of the Scheduled Maturity Date, withdrawal of cash from the Letter of
Credit Account or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, except that (i) to the extent any such
representations and warranties are expressly limited to an earlier date, in
which case, on and as of the date of such Borrowing, extension of the Scheduled
Maturity Date, withdrawal of cash from the Letter of Credit Account or the date
of issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, such representations and warranties shall continue to be true and
correct in all material respects as of such specified earlier date, and (ii) to
the extent that any such representations and warranties are qualified by
materiality, such representations and warranties shall continue to be true and
correct in all respects.

(c) In the case of an issuance, amendment, renewal or extension of a Letter of
Credit or the withdrawal of cash from the Letter of Credit Account to fund the
Alternative Cash Collateral Amount, the applicable Issuing Bank and the DIP
Agent shall have received a Letter of Credit Account Withdrawal Notice in
accordance with Section 2.07(m) or a request for a Letter of Credit and related
Letter of Credit Agreement in accordance with Section 2.07(b), as applicable.

(d) Solely with respect to the Delayed Draw DIP Term Loan, the Bankruptcy Court
shall have entered the Final DIP Order, in form and substance reasonably
satisfactory to the Required Lenders (and with respect to any provision that
affects the rights or duties of the DIP Agent, the DIP Agent) and the DIP Agent
shall have received a signed copy of such Final Order, which Final DIP Order has
not been vacated, reversed, modified, amended or stayed; provided, for the
avoidance of doubt, no Lender holding Delayed Draw DIP Term Commitments shall be
required to fund any Delayed Draw DIP Term Loans to the extent that the Final
DIP Order does not approve the Roll-Up that is to be consummated on the Delayed
Draw DIP Funding Date pursuant to Section 2.01(d).

(e) The Final DIP Order shall have been entered by the Bankruptcy Court no later
than noon (12:00 p.m.) Eastern Time on the initial Delayed Draw DIP Funding
Date.

(f) In the case of a Borrowing of Delayed Draw DIP Term Loans, the DIP Agent
shall have received a Notice of Borrowing in accordance with Section 2.03.

 

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(g) In the case of an issuance, amendment, renewal or extension of a Letter of
Credit or the withdrawal of cash from the Letter of Credit Account to fund the
Alternative Cash Collateral Amount, (i) the Prepetition Letters of Credit shall
continue to be deemed to have been cancelled and re-issued hereunder and no
action shall have been taken in the Chapter 11 Cases to void such deemed
cancellation and re-issuance and (ii) after giving effect to such issuance,
amendment, renewal or extension of a Letter of Credit or such withdrawal of
cash, the LC Cash Collateralization Amount shall not exceed the Letter of Credit
Deposit Amount.

Each request for a Borrowing and each request for the issuance, amendment,
renewal or extension of any Letter of Credit and each acceptance of the
foregoing shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in Sections 6.02(a) and
(b).

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

The Borrower (on behalf of itself and its Subsidiaries), and each Guarantor by
its execution of the Guaranty and Collateral Agreement, represents and warrants
to the DIP Agent, any Issuing Banks and the Lenders that:

Section 7.01 Organization; Powers. Each of the Borrower and its Subsidiaries is
a legal entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority, and has all material governmental licenses, authorizations, consents
and approvals necessary, to own its assets and to carry on its business as now
conducted, and is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required, except where failure to have
such power, authority, licenses, authorizations, consents, approvals and
qualifications could not reasonably be expected to have a Material Adverse
Effect.

Section 7.02 Authority; Enforceability. Subject to entry of the Interim DIP
Order (or the Final DIP Order, where applicable) and the terms thereof, the
Transactions are within each Loan Party’s corporate powers and have been duly
authorized by all necessary corporate and, if required, stockholder action
(including, without limitation, any action required to be taken by any class of
directors of the Borrower or any other Person, whether interested or
disinterested, in order to ensure the due authorization of the Transactions).
Each Loan Document to which a Loan Party is a party has been duly executed and
delivered by such Loan Party and constitutes a legal, valid and binding
obligation of such Loan Party, as applicable, enforceable in accordance with its
terms, except as may be limited by the DIP Orders.

Section 7.03 Approvals; No Conflicts. Subject to entry of the Interim DIP Order
(or the Final DIP Order, where applicable) and the terms thereof, the
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority or any other
third Person (including shareholders or any class of directors, whether
interested or disinterested, of the Borrower or any other Person), nor is any
such consent, approval, registration, filing or other action necessary for the
validity or enforceability of any Loan Document or the consummation of the
transactions contemplated thereby, except such as have been obtained or made and
are in full force and effect other than (i) the recording and filing of the

 

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Security Instruments as required by this Agreement and (ii) those third party
approvals or consents which, if not made or obtained, would not cause a Default
hereunder, could not reasonably be expected to have a Material Adverse Effect or
do not have an adverse effect on the enforceability of the Loan Documents,
(b) will not violate (i) any applicable law or regulation, (ii) any Organization
Documents of the Borrower or any Subsidiary, or (iii) any order of any
Governmental Authority, (c) other than violations arising as a result of the
commencement of the Chapter 11 Cases or where enforcement is stayed as upon
commencement of the Chapter 11 Cases or as otherwise excused by the Bankruptcy
Court, will not violate or result in a default under any indenture or other
agreement regarding Indebtedness of the Borrower or any Subsidiary or give rise
to a right thereunder to require any payment to be made by the Borrower or such
Subsidiary, (d) other than violations arising as a result of the commencement of
the Chapter 11 Cases or where enforcement is stayed as upon commencement of the
Chapter 11 Cases or as otherwise excused by the Bankruptcy Court, will not
violate or result in a default under any other agreement or other instrument
binding upon the Borrower or any Subsidiary, or its Properties, or give rise to
a right thereunder to require any payment to be made by the Borrower or such
Subsidiary, other than such violations or defaults which would not cause a
Default hereunder, could not reasonably be expected to have a Material Adverse
Effect, or do not have an adverse effect on the enforceability of any Loan
Documents, and (e) will not result in the creation or imposition of any Lien on
any Property of the Borrower or any Subsidiary (other than the Liens created by
the Loan Documents).

Section 7.04 Financial Condition; No Material Adverse Change.

(a) All financial statements relating to any Loan Party which have been or may
hereafter be delivered by any Loan Party to the DIP Agent and the Lenders
pursuant to the terms of the Agreement have been prepared in accordance with
GAAP and present fairly, in all material respects, the financial position and
results of operations and cash flows of the Borrower and its Consolidated
Subsidiaries as of such dates and for such periods. The representations in this
Section 7.04(a), as applicable, are subject, in the case of unaudited financial
statements, to normal year-end audit adjustments and accruals and the absence of
notes.

(b) Since December 31, 2018, there has been no event, development or
circumstance that has had or could reasonably be expected to have a Material
Adverse Effect.

(c) Neither the Borrower nor any Subsidiary has, on the date hereof after giving
effect to the Transactions, any Material Indebtedness (including Disqualified
Capital Stock) or any contingent liabilities, off-balance sheet liabilities or
partnerships, liabilities for taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments, except as
referred to or reflected or provided for in the Financial Statements.

(d) A true and complete copy of the Initial Approved Budget, as agreed to by the
Required Lenders, as of the Effective Date, is attached as Annex IV hereto.

(e) Each Proposed Budget and any other projections regarding the financial
performance of the Borrower and its Consolidated Subsidiaries which have been or
may hereafter be delivered to DIP Agent and the Lenders have been prepared on a
reasonable basis and in good faith by the Borrower and based upon assumptions
believed by the Borrower to be reasonable at the time such projections were
provided (and on the Effective Date in the case of forecasts provided

 

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prior to the Effective Date) and from the best information then-available to the
Borrower after reasonable inquiry and reflect the good faith and reasonable
estimates of the Loan Parties of the future financial performance of Borrower
and its Consolidated Subsidiaries and of the other information projected therein
for the periods set forth therein (it being recognized by the Lenders, however,
that projections as to future events are not to be viewed as facts and that
actual results during the period(s) covered by such projections may differ from
the projected results and that such differences may be material and that neither
the Borrower nor any Subsidiary makes any representation that such projections
will be realized).

Section 7.05 Litigation. Other than the Chapter 11 Cases, there are no unstayed
actions, suits, investigations or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the Borrower,
threatened in writing against or affecting the Borrower or any Subsidiary, or
any of their Properties (a) not fully covered by insurance (except for normal
deductibles) as to which there is a reasonable possibility of an adverse
determination that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect, or
(b) that involve any Loan Document or the Transactions.

Section 7.06 Environmental Matters. Except for such matters that, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect:

(a) the Borrower and the Subsidiaries and each of their respective Properties
and operations thereon are, and within all applicable statute of limitation
periods have been, in compliance with all applicable Environmental Laws;

(b) the Borrower and the Subsidiaries have obtained all Environmental Permits
required for their respective operations and each of their Properties, with all
such Environmental Permits being currently in full force and effect, and none of
the Borrower or the Subsidiaries has received any written notice or otherwise
has knowledge that any such existing Environmental Permit will be revoked or
that any application for any new Environmental Permit or renewal of any existing
Environmental Permit will be protested or denied;

(c) there are no claims, demands, suits, orders, inquiries, investigations,
requests for information or proceedings concerning any violation of, or any
liability (including as a potentially responsible party) under, any applicable
Environmental Law that is pending or, to the Borrower’s knowledge, threatened
against the Borrower or any Subsidiary or any of their respective Properties or
as a result of any operations at such Properties;

(d) none of the Properties of the Borrower or any Subsidiary contain or have
contained any: (i) underground storage tanks; (ii) asbestos-containing
materials; (iii) landfills or dumps; (iv) hazardous waste management units as
defined pursuant to RCRA or any comparable state law; or (v) sites on or
nominated for the National Priority List promulgated pursuant to CERCLA or any
state remedial priority list promulgated or published pursuant to any comparable
state law;

(e) there has been no Release or, to the Borrower’s knowledge, threatened
Release of Hazardous Materials at, on, under or from the Borrower’s or any
Subsidiary’s Properties, there are no investigations, remediations, abatements,
removals, or monitorings of

 

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Hazardous Materials required under applicable Environmental Laws at such
Properties and, to the knowledge of the Borrower, none of such Properties are
adversely affected by any Release or threatened Release of a Hazardous Material
originating or emanating from any other real property;

(f) neither the Borrower nor any Subsidiary has received any written notice
asserting an alleged liability or obligation under any applicable Environmental
Laws with respect to the investigation, remediation, abatement, removal, or
monitoring of any Hazardous Materials at, under, or Released or threatened to be
Released from any real properties offsite the Borrower’s or any Subsidiary’s
Properties and, to the Borrower’s knowledge, there are no conditions or
circumstances that could reasonably be expected to result in the receipt of such
written notice;

(g) there has been no exposure of any Person or Property to any Hazardous
Materials as a result of or in connection with the operations and businesses of
any of the Borrower’s or the Subsidiaries’ Properties that could reasonably be
expected to form the basis for a claim for damages or compensation, and, to the
Borrower’s knowledge, there are no conditions or circumstances that could
reasonably be expected to result in the receipt of notice regarding such
exposure; and

(h) the Borrower has provided, or has caused its Subsidiaries to provide, to the
Lenders complete and correct copies of all environmental site assessment
reports, investigations, studies, analyses, and correspondence on environmental
matters (including matters relating to any alleged non-compliance with or
liability under Environmental Laws) that are in any of the Borrower’s or the
Subsidiaries’ possession or control and relating to their respective Properties
or operations thereon.

Section 7.07 Compliance with the Laws and Agreements; No Defaults.

(a) Each of the Borrower and each Subsidiary is in compliance with all
Governmental Requirements applicable to it or its Property and all agreements
and other instruments binding upon it or its Property, and possesses all
licenses, permits, franchises, exemptions, approvals and other governmental
authorizations necessary for the ownership of its Property and the conduct of
its business, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

(b) Other than as result of the commencement of the Chapter 11 Cases, neither
the Borrower nor any Subsidiary is in default nor has any event or circumstance
occurred which, but for the expiration of any applicable grace period or the
giving of notice, or both, would constitute a default or would require the
Borrower or a Subsidiary to Redeem or make any offer to Redeem under any
indenture, note, credit agreement or instrument pursuant to which any Material
Indebtedness is outstanding or by which the Borrower or any Subsidiary or any of
their Properties is bound, except where enforcement is stayed upon commencement
of the Chapter 11 Cases.

(c) No Default has occurred and is continuing.

Section 7.08 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, or subject to regulation under, the Investment Company
Act of 1940, as amended.

 

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Section 7.09 Taxes. Except as set forth on Schedule 7.09, each of the Borrower
and its Subsidiaries has timely filed or caused to be filed all Tax returns and
reports required to have been filed. Each of the Borrower and its Subsidiaries
has paid or caused to be paid all Taxes required to have been paid by it, except
Taxes for which payment is stayed or excused under the Bankruptcy Code or that
are being contested in good faith by appropriate proceedings and for which the
Borrower or such Subsidiary, as applicable, has set aside on its books adequate
reserves in accordance with GAAP. The charges, accruals and reserves on the
books of the Borrower and its Subsidiaries in respect of Taxes and other
governmental charges are, in the reasonable opinion of the Borrower, adequate.
No currently outstanding Tax Lien has been filed against the Borrower, any of
the Subsidiaries, or any of their respective Properties, and, to the knowledge
of the Borrower, no claim is being asserted against the Borrower, any of the
Subsidiaries, or any of their respective Properties with respect to any such Tax
or other such governmental charge in each case, except with respect to Taxes
that are being contested in good faith by appropriate proceedings and for which
the Borrower or such Subsidiary, as applicable, has set aside on its books
adequate reserves in accordance with GAAP.

Section 7.10 ERISA.

(a) The Borrower, the Subsidiaries and each ERISA Affiliate have complied in all
material respects with ERISA and, where applicable, the Code regarding each
Plan.

(b) Each Plan is, and has been, established and maintained in compliance with
its terms, ERISA and, where applicable, the Code, except where the failure to so
establish and maintain such Plan could not reasonably be expected to have a
Material Adverse Effect.

(c) No act, omission or transaction has occurred which could result in
imposition on the Borrower, any Subsidiary or any ERISA Affiliate (whether
directly or indirectly) of (i) either a civil penalty assessed pursuant to
subsections (c), (i), (l) or (m) of section 502 of ERISA or a tax imposed
pursuant to Chapter 43 of Subtitle D of the Code or (ii) breach of fiduciary
duty liability damages under section 409 of ERISA.

(d) Full payment when due has been made of all amounts which the Borrower, the
Subsidiaries or any ERISA Affiliate is required under the terms of each Plan or
applicable law to have paid as contributions to such Plan as of the date hereof.

(e) Neither the Borrower, the Subsidiaries nor any ERISA Affiliate sponsors,
maintains, or contributes to an 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, with respect to which
its sponsorship of, maintenance of or contribution to may not be terminated by
the Borrower, a Subsidiary or any ERISA Affiliate in its sole discretion at any
time without any material liability.

(f) Neither the Borrower, the Subsidiaries nor any ERISA Affiliate sponsors,
maintains or contributes to, or has at any time in the six-year period preceding
the date hereof sponsored, maintained or contributed to, any employee pension
benefit plan, as defined in section 3(2) of ERISA, including a multiemployer
plan as defined in section 3(37) or 4001(a)(3) of ERISA, that is subject to
Title IV of ERISA, section 302 of ERISA or section 412 of the Code.

 

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Section 7.11 Disclosure; No Material Misstatements. The Borrower has disclosed
to the DIP Agent and the Lenders all agreements, instruments and corporate or
other restrictions to which it or any of its Subsidiaries is subject, and all
other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. None of the
reports, financial statements, certificates or other information furnished by or
on behalf of the Borrower or any Subsidiary to the DIP Agent or any Lender or
any of their Affiliates in connection with the negotiation of this Agreement or
any other Loan Document or delivered hereunder or under any other Loan Document
(as modified or supplemented by other information so furnished) contains any
material misstatement of fact or, when taken as a whole, omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, other forward-looking information
and information of a general economic or general industry nature, the Borrower
represents only that such information was prepared in good faith based upon
assumptions believed by the Borrower to be reasonable at the time such projected
financial information was made available and such projections reflect the good
faith and reasonable estimates of the Borrower of the future financial
performance of Borrower and its Consolidated Subsidiaries and of the other
information projected therein for the periods set forth therein, it being
understood that such projected financial information is not to be viewed as
facts and that the actual results may vary materially from such projected
financial information.

Section 7.12 Insurance. Each Loan Party has, and has caused all of its
Subsidiaries to have, (a) all insurance policies sufficient for the compliance
by each of them with all material Governmental Requirements and all material
agreements, including, without limitation, Flood Insurance, if required, with
respect to any Property subjected, or required under the Loan Documents to be
subjected, to a Lien pursuant to the DIP Orders and/or Security Instruments, and
(b) insurance coverage in at least amounts and against such risk (including,
without limitation, public liability) that are usually insured against by
companies similarly situated and of comparable size and engaged in the same or a
similar business for the assets and operations of the Borrower and its
Subsidiaries. Subject to Section 8.20, the DIP Agent and the Lenders have been
named as additional insureds in respect of such liability insurance policies,
and the DIP Agent has been named as loss payee with respect to Property loss
insurance.

Section 7.13 Restriction on Liens. Neither the Borrower nor any of the
Subsidiaries is a party to any material agreement or arrangement (other than
(a) the “Loan Documents” under and as defined in the Prepetition Term Loan
Agreement and the “Loan Documents” under and as defined in the Prepetition
Revolving Loan Agreement, (b) Capital Leases creating Liens permitted by
Section 9.03(c), but then only on the Property that is the subject of such
Capital Lease, (c) documents evidencing or securing Purchase Money Indebtedness
creating Liens permitted by Section 9.03(c), but then only on the Property that
is the subject of such Purchase Money Indebtedness, (d) documents creating Liens
which are described in clauses (g) or (h)) of the definition of “Excepted
Liens”, but then only on the Property that is the subject of the applicable
lease or license described in such clause (g) or (h), (e) customary restrictions
and conditions on transfers and investments contained in any agreement relating
to the sale of any asset or any Subsidiary pending the consummation of such
sale, (f) [reserved], (g) in the case of any assets acquired after the Effective
Date, any agreement in effect at the time of such acquisition which pertains to
such assets and only such assets and is assumed in connection with such
acquisition, so

 

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long as such agreement was not entered into in contemplation of such
acquisition, and (h) customary provisions in joint venture agreements and other
similar agreements permitted by Section 9.05 and applicable to joint ventures
and Equity Interests therein)), or subject to any order, judgment, writ or
decree (other than the DIP Orders), which either restricts or purports to
restrict its ability to grant Liens to the DIP Agent for the benefit of the
Secured Parties on or in respect of its Properties to secure the Secured
Obligations and the Loan Documents.

Section 7.14 Subsidiaries. Except as set forth on Schedule 7.14, the Borrower
has no Subsidiaries. Each Person on Schedule 7.14 is a Wholly-Owned Subsidiary.
The Borrower has no Foreign Subsidiaries. All of the outstanding Equity
Interests of each Subsidiary has been validly issued, is fully paid, is
nonassessable and has not been issued in violation of any preemptive or similar
rights. Schedule 7.14 also sets forth the holders (and percentages of ownership)
of the Equity Interests in each of the Subsidiaries as of the Effective Date.

Section 7.15 Location of Business and Offices. The Borrower’s jurisdiction of
organization is Delaware; the name of the Borrower as listed in the public
records of its jurisdiction of organization is Southcross Energy Partners, L.P.;
and the organizational identification number of the Borrower in its jurisdiction
of organization is 5138791 (or, in each case, as set forth in a notice delivered
to the DIP Agent pursuant to Section 8.01(j) in accordance with Section 12.01).
The Borrower’s principal place of business and chief executive offices are
located at the address specified in Section 12.01 (or as set forth in a notice
delivered pursuant to Section 8.01(j) and Section 12.01(c)).

Section 7.16 Properties; Titles, Etc.

(a) Each of the Borrower and the Subsidiaries has good and valid title to, valid
leasehold interests in, or valid easements, rights of way or other property
interests in all of its real and personal Property except for defects that,
individually or in the aggregate, (i) do not materially interfere with the
ordinary conduct of its business and (ii) could not reasonably be expected to
have a Material Adverse Effect. All such Property is free and clear of all Liens
except Liens permitted by Section 9.03.

(b) All leases, easements, rights of way and other agreements necessary for the
conduct of the business of the Borrower and the Subsidiaries are valid and
subsisting, in full force and effect, and, other than the commencement of the
Chapter 11 Cases, there exists no default or event or circumstance which with
the giving of notice or the passage of time or both would give rise to a default
under any material lease or leases, the enforcement of which has not been
stayed.

(c) The rights and Properties presently owned, leased or licensed by the
Borrower and the Subsidiaries including, without limitation, all easements and
rights of way, include all rights and Properties necessary to permit the
Borrower and the Subsidiaries to conduct their business in all material respects
in the same manner as its business has been conducted prior to the date hereof
(subject to any changes to the business resulting from transactions permitted
hereunder).

(d) The Borrower and each Subsidiary owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
rights (“Intellectual

 

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Property”) material to its business, and, to the knowledge of the Borrower, the
use of such Intellectual Property by the Borrower and such Subsidiary does not
infringe upon the rights of any other Person in any material respect.

Section 7.17 Maintenance of Properties. Except for such acts or failures to act
as could not be reasonably expected to have a Material Adverse Effect, the
offices, plants, gas processing plants, platforms, pipelines, improvements,
fixtures, equipment, and other Property owned, leased or used by the Borrower
and its Subsidiaries in the conduct of their businesses are (a) being maintained
in a state adequate to conduct normal operations, (b) structurally sound with no
known defects, (c) in good operating condition and repair, subject to ordinary
wear and tear, (d) not in need of maintenance or repair except for ordinary,
routine maintenance and repair, (e) sufficient for the operation of the
businesses of the Borrower and its Subsidiaries as currently conducted, and
(f) in conformity with all Governmental Requirements relating thereto.

Section 7.18 Hedging Agreements. Schedule 7.18, as of the date hereof, and after
the date hereof, each report required to be delivered by the Borrower pursuant
to Section 8.01(e), sets forth, a true and complete list of all Hedging
Agreements of the Borrower and each Subsidiary, the material terms thereof
(including the type, term, effective date, termination date and notional amounts
or volumes), all credit support agreements relating thereto (including any
margin required or supplied) and the counterparty to each such agreement.

Section 7.19 Security Instruments. The Interim DIP Order and/or the Final DIP
Order are effective to create, in favor of the DIP Agent for the benefit of the
Secured Parties, a legal, valid and enforceable Lien on, and perfected security
interest in, all of the Collateral described in the Interim DIP Order and/or
Final DIP Order. Pursuant to the terms of the DIP Orders, no filings or other
action (including the taking of possession or control) will be necessary to
perfect or protect such Liens and security interests, and upon entry by the
Bankruptcy Court, the Liens and security interests created by the Interim DIP
Order and/or the Final DIP Order shall automatically constitute fully perfected
first priority Liens on, and security interests in, all right, title and
interest of the Loan Parties in the Collateral covered thereby, in each case
free of all Liens other than Liens permitted under Section 9.03, and prior and
superior to all other Liens other than as provided in the DIP Orders. Pursuant
to and to the extent provided in the Interim DIP Order and/or the Final DIP
Order, the Secured Obligations of the Loan Parties hereunder will constitute
allowed superpriority administrative expense claims in the Chapter 11 Cases
under Section 364(c) of the Bankruptcy Code, having priority over all
administrative expense claims and unsecured claims against such Loan Parties now
existing or hereafter arising, of any kind whatsoever, including, without
limitation, all administrative expense claims of the kind specified in Sections
503(b) and 507(b) of the Bankruptcy Code and all superpriority administrative
expense claims granted to any other Person, subject only to the Carve-Out.

Section 7.20 Use of Loans and Letters of Credit. The proceeds of the Loans and
the Letters of Credit shall be used for the purposes specified in Section 8.22.
The Borrower and its Subsidiaries are not engaged principally, or as one of its
or their important activities, in the business of extending credit for the
purpose, whether immediate, incidental or ultimate, of buying or carrying margin
stock (within the meaning of Regulation T, U or X of the Board). No part of the

 

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proceeds of any Loan will be used for any purpose which violates the provisions
of (a) Regulations T, U or X or any other regulation of the Board, (b) any
Sanctions, or (c) the FCPA.

Section 7.21 [Reserved.]

Section 7.22 Common Enterprise. Each of the Borrower and its Subsidiaries and
their business operations are closely integrated with one another into a single,
interdependent and collective, common enterprise so that any benefit received by
any one of them from the financial accommodations provided under this Agreement
will be to the direct benefit of the others. The Borrower and its Subsidiaries
intend to render services to or for the benefit of each other, to purchase or
sell and supply goods to or from or for the benefit of each other, to make
loans, advances and provide other financial accommodations to or for the benefit
of each other and to provide administrative, marketing, payroll and management
services to or for the benefit of each other (in each case, except as may be
prohibited by this Agreement).

Section 7.23 Material Contracts. Schedule 7.23 hereto contains a complete list,
as of the Effective Date, of all Material Contracts of the Borrower and each
Subsidiary, including all amendments thereto. All Material Contracts are in full
force and effect, neither the Borrower nor any Subsidiary is in default under
any Material Contract other than as result of the commencement of the Chapter 11
Cases, and to the knowledge of the Borrower and each Subsidiary after due
inquiry, no other Person that is party thereto is in default under any Material
Contract, except for such defaults as could not be reasonably expected to have a
Material Adverse Effect or where enforcement is stayed upon commencement of the
Chapter 11 Cases. None of the Material Contracts prohibits the transactions
contemplated under the Loan Documents. Each of the Material Contracts is
currently in the name of, or has been assigned to, a Loan Party (with the
consent or acceptance of each other party thereto if and to the extent that such
consent or acceptance is required thereunder), each of the Material Contracts is
assignable to the DIP Agent as collateral, and each of the Material Contracts is
assignable, unless waived by the DIP Agent in its reasonable discretion, by the
DIP Agent to a reasonably acceptable transferee if an Event of Default were to
occur. The Borrower and its Subsidiaries have delivered to the DIP Agent a
complete and current copy of each of their Material Contracts existing on the
Effective Date.

Section 7.24 Broker’s Fees. Except as set forth in Schedule 7.24, no broker’s or
finder’s fee, commission or similar compensation will be payable by the Borrower
or any Subsidiary with respect to the Transactions.

Section 7.25 Employee Matters. As of the Effective Date, (a) neither the
Borrower nor any Subsidiary, nor any of their respective employees, is subject
to any collective bargaining agreement, (b) no petition for certification or
union election is pending or, to the knowledge of the Borrower or any
Subsidiary, contemplated with respect to the employees thereof and no union or
collective bargaining unit has sought such certification or recognition with
respect to the employees of the Borrower or any Subsidiary, and (c) there are no
strikes, slowdowns, work stoppages or controversies pending or, to the knowledge
of the Borrower or any Subsidiary after due inquiry, threatened between the
Borrower or any Subsidiary and its respective employees.

Section 7.26 Anti-Terrorism Laws.

 

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(a) The Borrower is not, and to the knowledge of the Borrower, none of the
Borrower’s Affiliates, officers or directors is in violation of any Governmental
Requirement relating to terrorism or money laundering (“Anti-Terrorism Laws”),
including Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001 (the “Executive Order”), the USA Patriot Act, and the Trading
with the Enemy Act, 50 U.S.C. App. 1 et seq., in each case, as amended from time
to time.

(b) The Borrower is not, and to the knowledge of the Borrower, no Affiliate,
officer, director, broker or other agent of the Borrower acting or benefiting in
any capacity in connection with the Loans is any of the following:

(i) a Person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order;

(ii) a Person owned or controlled by, or acting for or on behalf of, any Person
that is listed in the annex to, or is otherwise subject to the provisions of,
the Executive Order;

(iii) a Person with which any Lender is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;

(iv) a Person that commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order; or

(v) a Person that is named as a “specially designated national and blocked
Person” on the most current list published by OFAC at its official website or
any replacement website or other replacement official publication of such list.

(c) No Loan Party and, to the knowledge of the Borrower, no broker or other
agent of any Loan Party acting in any capacity in connection with the Loans
(i) conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of any Person described in
paragraph (b) above, (ii) deals in, or otherwise engages in any transaction
relating to, any Property or interests in Property blocked pursuant to the
Executive Order, or (iii) engages in or conspires to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law.

(d) (i) Neither the Borrower nor any of its subsidiaries, nor, to the knowledge
of any Loan Party, any director, officer, agent, employee or Affiliate of the
Borrower or any of its subsidiaries, is currently, or is owned or controlled by
Persons that are currently (A) the subject of any material United States
sanctions administered or enforced by OFAC or the United States Department of
State (collectively, “Sanctions”) or (B) located, organized or resident in a
country or territory that is, or whose government is, the subject of Sanctions,
and (ii) the Borrower will not directly or indirectly use the proceeds from the
Loans or lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other Person, for the purpose of financing
the activities of any Person currently the subject of Sanctions.

 

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Section 7.27 Foreign Corrupt Practices. No Loan Party, and, to the knowledge of
the Borrower, no director, officer, agent, employee or Affiliate of the Borrower
or any of its subsidiaries is aware of or has taken any action, directly or
indirectly, that would result in a material violation by such Persons of the
FCPA, including without limitation, making use of the mails or any means or
instrumentality of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of anything of
value to any “foreign official” (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for foreign
political office, in contravention of the FCPA; and, the Loan Parties and, to
the knowledge of the Borrower, their Affiliates have conducted their business in
material compliance with the FCPA.

Section 7.28 DIP Orders. The Loan Parties are in compliance with the terms and
conditions of the DIP Orders.

ARTICLE VIII

AFFIRMATIVE COVENANTS

Until Payment in Full, the Borrower (on behalf of itself and its Subsidiaries)
and each Guarantor by its execution of the Guaranty and Collateral Agreement,
covenants and agrees with the DIP Agent, any Issuing Banks and the Lenders that:

Section 8.01 Financial Statements; Ratings Change; Other Information. The
Borrower will furnish to the DIP Agent for, except as otherwise set forth below,
delivery to each Lender:

(a) Annual Financial Statements. As soon as available, but in any event not
later than ninety (90) days after the end of the fiscal year, its audited
consolidated balance sheet and related statements of income or operations (and,
as to balance sheets and statements of income or operations, accompanied by
consolidating schedules), stockholders’ equity and cash flows as of the end of
and for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, all reported on by Deloitte & Touche LLP or other
independent public accountants of recognized national standing (without any
qualification or exception as to the scope of such audit other than a “going
concern” qualification) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition and
results of operations of the Borrower and its Consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied.

(b) Quarterly Financial Statements. As soon as available, but in any event not
later than forty-five (45) days after the end of the fiscal quarter, commencing
with the fiscal quarter ending March 31, 2019, its consolidated balance sheet
and related statements of operations, stockholders’ equity and cash flows as of
the end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its Consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes.

 

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(c) [Reserved].

(d) Certificate of Financial Officer – Compliance. Concurrently with any
delivery of financial statements required pursuant to Section 8.01(a) or
Section 8.01(b), a certificate of a Financial Officer in substantially the form
of Exhibit L-1 hereto (i) 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, (ii) [reserved] and (iii) stating
whether any change in GAAP or in the application thereof has occurred since
December 31, 2018 and, if any such change has occurred, specifying the effect of
such change on the financial statements accompanying such certificate.

(e) Certificate of Financial Officer – Hedging Agreements. Concurrently with any
delivery of financial statements under Section 8.01(a) and Section 8.01(b), a
certificate of a Financial Officer, in substantially the form of Schedule 7.18,
setting forth as of the last Business Day of such fiscal quarter or fiscal year,
a true and complete list of all Hedging Agreements of the Borrower and each
Subsidiary, the material terms thereof (including the type, term, effective
date, termination date and notional amounts or volumes), the net mark-to-market
value therefor, any new credit support agreements relating thereto, any margin
required or supplied under any credit support document, and the counterparty to
each such agreement.

(f) [reserved].

(g) Other Accounting Reports. Promptly upon receipt thereof, a copy of each
other report or letter submitted to the Borrower or any of its Subsidiaries by
independent accountants in connection with any annual, interim or special audit
made by them of the books of the Borrower or any such Subsidiary, and a copy of
any response by the Borrower or any such Subsidiary, or the board of directors
(or comparable governing body) of the Borrower or any such Subsidiary, to such
letter or report.

(h) SEC and Other Filings; Reports to Shareholders. Promptly after the same
become publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by the Borrower or any Subsidiary with the
SEC, or with any national or foreign securities exchange, or required by
applicable law to be distributed by the Borrower to its equityholders generally,
as the case may be.

(i) Notices Under Material Instruments. Promptly after the furnishing thereof,
copies of any financial statement, report or notice furnished to or by any
Person pursuant to the terms of any order of the Bankruptcy Court or any
Material Indebtedness, other than the Loan Documents, and not otherwise required
to be furnished to the Lenders pursuant to any other provision of this
Section 8.01.

(j) Information Regarding Loan Parties. Promptly (and in any event within ten
(10) Business Days (or such later time as the DIP Agent may agree) written
notice of any change (i) any Loan Party’s corporate name or in any trade name
used to identify such Person in the conduct of its business or in the ownership
of its Properties, (ii) in the location of any Loan Party’s chief executive
office or principal place of business, (iii) in any Loan Party’s identity or
corporate structure or in the jurisdiction in which such Person is incorporated
or formed, (iv) in any Loan

 

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Party’s jurisdiction of organization or such Person’s organizational
identification number in such jurisdiction of organization, and (v) in any Loan
Party’s federal taxpayer identification number.

(k) Notices of Certain Changes. Except in connection with Organization Documents
of the Borrower and its Subsidiaries that are delivered pursuant to
Section 6.01(h), promptly, but in any event within five (5) Business Days after
the execution thereof, copies of any material amendment, modification or
supplement to the certificate or articles of incorporation, certificate or
articles of formation or organization, any preferred stock designation or any
other public organic document of the Borrower or any Subsidiary.

(l) [reserved].

(m) [reserved].

(n) Other Requested Information. Promptly following any request therefor, such
other information regarding the operations, business affairs, liquidity,
business plan, contract negotiations, financial condition and projections of the
Borrower or any Subsidiary (including, without limitation, any Plan and any
reports or other information required to be filed with respect thereto under the
Code or under ERISA), the status of the Chapter 11 Cases, the status of the sale
process and progress in achieving the Case Milestones, or compliance with the
terms of this Agreement or any other Loan Document, as the DIP Agent or any
Lender may reasonably request.

(o) Monthly Financial Statements. As soon as available but in any event within
thirty-five (35) calendar days after the end of each calendar month, (A) solely
with respect to the first two calendar months of each fiscal quarter, its
unaudited consolidated balance sheet and related statements of income or
operations and cash flows reflecting results of operations as of the end of and
for such calendar month and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for the corresponding period
or periods (or in the case of the balance sheet, as of the end) of the previous
fiscal year and (B) reports setting forth in reasonable detail intercompany
transactions between any Loan Party and any of its Affiliates, including
accounts receivable and payable as of such calendar month, all in form
satisfactory to the DIP Agent (acting at the direction of the Required Lenders)
or the Lender Financial Advisor and certified by one of its Financial Officers
as presenting fairly in all material respects the financial condition and the
results of operations of the Borrower and its Consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal quarter-end or year-end adjustments, as the case may be, and the absence
of footnotes. Concurrently with any delivery of financial statements required
pursuant to this Section 8.01(o), the Borrower will furnish to the DIP Agent for
delivery to each Lender a certificate of a Financial Officer in substantially
the form of Exhibit L-2 hereto 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. It is understood that the
materials provided to the DIP Agent and the Lenders pursuant to this clause (o),
in accordance with the last sentence of this Section 8.01, will not be
identified by the Borrower as “Public” information and may be treated by the DIP
Agent as being suitable only for posting on a portion of the Platform not
designated “Public Side Information”.

(p) Ratings Updates. Any reports, information, documentation or other evidence
required by and in accordance with Section 8.16.

 

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(q) Budget Updates and Variance Reports.

(i) To the DIP Agent and the financial advisors to the Lenders, as soon as
available, but in any event not later than May 1, 2019, and on the Wednesday (or
next preceding Business Day if such Wednesday is not a Business Day) of every
fourth week thereafter, proposed updated 13-week cash flow forecast (the
“Proposed Budget”), containing items of sufficient detail with respect to the
Loan Parties for the immediately succeeding consecutive 13 weeks, in the form of
the Initial Approved Budget, and otherwise in form and substance acceptable to
financial advisors to Lenders, acting at the direction of the Required Lenders,
setting forth all anticipated sources and uses of cash and beginning and ending
cash balances for such 13-week period, together with a certificate of a
Responsible Officer of the Borrower stating that such 13-week cash flow forecast
has been prepared on a reasonable basis and in good faith by the Borrower and
based upon assumptions believed by the Borrower to be reasonable at the time
such projections were provided and from the best information then-available to
the Borrower after reasonable inquiry and reflect the good faith and reasonable
estimates of the Loan Parties of the future financial performance of Borrower
and its Consolidated Subsidiaries and of the other information projected therein
for the periods set forth therein (it being recognized by the Lenders, however,
that projections as to future events are not to be viewed as facts and that
actual results during the period(s) covered by such projections may differ
substantially from the projected results). To the extent such Proposed Budget is
approved by financial advisors to the Lenders, acting at the direction of the
Required Lenders, such Proposed Budget shall thereafter be the “Approved Budget”
for such period contained therein and for all purposes hereunder and under the
DIP Orders. No such Proposed Budget shall become an Approved Budget until so
approved; provided that if such financial advisors have not objected to such
forecast within five (5) Business Days after delivery thereof, such Proposed
Budget shall be deemed to be acceptable to and approved by the financial
advisors to the Lenders acting at the direction of the Required Lenders.
Approval of any Proposed Budget shall be evidenced by a writing delivered (which
may be through electronic transmission) by the financial advisors to the Lenders
acting at the direction of the Required Lenders (which may be made by their
agent (including the DIP Agent) or its or their counsel or financial advisors)
or by the Borrower in the case of deemed approvals. In the event that any
Proposed Budget is not so approved, the last Approved Budget without giving
effect to any update, modification or supplement shall remain in effect.

(ii) To the DIP Agent and the financial advisors to the Lenders, on the
Wednesday of each calendar week or next preceding Business Day if such Wednesday
is not a Business Day (each such delivery date, a “Variance Testing Date”), a
variance report (each, a “Variance Report”), in form and detail reasonably
satisfactory to the Required Lenders, reconciling the Approved Budget to the
actual sources and uses of cash for (i) the immediately preceding full calendar
week (ending on a Saturday) and (ii) the Testing Period, (A) showing, for such
periods, actual results for the following items: (1) cash receipts, (2) cash

 

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disbursements, (3) net cash flow, (4) professional fees, (5) capital
expenditures and (6) billings, (B) noting a line-by-line reconciliation of
variances from values set forth for such periods in the relevant Approved Budget
and (C) providing an explanation for all material variances, certified by a
Responsible Officer of the Borrower. Each Variance Report delivered pursuant to
this Section 8.01(q) shall be accompanied by such supporting documentation as
reasonably requested by the DIP Agent or the Lender Financial Advisor.

(r) Real Property Report. Concurrently with the delivery of the financial
statements under Section 8.01(b), but in any event not later than 45 days after
the end of each fiscal quarter, (or such longer period as may be reasonably
acceptable to the DIP Agent (acting at the direction of the Required Lenders)
not to exceed 15 days), a certificate of a Financial Officer setting forth as of
the last Business Day of such fiscal quarter, title information in form and
substance acceptable to the DIP Agent (acting at the direction of the Required
Lenders) with respect to any real Property acquired by the Borrower and its
Subsidiaries during such fiscal quarter for consideration in excess of
$1,000,000, individually or in the aggregate.

Information required to be delivered pursuant to Section 8.01(a), (b) or
(n) shall be deemed to have been delivered if such information is available on
the website of the SEC and the Borrower has delivered notice to the DIP Agent
that such reports are so available, which notice may be provided in any
certificate delivered pursuant to Section 8.01(d).

The Borrower hereby acknowledges that (a) the DIP Agent may, but shall not be
obligated to, make available to the Lenders and the Issuing Banks materials
and/or information provided by or on behalf of the Borrower hereunder
(collectively, “Borrower Materials”) by posting the Borrower Materials on Debt
Domain, IntraLinks, SyndTrak or another similar electronic system (the
“Platform”) and (b) certain of the Lenders (each, a “Public Lender”) may have
personnel who do not wish to receive material non-public information with
respect to the General Partner or the Loan Parties, or the respective securities
of any of the foregoing, and who may be engaged in investment and other
market-related activities with respect to such Persons’ securities. The Borrower
hereby agrees that so long as the Borrower is the issuer of any outstanding debt
or equity securities that are registered or issued pursuant to a private
offering or is actively contemplating issuing any such securities it will
identify that portion of the Borrower Materials that may be distributed to the
Public Lenders and that (w) all such Borrower Materials 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; (x) by marking
Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the
DIP Agent, the Issuing Banks and the Lenders to treat such Borrower Materials as
not containing any material non-public information (although it may be sensitive
and proprietary) with respect to the Borrower or its securities for purposes of
United States Federal and state securities laws (provided, however, that to the
extent such Borrower Materials constitute Information, they shall be treated as
set forth in Section 12.11); (y) all Borrower Materials marked “PUBLIC” are
permitted to be made available through a portion of the Platform designated
“Public Side Information;” and (z) the DIP 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 Side Information.”
Notwithstanding the foregoing, the following Borrower Materials shall be deemed
“PUBLIC,” unless the Borrower

 

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notifies the DIP Agent promptly that any such document contains material
non-public information: (1) the Loan Documents and (2) notification of changes
in the terms of the Credit Facility.

Section 8.02 Notices of Material Events. The Borrower will furnish to the DIP
Agent and each Lender prompt written notice of the following:

(a) the occurrence of any Default;

(b) the filing or commencement of, or the threat in writing of, any action,
suit, proceeding, investigation or arbitration by or before any arbitrator or
Governmental Authority against or affecting any Loan Party not previously
disclosed in writing to the Lenders or any material adverse development in any
action, suit, proceeding, investigation or arbitration (whether or not
previously disclosed to the Lenders) that, in either case, if adversely
determined, could reasonably be expected to result in liability in excess of
$1,000,000, not fully covered by insurance, subject to normal deductibles;

(c) the occurrence of any ERISA Event that, alone or together with any other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an aggregate amount exceeding
$1,000,000;

(d) any threatened action, investigation or inquiry by any Governmental
Authority or any threatened demand or lawsuit by any Person against the Borrower
or its Subsidiaries or their Properties of which the Borrower has knowledge in
connection with any Environmental Laws if the Borrower could reasonably
anticipate that such action will result in liability (whether individually or in
the aggregate) in excess of $1,000,000, not fully covered by insurance, subject
to normal deductibles; and

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

Each notice delivered under this Section 8.02 shall be accompanied by a
statement of a Responsible Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.

Section 8.03 Existence; Conduct of Business. The Borrower will, and will cause
each Subsidiary to, do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its legal existence and the rights,
licenses, permits, consents, privileges and franchises material to the conduct
of its business and maintain, if necessary, its qualification to do business in
each other jurisdiction in which its Properties are located or the ownership of
its Properties requires such qualification, except where the failure to so
qualify could not reasonably be expected to have a Material Adverse Effect;
provided that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 9.10.

Section 8.04 Payment of Tax Obligations. The Borrower will, and will cause each
Subsidiary to, pay its Tax liabilities constituting postpetition obligations
that constitute administrative expenses in the Chapter 11 Cases under the
Bankruptcy Code or otherwise ordered by the Bankruptcy Court, before the same
shall become delinquent or in default; provided, that the

 

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obligations hereunder are subject to the provisions of the Bankruptcy Code and
any required approvals by an applicable order of the Bankruptcy Court.

Section 8.05 Performance of Obligations under Loan Documents. The Borrower will
repay the Loans according to the reading, tenor and effect thereof, and the
Borrower will, and will cause each Subsidiary to, do and perform every act and
discharge all of the obligations to be performed and discharged by them under
the Loan Documents, including, without limitation, this Agreement, at or within
the time or times and in the manner specified.

Section 8.06 Operation and Maintenance of Properties. The Borrower, at its own
expense, will, and will cause each Subsidiary to:

(a) operate its Properties or cause such Properties to be operated in a careful
and efficient manner in accordance with the practices of the industry and in
compliance with all applicable contracts and agreements and in compliance with
all Governmental Requirements, including, without limitation, applicable
Environmental Laws, except, in each case, where the failure to comply could not
reasonably be expected to have a Material Adverse Effect;

(b) preserve, maintain and keep in good repair, condition, working order and
efficiency (ordinary wear and tear excepted) all of its Properties, including,
without limitation, all equipment, machinery and facilities, except, in each
case, where the failure to comply could not reasonably be expected to have a
Material Adverse Effect;

(c) promptly perform or make reasonable and customary efforts to cause to be
performed, in accordance with industry standards, the obligations required by
each and all of the assignments, deeds, leases, sub-leases, contracts and
agreements affecting its interests in its Properties, except, in each case,
where the failure to comply could not reasonably be expected to have a Material
Adverse Effect; and

(d) to the extent the Borrower is not the operator of any Property, the Borrower
shall use commercially reasonable efforts to cause the operator of such Property
to comply with this Section 8.06 in accordance with customary industry
practices.

Section 8.07 Insurance. Subject to Section 8.20, the Borrower will, and will
cause each Subsidiary to, maintain, with financially sound and reputable
insurance companies, insurance (i) in such amounts and against such risks as are
customarily maintained by companies of similar size engaged in the same or
similar businesses operating in the same or similar locations (including hazard
insurance), and (ii) in accordance with all Governmental Requirements,
including, without limitation, Flood Insurance, if required. Subject to
Section 8.20, insurance policy or policies insuring any of the Collateral for
the Loans shall be endorsed in favor of and made payable to the DIP Agent (on
behalf of the Lenders) as its interests may appear, and such policies shall name
the DIP Agent as an “additional insured” (in the case of liability insurance) or
“lender’s loss payable” (in the case of property insurance) on behalf of the
Lenders, and provide that the insurer will give at least thirty (30) days’ prior
notice of any cancellation to the DIP Agent. Each of the parties hereto
acknowledges and agrees that any increase, extension or renewal of any of the
Commitments or Loans (other than as contemplated in the definition of “Scheduled
Maturity

 

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Date”) or the making of any new, additional or incremental facilities shall be
subject to (and conditioned upon) the prior delivery to the DIP Agent of all
Flood Zone Documentation.

Section 8.08 Books and Records; Inspection Rights. The Borrower will, and will
cause each Subsidiary to maintain financial records in accordance with GAAP. The
Borrower will, and will cause each Subsidiary to, permit any representatives
designated by the DIP Agent or any Lender, upon reasonable prior notice and
during normal business hours (unless an Exigent Circumstance or an Event of
Default then exists), at the Loan Parties’ expense, to visit and inspect its
Properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its Responsible Officers and
independent accountants, all at such reasonable times (unless an Exigent
Circumstance or Event of Default then exists) and as often as reasonably
requested (provided that the DIP Agent shall give the Borrower reasonable
advance notice of any proposed discussion with such accountants (unless an
Exigent Circumstance or an Event of Default then exists) and permit the Borrower
and its representatives to be present during such discussions).

Section 8.09 Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its Property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

Section 8.10 Compliance with Agreements. The Borrower will, and will cause each
Subsidiary to, comply with all agreements, contracts and instruments binding on
it or affecting its Properties or business, except to the extent that such
noncompliance could not reasonably be expected to have a Material Adverse
Effect.

Section 8.11 Environmental Matters.

(a) The Borrower shall at its sole expense: (i) comply, and shall cause its
Properties and operations and each Subsidiary and each Subsidiary’s Properties
and operations to comply, with all applicable Environmental Laws, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect; (ii) not Release or threaten to
Release, and shall cause each Subsidiary not to Release or threaten to Release,
any Hazardous Material on, under, about or from any of the Borrower’s or its
Subsidiaries’ Properties or any other property offsite the Property to the
extent caused by the Borrower’s or any of its Subsidiaries’ operations except in
compliance with applicable Environmental Laws, if the Release or threatened
Release could reasonably be expected to have a Material Adverse Effect;
(iii) timely obtain, file or prepare, and shall cause each Subsidiary to timely
obtain, file or prepare, all Environmental Permits, if any, required under
applicable Environmental Laws to be obtained or filed in connection with the
operation or use of the Borrower’s or its Subsidiaries’ Properties, except where
such failure to obtain or file could not reasonably be expected to have a
Material Adverse Effect; (iv) promptly commence and diligently prosecute to
completion, and shall cause each Subsidiary to promptly commence and diligently
prosecute to completion, any assessment, evaluation, investigation, monitoring,
containment, cleanup, removal, repair, restoration, remediation or other
remedial obligations (collectively, the “Remedial Work”) in the event any
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applicable Environmental Laws because of or in connection with the actual or
suspected past, present or future Release or threatened Release of any Hazardous
Material on, under, about or from any of the Borrower’s or its Subsidiaries’
Properties, if failure to commence and diligently prosecute to completion could
reasonably be expected to have a Material Adverse Effect; (v) conduct, and cause
its Subsidiaries to conduct, their respective operations and businesses in a
manner that will not expose any Property or Person to Hazardous Materials that
could reasonably be expected to form the basis for a claim for material damages
or compensation; and (vi) establish and implement, and shall cause each
Subsidiary to establish and implement, such procedures as may be necessary to
continuously determine and assure that the Borrower’s and its Subsidiaries’
obligations under this Section 8.11(a) are timely and fully satisfied, which
failure to establish and implement such procedures could reasonably be expected
to have a Material Adverse Effect.

(b) The Borrower will, and will cause each Subsidiary to, provide existing Phase
I site assessments, to the extent they are available, upon request by the DIP
Agent or the Lenders, in connection with any future acquisitions of Properties;
provided that for the avoidance of doubt, there shall be no obligation under
this Section for the Borrower to obtain such assessments.

Section 8.12 Further Assurances.

(a) The Borrower at its sole expense will, and will cause each Subsidiary to,
promptly execute and deliver to the DIP Agent all such other documents,
agreements and instruments reasonably requested by the DIP Agent or the Required
Lenders to comply with, cure any defects or accomplish the conditions precedent,
covenants and agreements of the Borrower or any Subsidiary, as the case may be,
in the Loan Documents, including the Notes, or to further evidence and more
fully describe the Collateral intended as security for the Secured Obligations,
or to correct any omissions in this Agreement or the Security Instruments, or to
state more fully the obligations secured therein, or to perfect, protect or
preserve any Liens created pursuant to this Agreement, the Interim DIP Order or
the Final DIP Order or any of the Security Instruments or the priority thereof,
or to make any recordings, file any notices or obtain any consents, all as may
be reasonably necessary or appropriate, in the sole discretion of the DIP Agent
(acting at the direction of the Required Lenders), in connection therewith.

(b) Pursuant to the terms of the DIP Orders, no filings or other action
(including the taking of possession or control) will be necessary to perfect or
protect the Liens and security interests created pursuant to this Agreement, the
DIP Orders or any other Security Instrument. Upon entry by the Bankruptcy Court,
the Liens and security interests created by the DIP Orders shall automatically
constitute fully perfected first priority Liens on, and security interests in,
all right, title and interest of the Loan Parties in the Collateral covered
thereby (including after-acquired Collateral), in each case free of all Liens
other than Liens permitted under Section 9.03, and prior and superior to all
other Liens other than as provided in the DIP Orders. Notwithstanding the
foregoing, upon the reasonable request of the Required Lenders, the Borrower and
each of its Subsidiaries shall take any additional actions requested, with
respect to any Material Real Property and any other tangible and intangible
personal Property of the Borrower or any Loan Party, in each case constituting
Collateral, to cause such Material Real Property and Collateral to be subject to
a Lien pursuant to the Security Instruments or the DIP Order or to evidence the
Lien on such

 

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Property, including to execute and deliver such Security Instruments (in proper
form for filing, registration or recordation, as applicable) as are requested by
the DIP Agent or the Required Lenders, and take such actions necessary or
advisable to subject such Property to a Lien or evidence of the Lien on such
Property pursuant to the Security Instruments.

(c) Upon the reasonable request of the Required Lenders, the Borrower and each
of its Subsidiaries shall take any additional actions required, if any, to cause
all of its right, title and interest in each Hedging Agreement to which it is a
party to be collaterally assigned to the DIP Agent, for the benefit of the
Secured Parties, and shall, if requested by the DIP Agent or the Required
Lenders, use its commercially reasonable efforts to cause each such agreement or
contract to (i) expressly permit such assignment and (ii) upon the occurrence of
any default or event of default under such agreement or contract, (A) to permit
the Lenders to cure such default or event of default and assume the obligations
of such Loan Party under such agreement or contract and (B) to prohibit the
termination of such agreement or contract by the counterparty thereto if the
Lenders assume the obligations of such Loan Party under such agreement or
contract and the Lenders take the actions required under the foregoing clause
(A).

Section 8.13 Title Information. If the Borrower or any Subsidiary acquires any
new pipeline and processing Properties for consideration in excess of
$5,000,000, individually or in the aggregate, the Borrower shall, or shall cause
such Subsidiary to, provide promptly (and in any event within 30 days (or such
longer period as may be reasonably acceptable to the DIP Agent (acting at the
direction of the Required Lenders))), title information regarding such new
pipeline and processing Properties to the DIP Agent. The Borrower shall, within
sixty (60) days of notice from the DIP Agent (or such later date as the DIP
Agent may agree in its sole discretion) that title defects or exceptions exist
with respect to such additional Properties, either (i) cure any such title
defects or exceptions (including defects or exceptions as to priority) which are
not permitted by Section 9.03 raised by such information to the reasonable
satisfaction of the DIP Agent (acting at the direction of the Required Lenders),
or (ii) deliver title information in form and substance acceptable to the DIP
Agent (acting at the direction of the Required Lenders) so that the DIP Agent
shall have received, together with title information previously delivered to the
DIP Agent, title information reasonably satisfactory to the DIP Agent (acting at
the direction of the Required Lenders) relative to the pipeline and processing
Properties of the Borrower and its Subsidiaries.

Section 8.14 [Reserved].

Section 8.15 [Reserved].

Section 8.16 Ratings. The Borrower shall use commercially reasonable efforts to
obtain a rating for the Credit Facility from both S&P and Moody’s on or prior to
the hearing to consider approval of the Final DIP Order; provided that if the
Borrower is unable to obtain both ratings for the Credit Facility on or prior to
such date, the Borrower shall (i) thereafter use its commercially reasonable
efforts to obtain both ratings for the Credit Facility as soon as possible, and
(ii) promptly provide to the DIP Agent any other information, documentation or
other evidence reasonably requested by the DIP Agent or the Required Lenders in
connection with the subject matter of this Section 8.16.

 

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Section 8.17 ERISA Compliance. The Borrower will promptly furnish and will cause
the Subsidiaries and any ERISA Affiliate to promptly furnish to the DIP Agent
(a) promptly after the filing thereof by the Borrower or any Subsidiary with the
United States Secretary of Labor or the Internal Revenue Service (or if filed by
a third party, promptly after the Borrower or a Subsidiary becomes aware of such
filing), copies of each annual and other report with respect to each Plan or any
trust created thereunder, and (b) promptly upon becoming aware of the occurrence
of any “prohibited transaction,” as described in section 406 of ERISA or in
section 4975 of the Code, in connection with any Plan or any trust created
thereunder, a written notice signed by the President or the principal Financial
Officer, the Subsidiary or the ERISA Affiliate, as the case may be, specifying
the nature thereof, what action the Borrower, the Subsidiary or the ERISA
Affiliate is taking or proposes to take with respect thereto, and, when known,
any action taken or proposed by the Internal Revenue Service or the Department
of Labor with respect thereto.

Section 8.18 [Reserved].

Section 8.19 [Reserved].

Section 8.20 Post-Closing Obligations. The Borrower shall deliver, or cause to
be delivered, as the case may be, each of the items set forth on Schedule 8.20,
in each case on or prior to the date specified in such Schedule for such item or
such later date as the DIP Agent (acting at the direction of the Required
Lenders) may determine and agree to in writing in its sole discretion.

Section 8.21 Use of Proceeds. The Borrower shall use the proceeds from the Loans
and the issuance of the Letters of Credit hereunder solely (i) to finance
working capital and for general corporate purposes of the Borrower and its
Subsidiaries (including to conduct the Section 363 Sale process and including
Professional Fees approved by the Bankruptcy Court), to the extent such expenses
are of the kind described in and in amounts shown in the Approved Budget
(subject to Permitted Variances) and including the Roll-Up of Prepetition Term
Loans as provided in Section 2.01(d) and the cash collateralization of the
Letters of Credit pursuant to Section 2.07(j), (ii) to deem to be cancelled and
reissue the Prepetition Letters of Credit as provided in Section 2.07(b),
(iii) to pay fees, costs and expenses incurred by the DIP Agent and the Lenders
in connection with the Transactions and other fees, costs and expenses of the
DIP Agent and the Lenders to the extent reimbursable hereunder, (iv) to make
adequate protection payments as permitted or required by the DIP Orders, and
(v) to fund the Carve-Out in accordance with the DIP Orders. Notwithstanding
anything to the contrary contained herein, in no event shall proceeds of the
Loans or the Letters of Credit hereunder be used to pay Professional Fees
incurred in connection with a Prohibited Purpose (as defined in the DIP Orders).
Nothing in this Section 8.22 shall be construed to waive the DIP Agent’s or any
Lender’s right to object to any requests, motions or applications made in or
filed with the Bankruptcy Court.

Section 8.22 Lender Calls. Upon request of the DIP Agent at the direction of the
Required Lenders, the Borrower shall arrange for conference calls, which call
shall occur not more frequently than once per calendar week, discussing and
analyzing the Approved Budget (or other 13-week cash flow forecasts furnished
pursuant to Section 8.01) for the prior week, the Variance Reports, the
financial condition, business operations, liquidity, business plan, contract
negotiations

 

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and projections of each of the Loan Parties, the status of the Chapter 11 Cases,
the status of the sale process and progress in achieving the Case Milestones.

Section 8.23 Case Milestones. Each Loan Party shall ensure that each of the
milestones set forth below (the “Case Milestones”) is achieved in accordance
with the applicable timing referred to below (or such later dates as approved in
writing by the Required Lenders):

(a)    On the Petition Date, the Loan Parties shall have filed a motion seeking
approval of the DIP Orders, in form and substance acceptable to the Required
Lenders in all respects.

(b)    Not later than five (5) Business Days after the Petition Date (or such
later date approved in writing by the Required Lenders), the Interim DIP Order
shall have been entered by the Bankruptcy Court and such Interim DIP Order shall
be in full force and effect and shall not have been (i) vacated, reversed, or
stayed, or (ii) amended or modified except as otherwise agreed to in writing by
the Required Lenders (and with respect to any provision that affects the rights
or duties of the DIP Agent, the DIP Agent).

(c)    Not later than the date that is forty (40) days following the Petition
Date (or such later date approved in writing by the Required Lenders), the
Bankruptcy Court shall have entered the Final DIP Order and such Final DIP Order
shall be in full force and effect and shall not have been (A) vacated, reversed,
or stayed, or (B) amended or modified except as otherwise agreed to in writing
by the Required Lenders (and with respect to any provision that affects the
rights or duties of the DIP Agent, the DIP Agent).

(d)    Not later than fifty (50) days after the Petition Date, the Loan Parties
shall have received non-binding first-round indications of interest from
potential purchasers of all or substantially all of the Loan Parties’ assets.

(e)    If, within fifty (50) days after the Petition Date, the Loan Parties and
the Required Lenders have not reached an agreement as to an Acceptable Plan,
then the Loan Parties shall pursue a Section 363 Sale. In connection with a
Section 363 Sale, the Loan Parties and the Required Lenders shall negotiate in
good faith a reasonable wind-down budget (the “Wind-Down Budget”) to pay all
allowed (i) post-petition claims, (ii) administrative expense and priority
claims, and (iii) professional fees and expenses necessary or appropriate to
wind down the Loan Parties’ estates on a reasonable and appropriate timeline.

(f) If, pursuant to Section 8.23(e), a Section 363 Sale is pursued:

(i) Not later than fifty five (55) days after the Petition Date, the Loan
Parties shall have filed a motion in the Bankruptcy Court in form and substance
acceptable to the Required Lenders, seeking approval of (a) a sale (the “Sale
Transaction”) of substantially all assets of the Loan Parties, and (b) bidding
procedures (the “Bid Procedures”) and related relief in connection with the Sale
Transaction (the “Bid Procedures and Sale Motion”).

 

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(ii) Not later than eighty (80) days after the Petition Date, (a) the Loan
Parties shall have scheduled a hearing on the Bid Procedures Motion, and (b) the
Loan Parties shall have obtained entry of an order, in form and substance
acceptable to the Required Lenders (the “Bid Procedures Order”), approving the
Bid Procedures and setting a date for the hearing to approve the Sale
Transaction (the “Sale Hearing”).

(iii) Not later than one hundred (100) days after the Petition Date, the Loan
Parties shall have established the final deadline to receive qualified bids, and
shall have received such qualified bids (the “Bid Deadline”).

(iv) Not later than two (2) weeks after the Bid Deadline, the Loan Parties shall
have obtained entry of a Final Order by the Bankruptcy Court (the “Sale Approval
Order”), in form and substance acceptable to the Required Lenders in all
respects.

(v) Not later than the earlier of (i) thirty (30) days after entry of the Sale
Approval Order and (ii) the Maturity Date, the Loan Parties shall have
discharged the DIP Term Loans and Roll-Up Loans by payment of such DIP Term
Loans and Roll-Up Loans in full, in cash (subject to the Wind-Down Budget).

(g) If, within fifty (50) days after the Petition Date, the Loan Parties and the
Required Lenders have reached an agreement as to an Acceptable Plan, then the
Loan Parties shall pursue such Acceptable Plan. If pursuant to this
Section 8.23(g), an Acceptable Plan is pursued:

(i) Not later than fifty five (55) days after the Petition Date, the Loan
Parties shall have filed in the Bankruptcy Court an Acceptable Plan, a
corresponding disclosure statement (the “Disclosure Statement”), and a motion
seeking approval of the Disclosure Statement, in each case, in form and
substance acceptable to the Required Lenders.

(ii) Not later than ninety five (95) days after the Petition Date, the Loan
Parties shall have scheduled a hearing on approval of the Disclosure Statement
and obtained entry of the order by the Bankruptcy Court approving the Disclosure
Statement in form and substance acceptable to the Required Lenders.

(iii) Not later than one hundred forty five (145) days after the Petition Date,
the Loan Parties shall have scheduled a hearing to confirm the Acceptable Plan
and obtained entry by the Bankruptcy Court of the order confirming the
Acceptable Plan (the “Confirmation Order”), in form and substance acceptable to
the Required Lenders.

(h) Not later than thirty (30) days after entry of the Confirmation Order, the
Loan Parties shall have discharged the DIP Term Loans and Roll-Up Loans by
(i) payment of such DIP Term Loans and Roll-Up Loans in full, in cash or
(ii) such other treatment as acceptable to the Required Lenders.

 

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Section 8.24 Certain Bankruptcy Matters; Case Documents.

(a) The Loan Parties shall, and shall cause each of their Subsidiaries to,
comply (i) in all respects, after entry thereof, with all of the requirements
and obligations set forth in the DIP Orders and the Cash Management Order, as
each such order is amended and in effect from time to time in accordance with
this Agreement, (ii) in all respects, after entry thereof, with each order of
the type referred to in clause (b) of the definition of “Approved Bankruptcy
Court Order”, as such orders, if entered by the Bankruptcy Court, must comply
with, and only be modified from time to time in accordance with, clause (b) of
the definition of “Approved Bankruptcy Court Order,” and (iii) in all material
respects, after entry thereof, with the orders (to the extent not covered by
subclause (i) or (ii) above) approving the Loan Parties’ “first day” and “second
day” relief obtained in the Chapter 11 Cases, as such orders, if entered by the
Bankruptcy Court, must comply with, and only be modified from time to time with
the approval of the DIP Agent and the Required Lenders.

(b) The Borrower shall provide at least five (5) Business Days’ (or such shorter
notice acceptable to the Required Lenders in their sole discretion) prior
written notice to the DIP Agent or its advisors prior to any assumption or
rejection of any Loan Party’s Material Contracts pursuant to Section 365 of the
Bankruptcy Code, and no such Material Contract shall be assumed or rejected, if
such assumption or rejection adversely impacts the Collateral, any Liens thereon
or any superpriority claims payable therefrom (including, without limitation,
any sale or other disposition of Collateral or the priority of any such Liens or
superpriority claims).

(c) As soon as practicable in advance of filing with the Bankruptcy Court of any
document, motion or pleading relating to or impacting (i) any rights or remedies
of the DIP Agent or any Lender, (ii) the Credit Facility, the DIP Orders, the
Cash Management Order, the Loan Documents, the “Loan Documents” as defined in
the Prepetition Term Loan Agreement and the “Loan Documents” as defined in the
Prepetition Revolving Loan Agreement (including the Loan Parties’ (as defined
therein) obligations thereunder), (iii) the Collateral, any Liens thereon or any
superpriority claims (including, without limitation, any sale or other
disposition of Collateral or the priority of any such Liens or superpriority
claims), (iv) use of cash collateral, (v) debtor-in-possession financing,
(vi) adequate protection or otherwise relating to the Prepetition Facilities,
(vii) any Chapter 11 Plan, (viii) any Section 363 Sale, or (viii) any
transaction outside of the ordinary course of business with any Loan Party, the
Loan Parties will deliver to the DIP Agent for delivery to each applicable
Lender all such documents to be filed and provide the DIP Agent and the Lenders
with a reasonable opportunity to review and comment on all such documents.

(d) Promptly following receipt thereof (and in any event within one (1) Business
Day after receipt thereof), the Loan Parties shall deliver to the professional
advisors to the Lenders copies of all formal proposals, letters of interest,
letters of intent, bids, agreements and any final proposed definitive
documentation for any sale of all or any material portion of it’s the Loan
Parties’ assets or any other investment pursuant to which additional capital is
to be received by the Loan Parties.

(e) It is understood that the materials provided to the DIP Agent and the
Lenders pursuant to Sections 8.23(b) and (c) will not be identified by the
Borrower as “Public”

 

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information and may be treated by the DIP Agent as being suitable only for
posting on a portion of the Platform not designated “Public Side Information”.
It is understood that the materials provided to the DIP Agent and the Lenders’
professional advisors pursuant to Section 8.23(d) will be provided solely on a
“professional eyes only” basis.

ARTICLE IX

NEGATIVE COVENANTS

Until Payment in Full, the Borrower (on behalf of itself and its Subsidiaries)
and each Guarantor by its execution of the Guaranty and Collateral Agreement)
covenants and agrees with the DIP Agent, any Issuing Banks and the Lenders that:

Section 9.01 Budget Variances. As of any Variance Testing Date, the Loan Parties
shall not allow the Total Receipts or the Total Disbursements (in each case, as
such terms are used in the applicable Approved Budget) to exceed the aggregate
amount forecasted therefor in the Approved Budget for such Testing Period by
more than the Permitted Variances for the period applicable thereto under Annex
III (the “Permitted Variances”).

Section 9.02 Indebtedness. The Borrower will not, and will not permit any
Subsidiary to, incur, create, assume or suffer to exist any Indebtedness,
except:

(a) the Secured Obligations arising under the DIP Orders and the Loan Documents,
or with respect to any Bank Products, or any guaranty of or suretyship
arrangement for the Secured Obligations arising under the Loan Documents, or
with respect to any Bank Products;

(b) Indebtedness under Capital Leases or that constitutes Purchase Money
Indebtedness; provided that the aggregate amount of all Indebtedness described
in this Section 9.02(b) at any one time outstanding shall not to exceed $500,000
in the aggregate;

(c) Indebtedness associated with performance bonds, bid bonds, surety bonds,
appeal bonds or customs bonds required in the ordinary course of business or in
connection with the enforcement of rights or claims of the Borrower or any
Subsidiary or in connection with judgments that do not result in a Default;

(d) unsecured intercompany Indebtedness between the Borrower and any Subsidiary
or between Subsidiaries to the extent permitted by Section 9.05(g); provided
that such Indebtedness is not held, assigned, transferred, negotiated or pledged
to any Person other than the Borrower or one of its Wholly-Owned Subsidiaries,
and, provided, further, that any such Indebtedness owed by a Loan Party shall be
subordinated to the Secured Obligations on terms set forth in the Guaranty and
Collateral Agreement;

(e) Indebtedness constituting a guaranty by any Loan Party of Indebtedness
permitted to be incurred by any other Loan Party under this Section 9.02;
provided that if the Indebtedness being guaranteed is subordinated to the
Secured Obligations, such guaranty shall be subordinated to the Guarantee of the
Secured Obligations on terms at least as favorable to the Lenders as those
contained in the subordination of such guaranteed Indebtedness;

 

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(f) endorsements of negotiable instruments for deposit or collection in the
ordinary course of business;

(g) Indebtedness consisting of the financing of insurance premiums in the
ordinary course of business or as otherwise approved by the Bankruptcy Court
pursuant to an Approved Bankruptcy Court Order, so long as such Indebtedness
shall not exceed the amount of the unpaid cost of, and shall be incurred only to
defer the cost of, the underlying policy;

(h) Indebtedness (i) arising from the honoring by a bank or other financial
institution of a check, draft, payment order or other debit drawn, presented or
issued against insufficient funds in the ordinary course of business, provided
that such Indebtedness is extinguished within five Business Days of its
incurrence or (ii) arising under any Bank Products provided by a bank or other
financial institution to the Loan Parties in the ordinary course of business and
pursuant to, or in accordance with, the Cash Management Order;

(i) other unsecured Indebtedness not to exceed $1,000,000 in the aggregate at
any one time outstanding;

(j) Indebtedness outstanding on the Effective Date consisting of Prepetition
Term Loans incurred under the Prepetition Term Loan Facility and Prepetition
Revolving Loans incurred under the Prepetition Revolving Loan Facility;

(k) Indebtedness outstanding on the Effective Date that is disclosed to the
Lenders in Schedule 9.02.

Section 9.03 Liens. The Borrower will not, and will not permit any Subsidiary
to, create, incur, assume or permit to exist any Lien on any of its Properties
(now owned or hereafter acquired), except:

(a) Liens securing the payment of any Secured Obligations pursuant to the DIP
Orders and other Security Instruments;

(b) Excepted Liens;

(c) Liens securing Capital Leases and Purchase Money Indebtedness permitted by
Section 9.02(b) but only on the Property under lease or the Property purchased
with such Purchase Money Indebtedness, as applicable;

(d) Liens on proceeds of Letters of Credit permitted to be posted in connection
with Hedging Agreements permitted by Section 9.17;

(e) (i) pledges and deposits of cash in the ordinary course of business securing
liability for reimbursement or indemnification obligations of (including
obligations in respect of letters of credit or bank guarantees for the benefit
of) insurance carriers providing property, casualty or liability insurance to
such Person and (ii) Liens on proceeds of insurance policies securing
Indebtedness permitted under Section 9.02(g);

 

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(f) Liens on cash earnest money or escrowed deposits in favor of the seller of
any property to be acquired in an Investment permitted pursuant to Section 9.05,
to be applied against the purchase price for and indemnities with respect to
such Investment, solely to the extent such Investment would have been permitted
on the date of the creation of such Lien;

(g) any Lien existing on any property or asset prior to the acquisition thereof
by the Borrower or any Subsidiary or existing on any property or assets of any
Person that becomes a Subsidiary after the Effective Date prior to the time such
Person becomes a Subsidiary, as the case may be; provided that (i) such Lien is
not created in contemplation of or in connection with such acquisition or such
Person becoming a Subsidiary, (ii) such Lien does not apply to any other
property or assets of the Borrower or any Subsidiary and (iii) such Lien secures
only those obligations which it secures on the date of such acquisition or the
date such Person becomes a Subsidiary, as the case may be;

(h) Liens on Collateral securing Indebtedness permitted by Section 9.02(i),
including adequate protection Liens granted pursuant to the DIP Orders, which
Liens, in each case, shall rank the same priorities as set forth in the DIP
Orders;

(i) other Liens securing obligations arising in the ordinary course of business,
other than Indebtedness for borrowed money, outstanding in an aggregate amount
not to exceed $1,000,000;

(j) Liens in the form of cash collateral (withdrawn from the Letter of Credit
Account pursuant to a Letter of Credit Account Withdrawal Notice) securing
obligations owed to suppliers and vendors in an aggregate amount not to exceed
the Alternate Cash Collateral Amount; provided that the Borrower shall use
commercially reasonable efforts to ensure that such cash collateral will
continue to secure the Secured Obligations (other than reimbursement obligations
under Letters of Credit) on a junior basis under arrangements (including
security documentation and cash management) that are acceptable to the DIP Agent
and the Required Lenders (it being understood and agreed that in any event the
Loan Parties’ interests in such cash collateral, including the residual value of
such cash collateral or the remaining interests of the Loan Parties therein will
continue to constitute Collateral that secures the Secured Obligations); and

(k) Liens outstanding as of the Effective Date that are disclosed to the Lenders
in Schedule 9.03.

Section 9.04 Restricted Payments. The Borrower will not, and will not permit any
of its Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, return any capital to its stockholders or
make any distribution of its Property to its Equity Interest holders, except
Subsidiaries may declare and pay dividends to the Loan Parties.

Section 9.05 Investments, Loans and Advances. The Borrower will not, and will
not permit any Subsidiary to, make or permit to remain outstanding, or enter
into any agreement to make, any Investments in or to any Person, except that the
foregoing restriction shall not apply to:

(a) Investments as of the Effective Date that are disclosed to the Lenders in
Schedule 9.05;

 

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(b) accounts receivable arising in the ordinary course of business consistent
with past practice;

(c) direct obligations of the United States or any agency thereof, or
obligations guaranteed by the United States or any agency thereof, in each case
maturing within one (1) year from the date of creation thereof;

(d) commercial paper maturing within one year from the date of creation thereof
rated in one of the two highest grades by S&P or Moody’s;

(e) deposits maturing within one (1) year from the date of creation thereof
with, including certificates of deposit issued by, any Lender or any office
located in the United States of any other bank or trust company which is
organized under the laws of the United States or any state thereof, has capital,
surplus and undivided profits aggregating at least $100,000,000 (as of the date
of such bank or trust company’s most recent financial reports) and has a short
term deposit rating of no lower than A2 or P2, as such rating is set forth from
time to time, by S&P or Moody’s, respectively;

(f) deposits in money market funds investing exclusively in Investments
described in Section 9.05(c), Section 9.05(d) or Section 9.05(e);

(g) Investments (i) made by the Borrower in or to the Guarantors, and (ii) made
by any Subsidiary in or to the Borrower or any Guarantor;

(h) Investments in stock, obligations or securities received in settlement of
debts arising from Investments permitted under this Section 9.05 owing to the
Borrower or any Subsidiary as a result of a bankruptcy or other insolvency
proceeding of the obligor in respect of such debts or upon the enforcement of
any Lien in favor of the Borrower or any of its Subsidiaries; provided that the
Borrower shall give the DIP Agent prompt written notice in the event that the
aggregate amount of all Investments held at any one time under this
Section 9.05(h) exceeds $100,000;

(i) Investments constituting Indebtedness permitted under Section 9.02;

(j) credit provided to new or existing customers of the Loan Parties for the
costs and expenses of extending service to such customers and for which such
customers are contractually obligated to reimburse the Loan Party providing such
credit in the ordinary course of business;

(k) Investments in Hedging Agreements permitted by Section 9.17;

(l) [reserved]; and

(m) other Investments not to exceed $100,000 in the aggregate at any time.

Section 9.06 Nature of Business; International Operations. The Borrower will
not, and will not permit any Subsidiary to, engage (directly or indirectly) in
any business other than those

 

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businesses in which the Borrower and its Subsidiaries are engaged on the
Petition Date. From and after the date hereof, the Borrower and its Subsidiaries
will not acquire or make any other expenditure (whether such expenditure is
capital, operating or otherwise) in or related to, any real Property not located
within the geographical boundaries of the United States.

Section 9.07 Proceeds of Loans. The Borrower will not permit the proceeds of the
Loans to be used for any purpose other than those permitted by Section 8.21.
Neither the Borrower nor any Person acting on behalf of the Borrower has taken
or will take any action which might cause any of the Loan Documents to violate
Regulations T, U or X or any other regulation of the Board, in each case as now
in effect or as the same may hereinafter be in effect.

Section 9.08 ERISA Compliance. The Borrower will not, and will not permit any
Subsidiary to, at any time:

(a) engage in, or permit any ERISA Affiliate to engage in, any transaction in
connection with which the Borrower, a Subsidiary or any ERISA Affiliate could be
subjected to either a civil penalty assessed pursuant to subsections (c), (i),
(l) or (m) of section 502 of ERISA or a tax imposed by Chapter 43 of Subtitle D
of the Code;

(b) fail to make, or permit any ERISA Affiliate 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 any ERISA
Affiliate is required to pay as contributions thereto;

(c) contribute to or assume an obligation to contribute to, or permit any ERISA
Affiliate to contribute to or assume an obligation to contribute to (i) 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 contributions to or the obligation to
contribute to may not be terminated by such entities in their sole discretion at
any time without any material liability, or (ii) any employee pension benefit
plan, as defined in section 3(2) of ERISA, including a multiemployer plan as
defined in section 3(37) or 4001(a)(3) of ERISA, that is subject to Title IV of
ERISA, section 302 of ERISA or section 412 of the Code; and

(d) acquire, or permit any ERISA Affiliate to acquire, an interest in any Person
that causes such Person to become an ERISA Affiliate with respect to the
Borrower or a Subsidiary or with respect to any ERISA Affiliate of the Borrower
or a Subsidiary 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, any employee pension benefit plan, as defined in
section 3(2) of ERISA, (i) that is a multiemployer plan as defined in section
3(37) or 4001(a)(3) of ERISA or (ii) 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.

Section 9.09 Sale or Discount of Receivables. Except (a) sales otherwise
permitted pursuant to Section 9.11 and (b) for receivables obtained by the
Borrower or any Subsidiary from the settlement of joint interest billing
accounts in the ordinary course of business or discounts granted to settle
collection of accounts receivable or the sale of defaulted accounts arising in
the

 

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ordinary course of business in connection with the compromise or collection
thereof and not in connection with any financing transaction, the Borrower will
not, and will not permit any Subsidiary to, discount or sell (with or without
recourse) any of its notes receivable or accounts receivable.

Section 9.10 Mergers, Etc. The Borrower will not, and will not permit any
Subsidiary to, merge into or with or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or sell, transfer,
lease or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its Property to any other Person
(whether now owned or hereafter acquired) (any such transaction, a
“consolidation”), or liquidate or dissolve, except (a) with the consent of the
DIP Agent or the Required Lenders, or (b) that the Borrower or any Subsidiary
may sell, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its Property to any
other Person pursuant to one or more Qualified APAs, the proceeds of which are
remitted to the DIP Agent concurrently with the consummation of such disposition
in an amount necessary to repay all of the Secured Obligations concurrently with
the consummation of such disposition, and which results in the Payment in Full
of all of the Secured Obligations.

Section 9.11 Sale of Properties. The Borrower will not, and will not permit any
Subsidiary to, sell, assign, farm-out, convey or otherwise transfer any Property
except for:

(a) dispositions of cash and Cash Equivalents in the ordinary course of business
and in connection with transactions permitted by this Agreement;

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

(c) the sale or transfer of obsolete or worn out property and property no longer
used or useful in the conduct of the business of the Borrower and its
Subsidiaries (including allowing any registration or application for
registration of any Intellectual Property that is no longer used or useful, or
economically practicable to maintain, to lapse or go abandoned or be
invalidated), whether now owned or hereafter acquired, in the ordinary course of
business or is replaced by replacement property of at least comparable value and
use;

(d) Restricted Payments permitted by Section 9.04 and Liens permitted by
Section 9.03;

(e) the transfer of Property to another Loan Party;

(f) the transfer of Property occurring in connection with a transaction
permitted by, and made in compliance with, the provisions of Section 9.10;

(g) dispositions of accounts receivables in connection with the collection or
compromise thereof in the ordinary course of business to the extent permitted
under Section 9.09;

(h) grants of Leases, subleases, licenses or sublicenses (including the
provision of software under an open source license), easements, rights of way or
similar rights or

 

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encumbrances in each case in the ordinary course of business and which do not
materially interfere with the business of the Borrower and its Subsidiaries;

(i) transfers of Property that has suffered a Casualty Event upon receipt of the
Net Cash Proceeds of such Casualty Event;

(j) other Asset Sales of the Properties listed on Schedule 9.11 for fair market
value; provided that such Asset Sale shall have been approved by the Bankruptcy
Court pursuant to an Approved Bankruptcy Court Order in form and substance
satisfactory to the Required Lenders and the Net Sale Proceeds thereof shall be
applied in accordance with Section 3.04(b)(ii); and

(k) other Asset Sales pursuant to a de minimis asset sales procedures order that
is an Approved Bankruptcy Court Order; provided that the Net Sale Proceeds
thereof in excess of $100,000 in the aggregate for all such Asset Sales shall be
applied in accordance with Section 3.04(b)(ii).

(l)

Section 9.12 Environmental Matters. With respect to the Properties and any
operations thereat or associated therewith, the Borrower will not, and will not
permit any Subsidiary to, be in violation of Environmental Law, have any Release
or threatened Release of Hazardous Materials other than those that are in
compliance with Environmental Law, allow any exposure to Hazardous Materials
that could reasonably be expected to form the basis for a claim for damages or
compensation, or be required under Environmental Law to perform any Remedial
Work.

Section 9.13 Transactions with Affiliates. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction, including, without
limitation, any purchase, sale, lease or exchange of Property or the rendering
of any service, with any Affiliate (other than the Borrower or any Guarantor),
except (a) Restricted Payments permitted by Section 9.04, (b) Investments
permitted by Section 9.05, and (c) transactions that are otherwise permitted
under this Agreement and the Approved Bankruptcy Court Orders, and are upon fair
and reasonable terms no less favorable to it, when taken as a whole, than it
would obtain in a comparable arm’s length transaction with a Person not an
Affiliate.

Section 9.14 Subsidiaries. The Borrower will not, and will not permit any
Subsidiary to, create or acquire any additional Subsidiary. The Borrower shall
not, and shall not permit any Subsidiary to, sell, assign or otherwise dispose
of any Equity Interests in any Subsidiary except in compliance with
Section 9.11(f), Section 9.11(g) or Section 9.15. Neither the Borrower nor any
Subsidiary shall have any Foreign Subsidiaries or any Subsidiaries that are not
Wholly-Owned Subsidiaries.

Section 9.15 Limitation on Issuance of Equity Interests. The Borrower shall not
permit any Subsidiary to issue any Equity Interest (including by way of sales of
treasury stock) or any options or warrants to purchase, or securities
convertible into, any Equity Interest, except for Equity Interests issued to
another Loan Party. The Borrower and the Subsidiaries shall comply with
Section 8.12 with respect to any such issued Equity Interests.

 

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Section 9.16 Negative Pledge Agreements; Dividend Restrictions. The Borrower
will not, and will not permit any Subsidiary to, create, incur, assume or suffer
to exist any material agreement or arrangement (other than (a) the Loan
Documents, (b) the loan documents for the Prepetition Facilities (c) Capital
Leases creating Liens permitted by Section 9.03(c), but then only on the
Property that is the subject of such Capital Lease, (d) documents evidencing or
securing Purchase Money Indebtedness creating Liens permitted by
Section 9.03(c), but then only on the Property that is the subject of such
Purchase Money Indebtedness, (e) documents creating Liens which are described in
clauses (g) or (h) of the definition of “Excepted Liens”, but then only on the
Property that is the subject of the applicable lease or license described in
such clause (g) or (h)), (f) customary restrictions and conditions on transfers
and investments contained in any agreement relating to the sale of any asset or
any subsidiary pending the consummation of such sale, (g) [reserved], (h) in the
case of any assets acquired after the Effective Date, any agreement in effect at
the time of such acquisition which pertains to such assets and only such assets
and is assumed in connection with such acquisition, so long as such agreement
was not entered into in contemplation of such acquisition, and (i) customary
provisions in joint venture agreements and other similar agreements permitted by
Section 9.05 and applicable to joint ventures and Equity Interests therein) that
in any way prohibits or restricts the granting, conveying, creation or
imposition of any Lien on any of its Property in favor of the DIP Agent and the
Lenders, or that requires the consent of or notice to other Persons in
connection therewith, or that restricts any Subsidiary from paying dividends or
making distributions to, making Investments in, or transferring any of its
Property to the Borrower or any Guarantor, or that requires the consent of or
notice to other Persons in connection therewith.

Section 9.17 Hedging Agreements. The Borrower will not, and will not permit any
Subsidiary to, enter into any Hedging Agreements with any Person other than
Hedging Agreements in respect of commodities or interest rates (i) with an
Approved Counterparty and (ii) that are entered into for the purpose of hedging
exposure to interest rates or commodity prices and that are not for speculative
purposes. In no event shall any Hedging Agreement contain any requirement,
agreement or covenant for the Borrower or any Subsidiary to post collateral or
margin to secure their obligations under such Hedging Agreement or to cover
market exposures, other than Letters of Credit (and the proceeds thereof) the
face amounts of which do not exceed $5,000,000 in the aggregate at any time.

Section 9.18 Holding Company. The Borrower will remain a holding company and
will not own any real property, immovable property, or other assets of material
value other than Equity Interests in Subsidiaries, furniture, furnishings and
equipment acquired and maintained in the ordinary course of business,
Investments to the extent permitted hereunder, assets acquired that are
promptly, and in any event within 30 days of acquisition by the Borrower,
transferred, contributed or otherwise assigned by the Borrower to one or more of
the other Loan Parties, and interests in contracts customarily entered into by
the Borrower in the ordinary course of its business.

Section 9.19 Sale and Leaseback. The Borrower shall not, and shall not permit
any Subsidiary to, enter into any arrangement, directly or indirectly, with any
Person whereby it shall sell or transfer any Property, whether now owned or
hereafter acquired, and thereafter rent or lease

 

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such Property which it intends to use for substantially the same purpose or
purposes as the Property being sold or transferred.

Section 9.20 Amendments to Organization Documents, Material Contracts, Fiscal
Year End; Prepayments of other Indebtedness.

(a) The Borrower shall not, and shall not permit any Subsidiary to, amend,
supplement or otherwise modify (or permit to be amended, supplemented or
modified) its Organization Documents.

(b) The Borrower shall not, and shall not permit any Subsidiary to, amend,
supplement or otherwise modify (or permit to be amended, supplemented or
modified) any Material Contract in a manner that would be adverse to the Lenders
in any material respect.

(c) The Borrower shall not, and shall not permit any Subsidiary to, change the
last day of its fiscal year from December 31 of each year, or the last days of
the first three fiscal quarters in each of its fiscal years from March 31,
June 30 and September 30 of each year, respectively.

(d) The Borrower shall not, and shall not permit any Subsidiary to, make (or
give any notice in respect of) any voluntary or optional payment or prepayment
on or redemption or acquisition for value of, or any prepayment or redemption as
a result of any asset sale, change of control or similar event of, any
outstanding prepetition Indebtedness, except as otherwise permitted by this
Agreement, the DIP Orders or any Approved Bankruptcy Court Order.

Section 9.21 Anti-Terrorism Law; Anti-Money Laundering.

(a) The Borrower shall not, and shall not permit any Subsidiary to, directly or
indirectly, (i) knowingly conduct any business or engage in making or receiving
any contribution of funds, goods or services to or for the benefit of any Person
described in Section 7.26, (ii) knowingly deal in, or otherwise engage in any
transaction relating to, any Property or interests in Property blocked pursuant
to the Executive Order or any other Anti-Terrorism Law, or (iii) knowingly
engage in or conspire to engage in any transaction that evades or avoids, or has
the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law (and the Borrower shall deliver
to any Lender any certification or other evidence requested from time to time by
such Lender confirming the Borrower’s and the Subsidiaries’ compliance with this
Section 9.21(a)).

(b) The Borrower shall not, and shall not permit any Subsidiary to, cause or
permit any of the funds of the Borrower or any Subsidiary that are used to repay
the Loans to be derived from any unlawful activity with the result that the
making of the Loans would be in violation of any Governmental Requirement.

Section 9.22 Embargoed Person. The Borrower shall not, and shall not permit any
Subsidiary to, permit (a) any of the funds or Properties of the Borrower or any
Subsidiary that are used to repay the Loans to constitute Property of, or be
beneficially owned directly or indirectly by, any Person subject to sanctions or
trade restrictions under United States law (“Embargoed

 

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Person” or “Embargoed Persons”) that is identified on (i) the “List of Specially
Designated Nationals and Blocked Persons” maintained by OFAC and/or on any other
similar list maintained by OFAC pursuant to any authorizing statute including,
but not limited to, the International Emergency Economic Powers Act, 50 U.S.C.
§§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and
any Executive Order or Governmental Requirement promulgated thereunder, with the
result that the investment in the Borrower or any Subsidiary (whether directly
or indirectly) is prohibited by a Governmental Requirement, or the Loans would
be in violation of a Governmental Requirement, or (ii) the Executive Order, any
related enabling legislation or any other similar Executive Orders or (b) any
Embargoed Person to have any direct or indirect interest, of any nature
whatsoever in the Borrower or any Subsidiary, with the result that the
investment in the Borrower or any Subsidiary (whether directly or indirectly) is
prohibited by a Governmental Requirement or the Loans are in violation of a
Governmental Requirement.

Section 9.23 Deposit Accounts, Securities Accounts and Commodity Accounts.
Subject to Section 8.20, the Borrower will not, and will not permit any
Subsidiary to, deposit any funds, securities or commodities in any Deposit
Account (other than payroll Deposit Accounts consistent with current practice
and Deposit Accounts used solely for any healthcare program), Securities Account
or Commodity Account (each, as defined in the Uniform Commercial Code, as it may
be amended, from time to time in effect in the State of New York), as
applicable, unless such account is subject to a valid Lien in favor of the DIP
Agent for the benefit of the Secured Parties and a control agreement in form and
substance satisfactory to the DIP Agent (acting at the direction of the Required
Lenders).

Section 9.24 Southcross Holdings Receivables. The Borrower will not, and will
not permit any Subsidiary to, permit any account receivable owing from
Southcross Holdings to the Borrower to be more than 30 days past its due date.

Section 9.25 Additional Bankruptcy Matters. Without the Required Lenders’ prior
written consent, the Borrower will not, and will not permit any Subsidiary to,
do any of the following:

(a) assert or prosecute any claim or cause of action against any of the Secured
Parties (in their capacities as such) or the Prepetition Secured Parties, unless
such claim or cause of action is in connection with the enforcement of the Loan
Documents against any of the Lenders;

(b) subject to the terms of the DIP Orders, object to, contest, delay, prevent
or interfere with in any material manner the exercise of rights and remedies by
the DIP Agent or the Lenders with respect to the Collateral following the
occurrence of an Event of Default (provided that any Loan Party may contest or
dispute whether an Event of Default has occurred); or

(c) except as expressly provided or permitted hereunder (including, without
limitation, to the extent expressly identified in any line item in the Approved
Budget) or, with the prior consent of the Required Lenders, as provided pursuant
to any other Approved Bankruptcy Court Order, make any payment or distribution
to any Affiliate that is not a Loan Party or to any insider of the Borrower
outside of the ordinary course of business; and

 

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(d) notwithstanding anything to the contrary in this Agreement, the DIP Orders
or any of the other Loan Documents, propose, adopt, support, consummate or
effect any Chapter 11 Plan, plan of liquidation, sale, structured dismissal or
any other resolution of the Cases, unless such case resolution provides for the
Payment in Full in cash on the effective date thereof of the Secured Obligations
(including any Loans held by the Lenders).

Section 9.26 Other Superpriority Claims. The Borrower will not, and will not
permit any Subsidiary to, incur, create, assume, suffer to exist or permit any
other Superpriority Claim which is pari passu with or senior to the claims of
the DIP Agent and the Lenders against the Loan Parties hereunder, except for the
Carve-Out or as otherwise provided in the DIP Orders.

ARTICLE X

EVENTS OF DEFAULT; REMEDIES

Section 10.01 Events of Default. One or more of the following events shall
constitute an “Event of Default”:

(a) The Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement, when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof, by acceleration or otherwise.

(b) The Borrower shall fail to pay any interest on any Loan or fee or other
amount (other than an amount referred to in Section 10.01(a)) payable under any
Loan Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of three (3) Business Days.

(c) Any representation or warranty made or deemed made by or on behalf of any
Loan Party, any Subsidiary of the Borrower or Holdings in or in connection with
any Loan Document or any amendment or modification of any Loan Document or
waiver under such Loan Document, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with any Loan
Document or any amendment or modification thereof or waiver thereunder, shall
prove to have been incorrect in any material respect when made or deemed made.

(d) The Borrower or any Subsidiary shall fail to observe or perform any
covenant, condition or agreement contained in (i) Section 8.01(j), Section 8.02,
Section 8.03, Section 8.07, Section 8.20, Section 8.23, Section 8.24 or in
Article IX or (ii) 8.01(q) and such failure in respect of this clause (ii) shall
continue unremedied for two (2) Business Days.

(e) Any Loan Party or any Subsidiary of the Borrower shall fail to observe or
perform any covenant, condition or agreement contained in this Agreement (other
than those specified in Section 10.01(a), Section 10.01(b) or Section 10.01(d))
or any other Loan Document, and such failure shall continue unremedied for a
period of fifteen (15) days after the earlier to occur of (i) notice thereof
from the DIP Agent to the Borrower (which notice will be given at the request of
any Lender) or (ii) a Responsible Officer, or a Responsible Officer of such
Subsidiary, otherwise becoming aware of such default.

 

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(f) The Borrower or any Subsidiary shall fail to make any payment of principal
of or interest on any postpetition Material Indebtedness, when and as the same
shall become due and payable, and such failure to pay shall extend beyond any
applicable period of grace.

(g) Except with respect to obligations that are unenforceable as a result of the
commencement of the Chapter 11 Cases and defaults that occur solely as a result
of the filing of the Chapter 11 Cases, any event or condition occurs that
results in any Material Indebtedness becoming due prior to its scheduled
maturity or that enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of such Material Indebtedness or
any trustee or agent on its or their behalf to cause such Material Indebtedness
to become due, or to require the Redemption thereof or any offer to Redeem to be
made in respect thereof, prior to its scheduled maturity or require the Borrower
or any Subsidiary to make an offer in respect thereof.

(h) The LC Cash Collateralization Amount, at any time, exceeds the Letter of
Credit Deposit Amount.

(i) [Reserved]

(j) The Borrower or any Subsidiary shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due.

(k) (i) One or more postpetition judgments for the payment of money in an
aggregate amount in excess of $1,000,000 or (ii) any one or more non-monetary
postpetition judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, shall be rendered
against the Borrower, any Subsidiary or any combination thereof and all such
judgments or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within thirty (30) days from the entry thereof.

(l) The Loan Documents after delivery thereof shall for any reason, except to
the extent permitted by the terms thereof, cease to be in full force and effect
and valid, binding and enforceable in accordance with their terms against any
Loan Party thereto, or shall be repudiated by any of them, or cease to create a
valid and perfected Lien of the priority required thereby on any of the
Collateral purported to be covered thereby, except to the extent permitted by
the terms of this Agreement, or any Loan Party or any of their Affiliates shall
so state in writing.

(m) An ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when together with all other ERISA Events that have occurred, could
reasonably be expected to result in the liability of the Borrower and its
Subsidiaries in an aggregate amount exceeding $1,000,000 in the aggregate.

(n) A Change in Control shall occur.

(o) (i) Any Debtor shall fail to comply with any of the provisions of the DIP
Orders, any order related to the Credit Facility, cash management or bank
accounts, or any Chapter 11 Plan, or any other Bankruptcy Court order that
affects or may reasonably be expected to affect any of the rights, remedies,
powers, privileges, claims or Liens of the DIP Agent or any other Secured Party;

 

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(ii) unless otherwise approved by the DIP Agent or the Required Lenders, an
order of the Bankruptcy Court shall be entered providing for a change in venue
with respect to any Chapter 11 Case, and such order shall not be reversed or
vacated;

(iv) a trustee, examiner or other responsible officer shall be appointed in any
of the Chapter 11 Cases with enlarged powers (powers beyond those set forth in
Section 1106(a)(3) and (4) of the Bankruptcy Code) under Section 1106(b) of the
Bankruptcy Code;

(v) any of the Chapter 11 Cases shall be dismissed or converted to a case under
Chapter 7 of the Bankruptcy Code, or the filing by a Debtor of a motion seeking
any such relief, or the failure of a Debtor to file responding materials
opposing a motion by a third party seeking any such relief within the time frame
provided for the filing of such response or objection by the Bankruptcy Court;

(vii) the Bankruptcy Court shall enter an order terminating the exclusive right
of any Debtor to file a Chapter 11 Plan;

(ix) any or all Loan Parties shall enter into an agreement for, or any Debtor
shall file (or support or fail to file responding materials opposing a motion by
a third party seeking any such relief within the time frame provided for the
filing of such response or objection by the respective court) a motion seeking,
or the Bankruptcy Court shall enter, an order authorizing, a sale of all or
substantially all of such Loan Party’s assets for a cash price or other terms
that will not result in Payment in Full of all of the Secured Obligations and
all of the Prepetition Obligations at the closing of such sale unless the terms
are otherwise acceptable to the Required Lenders;

(x) any Debtor shall file a motion seeking authority to consummate a sale of
assets of such Debtor or any of its Subsidiaries (other than any such sale of
assets that is permitted by the Loan Documents) outside the ordinary course of
business, or any sale of any part of the Collateral pursuant to Section 363 of
the Bankruptcy Code, in each case, that will not result in Payment in Full of
all of the Secured Obligations and all of the Prepetition Obligations at the
closing of such sale unless such sale is otherwise permitted under Section 9.11
or is otherwise acceptable to the Required Lenders;

(xi) without the prior written consent of the Required Lenders (and with respect
to any provision that affects the rights or duties of the DIP Agent, the DIP
Agent), any Debtor shall file a motion to alter, amend, vacate, supplement, or
modify, in any respect, either of the DIP Orders or either of the DIP Orders is
reversed, modified, amended, stayed, vacated or subject to a stay pending
appeal, provided that entry of the Final DIP Order shall not be deemed to
reverse, modify, amend, stay or vacate the Interim DIP Order for purposes of
this clause (xii);

 

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(xii) the Bankruptcy Court shall enter an order granting any Person, other than
the DIP Agent, relief from the automatic stay under the Cases, in either case,
to permit enforcement on, foreclosure on or repossession of any Collateral or
other assets of any Loan Party if such relief could reasonably be expected to
have a Material Adverse Effect, or to permit the commencement or continuation of
prepetition litigation against any Debtor for any purpose other than to
liquidate the amount of a disputed claim involving potential liability not
covered by insurance, which litigation could reasonably be expected to result in
net liabilities in excess of $250,000 or otherwise have a Material Adverse
Effect;

(xiii) an order shall be entered for the substantive consolidation of the Estate
of any Debtor with any other Person, unless such Person is another Debtor, and
such order granting substantive consolidation provides that the assets of such
Debtor shall remain subject to the Liens of the DIP Agent and Prepetition Agents
securing the Secured Obligations and the Prepetition Obligations, respectively;

(xiv) any Debtor shall contest the validity or enforceability of the Credit
Facility, any Debtor shall deny in writing that such Debtor has any further
liability or obligation under the Credit Facility, or the DIP Agent or Secured
Parties shall cease to have the benefit of the Liens granted by any of the DIP
Orders once such orders have been made;

(xv) an order shall be entered by the Bankruptcy Court avoiding or requiring
disgorgement by the DIP Agent or any other Secured Party of any amounts received
in respect of the Secured Obligations or Prepetition Obligations;

(xvi) a Debtor shall file any motion or other request with the Bankruptcy Court
seeking authority to use any cash proceeds of the DIP Collateral or the
Prepetition Collateral or to obtain any financing under Section 364(d) of the
Bankruptcy Code or other applicable law secured by a Lien upon any Collateral,
in each case without the DIP Agent’s prior written consent unless motion
contemplates the Payment in Full of the Secured Obligations immediately upon the
consummation of the transactions contemplated thereby;

(xvii) except as permitted in the DIP Orders, the Bankruptcy Court enters any
order in any of the Chapter 11 Cases granting to any Person a Superpriority
Claim or Lien pari passu with or senior to that granted to the DIP Agent under
the DIP Orders;

(xviii) any Loan Party shall file any action, suit or other proceeding or
contested matter challenging the validity, perfection or priority of any Liens
of the DIP Agent securing the Secured Obligations or any Liens of any
Prepetition Agent securing the Prepetition Obligations, or the validity or
enforceability of any of the Loan Documents or Prepetition Loan Documents, or
asserting any Avoidance Claim against any of the Prepetition Secured Parties, or
seeking to recover any monetary damages from the DIP Agent, any Lender, any of
the Prepetition Secured Parties;

 

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(xix) a Challenge (as defined in the DIP Orders) shall be filed by any party in
interest and shall be sustained by the Bankruptcy Court, in whole or in part; or

(xx) the Bankruptcy Court shall grant relief under any motion or other pleading
filed by any Debtor that results in the occurrence of an Event of Default;
provided that the Loan Parties hereby agree that the DIP Agent shall be entitled
to request an expedited hearing on any such motion and hereby consent to such
expedited hearing (and the DIP Agent is authorized to represent to the
Bankruptcy Court that the Loan Parties have consented to such expedited hearing
on the motion);

(p) Any Case Milestone shall have not been met;

(q) Any Loan Party seeks to obtain Bankruptcy Court approval of a disclosure
statement or Chapter 11 Plan other than a disclosure statement relating to, or a
plan that is, an Acceptable Plan, or any of the Loan Parties or affiliates file,
propose, support, or fail to contest in good faith the filing or confirmation of
such a plan or the entry of such an order;

(r) Entry of an order approving a Section 363 Sale unless such order
contemplates the Payment in Full of the DIP Facility upon consummation of such
sale or such terms are otherwise acceptable to the Required Lenders; or

(s) The Interim DIP Order or Final DIP Order, as applicable, ceases to create a
valid and perfected security interest and lien on the DIP Collateral.

Section 10.02 Remedies.

(a) Subject to the terms of the DIP Orders, in the case of an Event of Default,
at any time thereafter during the continuance of such Event of Default, the DIP
Agent may, and at the request of the Required Lenders, shall, by notice to the
Borrower, take either or both of the following actions, at the same or different
times: (i) terminate the Commitments, and thereupon the Commitments shall
terminate immediately, and (ii) declare the Loans then outstanding to be due and
payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrower and
the Guarantors accrued hereunder and under the Loan Documents shall become due
and payable immediately, without presentment, demand, protest, notice of intent
to accelerate, notice of acceleration or other notice of any kind, all of which
are hereby waived by the Borrower and each Guarantor.

(b) In the case of the occurrence of an Event of Default, the DIP Agent and the
Lenders will have all other rights and remedies available at law and equity.

(c) All proceeds realized from the liquidation or other disposition of
Collateral or otherwise received after maturity of the Loans, whether by
acceleration or otherwise, shall be applied, subject to the DIP Order (including
the Remedies Notice Period (as defined therein)), the Carve-Out and, if
applicable, the Wind-Down Budget:

 

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(i) first, to payment or reimbursement of that portion of the Secured
Obligations constituting fees, expenses and indemnities payable to the DIP Agent
in its capacity as such;

(ii) second, pro rata to payment or reimbursement of that portion of the Secured
Obligations constituting fees, expenses and indemnities payable to the Lenders;

(iii) third, pro rata to payment of accrued interest on the Loans;

(iv) fourth, pro rata to payment of (A) principal outstanding on the DIP Term
Loans, (B) Secured Obligations referred to in clause (c) of the definition of
Secured Obligations owing to a Bank Products Provider, and (C) any other Secured
Obligations (other than Roll-Up Loans);

(v) fifth, pro rata to payment of any superpriority adequate protection claims
of the Prepetition Secured Parties on a pro rata basis;

(vi) sixth, to repay ratably the Prepetition Revolving Loans then outstanding,
on the one hand, and the Roll-Up Loans and Prepetition Term Loans then
outstanding, on the other hand (provided that funds allocated to the Roll-Up
Loans and Prepetition Term Loans shall be applied to repay the Roll-Up Loans in
full prior to the Prepetition Terms Loans); and

(vii) seventh, any excess, after all of the Secured Obligations shall have been
indefeasibly paid in full in cash, shall be paid to the Borrower or as otherwise
required by any Governmental Requirement.

Notwithstanding the foregoing, Bank Products shall be excluded from the
application described above if the DIP Agent has not received a Secured Party
Designation Notice, together with such supporting documentation as the DIP Agent
may request, from the applicable Bank Products Provider Each Bank Products
Provider not a party to this Agreement that has given the notice contemplated by
the preceding sentence shall, by such notice, be deemed to have acknowledged and
accepted the appointment of the DIP Agent pursuant to the terms of Article XI
for itself and its Affiliates as if a “Lender” party hereto.

ARTICLE XI

THE DIP AGENT

Section 11.01 Appointment and Authority. Each of the Lenders and each Issuing
Bank hereby irrevocably appoints Wilmington Trust, National Association, to act
on its behalf as the DIP Agent hereunder and under the other Loan Documents and
authorizes the DIP Agent to take such actions on its behalf and to exercise such
powers as are delegated to the DIP Agent by the terms hereof and thereof,
together with such actions and powers as are reasonably incidental thereto. The
provisions of this Article XI are solely for the benefit of the DIP Agent, the
Lenders and each Issuing Bank, and neither the Borrower nor any Subsidiary shall
have any rights as a third party beneficiary of any such provisions. Without
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the DIP Agent is hereby expressly authorized to (a) execute any and all
documents (including releases) with respect to the Collateral and the rights of
the Secured Parties with respect thereto, as contemplated by and in accordance
with the provisions of this Agreement and the Security Instruments and
(b) negotiate, enforce or settle any claim, action or proceeding affecting the
Lenders in their capacity as such, at the written direction of the Required
Lenders, which negotiation, enforcement or settlement will be binding upon each
Secured Party.

Section 11.02

Section 11.03 Rights as a Lender. The Person serving as the DIP Agent hereunder
shall, if applicable, have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not the
DIP Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly
indicated or unless the context otherwise requires, include, if applicable, the
Person serving as the DIP Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the DIP Agent hereunder and without any duty
to account therefor to the Lenders.

Section 11.04 Exculpatory Provisions.

(a) The DIP Agent shall not have any duties or obligations except those
expressly set forth herein and in the other Loan Documents, and its duties
hereunder shall be administrative in nature. Without limiting the generality of
the foregoing, the DIP Agent:

(i) shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing (it being understood that the
term “agent” used herein and in the other Loan Documents with reference to the
DIP Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine or any other applicable law; rather,
such term is used merely as a matter of market custom, and is intended to create
or reflect only an administrative relationship between independent contracting
parties);

(ii) shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that the DIP Agent is required to exercise in
writing by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in
Section 10.02 or 12.02); provided that the DIP Agent shall not be required to
take any action that, in its opinion or the opinion of its counsel, may expose
the DIP Agent to liability, if the DIP Agent is not indemnified to its
satisfaction, or that is contrary to any Loan Document or applicable law
including, for the avoidance of doubt any action that may be in violation of the
automatic stay under any Bankruptcy Law;

(iii) shall not, except as expressly set forth herein and in the other Loan
Documents, have any duty to disclose, and shall not be liable for the failure to

 

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disclose, any information relating to the Borrower or any of its Affiliates that
is communicated to or obtained by the Person serving as the DIP Agent or any of
its Affiliates in any capacity; and

(iv) shall not be liable for any apportionment or distribution of payments made
by it in good faith and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Lender to whom payment was due but not made, shall be to recover from other
Lenders any payment in excess of the amount to which they are determined to be
entitled (and such other Lenders hereby agree to return to such Lender any such
erroneous payments received by them).

(b) The DIP Agent shall not be liable for any action taken or not taken by it
(i) with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary, or as the DIP Agent
shall believe in good faith shall be necessary, under the circumstances as
provided in Section 12.02 and Section 10.02) or (ii) otherwise hereunder or
under any other Loan Document or under any other document or instrument referred
to or provided for herein or therein or in connection herewith or therewith
INCLUDING ITS OWN ORDINARY NEGLIGENCE, except for its own gross negligence or
willful misconduct as determined by a court of competent jurisdiction by a final
and nonappealable judgment. The DIP Agent shall be deemed not to have knowledge
of any Default unless and until written notice describing such Default is given
to the DIP Agent by the Borrower, a Lender or an Issuing Bank.

(c) The DIP Agent shall not be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document, (ii) the contents of
any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein or
therein or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document, (v) the satisfaction of any condition
set forth in Article VI or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to the DIP Agent or as to those
conditions precedent expressly required to be to the DIP Agent’s satisfaction,
(vi) the existence, value, perfection, or priority of any collateral security or
the financial or other condition of the Loan Parties and the Subsidiaries or any
other obligor or guarantor, or (vii) any failure by any Loan Party or any other
Person (other than itself) to perform any of its obligations hereunder or under
any other Loan Document or the performance or observance of any covenants,
agreements, or other terms or conditions set forth herein or therein.

Section 11.05 Reliance by DIP Agent. The DIP Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper Person. The DIP Agent also may rely upon
any statement made to it orally or by telephone and believed by it to have been
made by the proper Person, and shall not incur any liability for relying
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hereunder to the making of a Loan, or the issuance of a Letter of Credit, that
by its terms must be fulfilled to the satisfaction of a Lender or an Issuing
Bank, the DIP Agent may presume that such condition is satisfactory to such
Lender or such Issuing Bank unless the DIP Agent shall have received notice to
the contrary from such Lender or such Issuing Bank prior to the making of such
Loan or the issuance of such Letter of Credit. The DIP Agent may consult with
legal counsel (who may be counsel for the Borrower), independent accountants and
other experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel, accountants
or experts.

Section 11.06 Delegation of Duties. The DIP Agent may perform any and all of its
duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub agents appointed by the DIP Agent.
The DIP Agent and any such sub-agent may perform any and all of its duties and
exercise its rights and powers by or through their respective Related Parties.
The exculpatory provisions of this Article XI and Section 12.03(b) and (c) shall
apply to any such sub agent and to the Related Parties of the DIP Agent and any
such sub agent, and shall apply to their respective as DIP Agent. The DIP Agent
shall not be responsible for the negligence or misconduct of any sub-agents
except to the extent that a court of competent jurisdiction determines in a
final and non-appealable judgment that the DIP Agent acted with gross negligence
or willful misconduct in the selection of such sub-agents.

Section 11.07 Resignation of DIP Agent. The DIP Agent may at any time give
notice of its resignation to the Lenders, each Issuing Bank and the Borrower.
Upon receipt of any such notice of resignation, the Required Lenders shall have
the right, in consultation with the Borrower, to appoint a bank as a successor.
If no such successor shall have been so appointed by the Required Lenders and
shall have accepted such appointment within thirty (30) days after the retiring
DIP Agent gives notice of its resignation, then the retiring DIP Agent may on
behalf of the Lenders and each Issuing Bank, appoint a successor DIP Agent
meeting the qualifications set forth above, provided that if no such successor
DIP Agent has been appointed by the 30th day after the resigning DIP Agent gave
notice of its resignation, the retiring DIP Agent’s resignation shall
nevertheless thereupon become effective in accordance with such notice and
(a) the retiring DIP Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that in the case of any
collateral security held by the DIP Agent on behalf of the Lenders or any
Issuing Bank under any of the Loan Documents, the retiring DIP Agent shall
continue to hold such collateral security until such time as a successor DIP
Agent is appointed) and (b) all payments, communications and determinations
provided to be made by, to or through the DIP Agent shall instead be made by or
to each Lender and each Issuing Bank directly, until such time as the Required
Lenders appoint a successor DIP Agent as provided for above in this
Section 11.06. Upon the acceptance of a successor’s appointment as DIP Agent
hereunder, such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring (or retired) DIP Agent,
and the retiring DIP Agent shall be discharged from all of its duties and
obligations hereunder or under the other Loan Documents (if not already
discharged therefrom as provided above in this paragraph). The fees payable by
the Borrower to a successor DIP Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After the retiring DIP Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article XI and Section 12.03 shall continue in
effect for the benefit of such retiring DIP Agent, its sub agents and their
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any actions taken or omitted to be taken by any of them while the retiring DIP
Agent was acting as DIP Agent.

Section 11.08 Non-Reliance on DIP Agent and Other Lenders. Each Lender and each
Issuing Bank acknowledges that it has, independently and without reliance upon
the DIP Agent or any other Lender or any of their Related Parties and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender and each Issuing
Bank also acknowledges that it will, independently and without reliance upon the
DIP Agent or any other Lender or any of their Related Parties and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document or any related agreement or any
document furnished hereunder or thereunder. The DIP Agent shall not be required
to keep itself informed as to the performance or observance by the Borrower or
any of its Subsidiaries of this Agreement, the Loan Documents, or any other
document referred to or provided for herein or to inspect the Properties or
books of the Loan Parties or the Subsidiaries. Except for notices, reports, and
other documents and information expressly required to be furnished to the
Lenders by the DIP Agent hereunder, the DIP Agent 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 the Loan Parties (or
any of their Affiliates) which may come into possession of the DIP Agent or any
of its Affiliates. Each other party hereto will consult with its own legal
counsel to the extent that it deems necessary in connection with the Loan
Documents and the matters contemplated therein.

Section 11.09 [Reserved.]

Section 11.10 Authority of DIP Agent to Release Collateral and Liens. Each
Lender and each Issuing Bank hereby authorizes, and each other Person accepting
the benefit of the Liens created by the Security Instruments shall be deemed to
have authorized, the DIP Agent to release (a) any Collateral that is permitted
to be sold or released pursuant to the terms of the Loan Documents, and (b) any
Mortgaged Property that does not constitute Material Real Property if any
Building (as defined in the applicable Flood Insurance Law) or Manufactured
(Mobile) Home (as defined in the applicable Flood Insurance Law) is situated on
such Mortgaged Property and the DIP Agent, in its sole discretion, determines
that the costs, financial and otherwise, of obtaining or maintaining a Lien or
complying with all Governmental Requirements with respect to such Lien outweigh
the benefit to the Secured Parties of the security afforded thereby. Each Lender
and each Issuing Bank hereby authorizes, and each other Person accepting the
benefit of the Liens created by the Security Instruments shall be deemed to have
authorized, the DIP Agent to execute and deliver to the Borrower (or file, if
appropriate), at the Borrower’s sole cost and expense, any and all releases of
Liens, termination statements, assignments or other documents reasonably
requested by the Borrower in connection with any sale or other disposition of
Property to the extent such sale or other disposition is permitted by the terms
of Section 9.11 or is otherwise authorized by the terms of the Loan Documents.
To the extent any Property is sold, assigned, conveyed or otherwise transferred
as expressly permitted by Section 9.11 to any Person other than a Loan Party,
such Collateral shall be sold, assigned, conveyed or otherwise transferred free
and clear of all Liens created by the Loan Documents.

 

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Section 11.11 Action by the DIP Agent. The DIP Agent shall have no duty to take
any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby or by the other
Loan Documents that the DIP Agent is required to exercise in writing as directed
by the Required Lenders (or such other number or percentage of the Lenders or
Issuing Banks, as applicable, as shall be necessary under the circumstances as
provided in Section 10.02 or Section 12.02) and in all cases the DIP Agent shall
be fully justified in failing or refusing to act hereunder or under any other
Loan Documents unless it shall (a) receive written instructions from the
Required Lenders (or such other number or percentage of the Lenders or Issuing
Banks, as applicable, as shall be necessary under the circumstances as provided
in Section 12.02) specifying the action to be taken and (b) be indemnified to
its satisfaction by the Lenders or Issuing Banks, as applicable, against any and
all liability and expenses which may be incurred by it by reason of taking or
continuing to take any such action. The instructions as aforesaid and any action
taken or failure to act pursuant thereto by the DIP Agent shall be binding on
all of the Lenders and Issuing Banks. If a Default has occurred and is
continuing, then the DIP Agent shall take such action with respect to such
Default as shall be directed by the requisite Lenders in the written
instructions (with indemnities) described in this Section, provided that, unless
and until the DIP Agent shall have received such directions, the DIP 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
interests of the Lenders. In no event, however, shall the DIP Agent be required
to take any action which exposes the DIP Agent to personal liability or which is
contrary to this Agreement, the Loan Documents or applicable law.

Section 11.12 Certain Secured Parties. No Bank Products Provider that obtains
the benefit of Section 10.02(c) or any Collateral by virtue of the provisions
hereof or any Security Instrument or DIP Order shall have any right to notice of
any action or to consent to, direct or object to any action hereunder or under
any other Loan Document or otherwise in respect of the Collateral (including the
release or impairment of any Collateral) (or to notice of or to consent to any
amendment, waiver or modification of the provisions hereof, any DIP Order or of
any Security Instrument) other than in its capacity as a Lender and, in such
case, only to the extent expressly provided in the Loan Documents.
Notwithstanding any other provision of this Article XI to the contrary, the DIP
Agent shall not be required to verify the payment of, or that other satisfactory
arrangements have been made with respect to, Secured Obligations consisting of
Bank Products except to the extent expressly provided herein and unless the DIP
Agent has received a Secured Party Designation Notice of such Secured
Obligations, together with such supporting documentation as the DIP Agent may
request, from the applicable Bank Products Provider. The Administrative Agent
shall not be required to verify the payment of, or that other satisfactory
arrangements have been made with respect to, Secured Obligations consisting of
Bank Products in the case of a Maturity Date.

ARTICLE XII

MISCELLANEOUS

Section 12.01 Notices.

 

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(a) Notices Generally. Subject to Section 12.01(b), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by facsimile, as follows:

(i) if to the Borrower, to it at the following:

Southcross Energy Partners, L.P.

1717 Main Street, Suite 5200

Dallas, TX 75201

Attn: Michael B. Howe

Fax: (214) 979-3710

Email: michael.howe@southcrossenergy.com

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

Davis Polk & Wardwell LLP

450 Lexington Ave

New York, NY 10017

Attn: Jinsoo H. Kim

Fax: (212) 701-5217

Email: jinsoo.kim@davispolk.com

(ii) if to the DIP Agent, to it at the following:

Wilmington Trust, National Association.

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Attn: Nikki Kroll

Fax: (612) 217-5651

Email: nkroll@wilmingtontrust.com

with copies to (which shall not constitute notice):

Arnold & Porter Kaye Scholer LLP

250 West 55th Street

New York, NY 10019-9710

Attn: Alan Glantz

Fax: (212) 836-6763

Email: alan.glantz@arnoldporter.com

and

 

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Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019

Attn: Leonard Klingbaum

Fax: (212) 728-9290

Email: LKlingbaum@willkie.com

(iii) if to Wells Fargo, as Issuing Bank, to it at the following:

Wells Fargo Bank, N.A.

301 S. College St

Charlotte, NC 28288

MAC D1053-150

Attn: Michael J. Thomas

Fax: 704-383-7611

Email: mjthomas@wellsfargo.com

(iv) if to RBC, as Issuing Bank, to it at the following:

Royal Bank of Canada

200 Vesey Street, 12th Floor

New York, New York 10281

Attn: Leslie P. Vowell

Tel: (212) 428-6607

Email: Les.vowell@rbccm.com

and

Royal Bank of Canada

200 Vesey Street, 12th Floor

New York, New York 10281

Attn: Leslie P. Vowell

Tel: (212) 548-3128

Email: amy.josephson@rbccm.com

(v) if to UBS AG, as Issuing Bank, to it at the following:

UBS AG, Stamford Branch

600 Washington Blvd, 9th Floor

Stamford, CT 06901

Attn: Loan Administration Team

Fax: (203) 719-3888

Email: UBSAgency@ubs.com

and

 

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UBS AG, Stamford Branch

600 Washington Blvd, 9th Floor

Stamford, CT 06901

Attn: Gary Riddell

Tel: (203) 719-6987

Email: gary.riddell@ubs.com

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

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the
recipient). Notices delivered through electronic communications to the extent
provided in Section 12.01(b) below, shall be effective as provided in
Section 12.01(b).

(b) Electronic Communications.

(i) Notices and other communications to the Lenders and the Issuing Banks
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
DIP Agent; provided that the foregoing shall not apply to notices to any Lender
or any Issuing Bank pursuant to Article II, Article III, Article IV and Article
V if such Lender or such Issuing Bank, as applicable, has notified the DIP Agent
that it is incapable of receiving notices under such Article(s) by electronic
communication. The DIP Agent or the Borrower may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications.

(ii) Unless the DIP Agent otherwise prescribes, (A) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next Business Day for the recipient, 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 (B) of notification that such notice or communication is
available and identifying the website address therefore.

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

Section 12.02 Waivers; Amendments.

(a) No failure on the part of the DIP Agent, any Issuing Bank or any Lender to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege, or any abandonment or discontinuance of steps to
enforce such right, power or privilege, under any of the Loan Documents shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under any of the Loan Documents preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies of the DIP Agent, any Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by Section 12.02(b), and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the DIP Agent, any Lender or any Issuing Bank may
have had notice or knowledge of such Default at the time.

(b) Neither this Agreement nor any provision hereof nor any Security Instrument
nor any provision thereof may be waived, amended or modified except pursuant to
an agreement or agreements in writing entered into by the Borrower and the
Required Lenders, and acknowledged by the DIP Agent, or by the Borrower and the
DIP Agent with the consent of the Required Lenders; provided that no such
agreement shall (i) increase the Commitment of any Lender without the written
consent of such Lender, (ii) reduce the principal amount of any Loan or reduce
the rate of interest thereon, or reduce any fees payable hereunder, or reduce
any other Secured Obligations hereunder or under any other Loan Document,
without the written consent of each Lender adversely affected thereby, provided,
however, that only the consent of the Required Lenders shall be necessary (A) to
amend the definition of “Default Rate” or to waive any obligation of the
Borrower to pay interest at the Default Rate or (B) [reserved], (iii) except as
provided in the definition of “Scheduled Maturity Date”, postpone the scheduled
date of payment or prepayment of the principal amount of any Loan (excluding
mandatory prepayments), or any interest thereon, or any fees payable hereunder,
or any other Secured Obligations hereunder or under any other Loan Document, or
reduce the amount of, waive or excuse any such payment, or postpone or extend
the Maturity Date or Maturity Date without the written consent of each Lender
adversely affected thereby, (iv) change Section 4.01(b) or Section 4.01(c) in a
manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) waive or amend Section 3.04(c),
Section 6.01, Section 10.02(c) or Section 12.14 or change the definition of the
terms “Domestic Subsidiary”, “Foreign Subsidiary” or “Subsidiary”, without the
written consent of each Lender (other than any Defaulting Lender), (vi) release
any Guarantor (except as permitted pursuant to the Guaranty and Collateral
Agreement or in connection with a sale of such Guarantor permitted under
Section 9.11) or release all or substantially all of the Collateral, without the
written consent of each Lender (other than any Defaulting Lender), (vii) change
any of the provisions of this Section 12.02(b), Section 10.02(c), or the
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“Required Lenders” or any other provision hereof specifying the number or
percentage of Lenders required to waive, amend or modify any rights hereunder or
under any other Loan Documents or make any determination or grant any consent
hereunder or any other Loan Documents, without the written consent of each
Lender other than any Defaulting Lender, (viii) change the application of
prepayments under Section 3.04(c), without the written consent of the Required
Lenders (it being understood that the Required Lenders may waive, in whole or in
part, any prepayment so long as the application of any such prepayment that is
still required to be made is not changed), or (ix) modify Section 2.07 (or any
definitions related thereto) in any manner that is adverse to the Issuing Banks
that have Letters of Credit outstanding without the consent of each such Issuing
Bank; provided, further, that (x) no such agreement shall amend, modify or
otherwise affect the rights or duties of the DIP Agent or any Issuing Bank
hereunder or under any other Loan Document without the prior written consent of
the DIP Agent or any Issuing Bank, as the case may be, and (y) the Agency Fee
Letter may be amended, or rights or privileged thereunder waived in a writing
executed only by the parties thereto (without the need for the consent of any
other party thereto). Notwithstanding the foregoing, (x) any supplement to
Schedule 7.14 (Subsidiaries) shall be effective simply by delivering to the DIP
Agent a supplemental schedule clearly marked as such and, upon receipt, the DIP
Agent will promptly deliver a copy thereof to the Lenders, (y) the Borrower (or
other applicable Loan Party) and the DIP Agent may amend this Agreement or any
other Loan Document without the consent of the Lenders in order to correct,
amend or cure any ambiguity, inconsistency or defect or correct any
typographical error or other manifest error in any Loan Document if the same is
not objected to in writing by Lenders constituting the Required Lenders within 5
Business Days after the DIP Agent delivers written notice thereof to the
Lenders, and (z) the DIP Agent and the Borrower (or other applicable Loan Party)
may enter into any amendment, modification or waiver of this Agreement or any
other Loan Document or enter into any agreement or instrument to effect the
granting, perfection, protection, expansion or enhancement of any security
interest in any Mortgaged Property or Property to become Mortgaged Property to
secure the Secured Obligations for the benefit of the Lenders or as required by
any Governmental Requirement to give effect to, protect or otherwise enhance the
rights or benefits of any Lender under the Loan Documents without the consent of
any Lender.

Section 12.03 Expenses, Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the DIP Agent and its Affiliates and by the Lenders
(including the reasonable fees, charges and disbursements of counsel and other
outside consultants for the DIP Agent and the Lenders) in connection with the
syndication of the credit facilities provided for herein, the preparation,
negotiation, execution, delivery and administration (both before and after the
execution hereof and including advice of counsel to the DIP Agent as to the
rights and duties of the DIP Agent and the Lenders with respect thereto) of this
Agreement and the other Loan Documents and any amendments, modifications or
waivers of or consents related to the provisions hereof or thereof (whether or
not the transactions contemplated hereby or thereby shall be consummated)
(limited, in the case of legal fees, disbursements and charges, to the
reasonable and documented fees, disbursements and other charges of Arnold &
Porter Kaye Scholer LLP, as counsel to the DIP Agent, Willkie Farr & Gallagher
LLP, as counsel for the Lenders, a single counsel for the Issuing Banks, and
local counsel in each material jurisdiction), (ii) all costs, expenses, Taxes,
assessments and other charges incurred by the DIP Agent or any Lender in

 

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connection with any filing, registration, recording or perfection of any
security interest contemplated by this Agreement or any Security Instrument or
any other document referred to therein, (iii) all reasonable out-of-pocket
expenses incurred by any Issuing Bank in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder (limited, in the case of legal fees, disbursements and
charges, to the reasonable and documented fees, disbursements and other charges
of Arnold & Porter Kaye Scholer LLP, as counsel to the DIP Agent, Willkie Farr &
Gallagher LLP, as counsel for the Lenders, a single counsel for the Issuing
Banks, and local counsel in each material jurisdiction), and (iv) all
out-of-pocket expenses incurred by the DIP Agent, any Issuing Bank or any Lender
(including the fees, charges and disbursements of any counsel for the DIP Agent,
any Issuing Bank or any Lender) in connection with the enforcement or protection
of its rights in connection with this Agreement and the other Loan Documents,
including its rights under this Section 12.03 or in connection with the Loans
made or Letters of Credit issued hereunder, including, without limitation, all
such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit (limited, in the case
of legal fees, disbursements and charges, to the reasonable and documented fees,
disbursements and other charges of Arnold & Porter Kaye Scholer LLP, as counsel
to the DIP Agent, Willkie Farr & Gallagher LLP, as counsel for the Lenders, a
single counsel for the Issuing Banks, and local counsel in each material
jurisdiction). Notwithstanding anything to the contrary contained in this
Section 12.03(a) or elsewhere in any of the Loan Documents, neither the Borrower
nor any Subsidiary shall be obligated to pay or reimburse any Person for any
costs, expenses, fees, taxes or other charges of any nature whatsoever that are
incurred or payable by any Person in connection with any assignment referred to
in Section 12.04(b), any participation referred to in Section 12.04(d) or any
pledge or security interest referred to in Section 12.04(f).

(b) INDEMNIFICATION BY THE BORROWER. THE BORROWER SHALL INDEMNIFY EACH AGENT
(AND ANY SUB-AGENT THEREOF), ANY ISSUING BANK AND EACH LENDER, AND EACH RELATED
PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN
“INDEMNITEE”) AGAINST, AND DEFEND AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY
AND ALL LOSSES, CLAIMS, DAMAGES, PENALTIES, LIABILITIES AND RELATED EXPENSES,
INCLUDING THE FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE
(LIMITED, IN THE CASE OF LEGAL FEES, DISBURSEMENTS AND CHARGES, TO THE
REASONABLE AND DOCUMENTED FEES, DISBURSEMENTS AND OTHER CHARGES OF ARNOLD &
PORTER KAYE SCHOLER LLP, AS COUNSEL TO THE DIP AGENT, WILLKIE FARR & GALLAGHER
LLP, AS COUNSEL FOR THE LENDERS, A SINGLE COUNSEL FOR THE ISSUING BANKS, AND
LOCAL COUNSEL IN EACH MATERIAL JURISDICTION), INCURRED BY ANY INDEMNITEE OR
ASSERTED AGAINST ANY INDEMNITEE BY A THIRD PARTY OR BY THE BORROWER OR ANY
SUBSIDIARY ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF (i) THE
EXECUTION OR DELIVERY OF THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY
AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE PERFORMANCE BY THE
PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT OF THEIR RESPECTIVE
OBLIGATIONS HEREUNDER OR THEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, (ii) THE FAILURE OF THE BORROWER OR

 

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ANY SUBSIDIARY TO COMPLY WITH THE TERMS OF ANY LOAN DOCUMENT, INCLUDING THIS
AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT, (iii) ANY INACCURACY OF ANY
REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR COVENANT OF THE BORROWER OR ANY
GUARANTOR SET FORTH IN ANY OF THE LOAN DOCUMENTS OR ANY INSTRUMENTS, DOCUMENTS
OR CERTIFICATIONS DELIVERED IN CONNECTION THEREWITH, (iv) ANY LOAN OR LETTER OF
CREDIT OR THE USE OF THE PROCEEDS THEREFROM, INCLUDING, WITHOUT LIMITATION,
(A) ANY REFUSAL BY ANY ISSUING BANK 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, OR (B) THE PAYMENT OF A
DRAWING UNDER ANY LETTER OF CREDIT NOTWITHSTANDING THE NON-COMPLIANCE,
NON-DELIVERY OR OTHER IMPROPER PRESENTATION OF THE DOCUMENTS PRESENTED IN
CONNECTION THEREWITH, (v) ANY OTHER ASPECT OF THE LOAN DOCUMENTS, (vi) THE
OPERATIONS OF THE BUSINESS OF THE BORROWER AND ITS SUBSIDIARIES BY THE BORROWER
AND ITS SUBSIDIARIES, (vii) ANY ASSERTION THAT THE SECURED PARTIES WERE NOT
ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY INSTRUMENTS,
(viii) ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY OR ANY
OF THEIR PROPERTIES OR OPERATIONS, INCLUDING, THE PRESENCE, GENERATION, STORAGE,
RELEASE, THREATENED RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT OF DISPOSAL
OR TREATMENT OF HAZARDOUS MATERIALS ON OR AT ANY OF THEIR PROPERTIES, (ix) THE
BREACH OR NON-COMPLIANCE BY THE BORROWER OR ANY SUBSIDIARY WITH ANY
ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY, (x) THE PAST
OWNERSHIP BY THE BORROWER OR ANY SUBSIDIARY OF ANY OF THEIR PROPERTIES OR PAST
ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE
AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (xi) THE PRESENCE, USE, RELEASE,
STORAGE, TREATMENT, DISPOSAL, GENERATION, THREATENED RELEASE, TRANSPORT,
ARRANGEMENT FOR TRANSPORT OR ARRANGEMENT FOR DISPOSAL OF HAZARDOUS MATERIALS ON
OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE BORROWER OR ANY SUBSIDIARY
OR ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM
ANY PROPERTY OWNED OR OPERATED BY THE BORROWER OR ANY OF ITS SUBSIDIARIES,
(xii) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE BORROWER OR ANY OF
ITS SUBSIDIARIES, OR (xiii) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION
IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xiv) ANY ACTUAL OR PROSPECTIVE CLAIM,
LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING,
WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY, WHETHER BROUGHT BY A THIRD
PARTY OR BY THE BORROWER OR ANY SUBSIDIARY, AND REGARDLESS OF WHETHER ANY
INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY SHALL EXTEND TO EACH
INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR
CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR
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LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT
(SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT
LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED
THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT
THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES (x) ARE
DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE
JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
SUCH INDEMNITEE, (y) OTHER THAN IN THE CASE OF THE DIP AGENT AND ITS RELATED
PARTIES, RESULT FROM A CLAIM BROUGHT BY THE BORROWER OR ANY SUBSIDIARY AGAINST
ANY INDEMNITEE FOR BREACH IN BAD FAITH OF SUCH INDEMNITEE’S OBLIGATIONS
HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT, IF THE BORROWER OR SUCH SUBSIDIARY
HAS OBTAINED A FINAL AND NONAPPEALABLE JUDGMENT IN ITS FAVOR ON SUCH CLAIM AS
DETERMINED BY A COURT OF COMPETENT JURISDICTION OR (z) RESULT FROM ANY DISPUTE
SOLELY AMONG INDEMNITEES, OTHER THAN ANY CLAIMS AGAINST ANY INDEMNITEE IN ITS
CAPACITY OR IN FULFILLING ITS ROLE AS AN AGENT, OR ANY SIMILAR ROLE UNDER THIS
AGREEMENT, AND OTHER THAN ANY CLAIMS ARISING OUT OF ANY ACT OR OMISSION ON THE
PART OF THE BORROWER OR ANY OF ITS SUBSIDIARIES OR AFFILIATES.

(c) Reimbursement by Lenders. To the extent that the Borrower for any reason
fails to pay indefeasibly any amount required under Sections 12.03(a) or (b) to
be paid by it to the DIP Agent (or any sub-agent thereof), any Issuing Bank or
any Related Party of any of the foregoing, each Lender severally agrees to pay
to such Agent (or any such sub-agent), such Issuing Bank or such Related Party,
as the case may be, such Lender’s Applicable Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought
(or, if such indemnity or reimbursement is sought after the date upon which the
Loans shall have been paid in full and the Commitments have been terminated, in
accordance with such Lenders’ Applicable Share as in effect immediately prior to
such date))) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against the DIP Agent (or any such sub-agent) or
such Issuing Bank in its capacity as such, or against any Related Party of any
of the foregoing acting for the DIP Agent (or any such sub-agent) or such
Issuing Bank in connection with such capacity. Each Lender hereby authorizes the
DIP Agent to set off and apply any and all amounts at any time owing to such
Lender under any Loan Document or otherwise payable by the DIP Agent to the
Lender from any source against any amount due to the DIP Agent under this
paragraph (c).

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by
applicable law, no party shall assert, and hereby waives, any claim against any
other party, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, any other Loan Document or
any agreement or instrument contemplated hereby or thereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof (other than to
the extent any such damages are asserted pursuant to a third-party claim that
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indemnified or reimbursed pursuant to any Loan Document). No Indemnitee referred
to in Section 12.03(b) shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the
Transactions.

(e) Payments. All amounts due under this Section 12.03 shall be payable promptly
after written demand therefor.

Section 12.04 Assignments and Participations.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby (including any Affiliate of any Issuing
Bank that issues a Letter of Credit), except that (i) the Borrower may not
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of the DIP Agent and each Lender, and (ii) no Lender
may assign or otherwise transfer its rights or obligations hereunder except
(A) to an assignee in accordance with the provisions of Section 12.04(b), (B) by
way of participation in accordance with the provisions of Section 12.04(d), or
(C) by way of pledge or assignment of a security interest subject to the
restrictions of Section 12.04(f) (and any other attempted assignment or transfer
by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
(including any Affiliate of any Issuing Bank that issues any Letter of Credit),
Participants (to the extent provided in Section 12.04(d)) and, to the extent
expressly contemplated hereby, the Related Parties of each of the DIP Agent, any
Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

(b) Assignments by Lenders. Any Lender may at any time assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it); provided that any such assignments shall be subject to the following
conditions:

(i) Minimum Amounts.

(A) in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
amount need be assigned; and

(B) in any case not described in Section 12.04(b)(i)(A), the aggregate amount of
the Commitment (which for this purpose includes Loans outstanding thereunder)
or, if the applicable Commitment is not then in effect, the principal
outstanding balance of the Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Assumption with respect
to such assignment is delivered to the DIP Agent or, if “Trade Date” is
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Assumption, as of the Trade Date) shall not be less than $5,000,000, unless each
of the DIP Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed).

(ii) Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all of the assigning Lender’s rights and
obligations under this Agreement and with respect to the Loan or the Commitment
assigned, except that this clause (ii) shall not prohibit any Lender from
assigning all or a portion of its rights on a non- pro rata basis.

(iii) Required Consents. No consent shall be required for any assignment except
to the extent required by Section 12.04(b)(i)(B) and, in addition:

(A) the consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless (1) an Event of Default has occurred and is
continuing at the time of such assignment or (2) such assignment is to a Lender,
an Affiliate of a Lender or an Approved Fund; provided that the Borrower shall
be deemed to have consented to any such assignment unless it shall object
thereto by written notice to the DIP Agent within five (5) Business Days after
having received notice thereof; and

(B) the consent of the DIP Agent (such consent not to be unreasonably withheld
or delayed) shall be required for assignments in respect of a Commitment or
Credit Exposure if such assignment is to a Person that is not a Lender with a
Commitment, an Affiliate of such Lender or an Approved Fund with respect to such
Lender.

(iv) Assignment and Assumption. The parties to each assignment shall execute and
deliver to the DIP Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500 (which may be waived or reduced in the
sole discretion of the DIP Agent), and the assignee, if it is not a Lender,
shall deliver to the DIP Agent an Administrative Questionnaire and any tax forms
required under Section 5.03.

(v) No Assignment to Borrower. No such assignment shall be made to the Borrower,
any Sponsor, or any of the Borrower’s or any Sponsor’s Affiliates or
Subsidiaries.

(vi) No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

(vii) No Assignments to Defaulting Lenders. No such assignment shall be made to
a Defaulting Lender.

 

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Subject to acceptance and recording thereof by the DIP Agent pursuant to
Section 12.04(c), from and after the effective date specified in each Assignment
and Assumption, the assignee thereunder shall be a party to this Agreement and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto) but shall continue to be entitled to the benefits of
Section 5.01, Section 5.02, Section 5.03 and Section 12.03 with respect to facts
and circumstances occurring prior to the effective date of such assignment. Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this Section 12.04 shall be treated for purposes of
this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with Section 12.04(d).

(c) Register. The DIP Agent, acting solely for this purpose as a non-fiduciary
agent of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amount (and stated interest) of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the “Register”). Upon the DIP Agent’s receipt of
a duly completed Assignment and Assumption executed by an assigning Lender and
an assignee, the assignee’s completed Administrative Questionnaire and
applicable tax forms (unless the assignee shall already be a Lender hereunder),
the processing and recordation fee referred to in Section 12.04(b) and any
written consent to such assignment required by Section 12.04(b), the DIP Agent
shall accept such Assignment and Assumption and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
Section 12.04(c). The entries in the Register shall be conclusive, and the
Borrower, the DIP Agent, any Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower, the
Issuing Banks and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

(d) Participations.

(i) Any Lender may at any time, without the consent of, or notice to the
Borrower, the DIP Agent or any Issuing Bank, sell participations to any Person
(other than a natural Person or the Borrower or any of the Borrower’s Affiliates
or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (C) the Borrower, the DIP Agent, any Issuing Bank and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.

 

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(ii) Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the proviso to
Section 12.02 that affects such Participant. In addition such agreement must
provide that the Participant be bound by the provisions of Section 12.03.
Subject to Section 12.04(e), the Borrower agrees that each Participant shall be
entitled to the benefits of Section 5.01, Section 5.02 and Section 5.03 to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 12.04(b). To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 12.08 as though it were a
Lender, provided that such Participant agrees to be subject to Section 4.01(c)
as though it were a Lender. Each Lender that sells a participation shall, acting
solely for this purpose as a non-fiduciary agent of the Borrower, maintain a
register on which it enters the name and address of each Participant and the
principal amounts (and stated interest) of each Participant’s interest in the
Loans or other obligations under the Loan Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any
Participant or any information relating to a Participant’s interest in any
commitments, loans, letters of credit or its other obligations under any Loan
Document) to any Person except to the extent that such disclosure is necessary
to establish that such commitment, loan, 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 DIP Agent (in its capacity as DIP Agent) shall have no
responsibility for maintaining a Participant Register.

(e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 5.01 or Section 5.03 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 5.03 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 5.03(f) as though it were a
Lender

(f) Certain Pledges. Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including, without limitation, any pledge or
assignment to secure obligations to a Federal Reserve Bank or other central bank
having jurisdiction over such Lender, and Section 12.04(e) shall not apply to
any such pledge or assignment of a security interest; provided that no such
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assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

(g) Restrictions if Registration Required. Notwithstanding any other provisions
of this Section 12.04, no transfer or assignment of the interests or obligations
of any Lender or any grant of participations therein shall be permitted if such
transfer, assignment or grant would require the Borrower and the Guarantors to
file a registration statement with the SEC or to qualify the Loans under the
“Blue Sky” laws of any state.

Section 12.05 Survival; Revival; Reinstatement.

(a) All covenants, agreements, representations and warranties made by the
Borrower herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the DIP Agent,
any Issuing Bank or any Lender may have had notice or knowledge of any Default
or incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated. The
provisions of Section 5.01, Section 5.02, Section 5.03 and Section 12.03 and
Article XI shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement, any other Loan Document or any
provision hereof or thereof.

(b) To the extent that any payments on the Secured Obligations or proceeds of
any Collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver or other Person under any bankruptcy law, common law or
equitable cause, then to such extent, the Secured Obligations so satisfied shall
be revived and continue as if such payment or proceeds had not been received and
the DIP Agent’s and the Lenders’ Liens, security interests, rights, powers and
remedies under this Agreement and each Loan Document shall continue in full
force and effect. In such event, each Loan Document shall be automatically
reinstated and the Borrower shall take such action as may be reasonably
requested by the DIP Agent or the Lenders to effect such reinstatement.

Section 12.06 Counterparts; Integration; Effectiveness; Electronic Execution.

(a) Counterparts. This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.

(b) Integration. This Agreement, the other Loan Documents and any separate
letter agreements with respect to fees payable to the DIP Agent constitute the
entire contract among the parties relating to the subject matter hereof and
thereof and supersede any and all previous agreements and understandings, oral
or written, relating to the subject matter hereof and thereof.

 

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THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG
THE PARTIES HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

(c) Effectiveness. Except as provided in Section 6.01, this Agreement shall
become effective when it shall have been executed by the DIP Agent and when the
DIP Agent shall have received counterparts hereof that, when taken together,
bear the signatures of each of the other parties hereto, and thereafter shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by facsimile or other electronic transmission shall be
effective as delivery of a manually executed counterpart of this Agreement.

(d) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.

Section 12.07 Severability. Any provision of this Agreement or any other Loan
Document held to be invalid, illegal or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof or thereof; and the invalidity
of a particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

Section 12.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender, each Issuing Bank and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by applicable law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (of whatsoever kind, including,
without limitations obligations under Hedging Agreements, and in whatever
currency) at any time owing by such Lender, such Issuing Bank or any such
Affiliate to or for the credit or the account of the Borrower or any Subsidiary
against any and all of the obligations of the Borrower or any Subsidiary now or
hereafter existing under this Agreement or any other Loan Document to such
Lender or such Issuing Bank, irrespective of whether or not such Lender or such
Issuing Bank shall have made any demand under this Agreement or any other Loan
Document and although such obligations of the Borrower or such Subsidiary may be
contingent or unmatured or are owed to a branch or office of such Lender or such
Issuing Bank different from the branch or office holding such deposit or
obligated on such Indebtedness. The rights of each Lender, each Issuing Bank and
their respective Affiliates under this Section 12.08 are in addition to other
rights and remedies (including other rights of setoff) that such Lender, such
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Affiliates may have. Each Lender and each Issuing Bank agrees to notify the
Borrower and the DIP Agent promptly after any such setoff and application;
provided that the failure to give such notice shall not affect the validity of
such setoff and application.

Section 12.09 Governing Law; Jurisdiction; Consent to Service of Process.

(a) THIS AGREEMENT AND, EXCEPT AS OTHERWISE SET FORTH THEREIN, THE OTHER LOAN
DOCUMENTS 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.

(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS SHALL,
EXCEPT AS OTHERWISE SET FORTH THEREIN, BE BROUGHT EXCLUSIVELY IN THE BANKRUPTCY
COURT AND IF THE BANKRUPTCY COURT DOES NOT HAVE OR ABSTAINS FROM JURISDICTION,
THE COURTS OF THE COUNTY AND STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH PARTY HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT
PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS.

(c) EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS
SPECIFIED IN SECTION 12.01 OR SUCH OTHER ADDRESS AS IS SPECIFIED PURSUANT TO
SECTION 12.01 (OR ITS ASSIGNMENT AND ASSUMPTION), SUCH SERVICE TO BECOME
EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANOTHER PARTY IN ANY OTHER JURISDICTION.

(d) EACH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY) AND FOR
ANY COUNTERCLAIM THEREIN; (ii) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT

 

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PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (iii) CERTIFIES THAT NO OTHER
PARTY HERETO NOR ANY REPRESENTATIVE, AGENT OR ATTORNEY FOR ANY OTHER PARTY
HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS, AND (iv) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION 12.09.

Section 12.10 Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

Section 12.11 Confidentiality. Each of the DIP Agent, any Issuing Bank and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates and to
its and its Affiliates’ respective partners, directors, officers, employees,
agents, advisors (including accountants and legal counsel) and other
representatives (it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority purporting to have jurisdiction over it (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 or any other Loan Document, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section 12.11, 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 Hedging
Agreement relating to the Borrower and its obligations, (g) with the consent of
the Borrower, (h) to any other party to this Agreement, or (i) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this Section 12.11 or (ii) becomes available to the DIP Agent, any
Issuing Bank, any Lender or any of their respective Affiliates on a
nonconfidential basis from a source other than the Borrower. For purposes of
this Section 12.11, “Information” means all information received from any
Sponsor, Southcross Holdings, the Borrower or any Subsidiary relating to any
Sponsor, Southcross Holdings, the Borrower or any Subsidiary or any of their
respective businesses, other than any such information that is available to the
DIP Agent, any Issuing Bank or any Lender on a nonconfidential basis prior to
disclosure by any Sponsor, Southcross Holdings, the Borrower or a Subsidiary;
provided that, in the case of information received from any Sponsor, Southcross
Holdings, the Borrower or any Subsidiary 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 12.11 shall be considered to have

 

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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.

Section 12.12 Interest Rate Limitation. It is the intention of the parties
hereto that each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the Transactions contemplated hereby would be usurious as to any
Lender under laws applicable to it (including the laws of the United States of
America and the State of Texas or any other jurisdiction whose laws may be
mandatorily applicable to such Lender notwithstanding the other provisions of
this Agreement), then, in that event, notwithstanding anything to the contrary
in any of the Loan Documents or any agreement entered into in connection with or
as security for the Secured Obligations, it is agreed as follows: (a) the
aggregate of all consideration which constitutes interest under law applicable
to any Lender that is contracted for, taken, reserved, charged or received by
such Lender under any of the Loan Documents or agreements or otherwise in
connection with the Loans shall under no circumstances exceed the maximum amount
allowed by such applicable law, and any excess shall be canceled automatically
and if theretofore paid shall be credited by such Lender on the principal amount
of the Secured Obligations (or, to the extent that the principal amount of the
Secured Obligations shall have been or would thereby be paid in full, refunded
by such Lender to the Borrower); and (b) in the event that the maturity of the
Loans is accelerated by reason of an 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 under law applicable to any Lender may never include more than the
maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be canceled automatically by
such Lender as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited by such Lender on the principal amount of
the Secured Obligations (or, to the extent that the principal amount of the
Secured Obligations shall have been or would thereby be paid in full, refunded
by such Lender to the Borrower). All sums paid or agreed to be paid to any
Lender for the use, forbearance or detention of sums due hereunder shall, to the
extent permitted by law applicable to such Lender, be amortized, prorated,
allocated and spread throughout the stated term of the Loans until Payment in
Full so that the rate or amount of interest on account of any Loans hereunder
does not exceed the maximum amount allowed by such applicable law. If at any
time and from time to time (i) the amount of interest payable to any Lender on
any date shall be computed at the Highest Lawful Rate applicable to such Lender
pursuant to this Section 12.12 and (ii) in respect of any subsequent interest
computation period the amount of interest otherwise payable to such Lender would
be less than the amount of interest payable to such Lender computed at the
Highest Lawful Rate applicable to such Lender, then the amount of interest
payable to such Lender in respect of such subsequent interest computation period
shall continue to be computed at the Highest Lawful Rate applicable to such
Lender until the total amount of interest payable to such Lender shall equal the
total amount of interest which would have been payable to such Lender if the
total amount of interest had been computed without giving effect to this
Section 12.12. To the extent that Chapter 303 of the Texas Finance Code is
relevant for the purpose of determining the Highest Lawful Rate applicable to a
Lender, such Lender elects to determine the applicable rate ceiling under such
Chapter by the weekly ceiling from time to time in effect. Chapter 346 of the
Texas Finance Code does not apply to the Borrower’s obligations hereunder.

 

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Section 12.13 Exculpation Provisions. EACH OF THE PARTIES HERETO SPECIFICALLY
AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS AGREEMENT
AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS
AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL
COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS
ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT
IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF
THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH
LIABILITY. EACH PARTY HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE
VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE
OF SUCH PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”

Section 12.14 [Reserved].

Section 12.15 No Third Party Beneficiaries. This Agreement, the other Loan
Documents, and the agreement of the Lenders to make Loans and each Issuing Bank
to issue, amend, renew or extend Letters of Credit hereunder are solely for the
benefit of the Borrower, and no other Person (including, without limitation, any
Subsidiary of the Borrower, any obligor, contractor, subcontractor, supplier or
materialman) shall have any rights, claims, remedies or privileges hereunder or
under any other Loan Document against the DIP Agent, any Issuing Bank or any
Lender for any reason whatsoever. There are no third party beneficiaries.

Section 12.16 USA Patriot Act Notice. The DIP Agent and each Lender hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “USA
Patriot Act”), it is required to obtain, verify and record information that
identifies the Borrower and its Subsidiaries, which information includes the
name and address of the Borrower and its Subsidiaries and other information that
will allow the DIP Agent and such Lender to identify the Borrower and its
Subsidiaries in accordance with the USA Patriot Act.

Section 12.17 [Reserved].

Section 12.18 Non-Recourse to the General Partner. This Agreement and the other
Loan Documents do not and will not in any way constitute a direct or indirect
guaranty by the General Partner of the obligations of the Borrower or any
Subsidiary hereunder or thereunder. If any provision of this Agreement or any
other Loan Document is held by any authority to constitute a direct or indirect
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Subsidiary, such provision shall be deemed ineffective to the extent such
provision constitutes a direct or indirect guaranty by the General Partner of
the obligations of the Borrower or any Subsidiary. Neither this Agreement nor
any Loan Document is intended to create any liability of the General Partner for
the performance of any obligation of the Borrower or any Subsidiary thereunder
or hereunder. NEITHER THE DIP AGENT NOR ANY LENDER SHALL HAVE ANY RECOURSE
AGAINST THE GENERAL PARTNER (INCLUDING ANY RECOURSE FOR ANY DEFICIENCY REMAINING
UNDER THIS AGREEMENT OR ANY LOAN DOCUMENT AFTER THE DISPOSITION OF COLLATERAL
PLEDGED BY THE BORROWER OR ANY SUBSIDIARY AND THE DISPOSITION OF THE GP
COLLATERAL PLEDGED BY THE GENERAL PARTNER); PROVIDED, THAT, NOTWITHSTANDING THE
FOREGOING TO THE CONTRARY, IN NO EVENT SHALL THIS SECTION 12.18 RELIEVE THE
GENERAL PARTNER FROM ANY LIABILITY IT MAY HAVE AS A RESULT OF ITS FRAUD, WILLFUL
MISCONDUCT OR GROSS NEGLIGENCE, OR THAT OF ANY OF ITS OFFICERS, IN CONNECTION
WITH THE EXECUTION, DELIVERY OR PERFORMANCE OF ANY LOAN DOCUMENTS OR ANY
CERTIFICATES OR DOCUMENTS DELIVERED IN CONNECTION THEREWITH BY THE GENERAL
PARTNER ON BEHALF OF THE BORROWER IN ITS CAPACITY AS THE BORROWER’S GENERAL
PARTNER.

Section 12.19 No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), the Borrower acknowledges and agrees, and acknowledges its
Subsidiaries’ understanding, that: (a) (i) no fiduciary, advisory or agency
relationship between the Borrower and its Subsidiaries and the DIP Agent or any
Lender is intended to be or has been created in respect of the transactions
contemplated hereby or by the other Loan Documents, irrespective of whether the
DIP Agent or any Lender has advised or is advising the Borrower or any
Subsidiary on other matters; (ii) the arranging and other services regarding
this Agreement provided by the DIP Agent and the Lenders are arm’s-length
commercial transactions between the Borrower and its Subsidiaries, on the one
hand, and the DIP Agent and the Lenders, on the other hand; (iii) the Borrower
has consulted its own legal, accounting, regulatory and tax advisors to the
extent that it has deemed appropriate; and (iv) the Borrower is capable of
evaluating, and understands and accepts, the terms, risks and conditions of the
transactions contemplated hereby and by the other Loan Documents; and (b) (i)
the DIP Agent and the Lenders each is and has been acting solely as a principal
and, except as expressly agreed in writing by the relevant parties, has not
been, is not, and will not be acting as an advisor, agent or fiduciary for the
Borrower or any of its Subsidiaries, or any other Person; (ii) neither the DIP
Agent or the Lenders has any obligation to the Borrower or any of its
Subsidiaries with respect to the transactions contemplated hereby except those
obligations expressly set forth herein and in the other Loan Documents; and
(iii) the DIP Agent and the Lenders and their respective Affiliates may be
engaged, for their own accounts or the accounts of customers, in a broad range
of transactions that involve interests that differ from those of the Borrower
and its Subsidiaries, and neither the DIP Agent nor any of the Lenders has any
obligation to disclose any of such interests to the Borrower or its
Subsidiaries. To the fullest extent permitted by Law, the Borrower hereby waives
and releases any claims that it may have against the DIP Agent and the Lenders
and their respective Affiliates with respect to any breach or alleged breach of
agency or fiduciary duty in connection with any aspect of any transaction
contemplated hereby.

 

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Section 12.20 [Reserved].

Section 12.21 Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any EEA Financial
Institution arising under any Loan Document, to the extent such liability is
unsecured, may be subject to the write-down and conversion powers of an EEA
Resolution Authority and agrees and consents to, and acknowledges and agrees to
be bound by:

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

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

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

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

(iii) the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

[SIGNATURES BEGIN NEXT PAGE]

 

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The parties hereto have caused this Agreement to be duly executed as of the day
and year first above written.

 

BORROWER:     SOUTHCROSS ENERGY PARTNERS, L.P.     By:   Southcross Energy
Partners GP, LLC, its general partner         By:   /s/ Michael B. Howe        
Name:  Michael B. Howe         Title:    Senior Vice President and CFO

 

[Signature Page]

SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

--------------------------------------------------------------------------------

Each of the undersigned (i) consents and agrees to this Agreement, and
(ii) agrees that the Loan Documents to which it is a party (including, without
limitation, the Debtor-in-Possession Guaranty and Collateral Agreement dated as
of April 3, 2019, as applicable) shall remain in full force and effect and shall
continue to be the legal, valid and binding obligation of the undersigned,
enforceable against it in accordance with its terms.

 

CONSENTED, ACKNOWLEDGED AND AGREED TO BY:

SOUTHCROSS ENERGY OPERATING, LLC

SOUTHCROSS ENERGY LP LLC

SOUTHCROSS ENERGY GP LLC

SOUTHCROSS DELTA PIPELINE LLC

SOUTHCROSS PROCESSING LLC

SOUTHCROSS ALABAMA PIPELINE LLC

SOUTHCROSS NUECES PIPELINES LLC

SOUTHCROSS ENERGY FINANCE CORP.

FL RICH GAS SERVICES GP, LLC

T2 EF COGENERATION HOLDINGS, LLC

T2 EF COGENERATION LLC

By:   /s/ Michael B. Howe   Name:  Michael B. Howe   Title:    Senior Vice
President and CFO

 

[Signature Page]

SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

--------------------------------------------------------------------------------

SOUTHCROSS CCNG GATHERING LTD.

SOUTHCROSS CCNG TRANSMISSION LTD.

SOUTHCROSS GULF COAST TRANSMISSION LTD.

SOUTHCROSS MISSISSIPPI PIPELINE, L.P.

SOUTHCROSS MISSISSIPPI GATHERING, L.P.

SOUTHCROSS ALABAMA GATHERING SYSTEM, L.P.

SOUTHCROSS MIDSTREAM SERVICES, L.P.

SOUTHCROSS MARKETING COMPANY LTD.

SOUTHCROSS NGL PIPELINE LTD.

SOUTHCROSS GATHERING LTD.

SOUTHCROSS MISSISSIPPI INDUSTRIAL GAS SALES, L.P.

By:  

Southcross Energy GP LLC,

as general partner

By:   /s/ Michael B. Howe   Name:  Michael B. Howe   Title:    Senior Vice
President and CFO

 

FL RICH GAS SERVICES, LP By:  

FL Rich Gas Services GP, LLC,

its general partner

By:   /s/ Michael B. Howe   Name:  Michael B. Howe   Title:    Senior Vice
President and CFO

 

[Signature Page]

SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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FL RICH GAS UTILITY GP, LLC By:   /s/ Michael B. Howe   Name:  Michael B. Howe  
Title:    Senior Vice President and CFO

 

FL RICH GAS UTILITY, LP

SOUTHCROSS TRANSMISSION, LP

By:   FL Rich Gas Utility GP, LLC, its general partner By:   /s/ Michael B. Howe
  Name:  Michael B. Howe   Title:    Senior Vice President and CFO

 

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DIP AGENT:

 

WILMINGTON TRUST, NATIONAL ASSOCIATION, as the DIP Agent By:   /s/ Nicole Kroll

Name:   Nicole Kroll

Title:   Assistant Vice President

 

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ISSUING BANK:     UBS AG, STAMFORD BRANCH, as an Issuing Bank     By:   /s/
Kenneth Chin     Name:   Kenneth Chin     Title:   Director           By:   /s/
Houssem Daly     Name:   Houssem Daly     Title:   Associate Director

 

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ISSUING BANK:     ROYAL BANK OF CANADA – NEW YORK BRANCH, as an Issuing Bank    
By:   /s/ Leslie P. Vowell     Name:   Leslie P. Vowell     Title:  
Attorney-in-Fact

 

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ISSUING BANK:     WELLS FARGO BANK, N.A., as an Issuing Bank     By:   /s/
Michael Thomas     Name:   Michael Thomas     Title:   Senior Vice President

 

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LENDER:     AVENUE ENERGY OPPORTUNITIES FUND II, L.P., as a Lender     By:   /s/
Sonia Gardner     Name:   Sonia Gardner     Title:   President

 

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LENDER:     BANK OF AMERICA, N.A., as a Lender     By:   /s/ Margaret Sang    
Name:   Margaret Sang     Title:   Vice President

 

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LENDER:     Columbia Strategic Income Fund, a series of Columbia Funds Series
Trust I., as a Lender     By:   /s/ Jerry R. Howard     Name:   Jerry R. Howard
    Title:   Assistant Vice President

 

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SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     COVE KEY MASTER FUND LP, as a Lender     By:  Cove Key Fund GP LP,
its general partner     By:  Cove Key GP LLC, its general partners     By:   /s/
Jeff Coviello     Name:   Jeff Coviello     Title:   Manager

 

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LENDER:     Columbia Floating Rate, a series of Columbia Funds Series Trust II.,
as a Lender     By:   /s/ Jerry R. Howard     Name:   Jerry R. Howard     Title:
  Assistant Vice President

 

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SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     COVE KEY BLUESCAPE HOLDINGS LP, as a Lender     By:  Cove Key Fund
GP LP, its general partner     By:  Cove Key GP LLC, its general partners    
By:   /s/ Jeff Coviello     Name:   Jeff Coviello     Title:   Manager

 

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LENDER:     HSBC Bank plc, as a Lender     By:   /s/ Shumin Papaioannou    
Name:   Shumin Papaioannou     Title:   Authorised Signatory

 

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SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     ICM Global Floating Rate Income Limited – US, as a Lender     By:  
/s/ David Endler     Name:   David Endler     Title:   Portfolio Manager

 

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SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     ICM Senior Loan Fund, L.P.,, as a Lender     By:   /s/ David Endler
    Name:   David Endler     Title:   Portfolio Manager

 

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SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Jamestown CLO II Ltd., as a Lender     By:   /s/ David Endler    
Name:   David Endler     Title:   Portfolio Manager

 

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SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Jamestown CLO VII Ltd., as a Lender     By:   /s/ David Endler    
Name:   David Endler     Title:   Portfolio Manager

 

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SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Jamestown CLO VIII Ltd., as a Lender     By:   /s/ David Endler    
Name:   David Endler     Title:   Portfolio Manager

 

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SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Jamestown CLO IX Ltd., as a Lender     By:   /s/ David Endler    
Name:   David Endler     Title:   Portfolio Manager

 

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LENDER:     Jamestown CLO X Ltd., as a Lender     By:   /s/ David Endler    
Name:   David Endler     Title:   Portfolio Manager

 

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SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Jamestown CLO VI-R Ltd., as a Lender     By:   /s/ David Endler    
Name:   David Endler     Title:   Portfolio Manager

 

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SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     J.H. LANE PARTNERS MASTER FUND, LP, as a Lender     By:   /s/ Haskel
Ginsberg     Name:   Haskel Ginsberg     Title:   CFO

 

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SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Logan Circle Partners, L.P. as investment adviser on behalf of:    
Stichting Bedrijfstakpensionfonds Voor Het Beroepsvervoer Over De Weg     By:  
/s/ Dan Ross     Name:   Dan Ross     Title:   VP

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     METROPOLITAN LIFE INSURANCE COMPANY, as a Lender     By: MetLife
Investment Advisors, LLC, its Investment Manager     By:   /s/ Matthew McInerny
    Name:   Matthew McInerny     Title:   Managing Director

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     METROPOLITAN PROPERTY AND CASUALTY INSURANCE COMPANY, as a Lender  
  By: MetLife Investment Advisors, LLC, its Investment Manager     By:   /s/
Matthew McInerny     Name:   Matthew McInerny     Title:   Managing Director

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Octagon Senior Secured Credit Master Fund Ltd.     By:   Octagon
Credit Investors, LLC, as Investment Manager, as a Lender     By:   /s/ Michael
B. Nechamkin     Name:   Michael B. Nechamkin     Title:   Senior Portfolio
Manager

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Octagon Investment Partners XIV, Ltd.     By:   Octagon Credit
Investors, LLC, as Collateral Manager, as a Lender     By:   /s/ Michael B.
Nechamkin     Name:   Michael B. Nechamkin     Title:   Senior Portfolio Manager

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Octagon Investment Partners XV, Ltd.     By:   Octagon Credit
Investors, LLC, as Collateral Manager, as a Lender     By:   /s/ Michael B.
Nechamkin     Name:   Michael B. Nechamkin     Title:   Senior Portfolio Manager

 

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SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Octagon Investment Partners XVI, Ltd.     By:   Octagon Credit
Investors, LLC, as Collateral Manager, as a Lender     By:   /s/ Michael B.
Nechamkin     Name:   Michael B. Nechamkin     Title:   Senior Portfolio Manager

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Octagon Investment Partners XVII, Ltd.     By:   Octagon Credit
Investors, LLC, as Collateral Manager, as a Lender     By:   /s/ Michael B.
Nechamkin     Name:   Michael B. Nechamkin     Title:   Senior Portfolio Manager

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Octagon Investment Partners 18-R, Ltd.     By:   Octagon Credit
Investors, LLC, as Collateral Manager, as a Lender     By:   /s/ Michael B.
Nechamkin     Name:   Michael B. Nechamkin     Title:   Senior Portfolio Manager

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Octagon Loan Funding Ltd.     By:   Octagon Credit Investors, LLC,
as Collateral Manager, as a Lender     By:   /s/ Michael B. Nechamkin     Name:
  Michael B. Nechamkin     Title:   Senior Portfolio Manager

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Octagon Investment Partners XXI, Ltd.     By:   Octagon Credit
Investors, LLC, as Collateral Manager, as a Lender     By:   /s/ Michael B.
Nechamkin     Name:   Michael B. Nechamkin     Title:   Senior Portfolio Manager

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Octagon Investment Partners XXII, Ltd.     By:   Octagon Credit
Investors, LLC, as Collateral Manager, as a Lender     By:   /s/ Michael B.
Nechamkin     Name:   Michael B. Nechamkin     Title:   Senior Portfolio Manager

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Octagon Investment Partners 24, Ltd.     By:   Octagon Credit
Investors, LLC, as Collateral Manager, as a Lender     By:   /s/ Michael B.
Nechamkin     Name:   Michael B. Nechamkin     Title:   Senior Portfolio Manager

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Octagon Investment Partners XXIII, Ltd.     By:   Octagon Credit
Investors, LLC, as Collateral Manager, as a Lender     By:   /s/ Michael B.
Nechamkin     Name:   Michael B. Nechamkin     Title:   Senior Portfolio Manager

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Octagon Investment Partners 25, Ltd.     By:   Octagon Credit
Investors, LLC, as Collateral Manager, as a Lender     By:   /s/ Michael B.
Nechamkin     Name:   Michael B. Nechamkin     Title:   Senior Portfolio Manager

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Baloise Senior Secured Loan Fund III     By: Octagon Credit
Investors, LLC, as Sub Investment Manager, as a Lender     By:   /s/ Michael B.
Nechamkin     Name:   Michael B. Nechamkin     Title:   Senior Portfolio Manager

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Octagon Investment Partners 33, Ltd.     By:   Octagon Credit
Investors, LLC, as Collateral Manager, as a Lender     By:   /s/ Michael B.
Nechamkin     Name:   Michael B. Nechamkin     Title:   Senior Portfolio Manager

 

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SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     Deutsche Bank (Cayman) Limited, as a Lender (solely in its capacity
as trustee of The Canary Star Trust and its Sub-Trusts), as Trustee     By: DB
USA Core Corporation     By:   /s/ Howard Lee     Name:   Howard Lee     Title:
  Assistant Vice President     By:   /s/ Andrew MacDonald     Name:   Andrew
MacDonald     Title:   Assistant Vice President

 

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SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     SOLUS OPPORTUNITIES IDF SERIES INTEREST OF THE SALI MULTI-SERIES
FUND, L.P., as a Lender     By: Solus Alternative Asset Management LP, Its
Investment Subadvisor     By:   /s/ Gordon J. Yeager     Name:   Gordon J.
Yeager     Title:   Executive Vice President

 

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SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     SOLUS LONG-TERM OPPORTUNITIES FUND MASTER, LP, as a Lender     By:
Solus Alternative Asset Management LP, Its Investment Subadvisor     By:   /s/
Gordon J. Yeager     Name:   Gordon J. Yeager     Title:   Executive Vice
President

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     SOLUS LTD, as a Lender     By: Solus Alternative Asset Management
LP, Its Investment Subadvisor     By:   /s/ Gordon J. Yeager     Name:   Gordon
J. Yeager     Title:   Executive Vice President

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     SOLUS OPPORTUNITIES FUND 4 LP, as a Lender     By: Solus Alternative
Asset Management LP, Its Investment Subadvisor     By:   /s/ Gordon J. Yeager  
  Name:   Gordon J. Yeager     Title:   Executive Vice President

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     SOLUS OPPORTUNITIES FUND 5 LP, as a Lender     By: Solus Alternative
Asset Management LP, Its Investment Subadvisor     By:   /s/ Gordon J. Yeager  
  Name:   Gordon J. Yeager     Title:   Executive Vice President

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     SOLUS SENIOR HIGH INCOME FUND LP, as a Lender     By: Solus
Alternative Asset Management LP, Its Investment Subadvisor     By:   /s/ Gordon
J. Yeager     Name:   Gordon J. Yeager     Title:   Executive Vice President

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     SOUND POINT CAPITAL MANAGEMENT, LP, as Investment Manager for and on
behalf of the below listed entities     By:   /s/ Kevin Gerlitz     Name:  
Kevin Gerlitz     Title:   Authorized Signatory

 

Legal Entity

Sound Point CLO VI-R, Ltd. Sound Point Credit Opportunities Master Fund, L.P.
Sound Point Senior Floating Rate Master Fund, L.P. American Beacon Sound Point
Floating Rate Income Fund, a series of American Beacon Funds Kaiser Foundation
Hospitals Kaiser Permanente Group Trust Sound Point Montauk Fund, L.P. Neuberger
Berman Alternative Funds – Neuberger Berman Absolute Return Multi-Manager Fund
PURE Insurance Company Principal Funds, Inc. – Global Multi-Strategy Fund
Teamsters Pension Trust Fund of Philadelphia & Vicinity

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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LENDER:     SOUND POINT CAPITAL MANAGEMENT, LP, as Investment Manager for and on
behalf of the below listed entities     By:   /s/ Kevin Gerlitz     Name:  
Kevin Gerlitz     Title:   Authorized Signatory

 

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SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.

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ANNEX IV

INITIAL APPROVED BUDGET

[SEE ATTACHED]

 

SENIOR SECURED SUPERPRIORITY PRIMING DEBTOR-IN-POSSESSION CREDIT AGREEMENT

SOUTHCROSS ENERGY PARTNERS, L.P.