Exhibit 10.1

 

Execution Version

 

 

 

$35,000,000

 

SENIOR SECURED PRIMING AND SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT
AND SECURITY AGREEMENT

 

EMERGE ENERGY SERVICES LP,
as Parent Guarantor,

 

EMERGE ENERGY SERVICES OPERATING LLC,
SUPERIOR SILICA SANDS LLC,
as Borrowers,

 

EMERGE ENERGY SERVICES FINANCE CORPORATION,

as a Guarantor

 

HPS INVESTMENT PARTNERS, LLC,
as Agent and Collateral Agent,

 

and

 

THE FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTY HERETO,

as Lenders

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July 19, 2019

 

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

I.

Definitions

1

 

 

 

 

1.1.

Accounting Terms

1

 

1.2.

General Terms

2

 

1.3.

Uniform Commercial Code Terms

32

 

1.4.

Certain Matters of Construction

32

 

1.5.

Accounting for Derivatives

33

 

 

 

II.

Advances; Payments

34

 

 

 

 

2.1.

Advances

34

 

2.2.

Procedures for Requesting Advances; Procedures for Selection of Applicable
Interest Rates for All Advances

34

 

2.3.

Disbursement of Advance Proceeds

36

 

2.4.

[Reserved]

37

 

2.5.

Repayment of Advances

37

 

2.6.

Repayment of Excess Revolving Facility Usage

37

 

2.7.

Statement of Account

37

 

2.8.

[Reserved]

37

 

2.9.

Additional Payments

37

 

2.10.

Making and Settlement of Advances

37

 

2.11.

[Reserved]

38

 

2.12.

Use of Proceeds

39

 

2.13.

Defaulting Lender

39

 

2.14.

[Reserved]

40

 

2.15.

[Reserved]

40

 

2.16.

[Reserved]

40

 

2.17.

Mandatory Prepayments

40

 

2.18.

Superpriority Nature of Obligations and Agent’s Liens

41

 

2.19.

Payment of Obligations

41

 

2.20.

No Discharge; Survival of Claims

41

 

2.21.

Release

42

 

2.22.

Waiver of any Priming Rights

42

 

 

 

III.

Interest and Fees

42

 

 

 

 

3.1.

Interest

42

 

3.2.

[Reserved]

43

 

3.3.

Commitment Fee

43

 

3.4.

Collateral Monitoring Fee, Collateral Evaluation Fee and Fee Letter

43

 

3.5.

Computation of Interest and Fees

43

 

3.6.

Maximum Charges

43

 

3.7.

Increased Costs

44

 

3.8.

Effect of Benchmark Transition Event

44

 

3.9.

Capital Adequacy

47

 

3.10.

Taxes

47

 

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3.11.

Replacement of Lenders

50

 

 

 

IV.

Collateral: General Terms

50

 

 

 

 

4.1.

Security Interest in the Collateral

50

 

4.2.

Perfection of Security Interest

51

 

4.3.

Protection of Collateral

51

 

4.4.

Preservation of Collateral

51

 

4.5.

Ownership of Collateral

51

 

4.6.

Defense of Agent’s and Lenders’ Interests

51

 

4.7.

Books and Records

52

 

4.8.

Compliance with Laws

52

 

4.9.

Access to Premises

52

 

4.10.

Insurance

52

 

4.11.

Failure to Pay Insurance

53

 

4.12.

Payment of Taxes

53

 

4.13.

Payment of Leasehold Obligations

53

 

4.14.

Receivables

54

 

4.15.

Inventory

55

 

4.16.

Maintenance of Equipment

56

 

4.17.

Exculpation of Liability

56

 

4.18.

Environmental Matters

56

 

4.19.

[Reserved]

57

 

4.20.

Voting Rights in Respect of Subsidiary Stock

57

 

4.21.

Dividend and Distribution Rights in Respect of Subsidiary Shares

57

 

 

 

V.

Representations and Warranties

58

 

 

 

 

5.1.

Authority

58

 

5.2.

Formation and Qualification

58

 

5.3.

Survival of Representations and Warranties

59

 

5.4.

Tax Returns

59

 

5.5.

Financial Statements

59

 

5.6.

Use of Proceeds

59

 

5.7.

O.S.H.A.; Environmental Compliance; Flood Laws

59

 

5.8.

[Reserved]

60

 

5.9.

Litigation

60

 

5.10.

Compliance with Laws; ERISA

60

 

5.11.

Patents, Trademarks, Copyrights and Licenses

61

 

5.12.

Licenses and Permits

61

 

5.13.

No Burdensome Restrictions

62

 

5.14.

No Labor Disputes

62

 

5.15.

Margin Regulations

62

 

5.16.

Investment Company Act

62

 

5.17.

Disclosure

62

 

5.18.

DIP Credit Financing

62

 

5.19.

Swaps

62

 

5.20.

Application of Certain Laws and Regulations

62

 

5.21.

No Brokers or Agents

63

 

5.22.

Commercial Tort Claims

63

 

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5.23.

Letter of Credit Rights

63

 

5.24.

Deposit Accounts

63

 

5.25.

[Reserved]

63

 

5.26.

Second Lien Documents

63

 

5.27.

Personal Properties

63

 

5.28.

No Default

63

 

5.29.

Real Property

63

 

5.30.

The Cases

64

 

 

 

VI.

Affirmative Covenants

64

 

 

 

 

6.1.

Payment of Fees

64

 

6.2.

Conduct of Business and Maintenance of Existence and Assets

64

 

6.3.

Violations

65

 

6.4.

Government Receivables

65

 

6.5.

Financial Covenants

65

 

6.6.

Perfection: Further Assurances

65

 

6.7.

Payment of Obligations

66

 

6.8.

Standards of Financial Statements

66

 

6.9.

Credit Parties’ Advisors

66

 

6.10.

Keepwell

66

 

6.11.

Approved Budget

67

 

6.12.

Compliance with Laws; Anti-Terrorism Law; International Trade Law Compliance

68

 

6.13.

Information Regarding Collateral

68

 

6.14.

Flood Insurance

68

 

6.15.

Restructuring Agreement

68

 

6.16.

Milestones

68

 

6.17.

San Antonio Notice

70

 

 

 

VII.

Negative Covenants

70

 

 

 

 

7.1.

Merger, Consolidation, Acquisition and Sale of Assets

70

 

7.2.

Creation of Liens

70

 

7.3.

Guarantees

70

 

7.4.

Investments

70

 

7.5.

Dividends and Distributions

71

 

7.6.

Indebtedness

71

 

7.7.

Nature of Business

72

 

7.8.

Transactions with Affiliates

72

 

7.9.

Subsidiaries

72

 

7.10.

Fiscal Year and Accounting Changes

73

 

7.11.

Pledge of Credit

73

 

7.12.

Amendment of Certain Documents

73

 

7.13.

Compliance with ERISA

73

 

7.14.

Prepayment of Indebtedness and Certain Other Obligations

73

 

7.15.

Management Fees

74

 

7.16.

Bank Accounts

74

 

7.17.

Passive Holding Company

74

 

7.18.

Capital Expenditures

74

 

7.19.

Bankruptcy Matters

74

 

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7.20.

NYSE Listing

75

 

 

 

VIII.

Conditions Precedent

75

 

 

 

 

 

8.1.

Conditions to Initial Advances

75

 

8.2.

Conditions to Each Advance

78

 

 

 

 

IX.

Information as to Credit Parties

78

 

 

 

 

 

9.1.

Disclosure of Material Matters

78

 

9.2.

Schedules

78

 

9.3.

Compliance Certificate

79

 

9.4.

Litigation

79

 

9.5.

Material Occurrences

79

 

9.6.

[Reserved]

79

 

9.7.

Annual Financial Statements

79

 

9.8.

Quarterly and Monthly Reporting

80

 

9.9.

Additional Information

80

 

9.10.

[Reserved]

80

 

9.11.

MD&A

80

 

9.12.

Notice of Suits, Adverse Events

80

 

9.13.

ERISA Notices and Requests

80

 

9.14.

[Reserved]

81

 

9.15.

Second Lien Notice

81

 

9.16.

[Reserved]

81

 

9.17.

SEC Filings

81

 

9.18.

Additional Documents

81

 

 

 

 

X.

Events of Default

82

 

 

 

 

 

10.1.

Nonpayment

82

 

10.2.

Breach of Representation

82

 

10.3.

Financial Information

82

 

10.4.

Judicial Actions

82

 

10.5.

Noncompliance

82

 

10.6.

Judgments

82

 

10.7.

Cases

83

 

10.8.

Collateral; Invalidity of Pre-Petition Loan Documents

84

 

10.9.

Cash Management Liabilities and Hedge Liabilities

85

 

10.10.

Lien Priority

85

 

10.11.

Cross Default

85

 

10.12.

Breach of Security Agreement

85

 

10.13.

Change of Control

85

 

10.14.

Invalidity

85

 

10.15.

Licenses

85

 

10.16.

Pension Plans

85

 

10.17.

Reportable Compliance Event

86

 

10.18.

SEC

86

 

10.19.

Corporate Governance

86

 

iv

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XI.

Lenders’ Rights and Remedies after Default

86

 

 

 

 

 

11.1.

Rights and Remedies

86

 

11.2.

Agent’s Discretion

87

 

11.3.

Setoff

87

 

11.4.

Rights and Remedies not Exclusive

87

 

11.5.

Allocation of Payments After Event of Default

88

 

 

 

 

XII.

Waivers and Judicial Proceedings

88

 

 

 

 

 

12.1.

Waiver of Notice

88

 

12.2.

Delay

88

 

12.3.

Jury Waiver

88

 

 

 

 

XIII.

Effective Date and Termination

89

 

 

 

 

 

13.1.

Term

89

 

13.2.

Termination

89

 

 

 

 

XIV.

Regarding Agent

89

 

 

 

 

 

14.1.

Appointment

89

 

14.2.

Nature of Duties

90

 

14.3.

Lack of Reliance on Agent and Resignation

91

 

14.4.

Certain Rights of Agent

91

 

14.5.

Reliance

91

 

14.6.

Notice of Default

92

 

14.7.

Indemnification

92

 

14.8.

Agent in its Individual Capacity

92

 

14.9.

Delivery of Documents

92

 

14.10.

Borrowers’ Undertaking to Agent

92

 

14.11.

No Reliance on Agent’s Customer Identification Program

93

 

14.12.

Other Documents

93

 

14.13.

Withholding Tax

93

 

14.14.

Collateral and Guaranty Matters

93

 

 

 

 

XV.

Borrowing Agency

93

 

 

 

 

 

15.1.

Borrowing Agency Provisions

93

 

15.2.

Waiver of Subrogation

95

 

 

 

 

XVI.

Miscellaneous

95

 

 

 

 

 

16.1.

Governing Law

95

 

16.2.

Entire Understanding; Amendments; No Waiver by Course of Conduct

96

 

16.3.

Successors and Assigns; Participations

97

 

16.4.

[Reserved]

99

 

16.5.

Indemnity

99

 

16.6.

Notice

100

 

16.7.

Survival

102

 

16.8.

Severability

102

 

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16.9.

Expenses

102

 

16.10.

Injunctive Relief

104

 

16.11.

Consequential Damages

104

 

16.12.

Captions

104

 

16.13.

Counterparts; Facsimile Signatures

104

 

16.14.

Construction

104

 

16.15.

Confidentiality; Sharing Information

104

 

16.16.

Publicity

105

 

16.17.

Certifications From Banks and Participants; USA PATRIOT Act

105

 

16.18.

Anti-Terrorism Laws

105

 

16.19.

Concerning Joint and Several Liability of Borrowers

106

 

16.20.

Non-Applicability of Chapter 346

107

 

16.21.

BORROWERS’ WAIVER OF RIGHTS UNDER TEXAS DECEPTIVE TRADE PRACTICES ACT

107

 

16.22.

Parties Including Trustees; Bankruptcy Court Proceedings

108

 

16.23.

Acknowledgment and Consent to Bail-In of EEA Financial Institutions

108

 

 

 

 

XVII.

Loan Guaranty

108

 

 

 

 

 

17.1.

Guaranty

108

 

17.2.

Guaranty of Payment

109

 

17.3.

No Discharge or Diminishment of Loan Guaranty

109

 

17.4.

Defenses Waived

109

 

17.5.

Rights of Subrogation

110

 

17.6.

Reinstatement; Stay of Acceleration

110

 

17.7.

Information

110

 

17.8.

Termination

110

 

17.9.

Taxes

110

 

17.10.

Maximum Liability

110

 

17.11.

Contribution

111

 

17.12.

Liability Cumulative

111

 

vi

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LIST OF EXHIBITS AND SCHEDULES

 

Exhibits

 

 

 

Exhibit 1.2(a)

Compliance Certificate

Exhibit 1.2(b)

Borrowing Notice

Exhibit 1.2(c)

Interim Order

Exhibit 2.1(a)

Revolving Credit Note

Exhibits 3.10-1-4

Non-Bank Tax Certificates

Exhibit 6.11

Budget Certificate

Exhibit 16.3

Commitment Transfer Supplement

 

 

Schedules

 

 

 

Schedule 1.2(a)

Commitment Amount

Schedule 1.2(b)

Collection Accounts

Schedule 1.2(c)

Permitted Encumbrances

Schedule 1.2(d)

Specified Documents

Schedule 4.14(b)

Chief Executive Offices and Jurisdictions

Schedule 5.2(a)

Formation and Qualification

Schedule 5.2(b)

Subsidiaries

Schedule 5.9(ii)(z)

Litigation

Schedule 5.10(b)

Plans

Schedule 5.12

Licenses and Permits

Schedule 5.13

No Burdensome Restrictions

Schedule 5.14

Labor Disputes

Schedule 7.4

Existing Investments

Schedule 7.6

Existing Indebtedness

 

vii

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SENIOR SECURED PRIMING AND SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AND
SECURITY AGREEMENT

 

This Senior Secured Priming and Superpriority Debtor-In-Possession Credit and
Security Agreement, dated as of July 19, 2019, among EMERGE ENERGY SERVICES LP,
a Delaware limited partnership (“Parent Guarantor”), EMERGE ENERGY SERVICES
OPERATING LLC, a Delaware limited liability company (“Emerge”), SUPERIOR SILICA
SANDS LLC, a Texas limited liability company (“SSS” and together with Emerge and
each Person joined hereto as a borrower from time to time, collectively, the
“Borrowers,” and each individually a “Borrower”), the financial institutions
which are now or which hereafter become a party hereto (collectively, the
“Lenders” and each individually a “Lender”), and HPS INVESTMENT PARTNERS, LLC
(“HPS”), as administrative agent for the Lenders and collateral agent for the
Secured Parties (in such capacities, the “Agent”).

 

WHEREAS, on July 15, 2019 (the “Petition Date”), (i) the Parent Guarantor,
(ii) the Borrowers, (iii) Emerge Energy Services Finance Corporation, a Delaware
corporation and (iv) Emerge Energy Services GP, LLC, a Delaware limited
liability company ((i) though (iv) collectively, the “Debtors” and each
individually, a “Debtor”), commenced Chapter 11 Case Nos 19-11563 (KBO) through
19-11567 (KBO), as administratively consolidated as Chapter 11 Case No 19-11563
(KBO) (collectively, the “Cases” and each individually, a “Case”) with the
United States Bankruptcy Court for the District of Delaware (the “Bankruptcy
Court”).  The Debtors continue to operate their businesses and manage their
properties as debtors and debtors-in-possession pursuant to Sections 1107 and
1108 of the Bankruptcy Code.

 

WHEREAS, the Parent Guarantor, the Borrowers, the Agent and the Lenders have
agreed to enter into this Agreement, pursuant to which the Lenders will provide
(i) new-money loans in an aggregate principal amount of up to $35,000,000 and
(ii) roll-up loans in an aggregate principal amount equal to the proceeds of
Collateral received on and from the Closing Date pursuant to the terms and
conditions of this Agreement (collectively, the “DIP Facility”), with all of the
Borrowers’ obligations under the DIP Facility to be guaranteed by each
Guarantor;

 

WHEREAS, the DIP Facility constitutes a DIP Financing under and as defined in
the First Lien/Second Lien Intercreditor Agreement; and

 

NOW, THEREFORE, the parties hereto, in consideration of their mutual covenants
and agreements hereinafter set forth and intending to be legally bound hereby,
covenant and agree as follows:

 

I.             DEFINITIONS.

 

1.1.         Accounting Terms.  As used in this Agreement, the Other Documents
or any certificate, report or other document made or delivered pursuant to this
Agreement, all accounting terms not specifically or completely defined herein
shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, except as otherwise
specifically prescribed herein.  If at any time (i) any change in GAAP or
(ii) any change in the application of GAAP concurred by the Credit Parties’
independent public accountants, would affect the requirements or covenants set
forth in this Agreement or any Other Document, including, without limitation,
any change as to whether leases are required to be capitalized for financial
reporting purposes, and either the Borrowing Agent or the Required Lenders shall
so request, Agent, Lenders and the Credit Parties shall negotiate in good faith
to amend such requirement, including, without limitation, the Indebtedness
negative covenant, to preserve the original intent thereof in light of such
change in GAAP (subject to the approval of the Required Lenders); provided that,
until so amended, such requirement shall continue to be computed in accordance
with GAAP prior to such change therein.

 

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1.2.         General Terms.  For purposes of this Agreement the following terms
shall have the following meanings:

 

“Accountants” shall mean an independent certified public accounting firm
selected by Parent Guarantor and reasonably satisfactory to Agent.

 

“Acquisition” shall mean a transaction or series of transactions resulting,
directly or indirectly, in (a) acquisition of a business, division, or
substantially all assets of a Person; (b) record or beneficial ownership of 50%
or more of the Equity Interests of a Person; or (c) merger, consolidation or
combination of a Credit Party or any Subsidiary thereof with another Person that
is not a Credit Party.

 

“Actual Cash Receipts” means the sum of all receipts received by the Credit
Parties during the relevant Period of determination, as determined in a manner
consistent with the Approved Budget.

 

“Actual Disbursement Amount” shall mean the sum of all disbursements, expenses
and payments made by the Credit Parties during the relevant Period of
determination, as determined in a manner consistent with the Approved Budget.

 

“Actual Net Cash Flow” shall mean the sum of (i) Actual Cash Receipts for the
relevant Period of determination, minus (ii) the Actual Disbursement Amount for
the relevant Period of determination.

 

“Adequate Protection Liens” has the meaning assigned to the term “Adequate
Protection Liens” in the Interim Order (or the Final Order, when applicable).

 

“Adequate Protection Superpriority Claims” has the meaning assigned to the term
“Adequate Protection Superpriority Claims” in the Interim Order (or the Final
Order, when applicable).

 

“Advances” shall mean all advances made under this Agreement, including Roll-Up
Loans.

 

“Affected Lender” shall have the meaning set forth in Section 3.11 hereof.

 

“Affiliate” of any Person shall mean (a) any Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with
such Person, or (b) any Person who is a director, managing member, general
partner or officer (i) of such Person, (ii) of any Subsidiary of such Person or
(iii) of any Person described in clause (a) above.  For purposes of this
definition, control of a Person shall mean the power, direct or indirect, (x) to
vote fifteen percent (15%) or more of the Equity Interests having ordinary
voting power for the election of directors of such Person or other Persons
performing similar functions for any such Person, or (y) to direct or cause the
direction of the management and policies of such Person whether by ownership of
Equity Interests, contract or otherwise.

 

“Agent” shall have the meaning set forth in the preamble to this Agreement and
shall include its successors and assigns.

 

“Agreement” shall mean this Senior Secured Priming and Superpriority
Debtor-In-Possession Credit and Security Agreement.

 

“Allocable Amount” shall have the meaning set forth in Section 17.11(b) hereof.

 

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
highest of (i) the Prime Rate in effect on such day, (ii) the Federal Funds
Effective Rate in effect on such day plus one half of one-percent (1/2 of 1%),
and (iii) the sum of the LIBOR Rate with a one (1) month interest period plus
one percent (1.0%), so long as a LIBOR Rate is offered, ascertainable and not
unlawful.

 

2

--------------------------------------------------------------------------------

 

“Anti-Terrorism Laws” shall mean any Laws relating to terrorism, trade sanctions
programs and embargoes, import/export licensing, money laundering, bribery or
corruption, including, without limitation, any sanctions imposed by the U.S.
Government (including, without limitation, the Office of Foreign Assets
Control), the United Nations Security Council, the European Union, and Her
Majesty’s Treasury.

 

“Applicable Law” shall mean all Laws applicable to the Person, conduct,
transaction, covenant, Other Document or contract in question, including as to
any Collateral located in Canada, the PPSA.

 

“Applicable Margin” shall mean an amount equal to (i) 7.00 percentage points for
Advances consisting of Domestic Rate Loans and (ii) 8.00 percentage points for
Advances consisting of LIBOR Rate Loans.

 

“Applicable Percentage” shall mean with respect to any Lender a percentage equal
to a fraction the numerator of which is the aggregate outstanding principal
amount of the Advances and unused Commitments of such Lender and the denominator
of which is the aggregate outstanding principal amount of the Advances and
unused Commitments of all Lenders.

 

“Approved Budget” shall mean the Initial Approved Budget prepared by the
Borrowing Agent and initially furnished to Agent on the Closing Date and which
is approved by, and in form and substance satisfactory to, the Required Lenders
in their sole discretion, as the same may be updated, modified or supplemented
from time to time as provided in Section 6.11, which shall include information
on a line item basis as to (w) Budgeted Cash Receipts, (x) Budgeted Disbursement
Amounts, (y) Budgeted Net Cash Flow, and (z) projected total Liquidity, in each
case for no less than the period beginning on the Closing Date and ending no
earlier than eighteen (18) weeks thereafter.

 

“Approved Budget Variance Report” shall mean a weekly report provided by the
Borrowing Agent to Agent (i) showing by line item Actual Disbursement Amounts,
Actual Cash Receipts and Actual Net Cash Flow for the last day of the Prior Week
and the Cumulative Period, noting therein all variances, on a line-item and
cumulative basis, from the amounts set forth for such Period in the Approved
Budget as in effect for such Prior Week and Cumulative Period, and shall include
explanations for all material variances, and (ii) certified by an Authorized
Officer of the Borrowing Agent.

 

“Approved Chapter 11 Plan” means a plan of reorganization that is acceptable to
the Agent and the Lenders in their sole and absolute discretion.

 

“Approved Plan Effective Date” shall have the meaning set forth in
Section 6.16(j).

 

“Authority” shall have the meaning set forth in Section 4.18(b) hereof.

 

“Authorized Officer” of any Person shall mean the Chairman, Chief Financial
Officer, Chief Executive Officer, Vice President, a chief restructuring officer
acceptable to Agent in its sole discretion (it being understood that the chief
restructuring officer and the restructuring officer of the Restructuring Advisor
are acceptable to the Agent), or other authorized officer of such Person
designated by Borrowing Agent.

 

“Average Life” shall mean, as of the date of determination, with respect to any
Indebtedness, the number of years obtained by dividing (a) the sum of the
products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment by (b) the then outstanding principal
amount of such Indebtedness.

 

“Bail-In Action” shall mean 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.

 

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

 

“Bankruptcy Court” shall have the meaning set forth in the recitals to this
Agreement.

 

“Benefited Lender” shall have the meaning set forth in Section 2.10(e) hereof.

 

“Borrower” or “Borrowers” shall have the meaning set forth in the preamble to
this Agreement and shall extend to all permitted successors and assigns of such
Persons.

 

“Borrowers’ Account” shall have the meaning set forth in Section 2.7 hereof.

 

“Borrowing Agent” shall mean Emerge.

 

“Borrowing Notice” shall mean a notice by the Borrowing Agent in accordance with
the terms of Section 2.2 and substantially in the form of Exhibit 1.2(b) to this
Agreement (or another form reasonably satisfactory to the Agent).

 

“Budget Certificate” shall mean a certificate in the form of Exhibit 6.11, in
form and substance satisfactory to Agent in its sole discretion.

 

“Budgeted Cash Receipts” means the sum of the line items contained in the
Approved Budget under the headings “Cash Collections” during the relevant Period
of determination.

 

“Budgeted Disbursement Amount” shall mean the sum of the line items contained in
the Approved Budget under the heading “Cash Disbursements” during the relevant
Period of determination.

 

“Budgeted Net Cash Flow” means the sum of (i) the Budgeted Cash Receipts for the
relevant Period of determination, minus (ii) the Budgeted Disbursement Amount
for the relevant Period of determination.

 

“Business Day” shall mean any day other than Saturday or Sunday or a legal
holiday on which commercial banks are authorized or required by law to be closed
for business in East Brunswick, New Jersey and, if the applicable Business Day
relates to any LIBOR Rate Loans, such day must also be a day on which dealings
are carried on in the London interbank market.

 

“Capital Expenditures” shall mean, for any period, with respect to any Person,
the aggregate of all expenditures by such Person for the acquisition or leasing
(pursuant to a Capital Lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) which are required to be capitalized under GAAP on a consolidated
balance sheet of such Person, other than expenditures made utilizing the
proceeds of insurance, as permitted under this Agreement, in order to replace
the assets giving rise to such proceeds.

 

“Capital Lease” shall mean a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP but in any case shall
exclude any operating leases that are recharacterized as a Capital Leases in
conformity with GAAP after giving effect to the adoption of ASU No. 2016-02
“Leases (Topic 842)” and ASU No. 2018-11 “Leases (Topic 842)”.

 

“Capital Stock” shall mean (i) in the case of a corporation, capital stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability company,
membership interests and (v) any other equity interest or participation that

 

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confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.

 

“Capitalized Lease Obligation” shall mean any Indebtedness of Parent Guarantor
and its applicable Subsidiaries, on a consolidated basis, represented by
obligations under Capital Leases.

 

“Carve-Out” shall have the meaning assigned to such term in the Interim Order or
Final Order, as applicable.

 

“Case” shall have the meaning set forth in the recitals to this Agreement.

 

“Cash Equivalents” shall have the meaning set forth in Section 7.4 hereof.

 

“Cash Management Liabilities” shall have the meaning provided in the definition
of “Cash Management Products and Services.”

 

“Cash Management Order” shall mean the order of the Bankruptcy Court entered in
the Cases after the “first day” hearings, together with all extensions,
modifications and amendments thereto, in form and substance satisfactory to
Agent which authorizes, among other things, the Debtors’ continued use of their
existing cash management system.

 

“Cash Management Products and Services” shall mean agreements or other
arrangements to provide any of the following products or services to any of any
of the Credit Parties: (a) credit cards; (b) credit card processing services;
(c) debit cards and stored value cards; (d) purchase cards; (e) ACH
transactions; (f) cash management and treasury management services and products,
including controlled disbursement accounts or services, lockboxes, automated
clearinghouse transactions, overdrafts, interstate depository network services;
or (g) foreign currency exchange and foreign currency swaps and hedges.  The
indebtedness, obligations and liabilities of any Credit Party to the provider of
any Cash Management Products and Services that was Agent or a Lender or an
Affiliate of Agent or a Lender at the date of entering into such Cash Management
Products and Services (including all obligations and liabilities owing to such
provider in respect of any returned items deposited with such provider) (the
“Cash Management Liabilities”) shall be “Obligations” hereunder and Obligations
under the Security Agreement, as applicable, and otherwise treated as
Obligations for purposes of each of the Other Documents (other than any
Lender-Provided Hedge).  The Liens securing the Cash Management Products and
Services shall be pari passu (without regard to control of remedies) with the
Liens securing all other Obligations under this Agreement and the Other
Documents, subject to the express provisions of Section 11.5.

 

“CEA” shall mean the Commodity Exchange Act (7 U.S.C.§ 1 et seq.).

 

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. §§ 9601 et seq.

 

“CFTC” shall mean the Commodity Futures Trading Commission.

 

“Change in Law” shall mean the occurrence, after the Closing Date, of any of the
following: (a) the adoption or taking effect of any Applicable Law; (b) any
change in any Applicable Law or in the administration, implementation,
interpretation or application thereof by any Governmental Body; or (c) the
making or issuance of any request, rule, guideline or directive (whether or not
having the force of Law) by any Governmental Body; provided that notwithstanding
anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, regulations, guidelines,
interpretations or directives thereunder or issued in connection therewith
(whether or not having the force of Applicable Law) and (y) all requests, rules,
regulations, guidelines, interpretations 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

 

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regulatory authorities (whether or not having the force of Law), in each case
pursuant to Basel III, shall in each case be deemed to be a Change in Law
regardless of the date enacted, adopted, issued, promulgated or implemented.

 

“Change of Control” shall mean: (a) any Person or “group” (within the meaning of
Rules 13d-3 and 13d-5 under the Exchange Act) (other than any Permitted Holder)
shall have acquired (i) beneficial ownership of 50% or more on a fully diluted
basis of the voting or economic Equity Interests of the General Partner in the
aggregate, or (ii) the power (whether or not exercised) to elect a majority of
the members of the board of directors (or similar governing body) of the General
Partner; (b) the Permitted Holders shall cease to beneficially own and control,
directly, at least 10% of the common units representing limited partnership
interests in the Parent Guarantor; (c) the General Partner shall cease to be the
sole general partner of the Parent Guarantor; (d) (i) the Parent Guarantor shall
cease to beneficially own and control, directly, 100% on a fully diluted basis,
of the economic and voting interest in the Equity Interests of Emerge or
(ii) except as permitted by Section 7.1(a), the Parent Guarantor shall cease to
beneficially own and control, directly or indirectly, 100%, on a fully diluted
basis, of the economic and voting interest in the Equity Interests of each
Borrower (other than Emerge); or (e) a “change of control” (or similarly defined
event) as defined in the documentation governing any other Indebtedness of the
Parent Guarantor or any of its Subsidiaries of more than $500,000 in principal
amount shall occur.

 

“CIP Regulations” shall have the meaning set forth in Section 14.11 hereof.

 

“Closing Date” shall mean July 19, 2019.

 

“Code” shall mean the Internal Revenue Code of 1986.

 

“Collateral” shall mean and include all right, title and interest of each Credit
Party in all of the following property and assets of such Credit Party, in each
case whether now existing or hereafter arising or created and whether now owned
or hereafter acquired and wherever located:

 

(a)           all Receivables;

 

(b)           all Equipment;

 

(c)           all General Intangibles;

 

(d)           all Inventory;

 

(e)           all Investment Property;

 

(f)            all Subsidiary Stock;

 

(g)           all Intellectual Property;

 

(h)           all Real Property that is, or is required to be under the terms of
this Agreement, subject to a Mortgage;

 

(i)            all Leasehold Interests that are, or are required to be under the
terms of this Agreement, subject to a Mortgage;

 

(j)            all Cash and Cash Equivalents;

 

(k)           all of each Credit Party’s right, title and interest in and to,
whether now owned or hereafter acquired and wherever located, (i) its respective
goods and other property including, but not

 

6

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limited to, all merchandise returned or rejected by Customers, relating to or
securing any of the Receivables; (ii) all of each Credit Party’s rights as a
consignor, a consignee, an unpaid vendor, mechanic, artisan, or other lienor,
including stoppage in transit, setoff, detinue, replevin, reclamation and
repurchase; (iii) all additional amounts due to any Credit Party from any
Customer relating to the Receivables; (iv) other property, including warranty
claims, relating to any goods securing the Obligations; (v) all of each Credit
Party’s contract rights, rights of payment which have been earned under a
contract right, instruments (including promissory notes), documents, chattel
paper (including electronic chattel paper), warehouse receipts, deposit
accounts, letters of credit, money, fixtures and as-extracted collateral;
(vi) each commercial tort claim described on Schedule 12 to the Perfection
Certificate (including those described on any updates to such Schedule delivered
with any Compliance Certificate) or in which a security interest is otherwise
hereafter granted to Agent by a Credit Party, whether pursuant to the provision
of Section 4.1 or otherwise; (vii) if and when obtained by any Credit Party, all
real and personal property of third parties in which such Credit Party has been
granted a lien or security interest as security for the payment or enforcement
of Receivables; (viii) all letter of credit rights (whether or not the
respective letter of credit is evidenced by a writing); (ix) all supporting
obligations; and (x) any other goods, personal property or real property now
owned or hereafter acquired in which any Credit Party has expressly granted a
security interest or may in the future grant a security interest to Agent
hereunder, or in any amendment or supplement hereto or thereto, or under any
other agreement between Agent and any Credit Party;

 

(l)            all of each Credit Party’s ledger sheets, ledger cards, files,
correspondence, records, books of account, business papers, computers, computer
software (owned by any Credit Party or in which it has an interest), computer
programs, tapes, disks and documents relating to (a), (b), (c), (d), (e), (f),
(g), (h), (i), (j) or (k) above; and

 

(m)          all proceeds and products of (a), (b), (c), (d), (e), (f), (g),
(h), (i), (j), (k) or (l) above in whatever form, including, but not limited to:
cash, Cash Equivalents, deposit accounts (whether or not comprised solely of
proceeds), certificates of deposit, insurance proceeds (including hazard, flood
and credit insurance), negotiable instruments and other instruments for the
payment of money, chattel paper, security agreements, documents, eminent domain
proceeds, condemnation proceeds and tort claim proceeds;

 

but excluding for all purposes any Excluded Collateral.

 

“Collection Accounts” shall mean the Concentration Account and each of the
deposit accounts listed on Schedule 1.2(b) hereto and each other collection
account established at PNC Bank, National Association, or another bank
reasonably satisfactory to Agent for the deposit of all proceeds of Collateral
of the Credit Parties and any other amounts payable to any Credit Party at any
time.

 

“Commitment” shall mean, as to any Lender, the obligation of such Lender, to
make Advances, in an aggregate principal amount not to exceed the Commitment
Amount of such Lender.

 

“Commitment Amount” shall mean as to any Lender, as of the Closing Date, the
Commitment Amount set forth across such Lender’s name on Schedule 1.2(a) hereto
(or, in the case of any Lender that became party to this Agreement after the
Closing Date pursuant to Section 16.3(c) or (d) hereof, the Commitment Amount of
such Lender as set forth in the applicable Commitment Transfer Supplement), as
the same may be adjusted or any assignment by or to such Lender pursuant to
Section 16.3(c) or (d) hereof.

 

“Commitment Percentage” shall mean, as to any Lender, the Commitment Amount of
such Lender divided by the Maximum Advance Amount, expressed as a percentage to
four (4) decimal places.  The initial Commitment Percentage of each Lender as of
the Closing Date is set forth across such Lender’s name on Schedule
1.2(a) hereto.

 

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“Commitment Transfer Supplement” shall mean a document in the form of
Exhibit 16.3 hereto, properly completed and otherwise in form and substance
satisfactory to Agent by which the Purchasing Lender purchases and assumes a
portion of the obligation of Lenders to make Advances under this Agreement.

 

“Compliance Certificate” shall mean a compliance certificate substantially in
the form attached hereto as Exhibit 1.2(a) to be signed by an Authorized Officer
of Parent Guarantor, which (a) shall state that, based on an examination
sufficient to permit such officer to make an informed statement, no Default or
Event of Default exists, or if such is not the case, shall specify such Default
or Event of Default, its nature, when it occurred, whether it is continuing and
the steps being taken by the applicable Credit Parties with respect to such
default and (b) shall include any updates to Schedule 5.10(b), 5.12 and 5.14
hereto and a supplement to the Perfection Certificate in the form attached as
Annex 6.13(b) to the Compliance Certificate (the “Perfection Certificate
Supplement”).

 

“Concentration Account” means the Collection Account, Account No. 8026285688
held at PNC Bank, National Association, or such other Collection Account that
may be specified by Agent in writing.

 

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

 

“Consents” shall mean all filings and all licenses, permits, consents,
approvals, authorizations, qualifications and orders of Governmental Bodies and
other third parties, domestic or foreign, necessary to carry on any Credit
Party’s business or necessary (including to avoid a conflict or breach under any
agreement, instrument, other document, license, permit or other authorization)
for the execution, delivery or performance of this Agreement and the Other
Documents, including any Consents required under all applicable federal, state
or other Applicable Law.

 

“Consolidated” or “consolidated” with reference to any term defined herein,
shall mean that term as applied to the accounts of Parent Guarantor and all of
its consolidated Subsidiaries or its consolidated Restricted Subsidiaries, as
indicated in such reference, in each case, consolidated in accordance with GAAP.

 

“Consolidated EBITDA” shall mean, for any Test Period, for Parent Guarantor and
its Restricted Subsidiaries on a consolidated basis, the sum of (a) Consolidated
Net Income for such period plus (b) without duplication and to the extent
deducted in determining Consolidated Net Income, the sum of (i) depreciation,
depletion and amortization for such period, (ii) all Consolidated Interest
Expense (net of interest income) for such period, (iii) provision for Taxes
based on income for such period, (iv) non-cash charges (including non-cash
compensation charges resulting from stock, equity option and related grants or
any other long-term incentive arrangement, non-cash impairment charges, non-cash
losses as a result of changes in the fair value of derivatives and non-cash
charges as a result of Equity Investments and any warrants issued in connection
therewith) for such period, (v) any and all expenses associated with remediation
actions taken at the Osburn Facility as a result of the temporary cessation of
mining operations at mines located at the Osburn Facility, to evaluate and
remediate conditions in respect of certain pond berms at said facility,
beginning on or around June 21, 2019, including but not limited to labor
performed by an employee of any Credit Party, contract labor, contract machine
costs, consulting fees, testing, engineering, travel expenses for employees
traveling to San Antonio to assist with remediation planning and implementation,
materials and professional fees, and (vi) professional fees and expenses paid
during such period which were incurred in connection with the Cases, minus
(c) to the extent included in determining Consolidated Net Income for such
period, Tax benefits for such period.

 

“Consolidated Net Income” shall mean for any Test Period, the consolidated net
income (or loss) of Parent Guarantor and its Restricted Subsidiaries, determined
on a consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any such Subsidiary accrued prior to the
date it becomes a Restricted Subsidiary of Parent Guarantor or is merged into or
consolidated with Parent Guarantor or any of its Restricted Subsidiaries except
to the extent included for any calculation of Consolidated EBITDA on a pro forma
basis, (b) the net income (or deficit) of any Person (other than a Restricted
Subsidiary of Parent

 

8

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Guarantor) in which Parent Guarantor or any of its Restricted Subsidiaries has
an ownership interest, except to the extent that any such income is actually
received by Parent Guarantor or such Restricted Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
such Restricted Subsidiary of Parent Guarantor (other than a Credit Party) to
the extent that the declaration or payment of dividends or similar distributions
by such Restricted Subsidiary is at the time prohibited by the terms of any
agreement to which such Person is a party or by which it or any of its property
is bound, any of such Person’s organizational documents or other legal
proceedings binding upon such Person or any of its property or to which such
Person or any of its property is subject.

 

“Controlled Group” shall mean, at any time, each Credit Party and all members of
a controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control and all other entities which, together with
any Credit Party, are treated as a single employer under Section 414(b) or
(c) of the Code or, solely for purposes of Sections 412 and 430 of the Code and
Title IV of ERISA, is treated as a single employer under Sections 414(m) and
(o) of the Code.

 

“Controlled Investment Affiliates” means, with respect to any Person, any fund
or investment vehicle that is organized by such Person or an Affiliate of such
Person for the purpose of, or in connection with, making investments in one or
more companies, and is controlled by such Person or an Affiliate of such Person
or has the same principal fund advisor as such Person or an Affiliate of such
Person.  For purposes of this definition “control” means the power to direct or
cause the direction of management and policies of a Person, whether by contract
or otherwise.

 

“Covered Entity” shall mean (a) each Credit Party, each Credit Party’s
Subsidiaries and each pledgor of Collateral, and (b) to the knowledge of the
Credit Parties, each Person which, directly or indirectly, is in control of, a
Person described in clause (a) above.  For purposes of this definition, control
of a Person shall mean the direct or indirect, ownership, or power (x) to vote
25% or more of the Equity Interests having ordinary voting power for the
election of directors of such Person or other Persons performing similar
functions for any such Person, or (y) the direct or indirect power to direct or
cause the direction of the management and policies of such Person whether by
ownership of Equity Interests, contract or otherwise; provided that no owner of
the Equity Interests of the Parent Guarantor shall be deemed to have control of
the Parent Guarantor unless such owner is considered to have control of the
Parent Guarantor pursuant to clause (y).

 

“Credit Parties” shall mean the Borrowers and the Guarantors, and “Credit Party”
shall mean any of them.

 

“Cumulative Period” shall mean, first, the period from the Petition Date through
the Friday of the second full week following the Petition Date, second, prior to
the San Antonio Operational Date, the two week period ending on the second
Friday following the end of the preceding Cumulative Period (a “Two Week
Cumulative Period”) and third from and after the occurrence of the San Antonio
Operational Date, the four-week period ending the fourth Friday following the
end of the preceding Cumulative Period (a “Four Week Cumulative Period”).

 

“Customer” shall mean and include the account debtor with respect to any
Receivable and/or the prospective purchaser of goods, services or both with
respect to any contract or contract right, and/or any party who enters into or
proposes to enter into any contract or other arrangement with any Credit Party,
pursuant to which such Credit Party is to deliver any personal property or
perform any services.

 

“Declined Proceeds” shall have the meaning set forth in Section 2.17(c).

 

“Debtor” shall have the meaning set forth in the recitals to this Agreement.

 

“Default” shall mean an event, circumstance or condition which, with the giving
of notice or passage of time or both, would constitute an Event of Default.

 

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“Default Rate” shall have the meaning set forth in Section 3.1 hereof.

 

“Defaulting Lender” shall mean any Lender that: (a) has failed, within five
Business Days of the date required to be funded or paid, to (i) fund any portion
of its Commitment Percentage of Advances or (ii) pay over to the Agent or any
Lender any other amount required to be paid by it hereunder, unless, in the case
of clause (i) above, such Lender notifies the Agent and the Borrowing Agent in
writing that such failure is the result of such Lender’s good faith
determination that a condition precedent to funding (specifically identified and
including a particular Default or Event of Default, if any) has not been
satisfied; (b) has notified the Borrowing Agent or the Agent in writing, or has
made a public statement to the effect, that it does not intend or expect to
comply with any of its funding obligations under this Agreement (unless such
writing or public statement indicates that such position is based on such
Lender’s good faith determination that a condition precedent (specifically
identified and including a particular Default or Event of Default, if any) to
funding Advances under this Agreement cannot be satisfied) or generally under
other agreements in which it commits to extend credit; (c) has failed, within
five Business Days after request by the Agent or the Borrowing Agent, acting in
good faith, to provide a certification in writing from an authorized officer of
such Lender that it will comply with its obligations (and is financially able to
meet such obligations) to fund prospective Advances under this Agreement;
provided that such Lender shall cease to be a Defaulting Lender pursuant to this
clause (c) upon the Agent’s and Borrowing Agent’s receipt of such certification
in form and substance satisfactory to the Agent; (d) has become the subject of
an Insolvency Event; or (e) has failed at any time to comply with the provisions
of Section 2.10(e) with respect to purchasing participations from the other
Lenders, whereby such Lender’s share of any payment received, whether by setoff
or otherwise, is in excess of its Pro Rata Share of such payments due and
payable to all of the Lenders.

 

“Deposit Account Control Agreements” shall mean the deposit account control
agreements or blocked account agreements in a form that is reasonably
satisfactory to the Agent to be executed by each institution maintaining a
deposit account or securities account for any of the Credit Parties, in favor of
Agent, for the benefit of Secured Parties, as security for the Obligations to
the extent required by Section 4.14(g) or any other provision of this Agreement
or any Other Document.

 

“DIP Facility” shall have the meaning set forth in the recitals to this
Agreement.

 

“DIP Superpriority Claims” shall have the meaning set forth in
Section 2.18(b) hereof.

 

“Disclosure Statement” shall mean the disclosure statement for an Approved
Chapter 11 Plan, as approved by the Bankruptcy Court pursuant to section 1125 of
the Bankruptcy Code, including all exhibits and schedules thereto filed by the
Debtors with the Bankruptcy Court, as thereafter amended, supplemented, or
modified in accordance with applicable law, reasonably acceptable to the Lenders
in their sole discretion.

 

“Disposition” shall have the meaning set forth in Section 7.1(b) hereof.

 

“Disqualified Stock” shall mean any Equity Interests of a Person that by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable, in either case at the option of the holder thereof) or
otherwise (a) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, (b) is or may become redeemable or repurchaseable at
the option of the holder thereof, in whole or in part or (c) is convertible or
exchangeable at the option of the holder thereof for Indebtedness or
Disqualified Stock, on or prior to the earlier of, in the case of clause (a),
(b) or (c), (i) 91 days after the Maturity Date hereunder as in effect at the
time of issuance and (ii) upon payment in full of the Obligations (provided that
only the portion of Equity Interests which is mandatorily redeemable or matures
or is redeemable at the option of the holder thereof prior to such date will be
deemed to be Disqualified Stock), in each case other than in exchange for Equity
Interests of the Borrowers (other than Disqualified Stock).

 

Notwithstanding the preceding sentence:

 

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(1)                                 any Equity Interests issued to any plan for
the benefit of employees of the Credit Parties or any of their Subsidiaries or
by any such plan to such employees shall not constitute Disqualified Stock
solely because such Equity Interests may be required to be repurchased by the
Credit Parties or their Subsidiaries in order to satisfy applicable statutory or
regulatory obligations; and

 

(2)                                 any Equity Interests held by any future,
current or former employee, director, manager or consultant (or their respective
trusts, estates, investment funds, investment vehicles or immediate family
members) of the Credit Parties or any of their Subsidiaries, in each case upon
the termination of employment or death of such person pursuant to any stock
option plan or any other management or employee benefit plan or agreement, shall
not constitute Disqualified Stock solely because such Equity Interests may be
required to be repurchased by the Credit Parties or their Subsidiaries.

 

“Documents” shall have the meaning set forth in Section 8.1(d) hereof.

 

“Dollar” and the sign “$” shall mean lawful money of the United States of
America.

 

“Domestic Rate Loan” shall mean any Advance that bears interest based upon the
Alternate Base Rate.

 

“Domestic Subsidiaries” shall mean, with respect to any Person, any Subsidiary
of such Person which is incorporated or organized under the laws of any state of
the United States or the District of Columbia other than any such Subsidiary
that is owned directly or indirectly by an entity that is not incorporated or
organized under the laws of any state of the United States or the District of
Columbia.

 

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

 

“EEA Member Country” shall mean any member state of the European Union, Iceland,
Liechtenstein and Norway or any other state that is a member of the European
Economic Area.

 

“EEA Resolution Authority” shall mean 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.

 

“Eligibility Date” shall mean, with respect to each Credit Party and each Swap,
the date on which this Agreement or any Other Document becomes effective with
respect to such Swap (for the avoidance of doubt, the Eligibility Date shall be
the date of the execution of such Swap if this Agreement or any Other Document
is then in effect with respect to such Credit Party, and otherwise it shall be
the date of execution and delivery of this Agreement and/or such Other
Document(s) to which such Credit Party is a party).

 

“Eligible Contract Participant” shall mean an “eligible contract participant” as
defined in the CEA and regulations thereunder.

 

“Emerge” shall have the meaning set forth in the preamble hereto.

 

“Environmental Complaint” shall have the meaning set forth in
Section 4.18(b) hereof.

 

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“Environmental Indemnity Agreements” shall mean any and all environmental
indemnity agreements provided by any Credit Party to Agent, for the benefit of
the Secured Parties, with respect to Real Property subject to a Mortgage.

 

“Environmental Laws” shall mean all applicable federal, state and local
environmental, land use, chemical use, mining, safety and sanitation laws,
statutes, ordinances and codes relating to the protection of the environment or
natural resources governing the use, storage, treatment, generation,
transportation, processing, handling, production or disposal of Hazardous
Substances and the rules, regulations, legally binding policies, guidelines,
interpretations, decisions, orders and directives of federal, state and local
governmental agencies and authorities with respect thereto (including, for the
avoidance of doubt, the Mine Safety and Health Act, 30 U.S.C. §§ 801 et seq. and
the Surface Mining Control and Reclamation Act 30 U.S.C. §§ 1201 et seq).

 

“Equipment” shall mean and include, as to each Credit Party, all “equipment,” as
such term is defined in the Uniform Commercial Code, of such Credit Party, and,
in any event, shall include all of such Credit Party’s goods (other than
Inventory) whether now owned or hereafter acquired and wherever located,
including all equipment, machinery, apparatus, fittings, furniture, furnishings,
fixtures, parts, accessories and all replacements and substitutions therefor or
accessions thereto.

 

“Equity Interests” shall mean, with respect to any Person, any and all Capital
Stock and all rights to purchase, options, warrants, participation or other
equivalents of or interest in (regardless of how designated) equity of such
Capital Stock, but excluding debt securities exchangeable for or convertible
into Capital Stock.  For purposes of the definition of “Change of Control,”
Equity Interests include all of the following rights relating to such Equity
Interests, whether arising under the Organizational Documents of the Person
issuing such Equity Interests (the “issuer”) or under the Applicable Laws of
such issuer’s jurisdiction of organization relating to the formation, existence
and governance of corporations, limited liability companies or partnerships or
business trusts or other legal entities, as the case may be: (i) all economic
rights (including all rights to receive dividends and distributions) relating to
such Equity Interests; (ii) all voting rights and rights to consent to any
particular action(s) by the applicable issuer; (iii) all management rights with
respect to such issuer; (iv) in the case of any Equity Interests consisting of a
general partner interest in a partnership, all powers and rights as a general
partner with respect to the management, operations and control of the business
and affairs of the applicable issuer; (v) in the case of any Equity Interests
consisting of the membership/limited liability company interests of a managing
member in a limited liability company, all powers and rights as a managing
member with respect to the management, operations and control of the business
and affairs of the applicable issuer; (vi) all rights to designate or appoint or
vote for or remove any officers, directors, manager(s), general partner(s) or
managing member(s) of such issuer and/or any members of any board of
members/managers/partners/directors that may at any time have any rights to
manage and direct the business and affairs of the applicable issuer under its
Organizational Documents as in effect from time to time or under Applicable Law;
(vii) all rights to amend the Organizational Documents of such issuer, (viii) in
the case of any Equity Interests in a partnership or limited liability company,
the status of the holder of such Equity Interests as a “partner,” general or
limited, or “member” (as applicable) under the applicable Organizational
Documents and/or Applicable Law; and (ix) all certificates evidencing such
Equity Interests, but in any case, excluding debt securities convertible into or
exchangeable for Equity Interests.

 

“Equity Investments” shall mean an issuance of Equity Interests (other than
Disqualified Stock) by, or a contribution to the common equity capital of, the
Parent Guarantor.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974.

 

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

 

“Event of Default” shall have the meaning set forth in Article X hereof.

 

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“Excess Availability” shall mean, as of any date of determination, (a) the
Maximum Advance Amount minus (b) the Revolving Facility Usage.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934.

 

“Excluded Collateral” shall mean (i) all motor vehicles and other rolling stock
and goods covered by a certificate of title, (ii) Excluded Deposit Accounts
described in clauses (b) and (c) of the definition thereof, (iii) Equipment
owned by any Credit Party that is subject to a Lien permitted pursuant to clause
(g) of the definition of “Permitted Encumbrances” (but only to the extent that
and only for so long as such Permitted Purchase Money Indebtedness restricts the
granting of a Lien therein to Agent), (iv) any lease, license, contract,
property right or agreement (or any Credit Party’s rights or interests
thereunder) if and to the extent that the grant of the security interest shall
constitute or result in (A) the abandonment, invalidation or unenforceability of
any right, title or interest of any Credit Party therein, or any legally
effective option to purchase or similar right of a third party (other than
another Credit Party) thereunder, under any lease, license, contract, or
agreement giving rise thereto, or (B) a breach or termination pursuant to the
terms of, or a default under, or a violation of any legally enforceable
provision requiring consent (which has not been obtained) of another party
(other than a Credit Party) to any such lease, license, contract, property right
or agreement, (v) any intent-to-use trademark applications for which no
statement of use has been filed and (vi) any stock of any Person that does not
constitute Subsidiary Stock, to the extent and for so long as the granting of
security interests in such stock would be prohibited by an agreement governing
such stock, in the case of clauses (iii), (iv) and (vi), after giving effect to
applicable anti-non-assignment provisions of the Uniform Commercial Code or any
other Applicable Law; provided that the exclusion in such clauses shall not
apply to proceeds and receivables of the applicable assets, the assignment of
which is expressly deemed effective under the Uniform Commercial Code or other
Applicable Law notwithstanding such prohibition.

 

“Excluded Deposit Accounts” shall mean (a) those deposit accounts identified as
“Excluded Deposit Accounts” on Schedule 5(a) to the Perfection Certificate and
any other deposit accounts established after the Closing Date, so long as (i) at
any time the balance in any such “Excluded Deposit Account” or other deposit
account established after the Closing Date does not exceed $500 and the
aggregate balance in all such “Excluded Deposit Accounts” or other deposit
accounts established after the Closing Date does not exceed $2,000 and (ii) such
deposit account does not receive remittances from Customers or other proceeds of
Receivables and is not an operating account; (b) other deposit accounts
established solely as, and containing no funds other than in respect of,
payroll, employee benefits, health care reimbursement and other zero balance
accounts; and (c) deposit accounts maintained in bank accounts outside of the
United States for Foreign Subsidiaries.

 

“Excluded Hedge Liabilities” shall mean, with respect to each Credit Party, each
of its Swap Obligations if, and to the extent that, all or any portion of this
Agreement or any Other Document that relates to such Swap Obligation (or the
guaranty of such Swap Obligation, or the grant by such Credit Party of a
security interest in the Collateral to secure such Swap Obligation) is or
becomes illegal under the CEA, or any rule, regulation or order of the CFTC, by
virtue of such Credit Party’s failure to qualify as an Eligible Contract
Participant on the Eligibility Date for such Swap.  Notwithstanding anything to
the contrary contained in the foregoing or in any other provision of this
Agreement or any Other Document, the foregoing is subject to the following
provisos: (a) if a Swap Obligation arises under a master agreement governing
more than one Swap, this definition shall only include the portion of such Swap
Obligation that is attributable to Swaps for which such guaranty or security
interest is or becomes illegal as a result of the failure by such Credit Party
for any reason to qualify as an Eligible Contract Participant on the Eligibility
Date for such Swap; (b) if a guarantee of a Swap Obligation would cause such
obligation to be an Excluded Hedge Liability but the grant of a security
interest would not cause such obligation to be an Excluded Hedge Liability, such
Swap Obligation shall constitute an Excluded Hedge Liability for purposes of the
guaranty but not for purposes of the grant of the security interest; and (c) if
there is more than one Credit Party executing this Agreement or the Other
Documents and a Swap Obligation would be an Excluded Hedge Liability with
respect to one or more of such Persons, but not all of them, the definition of
“Excluded Hedge Liabilities” with respect to each such Person shall only be
deemed applicable to (i) the particular Swap

 

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Obligations that constitute Excluded Hedge Liabilities with respect to such
Person and (ii) the particular Person with respect to which such Swap
Obligations constitute Excluded Hedge Liabilities.

 

“Excluded Taxes” shall mean, with respect to any Recipient, any of the following
Taxes imposed on or with respect to any payment to be made to such Recipient by
or on account of any Obligations: (a) Taxes imposed on or measured by its net
income (however denominated), franchise Taxes and branch profits Taxes, in each
case, (i) imposed 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) in the case of
any Lender, any U.S. federal withholding Tax that is imposed on amounts payable
to or for the account of such Recipient pursuant to a law in effect at the time
such Recipient becomes a party hereto (other than pursuant to an assignment
request under Section 3.11) or acquires a participation (or designates a new
lending office), except, in each case, to the extent that such Recipient (or its
assignor or seller of a participation, if any) was entitled, at the time of
designation of a new lending office (or assignment or sale of a participation),
to receive additional amounts with respect to such withholding Tax pursuant to
Section 3.10, (c) Taxes attributable to such Recipient’s failure to comply with
Section 3.10(e), or (d) any withholding Taxes imposed under FATCA.

 

“Extraordinary Receipt” means (a) litigation receipts not received as
reimbursements for cash or property losses or payments to third parties
previously made or incurred (or reasonably expected to be made or incurred) by
Parent Guarantor or any Subsidiary thereof, (b) settlement proceeds to the
extent not received as reimbursement for cash losses or payments to third
parties previously made or incurred (or reasonably expected to be made or
incurred) by Parent Guarantor or any Subsidiary thereof, in the case of clause
(a) and (b), net of (x) any income Taxes paid or reasonably expected to be
payable in respect of such receipts and (y) costs and expenses incurred in
connection with the collection of such receipts, but only to the extent actually
paid or payable to a Person that is not an Affiliate of Parent Guarantor or such
Subsidiary and properly attributable to such event and (c) any refunds of Taxes
paid in the current or any prior fiscal year.

 

“Fair Market Value” means with respect to any asset or group of assets on any
date of determination, the fair market value thereof as determined in good faith
by an Authorized Officer or by the board of directors (or similar governing
body) of the Parent Guarantor, in each case as such Person has the appropriate
authority as permitted by the corporate policies of the Parent Guarantor.

 

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the Closing
Date (or any amended or successor version that is substantively comparable and
not materially more onerous to comply with), any current or future regulations
thereunder or official interpretations thereof, any agreements entered into
pursuant to Section 1471(b)(1) of the Code, as of the Closing Date (or any
amended or successor version as described above), and any applicable
intergovernmental agreements entered into with respect thereto (together with
any law implementing such agreements).

 

“Federal Funds Effective Rate” for any day shall mean the rate per annum (based
on a year of 360 days and actual days elapsed and rounded upward to the nearest
1/100 of 1%) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates on overnight
federal funds transactions on the previous trading day, as computed and
announced by such Federal Reserve Bank (or any successor) in substantially the
same manner as such Federal Reserve Bank computes and announces the weighted
average it refers to as the “Federal Funds Effective Rate” as of the Closing
Date; provided that, if such Federal Reserve Bank (or its successor) does not
announce such rate on any day, the “Federal Funds Effective Rate” for such day
shall be the Federal Funds Effective Rate for the last day on which such rate
was announced; provided, that, if no such rate is published the Federal Funds
Effective Rate for such day shall be the average rate quoted to the Agent on
such day on such transactions by three (3) federal funds brokers of recognized
standing as determined by the Agent.  Notwithstanding anything to the contrary,
if the Federal Funds Effective Rate determined pursuant to the foregoing would
be less than 0.00% on any day, the Federal Funds Effective Rate shall be deemed
to be 0.00% on such day.

 

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“Fee Letter” shall mean the fee letter dated as of the Closing Date among the
Parent Guarantor, the Borrowers and the Agent.

 

“Field Examinations” shall mean, whether as to any one Borrower or all Borrowers
and whether in one visit or a series of related visits, the audit, inspection
and review by Agent or its agents of any Borrower’s (a) books, records, audits,
correspondence and all other papers relating to the Collateral, (b) the
operations of such Borrower and/or (c) the Collateral.

 

“Final Order” shall have the meaning set forth in Section 6.16(e).

 

“Finance Corp” shall mean Emerge Energy Services Finance Corporation, a Delaware
corporation.

 

“Financial Advisor” means a financial advisor reasonably acceptable to the
Agent.  For the avoidance of doubt, Houlihan Lokey shall be a reasonably
acceptable Financial Advisor.

 

“First Lien/Second Lien Intercreditor Agreement” shall mean the First
Lien/Second Lien Intercreditor Agreement, dated as of the Closing Date, among
the Agent and the notes agent and collateral agent under the Second Lien Note
Documentation and agreed to and acknowledged by the Credit Parties.

 

“Flood Laws” shall mean, collectively, (i) the National Flood Insurance Act of
1968 as now or hereafter in effect or any successor statute thereto, (ii) the
Flood Disaster Protection Act of 1973 as now or hereafter in effect or any
successor statute thereto, (iii) the National Flood Insurance Reform Act of 1994
as now or hereafter in effect or any successor statute thereto, (iv) the Flood
Insurance Reform Act of 2004 as now or hereafter in effect or any successor
statute thereto, (v) Biggert-Waters Flood Insurance Reform Act of 2012 as now or
hereafter in effect or any successor statute thereto, and (vi) any other
regulations or requirements that are associated with the National Flood
Insurance Program.

 

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

 

“Foreign Subsidiary” of any Person shall mean any Subsidiary of such Person that
is not a Domestic Subsidiary of such Person.

 

“Fraudulent Transfer Laws” shall have the meaning set forth in
Section 15.1(d) hereof.

 

“GAAP” shall mean generally accepted accounting principles in the United States
of America in effect from time to time.

 

“General Intangibles” shall mean and include as to each Credit Party all of such
Credit Party’s “general intangibles,” as such term is defined in the Uniform
Commercial Code, whether now owned or hereafter acquired, including all payment
intangibles, all choses in action, causes of action, corporate or other business
records, inventions, designs, patents, patent applications, equipment
formulations, manufacturing procedures, quality control procedures, trade names,
trademarks, trademark applications, service marks, trade secrets, goodwill,
copyrights, design rights, software, computer information, source codes, codes,
records and updates, registrations, licenses, franchises, customer lists, Tax
refunds, Tax refund claims, computer programs, all claims under guaranties,
security interests or other security held by or granted to such Credit Party to
secure payment of any of the Receivables by a Customer (other than to the extent
covered by Receivables) all rights of indemnification and all other intangible
property of every kind and nature (other than Receivables).

 

“General Partner” shall mean Emerge Energy Services GP LLC, a Delaware limited
liability company.

 

“Governmental Body” shall mean any nation or government, any state or other
political subdivision thereof or any entity, authority, agency, division or
department exercising the executive, legislative, judicial,

 

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taxing, regulatory or administrative powers or functions of or pertaining to a
government (including any supra-national bodies such as the European Union or
the European Central Bank) and any group or body charged with setting financial
accounting or regulatory capital rules or standards (including, without
limitation, the Financial Accounting Standards Board, the Bank for International
Settlements or the Basel Committee on Banking Supervision or any successor or
similar authority to any of the foregoing).

 

“Guaranteed Obligations” shall have the meaning set forth in Section 17.1
hereof.

 

“Guarantor” shall mean Parent Guarantor, Finance Corp and each Borrower (other
than with respect to its direct Obligations as a primary obligor under this
Agreement and the Other Documents) and any other Person who may hereafter
guarantee payment or performance of the whole or any part of the Obligations and
“Guarantors” shall mean collectively all such Persons.

 

“Guarantor Payment” shall have the meaning set forth in Section 17.11(a) hereof.

 

“Hazardous Discharge” shall have the meaning set forth in
Section 4.18(b) hereof.

 

“Hazardous Substance” shall mean, without limitation, any flammable explosives,
radon, radioactive materials, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous
materials, Hazardous Wastes, hazardous or Toxic Substances or related materials
or any other substance, material or waste defined as “hazardous,” “toxic,” a
“pollutant,” a “contaminant” or words of similar meaning or regulatory effect as
defined in CERCLA, the Hazardous Materials Transportation Act (49 U.S.C.
Sections 5101, et seq.), RCRA or any other applicable Environmental Law and in
the regulations adopted pursuant thereto.

 

“Hazardous Wastes” shall mean all waste materials subject to regulation under
CERCLA, RCRA or applicable state law, and any other applicable Federal and state
laws now in force or hereafter enacted relating to hazardous waste disposal.

 

“Hedge” shall mean an interest rate, currency or commodity exchange, collar,
cap, swap, floor, adjustable strike cap, adjustable strike corridor or similar
agreements entered into by any Credit Party in order to provide protection to,
or minimize the impact upon, such Credit Party and/or its respective
Subsidiaries of changes in interest rates, currency exchange rates or commodity
prices; provided that such agreement is entered into for hedging (rather than
speculative purposes).

 

“Hedge Liabilities” shall have the meaning provided in the definition of
“Lender-Provided Hedge”.

 

“Historical Statements” shall have the meaning set forth in
Section 5.5(a) hereof.

 

“HPS” shall have the meaning set forth in the preamble to this Agreement and
shall extend to all of its successors and assigns.

 

“Inactive Subsidiary” shall mean any Subsidiary that does not (a) conduct any
business operations (including the operations of a holding company), (b) have
any assets or (c) own any Capital Stock of any Credit Party or any other
Subsidiary (except another Inactive Subsidiary) of any Credit Party.

 

“Indebtedness” shall mean, with respect to any Person, as of the date of
determination thereof (without duplication), (i) all obligations of such Person
for borrowed money, (ii) all obligations evidenced by any note, debenture, bond
or other instrument, (iii) all obligations of such Person to pay the deferred
purchase price of property or services (other than current unsecured trade
accounts payable which arise in the ordinary course of business and that are not
overdue more than 120 days unless the same are being Properly Contested),
(iv) all Capitalized Lease Obligations, (v) the then outstanding amount of
withdrawal or termination liability incurred under ERISA, (vi) all indebtedness
created or arising under any conditional sale or other title retention agreement

 

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with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (vii) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right to be secured by) a Lien on any asset of such Person whether or not the
Indebtedness is assumed by such Person, provided that for the purpose of
determining the amount of Indebtedness of the type described in this clause
(vii), if recourse with respect to such Indebtedness is limited to the assets of
such Person, then the amount of Indebtedness shall be limited to the Fair Market
Value of such assets, (viii) all obligations of such Person in respect of
letters of credit, bankers acceptances, surety bonds or similar instruments
issued or accepted by banks or other financial institutions for the account of
such Person, (ix) any other obligation for borrowed money or other financial
accommodation which in accordance with GAAP would be shown as a long-term
liability on the consolidated balance sheet of such Person, (x) all obligations
of such Person under hedging agreements or arrangements therefor, (xi) all
guarantees by such Person of Indebtedness of others, (xii) amounts payable under
the Midwest Frac Agreement, (xiii) all obligations in respect of Disqualified
Stock and (xiv) all earn-outs (once accrued), seller notes and similar
obligations; provided that (x) operating leases shall not be considered
Indebtedness, and (y) any Equity Investments and warrants to purchase Equity
Interests issued in connection therewith shall not be considered Indebtedness so
long as such investment does not constitute Disqualified Stock.  For purposes of
this definition, the “principal amount” of the obligations of any Person in
respect of any hedging agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that such Person would be
required to pay if such hedging agreement were terminated at such time.

 

“Indemnified Party” shall have the meaning set forth in Section 16.5 hereof.

 

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

 

“Initial Approved Budget” shall have the meaning set forth in Section 6.11(a).

 

“Interest Payment Date” shall have the meaning set forth in Section 3.1 hereof.

 

“Insolvency Event” shall mean, with respect to any Person, including without
limitation any Lender, such Person or such Person’s direct or indirect parent
company (a) becomes the subject of a bankruptcy or insolvency proceeding
(including any proceeding under Title 11 of the United States Code), or
regulatory restrictions, (b) has had a receiver, conservator, trustee,
administrator, custodian, assignee for the benefit of creditors or similar
Person charged with the reorganization or liquidation of its business appointed
for it or has called a meeting of its creditors, (c) admits in writing its
inability, or be generally unable, to pay its debts as they become due or cease
operations of its present business, (d) with respect to a Lender, such Lender is
unable to perform hereunder due to the application of Applicable Law, or (e) in
the good faith determination of the Agent, has taken any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any such
proceeding or appointment of a type described in clause (a) or (b), provided
that an Insolvency Event shall not result solely by virtue of any ownership
interest, or the acquisition of any ownership interest, in such Person or such
Person’s direct or indirect parent company by a Governmental Body or
instrumentality thereof if, and only if, such ownership interest does not result
in or provide such Person with immunity from the jurisdiction of courts within
the United States or from the enforcement of judgments or writs of attachment on
its assets or permit such Person (or such Governmental Body or instrumentality)
to reject, repudiate, disavow or disaffirm any contracts or agreements made by
such Person.

 

“Intellectual Property” shall mean property constituting under any Applicable
Law a patent, patent application, copyright, copyright application, trademark,
trademark application, service mark, corporate and trade names, mask work, trade
secret or license, in each case whether registered or unregistered, or other
right to use any of the foregoing and all goodwill connected with any Credit
Party’s business, together with any and all (i) rights and privileges arising
under Applicable Law with respect to any Credit Party’s use of any of the
foregoing, (ii) inventions and improvements described and claimed therein,
(iii) reissues, divisions,

 

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continuations, renewals, extensions and continuations-in-part thereof and
amendments thereto, (iv) income, fees, royalties, damages, claims and payments
now or hereafter due and/or payable thereunder and with respect thereto
including damages and payments for past, present or future infringements
thereof, (v) rights corresponding thereto throughout the world and (vi) rights
to sue for past, present or future infringements thereof.

 

“Interest Period” shall mean the period provided for any LIBOR Rate Loan
pursuant to Sections 2.1(b) and 2.2(b) hereof.

 

“Interim Order” shall mean collectively, the order of the Bankruptcy Court
entered in the Cases after an interim hearing (assuming satisfaction of the
standards prescribed in Section 364 of the Bankruptcy Code and Bankruptcy
Rule 4001 and other applicable law), in form and substance satisfactory to the
Required Lenders in their sole and absolute discretion, together with all
extension, modifications, and amendments thereto, in form and substance
satisfactory to Agent, which, among other matters but not by way of limitation,
authorizes, on an interim basis, the Credit Parties to execute and perform under
the terms of this Agreement and the Other Documents.

 

“Inventory” shall mean and include as to each Credit Party all “inventory,” as
such term is defined in the Uniform Commercial Code, of such Credit Party, and,
in any event, shall include all of such Credit Party’s now owned or hereafter
acquired goods, merchandise and other personal property, wherever located, to be
furnished under any consignment arrangement, contract of service or held for
sale or lease, all raw materials, work in process, finished goods and materials
and supplies of any kind, nature or description which are or might be used or
consumed in such Credit Party’s business or used in selling or furnishing such
goods, merchandise and other personal property, and all documents of title or
other documents representing them.

 

“Investment” shall mean, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of Equity Interests of another Person, (b) a loan, advance or
capital contribution to, guaranty or assumption of debt of, or purchase or other
acquisition of any other debt or interest in, another Person, (c) the purchase
or other acquisition of all or substantially all of the property and assets or
business of another Person or assets constituting a business unit, line of
business or division of such Person, or (d) otherwise, other than (i) the
acquisition of inventory in the ordinary course of business, including through
bulk purchases, (ii) [reserved] and (iii) acquisition or investment in equipment
in the ordinary course of business that are Capital Expenditures made in
compliance with the Approved Budget.  For purposes of covenant compliance, the
amount of any Investment shall be (i) the amount actually invested (measured at
the time made), without adjustment for subsequent increases or decreases in the
value of such Investment minus (ii) the amount of any return of capital and any
payment of principal received in respect of such Investment that in each case is
received in cash or Cash Equivalents.  For the purpose of clarity, a Hedge shall
not be considered an Investment.

 

“Investment Property” shall mean and include as to each Credit Party, all
“investment property,” as such term is defined in the Uniform Commercial Code,
of such Credit Party, and, in any event, shall include all of such Credit
Party’s now owned or hereafter acquired securities (whether certificated or
uncertificated), securities entitlements, securities accounts, commodities
contracts, commodities accounts and financial assets.

 

“IRS” shall mean the United States Internal Revenue Service.

 

“Law(s)” shall mean any law(s) (including common law and equitable principles),
federal, state and foreign constitutions, statute, treaty, regulation, rule,
ordinance, opinion, issued guidance, release, ruling, order, executive order,
injunction, writ, decree, judgment, authorization or approval, lien or award of
or any settlement arrangement with any Governmental Body or arbitrator,
directives and orders of any Governmental Body, in each case, whether, foreign
or domestic, state, federal or local.

 

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“Leasehold Interests” shall mean all of each Credit Party’s right, title and
interest in and to, and as lessee of, any real property on which any Credit
Party conducts mining operations, including, without limitation, the premises
identified as Leasehold Interests on Schedule 11(b) to the Perfection
Certificate.

 

“Lender” and “Lenders” shall have the meaning ascribed to such term in the
preamble to this Agreement and shall include each Person which becomes a
transferee, successor or assign of any Lender.  For the purpose of any provision
of this Agreement or any Other Document which provides for the granting of a
security interest or other Lien to the Agent for the benefit of the Lenders as
security for the Obligations, “Lenders” shall include any Affiliate of a Lender
to which such Obligation (specifically including any Hedge Liabilities and any
Cash Management Liabilities) is owed.

 

“Lender-Provided Hedge” shall mean a Hedge which at the date of entering into
such Hedge was provided by Agent, any Lender or Affiliate of Agent or any Lender
and with respect to which Agent confirms meets the following requirements: such
Hedge (i) is documented in a standard International Swap Dealer Association
Agreement or other customary agreement reasonably satisfactory to Agent,
(ii) provides for the method of calculating the reimbursable amount of the
provider’s credit exposure in a reasonable and customary manner, and (iii) is
entered into for hedging (rather than speculative) purposes.  The indebtedness,
obligations and liabilities to the provider of any Lender-Provided Hedge that
was Agent or a Lender or an Affiliate of Agent or a Lender at the date of
entering into such Lender-Provided Hedge (the “Hedge Liabilities”) of the Credit
Party or Subsidiary thereof that is party to such Lender-Provided Hedge shall,
for purposes of this Agreement and all Other Documents be “Obligations” of such
Person and of each other Credit Party except to the extent constituting Excluded
Hedge Liabilities of such Person (subject to the final sentence of the
definition of “Excluded Hedge Liabilities”).  The Liens securing the Hedge
Liabilities shall be pari passu (without regard to control of remedies) with the
Liens securing all other Obligations under this Agreement and the Other
Documents, subject to the express provisions of Section 11.5 hereof.

 

“LIBOR Rate” shall mean for any LIBOR Rate Loan for the then current Interest
Period relating thereto, the interest rate per annum determined by Agent by
dividing (the resulting quotient rounded upwards, if necessary, to the nearest
1/100th of 1% per annum) (i) the rate which appears on the applicable Bloomberg
Page BBAM1 (or on such other substitute Bloomberg page that displays rates at
which US dollar deposits are offered by leading banks in the London interbank
deposit market), or the rate which is quoted by another source selected by Agent
as an authorized information vendor for the purpose of displaying rates at which
U.S. dollar deposits are offered by leading banks in the London interbank
deposit market (an “Alternate Source”), at approximately 11:00 a.m., London
time, two (2) Business Days prior to the commencement of such Interest Period as
the London interbank offered rate for U.S. Dollars for an amount comparable to
such LIBOR Rate Loan and having a borrowing date and a maturity comparable to
such Interest Period (or if there shall at any time, for any reason, no longer
exist a Bloomberg Page (or any substitute page) or any Alternate Source, the
LIBOR Rate shall be determined by reference to the rate at which dollar deposits
for a maturity comparable to such Interest Period are offered by three major
banking institutions in immediately available funds in the London interbank
market as of the 11:00 a.m., London time, two (2) Business Days, if such rates
are no longer available a comparable replacement rate determined by Agent at
such time (which determination shall be conclusive absent manifest error)), by
(ii) a number equal to 1.00 minus the Reserve Percentage.  The LIBOR Rate may
also be expressed by the following formula:

 

LIBOR Rate =

Average of London interbank offered rates quoted by Bloomberg or appropriate
successor as shown on Bloomberg Page BBAM1 or appropriate substitute Bloomberg
page or Alternate Source

 

1.00 – Reserve Percentage

 

The LIBOR Rate shall be adjusted with respect to any LIBOR Rate Loan that is
outstanding on the effective date of any change in the Reserve Percentage as of
such effective date.  Agent shall give prompt notice to the Borrowing Agent of
the LIBOR Rate as determined or adjusted in accordance herewith, which

 

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determination shall be conclusive absent manifest error.  Notwithstanding
anything to the contrary, the LIBOR Rate shall not be less than 2.00% for any
period.

 

“LIBOR Rate Loan” shall mean an Advance at any time that bears interest based on
the LIBOR Rate.

 

“Lien” shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, security interest, lien (whether statutory or otherwise), tax, claim
or encumbrance, or preference, priority or other security agreement or
preferential arrangement held or asserted in respect of any asset of any kind or
nature whatsoever including any conditional sale or other title retention
agreement, and the filing of, or agreement to give, any financing statement
under the Uniform Commercial Code or comparable law of any jurisdiction.

 

“Liquidity” shall mean the sum of (a) Excess Availability plus (b) Unrestricted
Cash.

 

“Loan Guaranty” means Article XVII of this Agreement, as it may be amended or
modified and in effect from time to time.

 

“Material Adverse Effect” shall mean a material adverse effect on (a) the
financial condition, operations, assets, business or liabilities of the Credit
Parties taken as a whole, (b) any Credit Party’s ability to perform its
non-monetary Obligations in accordance with the terms of this Agreement or the
Other Documents (as applicable) or the ability of the Credit Parties taken as a
whole to pay or perform the Obligations in accordance with the terms of this
Agreement or the Other Documents (as applicable), (c) the value of a material
portion of the Collateral, or Agent’s Liens on a material portion of the
Collateral or the priority of any such Lien or (d) Agent’s and each Lender’s
rights and remedies under this Agreement and the Other Documents provided that,
solely for the purposes of Section 5.5(c), the occurrence of the San Antonio
Shutdown (but excluding any event or development resulting, directly or
indirectly, from the San Antonio Shutdown) shall not itself be deemed to
constitute a Material Adverse Effect.

 

“Material Contract” shall mean (a) any agreement, document, instrument, contract
or other arrangement to which a Credit Party or any of its Restricted
Subsidiaries is a party (other than this Agreement and the Other Documents
(i) which accounts for more than 10.0% of the consolidated gross revenues of the
Parent Guarantor and its Subsidiaries, (ii) that is a “material contract” as
defined in Item 601(b)(10) of Regulation S-K of the Securities Exchange Act of
1934, as amended or (iii) for which the nonperformance, cancellation or failure
to renew could reasonably be expected to have a Material Adverse Effect), or
(b) the Design/Build Contract dated December 2017 between SSS and Market &
Johnson, Inc. with respect to the Phase III expansion of the Osburn Facility dry
plant and the Design/Build Contract to be entered into between SSS and a
counterparty to be determined with respect to the Phase III expansion of the
Osburn Facility wet plant.

 

“Maturity Date” shall mean the earliest to occur of (i) the six month
anniversary of the Closing Date, (ii) the date any Debtor enters into (or files
a motion with the Bankruptcy Court or otherwise takes action to seek the
Bankruptcy Court’s approval of) any agreement for the sale or transfer of all or
any material portion of the Debtors’ assets unless such agreement and any
related orders proposed to be entered by the Bankruptcy Court provide for the
indefeasible payment in full of the Obligations on or prior to the closing of
such proposed sale or transfer; (iii) the date which is the closing date of any
sale or transfer of all or any material portion of the Debtors’ assets, other
than sales or transfers of Inventory in the ordinary course of business;
(iv) the filing or support by any Debtor of a Chapter 11 plan that (x) does not
provide for indefeasible payment in full of the Obligations and (y) is not
otherwise acceptable to the Required Lenders; (v) the effective date of a
Chapter 11 plan of reorganization or liquidation filed in any of the Cases that
is confirmed pursuant to an order entered by the Bankruptcy Court; (vi) the 30th
day after the entry of the Interim Order by the Bankruptcy Court, if the Final
Order shall not have been entered by the Bankruptcy Court on or prior to such
date; (vii) the date the Bankruptcy Court orders any Case be converted to a case
filed under Chapter 7 of the Bankruptcy Court or the dismissal of the Case of
any Debtor; (viii) the date of termination of the Lenders’ Commitments and the
acceleration of the Advances, in each case, under the DIP Facility in accordance
with the terms of this Agreement and the Other Documents (including, without
limitation, as a result of the occurrence of an Event of Default or any default

 

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under the Interim Order or the Final Order); or (ix) the termination of the
Restructuring Agreement by the Debtors or the Consenting Creditors (as defined
therein).

 

“Maximum Advance Amount” shall mean $35,000,000.

 

“Midwest Frac Agreement” shall mean that certain Agreement of Purchase and Sale
dated as of May 29, 2014 between Midwest Frac and Sands LLC, as Seller, and SSS,
as purchaser, as amended by the First Amendment to Agreement of Purchase and
Sale dated as of July 7, 2014, as amended from time to time.

 

“Milestone” shall have the meaning set forth in Section 6.16 hereof.

 

“Modified Commitment Transfer Supplement” shall have the meaning set forth in
Section 16.3(d) hereof.

 

“Mortgages” shall mean any and all mortgages or deeds of trust on any of the
Real Property securing the Obligations.

 

“Multiemployer Plan” shall mean a “multiemployer plan” as defined in
Section 3(37) or 4001(a)(3) of ERISA to which contributions are required or,
within the preceding five plan years, were required, by any Credit Party or any
member of the Controlled Group.

 

“Multiple Employer Plan” shall mean a Plan which has two or more contributing
sponsors (including any Credit Party or any member of the Controlled Group) at
least two of whom are not under common control, as such a plan is described in
Section 4063 or 4064 of ERISA.

 

“Net Cash Proceeds” shall mean, with respect to any event described in
Section 2.17, proceeds received by any Credit Party or any Restricted Subsidiary
from or in respect of such event, less (i) any foreign, federal, state or local
income Taxes paid or payable in respect of such event, (ii) any customary and
reasonable transaction fees and expenses incurred in connection with such event
(including financial advisory fees, legal fees and accountants’ fees), and
(iii) the amount of any reasonable reserve established in accordance with GAAP
against any liabilities associated with the assets that are the subject of such
event and retained by any Credit Party or any Restricted Subsidiary thereof.

 

“Non-Bank Tax Certificate” shall have the meaning set forth in
Section 3.10(e) hereof.

 

“Non-Qualifying Party” shall mean any Credit Party that fails for any reason to
qualify as an Eligible Contract Participant.

 

“Note” shall mean the Revolving Credit Note.

 

“Obligated Party” shall have the meaning set forth in Section 17.2 hereof.

 

“Obligations” shall mean and include (a) any and all loans (including without
limitation, all Advances), advances, debts, liabilities, obligations, covenants
and duties owing by any Credit Party to any Secured Party of any kind or nature,
present or future (including any interest or other amounts accruing thereon, any
fees accruing under or in connection therewith, any costs and expenses of any
Person payable by any Credit Party under the terms of this Agreement or any
Other Document and any indemnification obligations payable by any Credit Party
arising or payable after maturity, or after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding relating to any Credit Party, whether or not a claim for post-filing
or post-petition interest, fees or other amounts is allowable or allowed in such
proceeding), whether or not for the payment of money, whether arising by reason
of an extension of credit, opening or issuance of a letter of credit, loan,
establishment of any purchase card or similar facility or guarantee, under any
interest or currency swap, future, option or other similar agreement, or in any
other manner, whether arising out of overdrafts or

 

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deposit or other accounts or electronic funds transfers (whether through
automated clearing houses or otherwise) or out of the Agent’s or any Lender’s
non-receipt of or inability to collect funds or otherwise not being made whole
in connection with depository transfer check or other similar arrangements,
whether direct or indirect (including those acquired by assignment or
participation), absolute or contingent, joint or several, due or to become due,
now existing or hereafter arising, contractual or tortious, liquidated or
unliquidated, regardless of how such indebtedness or liabilities arise or by
what agreement or instrument they may be evidenced or whether evidenced by any
agreement or instrument, in any such case to the extent advanced to or owing by
any Credit Party or any Subsidiary of any Credit Party under, in each case,
arising under or out of and/or related to (i) this Agreement, the Other
Documents and any amendments, extensions, renewals or increases thereto,
including, subject to Section 16.9, all costs and expenses of Agent and any
Lender incurred in the documentation, negotiation, modification, enforcement,
collection or otherwise in connection with any of the foregoing (including but
not limited to reasonable attorneys’ fees and expenses) and all obligations of
any Credit Party to Agent or Lenders to perform acts or refrain from taking any
action and (b) all Hedge Liabilities and all Cash Management Liabilities. 
Notwithstanding anything to the contrary contained in the foregoing (but subject
to the final sentence of the definition of “Excluded Hedge Liabilities”), as to
each Credit Party, the Obligations shall not include any Excluded Hedge
Liabilities of such Person.

 

“Order” shall have the meaning set forth in Section 6.16(d).

 

“Organizational Documents” shall mean (i) with respect to any corporation, its
certificate or articles of incorporation or organization and its by-laws,
(ii) with respect to any limited partnership, its certificate of limited
partnership and its partnership agreement, (iii) with respect to any general
partnership, its partnership agreement and (iv) with respect to any limited
liability company, its articles of organization and its operating agreement.  In
the event any term or condition of this Agreement or any Other Document requires
any Organizational Document to be certified by a secretary of state or similar
governmental official, the reference to any such “Organizational Document” shall
only be to a document of a type customarily certified by such governmental
official.

 

“Osburn Acquisition” shall mean the acquisition of the assets of Osburn
Materials, Inc. pursuant to the Osburn Acquisition Agreement.

 

“Osburn Acquisition Agreement” means that certain Asset Purchase Agreement dated
as of April 12, 2017 by and among Materials Holding Company, Inc., a Texas
corporation, Osburn Materials, Inc., a Texas corporation, Osburn Sand Co., a
Texas corporation, South Lehr, Inc., a Texas corporation, Clay M.  Tooke, an
individual, and SSS.

 

“Osburn Facility” shall mean the Real Property acquired pursuant to the Osburn
Acquisition.

 

“Other Connection Taxes” shall mean, with respect to any Recipient, Taxes
imposed as a result of a present or former connection between it and the
jurisdiction imposing such Tax (other than connections arising from it 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 this Agreement or any
Other Document, or sold or assigned an interest in its Commitment or any
Advances, this Agreement or any Other Document).

 

“Other Documents” shall mean the Notes, the First Lien/Second Lien Intercreditor
Agreement, the Security Agreement, any and all other agreements, instruments,
certificates, statements and documents, including any acknowledgment and
waivers, intercreditor agreements, guaranties, pledges, powers of attorney,
consents, interest or currency swap agreements or other similar agreements and
all other writings heretofore, now or hereafter executed or provided by any
Credit Party and/or delivered to Agent or any Lender in respect of the
transactions contemplated by this Agreement.

 

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“Other Taxes” shall mean all present or future stamp, court or documentary,
intangible, recording or filing Taxes or any other excise or property Taxes,
charges or similar levies arising from any payment made hereunder or under any
Other Document or from the execution, delivery, registration or enforcement of,
from the receipt or perfection of a security interest under, or otherwise with
respect to, this Agreement or any Other Document, but excluding any and all such
Taxes that are Other Connection Taxes imposed with respect to any assignment
(other than an assignment made pursuant to Section 3.11) by any Recipient of an
interest in its Commitment or any Advances, this Agreement or any Other
Document.

 

“Parent Guarantor” shall have the meaning set forth in the preamble hereto.

 

“Participant” shall mean each Person who pursuant to Section 16.3(b) shall be
granted the right by any Lender to participate in any of the Advances and who
shall have entered into a participation agreement in form and substance
satisfactory to such Lender.

 

“Participant Register” shall have the meaning set forth in
Section 16.3(b) hereof.

 

“Partnership Agreement” shall mean that certain First Amended and Restated
Agreement of Limited Partnership of Parent Guarantor, dated May 14, 2013 as
amended by that certain Amendment No. 1 to the First Amended and Restated
Agreement of Limited Partnership of Parent Guarantor.

 

“Payment Office” shall mean such office or account of Agent, if any, which it
may designate by notice to Borrowing Agent and to each Lender to be the Payment
Office.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA or any successor.

 

“Pension Benefit Plan” shall mean at any time any employee pension benefit plan
(including a Multiple Employer Plan, but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Code and either (i) is maintained or to which
contributions are required by any member of the Controlled Group; or (ii) has at
any time within the preceding five years been maintained or to which
contributions have been required by any entity which was at such time a member
of the Controlled Group.

 

“Perfection Certificate” shall mean collectively, the Perfection Certificate and
the responses thereto provided by each Credit Party and delivered to Agent on
the Closing Date (as defined in the Pre-Petition Credit Agreement), as amended
or supplemented by each Perfection Certificate Supplement.

 

“Perfection Certificate Supplement” shall have the meaning set forth in the
definition of “Compliance Certificate.”

 

“Period” shall mean a Prior Week or a Cumulative Period, as applicable.

 

“Permitted Acquisition” shall mean any Acquisition by a Credit Party which is
consented to by Agent and the Required Lenders.

 

“Permitted Discretion” shall mean, a determination made by Agent in good faith
in the exercise of its reasonable business judgment based on how a lender with
similar rights providing a secured credit facility of the type set forth herein
would act, in the circumstances then applicable to the Credit Parties at the
time with the information then available to it.

 

“Permitted Encumbrances” shall mean (a) Liens in favor of Agent for the benefit
of Agent and the other Secured Parties; (b) Liens for Taxes, assessments or
other governmental charges which are not delinquent or are being Properly
Contested; (c) deposits or pledges to secure obligations under worker’s
compensation, social

 

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security or similar laws, or under unemployment insurance, in each case in the
ordinary course of business and under operation of law; (d) deposits or pledges
to secure bids, tenders, contracts (other than contracts for the payment of
money), leases, statutory obligations, surety and appeal bonds and other
obligations of like nature arising, in each case, either (i) with prior written
approval of the Required Lenders or (ii) to the extent contemplated by the
Approved Budget (including permitted variances therefrom); (e) Liens arising by
virtue of the rendition, entry or issuance against any Credit Party or any
Subsidiary, or any property of any Credit Party or any Subsidiary, of any
judgment, writ, order, or decree which have been in force for less than the
applicable period for taking an appeal so long as execution is not levied
thereunder or in respect of which the Credit Parties shall at the time in good
faith be prosecuting an appeal or proceedings for review and in respect of which
a stay of execution shall have been obtained pending such appeal or review;
(f) mechanics’, workers’, materialmen’s, carrier’s, repairmens’ or other like
Liens arising in the ordinary course of business with respect to obligations
which are not yet due and payable or which are being Properly Contested;
(g) Liens securing Capitalized Lease Obligations permitted by Section 7.6(b) or
Permitted Purchase Money Indebtedness, provided that (i) such Liens were created
substantially simultaneously with the acquisition of the asset financed with
such Indebtedness (or substantially simultaneously with the incurrence of the
Capitalized Lease Obligation or Permitted Purchase Money Indebtedness, if
later), (ii) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness and (iii) the principal amount of
Indebtedness secured by any such Lien shall at no time exceed 100% of the
original purchase price of such property and, in each case, either (x) with
prior written approval of the Required Lenders or (y) to the extent contemplated
by the Approved Budget (including permitted variances therefrom); (h) Liens on
insurance policies and the proceeds thereof securing the financing of the
premiums with respect thereto incurred in the ordinary course of business;
(i) Liens disclosed on Schedule 1.2(c), provided that such Liens shall secure
only those obligations which they secure on the Closing Date (and any Permitted
Refinancing in respect thereof, either (x) subject to prior written approval of
the Required Lenders or (y) to the extent contemplated by the Approved Budget
(including permitted variances therefrom)) and shall not subsequently apply to
any other property or assets of any Credit Party, (j) Liens on Real Property
(i) which is subject to a Mortgage as of the Closing Date and which are
disclosed on any title commitments and surveys provided to Agent with respect to
such Mortgage, (ii) which consist of easements, rights-of-way, covenants,
zoning, building, and land-use laws, rules and restrictions, or other
restrictions on the use of real property which do not (individually or in the
aggregate) materially affect the value of the assets encumbered thereby or
materially impair the ability of any Credit Party to use such assets in its
business, and none of which is violated in any material aspect by existing or
proposed structures or land use or (iii) in favor of Dairy State Bank to secure
an aggregate principal amount not greater than $135,000, (k) statutory Liens in
favor of landlords, warehousemen, processors and bailees arising in the ordinary
course of business, (l) Prior Permitted Liens, (m) licenses or sublicenses of
patents, trademarks and other intellectual property rights granted by any Credit
Party or any of its Subsidiaries prior to the Petition Date in the ordinary
course of business and not (i) interfering in any respect with the ordinary
course of business of such Credit Party or Subsidiary or (ii) securing
Indebtedness, (n) Liens arising from precautionary UCC financing statements or
similar filings made in respect of operating leases, bailment arrangements and
consignment arrangements entered into by any Credit Party and not prohibited by
this Agreement or any Other Document, (o) Liens (including the right of set-off)
in favor of a bank or other depository institution arising as a matter of law,
(p) the Adequate Protection Liens and Adequate Protection Superpriority Claims,
(q) Liens to renew, extend, refinance or refund a Lien referred to in clause
(g) above; provided that (i) such new Lien shall be limited to all or part of
the same property (including future improvements thereon and accessions thereto)
subject to the original Lien, (ii) the Indebtedness secured by such Lien at such
time is not increased to any amount greater than the amount necessary to effect
a Permitted Refinancing of such Indebtedness and (iii) such renewal, extension,
refinancing or refund is either (x) granted prior written approval of the
Required Lenders or (y) to the extent contemplated by the Approved Budget
(including permitted variances therefrom), (r) Liens securing the Prior Lender
Obligations, (s) Liens created under this Agreement or any Other Document and
(t) Liens on Collateral securing Permitted Second Lien Notes thereof.

 

“Permitted Holders” shall mean any of (a) Insight Equity I LP, Insight Equity
(Tax-Exempt) I LP, Insight Equity (Cayman) I LP, Insight Equity (Affiliated
Coinvestors) I LP, and/or (b) any of their Controlled Investment Affiliates.

 

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“Permitted Purchase Money Indebtedness” shall mean Purchase Money Indebtedness
of any Credit Party or any Subsidiary thereof which is incurred after the
Closing Date and which is secured by no Lien or only by a Lien permitted by
clause (g) of the definition of “Permitted Encumbrance” as defined herein;
provided that such Indebtedness when incurred shall not exceed the purchase
price of the asset(s) financed.

 

“Permitted Refinancing” shall mean Indebtedness incurred to Refinance other
Indebtedness; provided that (i) the principal amount (or accreted value, if
applicable) of the Permitted Refinancing shall not exceed the sum of the
principal amount (or accreted value, if applicable) of the Indebtedness being
Refinanced plus accrued and unpaid interest thereon, any stated premium thereon
due upon such Refinancing pursuant to the terms of the documentation governing
such Indebtedness and fees and expenses reasonably incurred in connection with
such Refinancing, (ii) the terms and conditions of any such Permitted
Refinancing, taken as a whole, shall not be materially more restrictive on the
Credit Parties than the Indebtedness being Refinanced, (iii) the Permitted
Refinancing shall not be guaranteed by any Person that is not a guarantor of, or
be secured by any assets that are not securing, the Indebtedness being
Refinanced, (iv) if the Indebtedness being Refinanced is subordinated in right
of payment to the Obligations, such Permitted Refinancing shall be subordinated
in right of payment to the Obligations on terms taken as a whole at least as
favorable to the Lenders as those contained in the documentation governing the
Indebtedness being Refinanced, and (v) except with respect to Indebtedness
incurred pursuant to Sections 7.6(b) and (c), such Permitted Refinancing shall
have (A) a Stated Maturity no earlier than the Stated Maturity of the
Indebtedness being Refinanced, and (B) an Average Life at the time such
Permitted Refinancing is incurred that is equal to or greater than the Average
Life of the Indebtedness being Refinanced.

 

“Permitted Second Lien Notes” shall mean notes issued pursuant to the Second
Lien Note Documentation; provided that (i) the aggregate principal amount of
such notes shall not exceed the Junior Lien Obligations Cap (as defined in the
First Lien/Second Lien Intercreditor Agreement), (ii) [reserved], (iii) the
obligors in respect thereof shall not include any Person other than a Borrower
or a Guarantor, (iv) such notes shall not be secured by any asset that is not
Collateral, (v) such notes shall be subject to the First Lien/Second Lien
Intercreditor Agreement and (vi) the Second Lien Note Documentation shall not
require any payments in respect of such notes prior to January 5, 2023.

 

“Person” shall mean any individual, sole proprietorship, partnership,
corporation, business trust, joint stock company, trust, unincorporated
organization, association, limited liability company, limited liability
partnership, institution, public benefit corporation, joint venture, entity or
Governmental Body (whether federal, state, county, city, municipal or otherwise,
including any instrumentality, division, agency, body or department thereof).

 

“Petition Date” shall have the meaning set forth in the recitals to this
Agreement.

 

“Plan” shall mean any employee benefit plan within the meaning of
Section 3(3) of ERISA which is a Pension Benefit Plan, a Multiemployer Plan or a
Welfare Plan (as defined in Section 3(2) of ERISA) which provides self-insured
benefits and which is maintained by any Credit Party or any member of the
Controlled Group or to which any Credit Party or any member of the Controlled
Group is required to contribute.

 

“Post-Petition” shall mean the time period commencing immediately upon the
filing of the Cases on the Petition Date.

 

“PPSA” shall mean the Personal Property Security Act (Alberta) or similar
personal property security legislation as in effect from time to time in any
province or territory of Canada applicable to any Collateral.  References to
sections of the PPSA shall be construed to also refer to any successor sections.

 

“Pre-Petition Credit Agreement” shall mean that certain Second Amended and
Restated Revolving Credit and Security Agreement, dated as of January 5, 2018
(as amended, supplemented and otherwise modified from time to time prior to the
Closing Date), by and among the Borrowers, Parent Guarantor, the Prior Lenders,

 

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and the applicable Prior Agent, as agent for the lenders, providing for a
$75,000,000 revolving credit facility to the Borrowers.

 

“Pre-Petition Indebtedness” shall mean all Indebtedness of any of the Credit
Parties outstanding on the Petition Date immediately prior to the filing of the
Cases other than Indebtedness under (i) the Pre-Petition Credit Agreement and
(ii) the Second Lien Note Documentation.

 

“Pre-Petition Liens” shall mean the Liens securing the Prior Lender Obligations.

 

“Pre-Petition Loan” shall mean (i) all “Advances” as such term is defined in the
Pre-Petition Credit Agreement and (ii) all “Notes” as such term is defined in
the Second Lien Note Purchase Agreement, as the case may be.

 

“Pre-Petition Loan Documents” shall mean the “Agreement” and the “Other
Documents” as such terms are defined in the Pre-Petition Credit Agreement and
the Second Lien Note Purchase Agreement, as the case may be.

 

“Prime Rate” shall mean for any day, the rate of interest in effect for such day
as published in the “Money Rates” section of The Wall Street Journal as being
the “Prime Rate” (or, if more than one rate is published as the Prime Rate, then
the highest of such rates). The Prime Rate will change as of the date of
publication in The Wall Street Journal of a Prime Rate that is different from
that published on the preceding Business Day. In the event that The Wall Street
Journal shall, for any reason, fail or cease to publish the Prime Rate, the
Agent shall choose a reasonable comparable index or source to use as the basis
for the Prime Rate with the consent of the Borrower (not to be unreasonably
withheld or delayed).

 

“Prior Agent” shall mean (i) HPS (as successor to PNC Bank, National Association
on and from March 15, 2019), as administrative agent and collateral agent under
the Pre-Petition Credit Agreement and (ii) HPS, as notes agent and collateral
agent under the Second Lien Note Purchase Agreement, as the case may be.

 

“Prior Lender Obligations” shall mean all “Obligations” under, and as defined
in, the Pre-Petition Credit Agreement and/or the Second Lien Note Purchase
Agreement, as applicable, of any Credit Party and any of their Subsidiaries to
the Secured Parties (under, and as defined in, the Pre-Petition Credit Agreement
and the Second Lien Note Purchase Agreement, as applicable) pursuant to the
Pre-Petition Credit Agreement and/or the Second Lien Note Purchase Agreement, as
applicable and all instruments and documents executed pursuant thereto or in
connection therewith.

 

“Prior Lenders” means (i) the lenders under the Pre-Petition Credit Agreement
and (ii) the noteholders under the Second Lien Note Purchase Agreement, as the
case may be.

 

“Prior Permitted Liens” shall mean (i) valid, perfected, and unavoidable Liens
in favor of third parties that were in existence immediately prior to the
Petition Date and senior in priority to the liens and security interests
securing the Prepetition Facilities as of the Closing Date, (ii) to valid,
perfected, and unavoidable Liens in favor of third parties that were in
existence immediately prior to the Petition Date that were perfected subsequent
to the Petition Date as permitted by Section 546(b) of the Bankruptcy Code,
subject as to priority to such Liens in favor of such third parties, and
(iii) other Liens and encumbrances that are senior in priority by operation of
Law to the Liens and security interests securing the DIP Facility.

 

“Prior Week” shall mean, as of any date of determination, the immediately
preceding week ended on a Saturday and commencing on the prior Sunday.

 

“Pro Rata Share” shall have the meaning set forth in Section 16.19(h) hereof.

 

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“Properly Contested” shall mean, in the case of any Indebtedness, obligation or
Lien, as applicable, of any Person (including any Taxes) that is not paid as and
when due and payable by reason of such Person’s bona fide dispute concerning its
liability to pay same or concerning the amount thereof: (i) such Indebtedness or
Lien, as applicable, is being properly contested in good faith by appropriate
proceedings promptly instituted and diligently conducted; (ii) such Person has
established appropriate reserves as shall be required in conformity with GAAP;
(iii) the non-payment of such Indebtedness will not have a Material Adverse
Effect; (iv) no Lien is imposed upon any of such Person’s assets with respect to
such Indebtedness unless such Lien is at all times junior and subordinate in
priority to the Liens in favor of Agent (except only with respect to Liens that
have priority as a matter of applicable state law) and enforcement of such Lien
is stayed during the period prior to the final resolution or disposition of such
dispute; (v) if such Indebtedness or Lien, as applicable, results from, or is
determined by the entry, rendition or issuance against a Person or any of its
assets of a judgment, writ, order or decree, enforcement of such judgment, writ,
order or decree is stayed pending a timely appeal or other judicial review; and
(vi) if such contest is abandoned, settled or determined adversely (in whole or
in part) to such Person, such Person forthwith pays such Indebtedness and all
penalties, interest and other amounts due in connection therewith.

 

“Published Rate” shall mean the rate of interest published each Business Day in
the Wall Street Journal “Money Rates” listing under the caption “London
Interbank Offered Rates” for a one month period (or, if no such rate is
published therein for any reason, then the Published Rate shall be the rate at
which U.S. dollar deposits are offered by leading banks in the London interbank
deposit market for a one month period as published in another publication
selected by Agent).

 

“Purchase Money Indebtedness” shall mean and include (i) Indebtedness (other
than the Obligations) of any Credit Party or Subsidiary thereof for the payment
of all or any part of the purchase price of any Equipment, real property or
other fixed assets, (ii) any Indebtedness (other than the Obligations) of any
Borrower incurred at the time of or within thirty (30) days prior to or thirty
(30) days after the acquisition of any Equipment, real property or other fixed
assets for the purpose of financing all or any part of the purchase price
thereof (whether by means of a loan agreement, capitalized lease or otherwise),
and (iii) any Permitted Refinancing thereof outstanding at the time, in each
case of the foregoing, incurred in the ordinary course of business.

 

“Purchasing CLO” shall have the meaning set forth in Section 16.3(d) hereof.

 

“Purchasing Lender” shall have the meaning set forth in Section 16.3(c) hereof.

 

“Qualified ECP Credit Party” shall mean each Credit Party that (a) has total
assets exceeding $10,000,000 on the Eligibility Date, or (b) such other Person
as is qualified to give a “letter of credit or keepwell, support, or other
agreement” for purposes of Section 1a(18)(A)(v)(II) of the CEA.

 

“Railcar Lease and Transload Facilities” shall mean an operating lease of
railcars or with respect to transloading facilities in the ordinary course of
business of the Borrowers, including any such operating lease of railcars that
is recharacterized as a Capital Lease in conformity with GAAP after giving
effect to the adoption of ASU No. 2016-02 “Leases (Topic 842)” and ASU
No. 2018-11 “Leases (Topic 842)”.

 

“RCRA” shall mean the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901
et seq., as same may be amended from time to time.

 

“Real Property” shall mean all real property (including fixtures and
improvements thereon) owned or leased by any Credit Party.

 

“Receivables” shall mean and include, as to each Credit Party, all of such
Credit Party’s accounts, contract rights, instruments (including those
evidencing indebtedness owed to such Credit Party by its Affiliates), documents,
chattel paper (including electronic chattel paper), general intangibles relating
to accounts, drafts and acceptances, credit card receivables and all other forms
of obligations owing to such Credit Party arising out of

 

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or in connection with the sale or lease of Inventory or the rendition of
services, all supporting obligations, guarantees and other security therefor,
whether secured or unsecured, now existing or hereafter created, and whether or
not specifically sold or assigned to Agent hereunder.

 

“Recipient” shall mean the Agent or any Lender.

 

“Refinance” shall mean, in respect of any Indebtedness, to refinance, extend,
renew, refund, repay, prepay, redeem, replace, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such Indebtedness. 
“Refinanced” and “Refinancing” shall have correlative meanings.

 

“Register” shall have the meaning set forth in Section 16.3(e) hereof.

 

“Release” shall have the meaning set forth in Section 5.7(c)(i) hereof.

 

“Replacement Notice” shall have the meaning set forth in Section 3.11 hereof.

 

“Reportable Compliance Event” shall mean that any Covered Entity becomes a
Sanctioned Person, or is charged by indictment, criminal complaint or similar
charging instrument, arraigned, or custodially detained in connection with any
Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or
self-discovers facts or circumstances implicating any aspect of its operations
with the actual violation of any Anti-Terrorism Law.

 

“Reportable Event” shall mean a reportable event described in Section 4043(c) of
ERISA or the regulations promulgated thereunder (other than an event for which
the 30-day notice period has been waived by regulation).

 

“Required Lenders” shall mean Lenders holding fifty-one percent (51%) or more of
either (a) the aggregate of the Commitment Amounts of all Lenders (excluding any
Defaulting Lender), or (b) after the termination of all Commitments of the
Lenders hereunder, the outstanding Advances excluding such Obligations held by a
Defaulting Lender.

 

“Reserve Percentage” shall mean as of any day the maximum percentage in effect
on such day as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the reserve requirements (including
supplemental, marginal and emergency reserve requirements) with respect to
eurocurrency funding.

 

“Restricted Payment” shall have the meaning set forth in Section 7.5.

 

“Restricted Subsidiaries” shall mean each Subsidiary of the Parent Guarantor.

 

“Restructuring Advisor” means a financial advisor reasonably acceptable to the
Agent.  For the avoidance of doubt, Ankura shall be a reasonably acceptable
Restructuring Advisor.

 

“Restructuring Agreement” shall mean that certain Restructuring Support
Agreement dated as of April 18, 2019 by and among the Debtors, certain direct
and indirect equity holders the General Partner, the Prior Agent and the Prior
Lenders.

 

“Revolving Credit Note” shall mean, collectively, the promissory notes referred
to in Section 2.1 hereof.

 

“Revolving Exposure” shall mean, with respect to any Lender at any time, the sum
of the outstanding principal amount of such Lender’s Advances (other than any
Roll-Up Loans), at such time.

 

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“Revolving Facility Usage” shall mean at any time the sum of the outstanding
Advances (other than the Roll-Up Loans).

 

“Revolving Interest Rate” shall mean, (a) with respect to Domestic Rate Loans,
an interest rate per annum equal to the sum of the Applicable Margin for
Domestic Rate Loans plus the Alternate Base Rate and (b) with respect to LIBOR
Rate Loans, the sum of the Applicable Margin for LIBOR Rate Loans plus the LIBOR
Rate.

 

“Roll-Up Date” shall have the meaning set forth in Section 2.1(b).

 

“Roll-Up Loan” shall have the meaning set forth in Section 2.1(b).

 

“San Antonio Operational Date” means the date upon which the Credit Parties have
resumed mining operations at the A and B mines located at the Osburn Facility.

 

“San Antonio A and B Mine Shutdown” means the temporary cessation of mining
operations at the A and B mines located at the Osburn Facility, to evaluate and
remediate conditions in respect of certain pond berms at said facility,
beginning on or around June 21, 2019, and ending on the San Antonio Operational
Date.

 

“Sanctioned Country” shall mean a country subject to a sanctions program
maintained under any Anti-Terrorism Law.

 

“Sanctioned Person” shall mean any Person, group, regime, entity or thing
(a) listed or otherwise recognized as a specially designated, prohibited,
sanctioned or debarred Person, group, regime, entity or thing, or subject to any
limitations or prohibitions (including but not limited to the blocking of
property or rejection of transactions), under any Anti-Terrorism Law,
(b) located, organized or resident in a Sanctioned Country, or (c) owned or
controlled by any Person or Persons referenced in the foregoing clause (a) or
(b).

 

“SEC” shall mean the Securities and Exchange Commission or any successor
thereto.

 

“Second Lien Note Documentation” shall mean (i) the Second Lien Note Purchase
Agreement, dated as of January 5, 2018, among the Credit Parties, HPS Investment
Partners, LLC, as notes agent and collateral agent, and the lenders from time to
time party thereto and (ii) the “Other Documents” as defined in the agreement
referred to in clause (i), in each case, as amended, supplemented or otherwise
modified from time to time.

 

“Secured Parties” shall mean, collectively, Agent and Lenders, together with any
Person to whom any Hedge Liabilities or Cash Management Liabilities are owed and
each other holder of any of the Obligations, and the respective successors and
assigns of each of them.

 

“Securities Act” shall mean the Securities Act of 1933.

 

“Security Agreement” shall mean the provisions of Article IV hereof.

 

“Specified Documents” shall have the meaning set forth on Schedule
1.2(d) hereto.

 

“Specified Leases” shall have the meaning set forth on Schedule 1.2(d) hereto.

 

“Specified Note” shall have the meaning set forth on Schedule 1.2(d) hereto.

 

“SSS” shall have the meaning set forth in the preamble hereto.

 

“Stated Maturity” shall mean, with respect to any security or other
Indebtedness, the date specified in such security or the documents governing
such Indebtedness as the fixed date on which the final payment of

 

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principal of such security or other Indebtedness is due and payable, including
pursuant to any mandatory redemption provision (but excluding any provision
providing for the repurchase of such security or other Indebtedness at the
option of the holder thereof upon the happening of any contingency unless such
contingency has occurred).

 

“Subsidiary” of any Person shall mean a corporation or other entity whose Equity
Interests having ordinary voting power (other than Equity Interests having such
power only by reason of the happening of a contingency) to elect a majority of
the directors of such corporation, or other Persons performing similar functions
for such entity, are owned, directly or indirectly, by such Person.

 

“Subsidiary Stock” shall mean:

 

(a)                                 all of the issued and outstanding Equity
Interests of each issuer at any time owned or otherwise acquired by any Credit
Party, in each case together with the certificates (or other agreements or
instruments), if any, representing such Equity Interests, and all options and
other rights, contractual or otherwise, with respect thereto, including, but not
limited to, the following; provided that, in the case of any issuer that is a
Foreign Subsidiary of a Credit Party, and only to the extent a pledge in excess
of 65% would result in material adverse tax consequences, such Equity Interests
shall be limited to sixty-five percent (65%) of each class of the issued and
outstanding Equity Interests entitled to vote (within the meaning of Treas. 
Reg.  Section 1.956-2(c)(2)) and one hundred percent (100%) of each class of the
issued and outstanding Equity Interests not entitled to vote (within the meaning
of Treas.  Reg.  Section 1.956-2(c)(2)) (“Non-Voting Equity”) of each such
Foreign Subsidiary of a Credit Party (but only to the extent that the pledge of
such Non-Voting Equity would not cause the Obligations to be treated as
“United States property” of such Foreign Subsidiary within the meaning of
Treas.  Reg.  Section 1.956-2) (collectively, the “Pledged Capital Stock”):

 

(x)                                 subject to the percentage restrictions
described above, all shares, securities, membership interests or other equity
interests representing a dividend on any of the Pledged Capital Stock, or
representing a distribution or return of capital upon or in respect of the
Pledged Capital Stock, or resulting from a stock split, revision,
reclassification or other exchange therefor, and any subscriptions, warrants,
rights or options issued to the holder of, or otherwise in respect of, the
Pledged Capital Stock; and

 

(y)                                 without affecting the obligations of the
Credit Parties under any provision prohibiting such action hereunder, in the
event of any consolidation or merger involving the issuer of any Pledged Capital
Stock and in which such issuer is not the surviving entity, all shares of each
class of the Equity Interests of the successor entity formed by or resulting
from such consolidation or merger;

 

(b)                                 subject to the percentage restrictions
described above, any and all other Equity Interests owned by any Credit Party in
any Domestic Subsidiary or any Foreign Subsidiary; and

 

(c)                                  all proceeds and products of the foregoing,
however and whenever acquired and in whatever form.

 

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

 

“Swap” shall mean any “swap” as defined in Section 1a(47) of the CEA and
regulations thereunder, other than (a) a swap entered into, or subject to the
rules of, a board of trade designated as a contract market under Section 5 of
the CEA, or (b) a commodity option entered into pursuant to CFTC Regulation
32.3(a).

 

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“Swap Obligation” shall mean any obligation to pay or perform under any
agreement, contract or transaction that constitutes a Swap which is also a
Lender-Provided Hedge.

 

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

 

“Termination Date” shall mean the date on which (a) all of the Obligations
(excluding contingent indemnification obligations with respect to which no
claims have been made) have been paid in full in cash and (b) all Commitments
have been terminated; provided, however, if at any time, any payment, or any
part thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by any Lender upon the insolvency, bankruptcy
or reorganization of any of the Borrowers, or otherwise, the Termination Date
shall be deemed to have not occurred.

 

“Termination Event” shall mean (i) a Reportable Event with respect to any
Pension Benefit Plan; (ii) the withdrawal of any Credit Party or any member of
the Controlled Group from a Pension Benefit Plan during a plan year in which
such Person was a “substantial employer” as defined in Section 4001(a)(2) of
ERISA or a cessation of operations that is treated as such a withdrawal under
Section 4062(e) of ERISA; (iii) the providing of notice of intent to terminate a
Pension Benefit Plan in a distress termination described in Section 4041(c) of
ERISA or any termination under Section 4042 of ERISA, or of the appointment of a
trustee to administer a Pension Benefit Plan, and with respect to which any
Credit Party has liability (including liability in its capacity as a member of
the Controlled Group of another entity); (iv) the termination of a Multiemployer
Plan pursuant to Section 4041A or 4042 of ERISA, which termination could
reasonably result in material liability to any Credit Party (including liability
in its capacity as a member of the Controlled Group of another entity); (v) the
partial or complete withdrawal within the meaning of Section 4203 or 4205 of
ERISA, of any Credit Party or any member of the Controlled Group from a
Multiemployer Plan, which withdrawal could reasonably result in liability of any
Credit Party (including liability in its capacity as a member of the Controlled
Group of another entity); (vi) notice that a Multiemployer Plan is subject to
Section 4245 of ERISA; or (vii) the imposition of any liability under Title IV
of ERISA, other than for PBGC premiums due but not delinquent, upon any Borrower
or any member of the Controlled Group.

 

“Test Period” shall mean, as of any date of determination, the period of four
consecutive fiscal quarters of the Parent Guarantor most recently ended on or
prior to such date for which financial statements have been or are required to
be delivered pursuant to Section 9.8.

 

“Toxic Substance” shall mean and include any material present on the Real
Property which has been shown to have significant adverse effect on human health
or which is subject to regulation under the Toxic Substances Control Act (TSCA),
15 U.S.C. §§ 2601 et seq., or any other applicable Federal or state laws now in
force or hereafter enacted that regulate toxic substances.  “Toxic Substance”
includes but is not limited to asbestos, polychlorinated biphenyls (PCBs) and
lead-based paints.

 

“Transactions” shall mean (a) the entering into this Agreement, (b) the granting
of Liens to secure the Obligations, (c) the consummation of any other
transactions in connection with the foregoing including the borrowing of
Advances hereunder on the Closing Date, if applicable, (d) the payment of fees
and expenses in connection therewith and (e) the filing of the Cases on the
Petition Date.

 

“Transferee” shall have the meaning set forth in Section 16.3(d) hereof.

 

“Uniform Commercial Code” shall have the meaning set forth in Section 1.3
hereof; provided however that, at any time, if by reason of mandatory provisions
of law, any or all of the perfection or priority of Agent’s and the Secured
Parties’ security interest in any item or portion of the Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than the
State of New York, the term “Uniform Commercial Code” shall mean the Uniform
Commercial Code as in effect, at such time, in such other jurisdiction for
purposes

 

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of the provisions hereof, the Security Agreement and any Other Document relating
to such perfection or priority and for purposes of definitions relating to such
provisions.

 

“Unliquidated Obligations” means, at any time, any Obligations (or portion
thereof) that are contingent in nature or unliquidated at such time or an
obligation to provide collateral to secure such obligations.

 

“Unrestricted Cash” shall mean the aggregate amount of all cash or Cash
Equivalents on the consolidated balance sheet of the Parent Guarantor and its
Restricted Subsidiaries that is not “restricted” for purposes of GAAP, and is
pledged to secure the Obligations and subject to a Deposit Account Control
Agreement.

 

“USA PATRIOT Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.

 

“Write-down and Conversion Powers” shall mean, 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.

 

1.3.                            Uniform Commercial Code Terms.  All terms used
herein and defined in the Uniform Commercial Code as adopted in the State of New
York from time to time (the “Uniform Commercial Code”) shall have the meaning
given therein unless otherwise defined herein.  Without limiting the foregoing,
the terms “accounts,” “as-extracted collateral,” “chattel paper” (and
“electronic chattel paper” and “tangible chattel paper”), “commercial tort
claims,” “deposit accounts,” “documents,” “equipment,” “financial asset,”
“fixtures,” “general intangibles,” “goods,” “instruments,” “inventory,”
“investment property,” “letter-of-credit rights,” “payment intangibles,”
“proceeds,” “promissory note” “securities,” “software” and “supporting
obligations” as and when used in the description of Collateral or the
capitalized terms used within the description of Collateral shall have the
meanings given to such terms in Articles 8 or 9 of the Uniform Commercial Code. 
To the extent the definition of any category or type of collateral is expanded
by any amendment, modification or revision to the Uniform Commercial Code, such
expanded definition will apply automatically as of the date of such amendment,
modification or revision.

 

1.4.                            Certain Matters of Construction.

 

(a)                                 The following rules of construction shall
apply in this Agreement and the Other Documents:

 

(i)                                     The terms “herein,” “hereof” and
“hereunder” and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision.

 

(ii)                                  All references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement.

 

(iii)                               Any pronoun used shall be deemed to cover
all genders.

 

(iv)                              Wherever appropriate in the context, terms
used herein in the singular also include the plural and vice versa.

 

(v)                                 All references to Laws shall include any
amendments of same and any successor Laws.

 

(vi)                              Unless otherwise provided, all references to
any instruments or agreements, including references to this Agreement or any of
the Other Documents, shall include any and all modifications or

 

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amendments thereto, and any and all restatements, amendment and restatements,
extensions or renewals thereof, in each case, in accordance therewith and
herewith.

 

(vii)                           All references herein to the time of day shall
mean the time in New York, New York.

 

(viii)                        Unless otherwise provided, all calculations shall
be performed with Inventory valued at the lower of cost (on a weighted average
basis) or current market value.

 

(ix)                              Whenever the words “including” or “include”
shall be used, such words shall be understood to mean “including, without
limitation” or “include, without limitation”.

 

(x)                                 A Default or Event of Default shall be
deemed to exist at all times during the period commencing on the date that such
Default or Event of Default occurs to the date on which such Default or Event of
Default is waived in writing pursuant to this Agreement or, in the case of a
Default, is cured within any period of cure expressly provided for in this
Agreement; and an Event of Default shall “continue” or be “continuing” until
such Event of Default has been waived in writing by the Required Lenders or
cured to the satisfaction of the Required Lenders.

 

(xi)                              Any Lien referred to in this Agreement or any
of the Other Documents as having been created in favor of Agent, any agreement
entered into by Agent pursuant to this Agreement or any of the Other Documents,
any payment made by or to or funds received by Agent pursuant to or as
contemplated by this Agreement or any of the Other Documents, or any act taken
or omitted to be taken by Agent, shall, unless otherwise expressly provided, be
created, entered into, made or received, or taken or omitted, for the benefit or
account of Agent and Secured Parties.

 

(xii)                           Wherever the phrase “to the best of Credit
Parties’ knowledge” or words of similar import relating to the knowledge or the
awareness of any Borrower are used in this Agreement or Other Documents, such
phrase shall mean and refer to (x) the actual knowledge of an Authorized Officer
of any Credit Party or (y) the knowledge that an Authorized Officer would have
obtained if he had engaged in good faith and diligent performance of his duties.

 

(b)                                 All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default if such action is taken or condition exists.

 

(c)                                  All representations and warranties
hereunder shall be given independent effect so that if a particular
representation or warranty proves to be incorrect or is breached, the fact that
another representation or warranty concerning the same or similar subject matter
is correct or is not breached will not affect the incorrectness of a breach of a
representation or warranty hereunder.  Notwithstanding the foregoing, with
respect to any covenant or any representation and warranty relating to ERISA and
environmental matters, such covenant and representation and warranty shall
control over any non-specific compliance with law covenant or representation to
the extent that there is a direct conflict.  All references to filing,
registering or recording financing statements or other required documents under
the Uniform Commercial Code shall be deemed to include filings and registrations
under the PPSA.

 

1.5.                            Accounting for Derivatives.  In making any
computation pursuant to Section 6.5 by reference to any item appearing on the
balance sheet or other financial statement of Parent Guarantor and its
Subsidiaries, all adjustments to such computation resulting from the application
of Statement of Financial Accounting Standards No. 133 shall be disregarded,
except to the extent a gain or loss is actually realized with respect to any
such item.

 

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II.                                   ADVANCES; PAYMENTS.

 

2.1.                            Advances.

 

(a)                                 Subject to the terms and conditions set
forth in this Agreement including this Section 2.1, each Lender, severally and
not jointly, will make Advances to Borrowers; provided that, after giving effect
to any Advance, (i) such Lender’s Revolving Exposure shall not exceed such
Lender’s Commitment Amount and (ii) the Revolving Facility Usage does not exceed
the Maximum Advance Amount.  The Advances shall be evidenced, if requested by
such Lender, by one or more promissory notes (collectively, the “Revolving
Credit Note”) substantially in the form attached hereto as Exhibit 2.1(a).

 

(b)                                 The Agent, the Lenders and the Credit
Parties each acknowledge and agree that (i) upon the making of a payment
pursuant to Section 2.17 under the heading “FIRST” (the date as specified in the
Approved Budget for any such payment, the “Roll-Up Date”), such portion of the
Pre-Petition Loans that are repaid on such Roll-Up Date shall be deemed borrowed
and funded hereunder concurrently on such Roll-Up Date (the “Roll-Up Loans”) in
accordance with the terms of the applicable Order, (ii) on the applicable
Roll-Up Date, a Roll-Up Loan shall be deemed funded by each Lender in the exact
same principal amount equal to the aggregate outstanding principal amount of the
Pre-Petition Loans held by such Lender on the Roll-Up Date (immediately prior to
the funding of such Roll-Up Loan) and (iii) the aggregate outstanding principal
amount of the Pre-Petition Loans shall be automatically substituted and
exchanged for (and deemed prepaid by) the Roll-Up Loans deemed made hereunder
(and the parties hereto hereby agree that the Agent and the Agent (as defined in
the Pre-Petition Credit Agreement) may each conclusively rely on the provisions
of this Section 2.1(b) in adjusting the Register and the Register (as defined in
the Pre-Petition Credit Agreement) to reflect (x) the cancellation of the
aggregate outstanding principal amount of the Pre-Petition Loans and (y) the
Roll-Up Loans to be received by the Lenders upon the Roll-Up Date; provided,
that notwithstanding the foregoing, (x) no Prior Lender shall receive its
portion of the Roll-Up Loans hereunder (and the Pre-Petition Loans of such Prior
Lender shall not be deemed exchanged for Roll-Up Loans hereunder) unless such
Prior Lender, to the extent such Prior Lender is not then already a Lender
hereunder, has, on or prior to the Roll-Up Date, executed and delivered to the
Agent a joinder to this Agreement in form and substance reasonably satisfactory
to the Agent and (y) unless an appropriate Commitment Transfer Supplement (as
defined in the Pre-Petition Credit Agreement) has become effective prior to the
Roll-Up Date between any Prior Lender and an assignee thereof who is intended to
receive its Roll-Up Loans hereunder, only the lenders listed in the Register (as
defined in the Pre-Petition Credit Agreement) as of the Roll-Up Date will
receive Roll-Up Loans hereunder (subject to clause (x) of this proviso).
Notwithstanding anything to the contrary contained herein, (i) for the period
commencing on the Roll-Up Date, Roll-Up Loans shall accrue interest hereunder as
a Domestic Rate Loan unless and until the Borrowing Agent elects to convert such
Domestic Rate Loan to a LIBOR Rate Loan in accordance with Section 2.2(b) and
(e) and (ii) on the first Interest Payment Date applicable to each Roll-Up Loan,
in addition to paying all accrued and unpaid interest on such Roll-Up Loan for
the period commencing on the Roll-Up Date, the Borrowing Agent shall also pay to
the Lenders all accrued and unpaid interest on such Pre-Petition Loan that was
exchanged into such Roll-Up Loan for the period ending on the Roll-Up Date at
the interest rate applicable to the Prepetition Loan being exchanged for such
Roll-Up Loan hereunder as in effect immediately prior to the Roll-Up Date, in
accordance with the terms of this Agreement, unless the applicable Order
requires the Borrowers to make such payment to the applicable Prior Lenders,
prior to such Interest Payment Date, as an adequate protection payment or
otherwise.

 

2.2.                            Procedures for Requesting Advances; Procedures
for Selection of Applicable Interest Rates for All Advances.

 

(a)                                 [Reserved].

 

(b)                                 Notwithstanding the provisions of subsection
(a) above, in the event any Borrower desires to obtain an Advance hereunder
(other than a Roll-Up Loan), Borrowing Agent shall give Agent written notice (a
“Borrowing Notice”) by no later than 10:00 a.m. (New York time) on the day which
is five (5) Business Days

 

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prior to the date such Advance is to be borrowed (or such shorter period as the
Agent may agree in its sole discretion), specifying (i) the date of the proposed
borrowing (which shall be a Business Day), (ii) the type of borrowing and the
amount on the date of such Advance to be borrowed, which amount shall be in an
aggregate principal amount that is not less than $7,500,000 or in integral
multiples of $500,000 in excess thereof thereafter, (iii) whether the Advance is
to be a LIBOR Rate Loan or an Domestic Rate Loan, (iv) if applicable, the
duration of the first Interest Period therefor and (v) the applicable Borrower’s
wire instructions; provided that, no more than three (3) Borrowing Requests may
be delivered by the Borrowing Agent as follows: as follows: on or about July 19,
2019, on or about August 19, 2019, on or about September 23, 2019 and on or
about the Approved Plan Effective Date, in each case, the proceeds of which
shall only be used in accordance with Section 2.12; provided, further that no
Lender shall be obligated to make more than three (3) Advances (other than any
Roll-Up Loans); provided, further that no Borrower may request an Advance in an
amount greater than it requires for the following four-week period in accordance
with the Approved Budget.  Interest Periods for LIBOR Rate Loans shall be for
one month; provided, (A) if an Interest Period would end on a day that is not a
Business Day, it shall end on the next succeeding Business Day unless such day
falls in the next succeeding calendar month in which case the Interest Period
shall end on the next preceding Business Day, (B) any Interest Period that
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the last calendar month
of such Interest Period and (C) no Interest Period shall extend beyond the
Maturity Date.  At the election of Agent or the Required Lenders, no Advance
shall be made available to any Borrower during the continuance of a Default or
an Event of Default.  After giving effect to each requested LIBOR Rate Loan,
including those which are converted from a Domestic Rate Loan under
Section 2.2(e), there shall not be outstanding more than eight (8) LIBOR Rate
Loans (including, for the avoidance of doubt, any Roll Up Loans), in the
aggregate.

 

(c)                                  Each Interest Period of a LIBOR Rate Loan
shall commence on the date such LIBOR Rate Loan is made and shall end on such
date as Borrowing Agent may elect as set forth in subsection (b)(iii) above or
subsection (e) below.

 

(d)                                 Borrowing Agent shall elect the initial
Interest Period applicable to a LIBOR Rate Loan in the Borrowing Notice given to
Agent pursuant to Section 2.2(b) or by its notice of conversion given to Agent
pursuant to Section 2.2(e), as the case may be.  Borrowing Agent shall elect the
duration of each succeeding Interest Period by giving irrevocable written notice
to Agent of such duration not later than 10:00 a.m. (New York time) on the day
which is five (5) Business Days prior to the last day of the then current
Interest Period applicable to such LIBOR Rate Loan.  If Agent does not receive
timely notice of the Interest Period elected by Borrowing Agent, Borrowing Agent
shall be deemed to have elected to convert to a Domestic Rate Loan subject to
Section 2.2(e) below.

 

(e)                                  Provided that no Event of Default shall
have occurred and be continuing with respect to which Agent or the Required
Lenders have elected to suspend Borrower’s ability to incur LIBOR Rate Loans,
Borrowing Agent may, with respect to any Advance, on the last Business Day of
the then current Interest Period applicable to any outstanding LIBOR Rate Loan,
or on any Business Day with respect to Domestic Rate Loans, convert any such
loan into a loan of another type in the same aggregate principal amount;
provided that any conversion of a LIBOR Rate Loan shall be made only on the last
Business Day of the then current Interest Period applicable to such LIBOR Rate
Loan.  If Borrowing Agent desires to convert a loan, Borrowing Agent shall give
Agent written notice by no later than 10:00 a.m. (New York time) (i) on the day
which is five (5) Business Days’ prior to the date on which such conversion is
to occur with respect to a conversion from a Domestic Rate Loan to a LIBOR Rate
Loan, or (ii) on the day which is one (1) Business Day prior to the date on
which such conversion is to occur with respect to a conversion from a LIBOR Rate
Loan to a Domestic Rate Loan, specifying, in each case, the date of such
conversion, the loans to be converted and if the conversion is from a Domestic
Rate Loan to any other type of loan, the duration of the first Interest Period
therefor.

 

(f)                                   At its option and upon written notice
given prior to 10:00 a.m. (New York time) at least three (3) Business Days’
prior to the date of such prepayment, any Borrower may prepay the LIBOR Rate
Loans in whole at any time or in part from time to time with accrued interest on
the principal being prepaid to the date of

 

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such repayment. Borrowing Agent shall specify the date of prepayment of Advances
which are LIBOR Rate Loans. No Borrower may, at its option, prepay or repay the
Advances in whole at any time or in part from time to time other than on the
Maturity Date or in accordance with this Section and Sections 2.6, 2.17 or 11.1
hereof.  In the event that any prepayment of a LIBOR Rate Loan is required or
permitted on a date other than the last Business Day of the then current
Interest Period with respect thereto, such Borrower shall indemnify Agent and
Lenders therefor in accordance with Section 2.2(g) hereof.

 

(g)                                  Each Borrower shall indemnify Agent and
Lenders and hold Agent and Lenders harmless from and against any and all actual
losses or expenses (including, without limitation, any loss or expense arising
from the reemployment of funds obtained by Agent or any Lender or from fees
payable to terminate the deposits from which such funds were obtained) that
Agent and Lenders may sustain or incur as a consequence of any prepayment
(whether voluntary, as a result of acceleration or otherwise), conversion of or
to, continuation of, or any default by any Borrower in the payment of the
principal of or interest on any LIBOR Rate Loan or failure by any Borrower to
complete a borrowing of, a prepayment of or conversion of or to, or continuation
of a LIBOR Rate Loan on a day which is not the last day of an Interest Period
with respect thereto, including, but not limited to, any interest payable by
Agent or Lenders to lenders of funds obtained by it in order to make or maintain
its LIBOR Rate Loans hereunder, or after notice thereof has been given.  A
certificate in reasonable detail as to any additional amounts payable pursuant
to the foregoing sentence submitted by Agent or any Lender to Borrowing Agent
shall be conclusive absent manifest error.  Failure or delay on the part of
Agent or any Lender to demand compensation pursuant to this section shall not
constitute a waiver of Agent’s or such Lender’s right to demand such
compensation.

 

(h)                                 Notwithstanding any other provision hereof,
if any Applicable Law, treaty, regulation or directive, or any change therein or
in the interpretation or application thereof, including without limitation any
Change in Law, shall make it unlawful for Lenders or any Lender (for purposes of
this subsection (h), the term “Lender” shall include any Lender and the office
or branch where any Lender or any corporation or bank controlling such Lender
makes or maintains any LIBOR Rate Loans) to make or maintain its LIBOR Rate
Loans, the obligation of Lenders to make LIBOR Rate Loans hereunder shall
forthwith be cancelled and Borrowers shall, if any affected LIBOR Rate Loans are
then outstanding, either pay all such affected LIBOR Rate Loans or convert such
affected LIBOR Rate Loans into loans of another type (either on the last day of
the Interest Period therefor, if Lenders may lawfully continue to maintain such
LIBOR Rate Loans to such day, or immediately, if Lenders may not lawfully
continue to maintain such LIBOR Rate Loans).  If any such payment or conversion
of any LIBOR Rate Loan is made on a day that is not the last day of the Interest
Period applicable to such LIBOR Rate Loan, Borrowers shall pay Agent such amount
or amounts as may be necessary to compensate Lenders for any actual loss or
expense sustained or incurred by Lenders in respect of such LIBOR Rate Loan as a
result of such payment or conversion, including (but not limited to) any
interest or other amounts payable by Lenders to lenders of funds obtained by
Lenders in order to make or maintain such LIBOR Rate Loan.  A certificate in
reasonable detail as to any additional amounts payable pursuant to the foregoing
sentence submitted by Lenders to Borrowing Agent shall be conclusive absent
manifest error.  Failure or delay on the part of Agent or any Lender to demand
compensation pursuant to this section shall not constitute a waiver of Agent’s
or such Lender’s right to demand such compensation.  A certificate as to any
amounts that a Lender is entitled to receive under this Section 2.2 submitted by
such Lender, through Agent, to Borrowing Agent shall be conclusive in the
absence of clearly demonstrable error and all such amounts shall be paid by
Borrowers promptly upon demand by such Lender.  This covenant shall survive the
termination of this Agreement and the payment of the Notes and all other amounts
payable hereunder.

 

2.3.                            Disbursement of Advance Proceeds.  All Advances
shall be disbursed from whichever office or other place Agent may designate from
time to time and, together with any and all other Obligations of Borrowers to
Agent or Lenders, shall be charged to Borrowers’ Account on Agent’s books. 
Prior to the Maturity Date, Borrowers may use the Advances by borrowing in
accordance with the terms and conditions hereof.  The proceeds of each Advance
requested by Borrowing Agent on behalf of any Borrower or deemed to have been
requested by any Borrower under Section 2.2(b) hereof shall, with respect to
requested Advances to the extent Lenders make such Advances, be made available
to the applicable Borrower on the day specified in the

 

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Borrowing Notice by way of wire transfer to such Borrower’s operating account at
such bank as Borrowing Agent may designate following notification to Agent, in
immediately available federal funds or other immediately available funds or,
with respect to Advances deemed to have been requested by any Borrower, be
disbursed to Agent to be applied to the outstanding Obligations giving rise to
such deemed request.

 

2.4.                            [Reserved].

 

2.5.                            Repayment of Advances.

 

(a)                                 The Advances (including, for the avoidance
of doubt, the Roll-Up Loans) shall be due and payable in full on the Maturity
Date subject to earlier prepayment as herein provided.

 

(b)                                 [Reserved].

 

(c)                                  All payments of principal, interest and
other amounts payable hereunder, or under any of the Other Documents shall be
made to Agent at the Payment Office not later than 1:00 P.M. (New York time) on
the due date therefor in lawful money of the United States of America in federal
funds or other funds immediately available to Agent.  Agent shall have the right
to effectuate payment of any and all Obligations due and owing hereunder by
charging Borrowers’ Account or by making Advances as provided in Section 2.2
hereof.

 

(d)                                 Borrowers, jointly and severally, shall pay
principal, interest, and all other amounts payable hereunder, or under any Other
Document, without any deduction whatsoever, including, but not limited to, any
deduction for any setoff or counterclaim.

 

2.6.                            Repayment of Excess Revolving Facility Usage. 
If at any time the Revolving Facility Usage exceeds the Maximum Advance Amount,
the Borrower shall repay the Advances to eliminate such excess.  Such amounts
shall be immediately due and payable, without the necessity of any demand, at
the Payment Office.

 

2.7.                            Statement of Account.  Agent shall maintain, in
accordance with its customary procedures, a loan account (“Borrowers’ Account”)
in the name of Borrowers in which shall be recorded the date and amount of each
Advance made by Agent and the date and amount of each payment in respect
thereof; provided however the failure by Agent to record the date and amount of
any Advance shall not adversely affect Agent or any Lender.  Each month, Agent
shall send to Borrowing Agent a statement showing the accounting for the
Advances made, payments made or credited in respect thereof, and other
transactions between Agent and Borrowers during such month.  The monthly
statements shall be deemed correct and binding upon Borrowers in the absence of
manifest error and shall constitute an account stated between Lenders and
Borrowers unless Agent receives a written statement of Borrowers’ specific
exceptions thereto within sixty (60) days after such statement is received by
Borrowing Agent.  The records of Agent with respect to the loan account shall be
conclusive evidence absent manifest error of the amounts of Advances and other
charges thereto and of payments applicable thereto.

 

2.8.                            [Reserved].

 

2.9.                            Additional Payments.  Any sums expended by Agent
or any Lender due to any Borrower’s failure to perform or comply with its
obligations under this Agreement or any Other Document including any Borrower’s
obligations under Sections 4.2, 4.4, 4.9, 4.11, 4.12, 4.13, 4.14(d) and 6.1
hereof, may be charged to Borrowers’ Account as an Advance and added to the
Obligations.

 

2.10.                     Making and Settlement of Advances.

 

(a)                                 Each borrowing of Advances shall be advanced
according to the applicable Commitment Percentages of the Lenders holding the
Commitments (subject to any contrary terms of Section 2.13).

 

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(b)                                 Promptly after receipt by Agent of a request
or a deemed request for an Advance pursuant to Section 2.2(b), Agent shall
notify the Lenders holding the Commitments of its receipt of such request
specifying the information provided by Borrowing Agent and the apportionment
among Lenders of the requested Advance as determined by Agent in accordance with
the terms hereof.  Each Lender shall remit the principal amount of each Advance
to Agent such that Agent is able to, and Agent shall, upon receipt of all
requested funds, to the extent the applicable Lenders have made funds available
to it for such purpose and subject to Section 8.2, fund such Advance to
Borrowers in U.S. Dollars and immediately available funds to the applicable
Borrower’s account set forth in the applicable Borrowing Notice prior to the
close of business, on the day specified in the Borrowing Notice; provided that
if any applicable Lender fails to remit such funds to Agent in a timely manner,
Agent may elect in its sole discretion to fund with its own funds the Advance of
such Lender on such borrowing date, and such Lender shall be subject to the
repayment obligation in Section 2.10(c) hereof.

 

(c)                                  Unless Agent shall have received written
notice by any Lender holding a Commitment that such Lender will not make the
amount which would constitute its applicable Commitment Percentage of the
requested Advance available to Agent, Agent may (but shall not be obligated to)
assume that such Lender has made such amount available to Agent on such date in
accordance with Section 2.10(b) and may, in reliance upon such assumption, make
available to Borrowers a corresponding amount.  In such event, if a Lender has
not in fact made its applicable Commitment Percentage of the requested Advance
available to Agent, then the applicable Lender and Borrowers severally agree to
pay to Agent on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to Borrowers
through but excluding the date of payment to Agent, at (i) in the case of a
payment to be made by such Lender, the greater of (A) (x) the daily average
Federal Funds Effective Rate (computed on the basis of a year of 360 days)
during such period as quoted by Agent, times (y) such amount or (B) a rate
determined by 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
Revolving Interest Rate for Advances that are Domestic Rate Loans.  If such
Lender pays its share of the applicable Advance to Agent, then the amount so
paid shall constitute such Lender’s Advance.  Any payment by Borrowers shall be
without prejudice to any claim the Borrowers may have against a Lender that
shall have failed to make such payment to Agent.  A certificate of Agent
submitted to any Lender or Borrower with respect to any amounts owing under this
paragraph (c) shall be conclusive, in the absence of manifest error.

 

(d)                                 [Reserved].

 

(e)                                  If any Lender or Participant (a “Benefited
Lender”) shall at any time receive any payment of all or part of its Advances,
or interest thereon, or receive any Collateral in respect thereof (whether
voluntarily or involuntarily or by set-off) in a greater proportion than any
such payment to and Collateral received by any other Lender, if any, in respect
of such other Lender’s Advances, or interest thereon, and such greater
proportionate payment or receipt of Collateral is not expressly permitted
hereunder, such Benefited Lender shall purchase for cash from the other Lenders
a participation in such portion of each such other Lender’s Advances, or shall
provide such other Lender with the benefits of any such Collateral, or the
proceeds thereof, as shall be necessary to cause such Benefited Lender to share
the excess payment or benefits of such Collateral or proceeds ratably with each
of the other Lenders; provided however that if all or any portion of such excess
payment or benefits is thereafter recovered from such Benefited Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest.  Each Borrower consents to
the foregoing and agrees, to the extent it may effectively do so under
Applicable Law, that each Lender so purchasing a portion of another Lender’s
Advances may exercise all rights of payment (including rights of set-off) with
respect to such portion as fully as if such Lender were the direct holder of
such portion, and the obligations owing to each such purchasing Lender in
respect of such participation and such purchased portion of any other Lender’s
Advances shall be part of the Obligations secured by the Collateral, and the
obligations owing to each such purchasing Lender in respect of such
participation and such purchased portion of any other Lender’s Advances shall be
part of the Obligations secured by the Collateral.

 

2.11.                     [Reserved].

 

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2.12.                     Use of Proceeds.

 

(a)                                 Credit Parties shall apply the proceeds of
Advances (including any Roll-Up Loans) (i) if applicable, on the Closing Date,
subject to the limitations set forth in this Agreement, to consummate the
Transactions and pay related fees, costs and expenses, (ii) for the financing of
the Borrowers’ general business purposes, including working capital requirements
during the pendency of the Cases and (iii) to pay certain fees and expenses of
professionals retained by the Credit Parties, subject to the Carve-Out and for
certain other pre-petition and pre-filing expenses that are approved by the
applicable Bankruptcy Court and consented to by Agent, in each case of the
foregoing clauses (i), (ii) and (iii), in accordance with the Approved Budget or
with the prior written consent of the Agent in its sole discretion.  Credit
Parties shall not be permitted to use the proceeds of the Advances and the
proceeds of Collateral in contravention of the provisions of the applicable
Order, including any restrictions or limitations on the use of proceeds
contained therein.

 

(b)                                 Without limiting the generality of
Section 2.12(a) above, neither a Credit Party nor any other Person which may in
the future become party to this Agreement or the Other Documents as a Credit
Party, (i) intends to use nor shall they use any portion of the proceeds of the
Advances, directly or indirectly, for any purpose in violation of Anti-Terrorism
Laws or (ii) shall use any portion of the proceeds of the Advances (A) to permit
the Borrower, any Credit Party or any other party-in interest or their
respective representatives to challenge or otherwise contest or institute any
proceeding to determine (x) the validity, enforceability, perfection or priority
of security interests in favor of the Agent or any of the Lenders, or (y) the
enforceability of the Obligations, (B) to investigate, commence, prosecute or
defend any claim, motion, proceeding or cause of action against the Agent or any
of the Lenders and their respective agents, attorneys, advisors or
representatives, including, without limitation, any lender liability claims or
subordination claims (other than $35,000 for an official creditors’ committee of
creditors holding unsecured claims, if any, appointed by the Bankruptcy Court in
respect of the Cases pursuant to Section 1102(a) of the Bankruptcy Code
committee to investigate such matters), or (C) to fund acquisitions, capital
expenditures, capital leases, or any other expenditure, in each case, other than
as set forth in the Approved Budget except for any obligation benefitting from
the Carve-Out and as otherwise approved in advance in writing by the Required
Lenders acting in their sole discretion.

 

2.13.                     Defaulting Lender.

 

(a)                                 Notwithstanding anything to the contrary
contained herein, in the event any Lender is a Defaulting Lender, all rights and
obligations hereunder of such Defaulting Lender and of the other parties hereto
shall be modified to the extent of the express provisions of this Section 2.13
so long as such Lender is a Defaulting Lender.

 

(b)                                 (i) Except as otherwise expressly provided
for in this Section 2.13, Advances shall be made pro rata from Lenders holding
Commitments which are not Defaulting Lenders based on their respective
Commitment Percentages, and no Commitment Percentage of any Lender or any Pro
Rata Share of any Advances required to be advanced by any Lender shall be
increased as a result of any Lender being a Defaulting Lender.  Amounts received
in respect of principal of any type of Advances shall be applied to reduce such
type of Advances of each Lender (other than any Defaulting Lender) holding a
Commitment in accordance with their Commitment Percentages; provided that Agent
shall not be obligated to transfer to a Defaulting Lender any payments received
by Agent for the Defaulting Lender’s benefit, nor shall a Defaulting Lender be
entitled to the sharing of any payments hereunder (including any principal,
interest or fees).  Amounts payable to a Defaulting Lender shall instead be paid
to or retained by Agent.  Agent may hold and, in its discretion, re-lend to
Borrowers the amount of such payments received or retained by it for the account
of such Defaulting Lender.

 

(ii)                                  Fees pursuant to Section 3.3 hereof shall
cease to accrue in favor of such Defaulting Lender while such Person is a
Defaulting Lender.

 

(c)                                  A Defaulting Lender shall not be entitled
to give instructions to Agent or to approve, disapprove, consent to or vote on
any matters relating to this Agreement and the Other Documents, and all

 

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amendments, waivers and other modifications of this Agreement and the Other
Documents may be made without regard to a Defaulting Lender and, for purposes of
the definition of “Required Lenders,” a Defaulting Lender shall not be deemed to
be a Lender, to have any outstanding Advances or a Commitment Percentage;
provided that this clause (c) shall not apply to the vote of a Defaulting Lender
in the case of an amendment, waiver or other modification described in
Section 16.2(b)(i).

 

(d)                                 Other than as expressly set forth in this
Section 2.13, the rights and obligations of a Defaulting Lender (including the
obligation to indemnify Agent) and the other parties hereto shall remain
unchanged.  Nothing in this Section 2.13 shall be deemed to release any
Defaulting Lender from its obligations under this Agreement and the Other
Documents, shall alter such obligations, shall operate as a waiver of any
default by such Defaulting Lender hereunder, or shall prejudice any rights which
any Borrower, Agent or any Lender may have against any Defaulting Lender as a
result of any default by such Defaulting Lender hereunder.

 

(e)                                  In the event that the Agent and the
Borrowers agree in writing that a Defaulting Lender has adequately remedied all
matters that caused such Lender to be a Defaulting Lender, then the Agent will
so notify the parties hereto, and on such date such Lender shall purchase at par
such of the Advances of the other Lenders as the Agent shall determine may be
necessary in order for such Lender to hold such Advances in accordance with its
Commitment Percentage.

 

2.14.                     [Reserved].

 

2.15.                     [Reserved].

 

2.16.                     [Reserved].

 

2.17.                     Mandatory Prepayments.  (a) Upon receipt by a Credit
Party or Agent of any proceeds of Collateral, including for the avoidance of
doubt, Inventory and Receivables, such proceeds shall be delivered, or caused to
be delivered or deemed to be delivered in the case of clause “FIRST” below”, to
Agent as a prepayment of the Advances and shall be applied as follows:

 

FIRST, to permanently reduce the Prior Lender Obligations in accordance with the
provisions of the Pre-Petition Credit Agreement, until paid in full;

 

SECOND, to the payment of any fees, costs, indemnities, and expenses, including
attorneys’ fees of Agent payable or reimbursable by the Credit Parties under
this Agreement or any of the Other Documents;

 

THIRD, to the payment of all interest and fees on the Obligations then due and
payable owed to the Lenders;

 

FOURTH, to the payment of all principal of the Advances; and

 

FIFTH, any remainder shall be for the account of and paid to whoever may be
lawfully entitled thereto.

 

(b)                                 The foregoing clause shall not be deemed to
be implied consent of the Lenders to any such transaction otherwise prohibited
by the terms and conditions hereof.

 

(c)                                  Any Lender may elect, by notice to the
Agent at or prior to the time and in the manner specified by the Agent, prior to
any prepayment of Advances required to be made by the Borrowers pursuant to this
Section 2.17 under the headings ‘FOURTH’ and ‘FIFTH’, to decline all or a
portion of its Applicable Percentage of such prepayment (such declined amounts,
the “Declined Proceeds”), in which case such Declined Proceeds may be retained
by the Borrowers and applied in accordance with the terms of this Agreement. If
any Lender fails to

 

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deliver a notice to the Agent of its election to decline receipt of its
Applicable Percentage of any mandatory prepayment within the time frame
specified by the Agent, such failure will be deemed to constitute an acceptance
of such Lender’s Applicable Percentage of the total amount of such mandatory
prepayment of Advances.

 

2.18.                     Superpriority Nature of Obligations and Agent’s Liens.

 

(a)                                 The priority of Agent’s Liens on the
Collateral owned by the Debtors shall be set forth in the Interim Order and the
Final Order.

 

(b)                                 All Obligations shall constitute allowed
administrative expenses of the Debtors in the Cases, with administrative
priority and senior secured status under Sections 364(c)(1) and 364(d) of the
Bankruptcy Code (the “DIP Superpriority Claim”) other than relative to (A) Prior
Permitted Liens and (B) the Carve-Out.  Subject only to the Carve-Out, such
administrative claim shall have priority over all other costs, claims and
expenses of the kinds specified in, or ordered pursuant to, Bankruptcy Code
Sections 105, 326, 328, 330, 331, 365, 503(a), 503(b), 506(c), 507(a), 507(b),
546(c), 546(d), 726 (to the extent permitted by law), 1113, 1114 or any other
provision of the Bankruptcy Code or otherwise and shall at all times be senior
to the rights of the Debtors, the Debtors’ estates and any successor trustee or
estate representative in the Cases or any subsequent proceeding or case under
the Bankruptcy Code.  The Liens granted to the Agent, on behalf of the Secured
Parties, on the Collateral, and the priorities accorded to the Obligations shall
have the priority and senior secured status afforded by Section 364(c) and
Section 364(d) of the Bankruptcy Code (all as more fully set forth in the
Interim Order and Final Order) senior to all claims and interests other than
(A) Prior Permitted Liens and (B) the Carve-Out.

 

(c)                                  The Agent’s Liens on the Collateral and
Agent’s and other Secured Parties’ respective administrative claims under
Sections 364(c)(l) of the Bankruptcy Code afforded the Obligations shall also
have priority over any claims arising under Section 506(c) of the Bankruptcy
Code subject and subordinate only to the Carve-Out.  Except as set forth herein
or in the Interim Order or the Final Order, no other Lien having a priority
superior to or pari passu with that granted to Agent and Lenders and the Prior
Agent and the Prior Lenders shall be granted or approved while any Obligations
under this Agreement or the Prior Lender Obligations under the Pre-Petition
Credit Agreement and the Second Lien Note Purchase Agreement remain outstanding.

 

(d)                                 Except for the Carve-Out, as set forth in
the Interim Order and the Final Order, no costs or expenses of administration
shall be imposed against the Agent, the Lenders or any of the Collateral or the
Prior Agent and Prior Lenders under the Pre-Petition Credit Agreement and the
Second Lien Note Purchase Agreement or any of the Collateral (as defined in the
Pre-Petition Credit Agreement and the Second Lien Note Purchase Agreement, as
applicable) under Sections 105, 506(c) or 552 of the Bankruptcy Code, or
otherwise, and each of the Debtors hereby waives for itself and on behalf of its
estate in bankruptcy, any and all rights under Sections 105, 506(c) or 552 of
the Bankruptcy Code, or otherwise, to assert or impose or seek to assert or
impose, any such costs or expenses of administration against Agent or the
Lenders or the Prior Agent and Prior Lenders under the Pre-Petition Credit
Agreement and the Second Lien Note Purchase Agreement.

 

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

 

2.20.                     No Discharge; Survival of Claims.  The Credit Parties
agree that (a) the Obligations hereunder and the Other Documents and the Prior
Lender Obligations under the Pre-Petition Credit Agreement, the Second Lien Note
Purchase Agreement and the other Pre-Petition Loan Documents shall not be
discharged by the entry of an order confirming a plan of reorganization,
compromise or arrangement in any of the Insolvency Cases (notwithstanding the
provisions of Section 1141(d)(4) of the Bankruptcy Code) or any Successor Case,
any order converting a Case to a case under Chapter 7 of the Bankruptcy Code, or
dismissing any Case, or withdrawing the reference in any Case or Successor Case
or terminating the joint administration of the Cases or any Successor

 

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Cases or by any other act or omission and (b) the DIP Superpriority Claim
granted to the Agent and Lenders pursuant to the Interim Order and Final Order
and described in Section 2.18 and the Liens granted to the Agent pursuant to the
Interim Order and Final Order and described in Section 2.18 shall not be
affected in any manner by the entry of an order confirming a plan of
reorganization in the Cases or any Successor Case.

 

2.21.                     Release.  The Credit Parties hereby acknowledge
effective upon entry of the applicable Order, that no Credit Party has any
defense, counterclaim, offset, recoupment, cross-complaint, claim or demand of
any kind or nature whatsoever that can be asserted to reduce or eliminate all or
any part of the Credit Parties’ liability to repay Agent or any Lender as
provided in this Agreement or the Prior Agent or any Prior Lender as provided in
the Pre-Petition Credit Agreement and the Second Lien Note Purchase Agreement or
to seek affirmative relief or damages of any kind or nature from Agent, any
Lender, Prior Agent or any Prior Lender.  Each Credit Party, on behalf of itself
and its bankruptcy estate, and on behalf of all its successors, assigns,
Subsidiaries and any Affiliates and any Person acting for and on behalf of, or
claiming through them (collectively, the “Releasing Parties”), hereby fully,
finally and forever release and discharge Agent, Lenders, Prior Agent and Prior
Lenders and all Affiliates of each such Person (collectively, the “Released
Parties”) of and from any and all past, present and future actions, causes of
action, demands, suits, claims, liabilities, Liens, lawsuits, adverse
consequences, amounts paid in settlement, costs, damages, debts, deficiencies,
diminution in value, disbursements, expenses, losses and other obligations of
any kind or nature whatsoever, whether in law, equity or otherwise (including
those arising under Sections 541 through 550 of the Bankruptcy Code and interest
or other carrying costs, penalties, legal, accounting and other professional
fees and expenses, and incidental, consequential and punitive damages payable to
third parties), whether known or unknown, fixed or contingent, direct, indirect,
or derivative, asserted or unasserted, foreseen or unforeseen, suspected or
unsuspected, now existing, heretofore existing or which may heretofore accrue
against any of the Released Parties, whether held in a personal or
representative capacity, and which are based on any act, fact, event or omission
or other matter, cause or thing occurring at or from any time prior to and
including the date hereof in any way, directly or indirectly arising out of,
connected with or relating to this Agreement, the Interim Order, the Final Order
and the transactions contemplated hereby, and all other agreements,
certificates, instruments and other documents and statements (whether written or
oral) related to any of the foregoing.

 

2.22.                     Waiver of any Priming Rights.  Upon the Closing Date,
and on behalf of itself and its estate, and for so long as any Obligations shall
be outstanding, each Credit Party hereby irrevocably waives any right, pursuant
to Sections 364(c) or 364(d) of the Bankruptcy Code or otherwise, to grant any
Lien of equal or greater priority than the Liens securing the Obligations, or to
approve a claim of equal or greater priority than the Obligations (other than
the Carve-Out).

 

III.                              INTEREST AND FEES.

 

3.1.                            Interest.  Advances shall bear interest as
either LIBOR Rate Loans or Domestic Rate Loans. Subject to Section 2.1 in
respect of Roll-Up Loans, Interest on Advances shall be payable in arrears on
(a) the first Business Day of each month with respect to Domestic Rate Loans,
(b) at the end of each Interest Period with respect to LIBOR Rate Loans and
(c) in each case, on the Termination Date (the dates referenced in clauses
(a) and (b), an “Interest Payment Date”).  Interest charges shall be computed on
the actual principal amount of Advances (including Roll-Up Loans) outstanding
during the month preceding the payment date in the case of Domestic Rate Loans
and during the Interest Period in the case of LIBOR Rate Loans at a rate per
annum equal to the applicable Revolving Interest Rate.  Whenever, subsequent to
the date of this Agreement, the Alternate Base Rate is increased or decreased,
the applicable Revolving Interest Rate for Domestic Rate Loans shall be
similarly changed without notice or demand of any kind by an amount equal to the
amount of such change in the Alternate Base Rate during the time such change or
changes remain in effect.  The LIBOR Rate shall be adjusted with respect to
LIBOR Rate Loans without notice or demand of any kind on the effective date of
any change in the Reserve Percentage as of such effective date.  Upon the
occurrence of an Event of Default and during the continuation thereof, without
further notice, motion or application to, hearing before, or order from the
Bankruptcy Court, the Obligations shall bear interest at the applicable
Revolving Interest Rate plus two (2%) percent per annum (the “Default Rate”).

 

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3.2.                            [Reserved].

 

3.3.                            Commitment Fee.  If, for any calendar quarter
prior to the Maturity Date, the average daily unpaid balance of the Advances
(other than any Roll-Up Loans) for each day of such calendar quarter does not
equal the Maximum Advance Amount, then Borrowers shall pay to Agent for the
ratable benefit of Lenders a fee at a rate equal to 1.00% per annum on the
amount by which the Maximum Advance Amount exceeds such average daily unpaid
balance of the Advances (other than any Roll-Up Loans) for each day of such
calendar quarter.  Such fee shall be payable to Agent in arrears on the first
Business Day of each calendar quarter with respect to the previous calendar
quarter.

 

3.4.                            Collateral Monitoring Fee, Collateral Evaluation
Fee and Fee Letter.

 

(a)                                 [Reserved].

 

(b)                                 [Reserved].

 

(c)                                  Borrowers shall pay the amounts required to
be paid in the Fee Letter in the manner and at the times required by the Fee
Letter.

 

3.5.                            Computation of Interest and Fees.  Interest
hereunder computed at the Alternate Base Rate shall be computed on the basis of
a year of 365 or 366 (as applicable) days and for the actual number of days
elapsed.  All other fees and interest hereunder shall be computed on the bases
of a year of 360 days and for the actual number of days elapsed.  If any payment
to be made hereunder becomes due and payable on a day other than a Business Day,
the due date thereof shall be extended to the next succeeding Business Day and
interest thereon shall be payable at the applicable Revolving Interest Rate
during such extension.

 

3.6.                            Maximum Charges.  It is the intention of the
parties to comply strictly with applicable usury laws.  Accordingly, no rate
change shall be put into effect that would result in a rate greater than the
highest rate permitted by law.  Notwithstanding anything to the contrary
contained in this Agreement or in any Other Document, all agreements which
either now are or which shall become agreements among Borrowers, Agent and
Lenders are hereby limited so that in no contingency or event whatsoever shall
the total liability for payments in the nature of interest, additional interest
and other charges exceed the applicable limits imposed by any applicable usury
laws.  If any payments in the nature of interest, additional interest and other
charges made under this Agreement or any Other Document are held to be in excess
of the limits imposed by any applicable usury laws, it is agreed that any such
amount held to be in excess shall be considered payment of principal hereunder,
and the indebtedness evidenced hereby shall be reduced by such amount so that
the total liability for payments in the nature of interest, additional interest
and other charges shall not exceed the applicable limits imposed by any
applicable usury laws, in compliance with the desires of Borrowers and Agent. 
This provision shall never be superseded or waived and shall control every other
provision of this Agreement or any Other Document and all agreements among
Borrowers, Agent and Lenders, or their respective successors and assigns. 
Unless preempted by federal law or as permitted under the sentence immediately
following this sentence, the applicable Revolving Interest Rate from time to
time in effect under this Agreement may not exceed the “weekly ceiling” from
time to time in effect under Chapter 303 of the Texas Finance Code (the “Texas
Finance Code”).  If the applicable state or federal law is amended in the future
to allow a greater rate of interest to be charged under this Agreement than is
presently allowed by applicable state or federal law, then the limitation of
interest hereunder shall be increased to the maximum rate of interest allowed by
applicable state or federal law as amended, which increase shall be effective
hereunder on the effective date of such amendment, and all interest charges
owing to Lenders by reason thereof shall be payable in accordance with
Section 2.5 hereof.  If by operation of this provision, Borrowers would be
entitled to a refund of interest paid pursuant to this Agreement, each Lender
agrees that it shall pay to Borrowing Agent, upon Agent’s request, such Lender’s
Commitment Percentage of such interest to be refunded, as determined by Agent. 
As provided in Section 16.1 hereof, this Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard
to conflict of law provisions.  The provisions of this Section 3.6 with respect
to the Texas Finance Code are included solely

 

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out of an abundance of caution and shall not be construed to mean that any
provisions of Texas law are in any way applicable to this Agreement, the Other
Documents or any of the Obligations.

 

3.7.                            Increased Costs.  In the event that any
Applicable Law or any Change in Law or compliance by any Lender (for purposes of
this Section 3.7, the term “Lender” shall include Agent or Lender and any
corporation or bank controlling Agent or any Lender and the office or branch
where Agent or any Lender (as so defined) makes or maintains any LIBOR Rate
Loans) with any request or directive (whether or not having the force of law)
from any central bank or other financial, monetary or other authority, shall:

 

(a)                                 subject Agent or any Lender to any Tax of
any kind whatsoever with respect to this Agreement or any Other Document or any
LIBOR Rate Loan, or change the basis of taxation of payments to Agent or such
Lender in respect thereof (except for (i) Indemnified Taxes or Other Taxes
indemnified under Section 3.10, (ii) any Taxes described in clauses (b) through
(d) of the definition of Excluded Tax and (iii) Connection Income Taxes);

 

(b)                                 impose, modify or deem applicable any
reserve, special deposit, assessment, special deposit, compulsory loan,
insurance charge or similar requirement against assets held by, or deposits in
or for the account of, advances or loans by, or other credit extended by, any
office of Agent or any Lender, including pursuant to Regulation D of the Board
of Governors of the Federal Reserve System; or

 

(c)                                  impose on Agent or any Lender or the London
interbank LIBOR market any other condition, loss or expense (other than Taxes)
affecting this Agreement or any Other Document or any Advance made by any
Lender;

 

and the result of any of the foregoing is to increase the cost to Agent or any
Lender of making, converting to, continuing, renewing or maintaining its
Advances hereunder by an amount that Agent or such Lender deems to be material
or to reduce the amount of any payment (whether of principal, interest or
otherwise) in respect of any of the Advances by an amount that Agent or such
Lender deems to be material, then, in any case Borrowers shall promptly pay
Agent or such Lender, upon its demand, such additional amount as will compensate
Agent or such Lender for such additional cost or such reduction, as the case may
be, provided that the foregoing shall not apply to increased costs which are
reflected in the LIBOR Rate.  Agent or such Lender shall certify the amount of
such additional cost or reduced amount to Borrowing Agent, and such
certification shall be conclusive absent manifest error.  Failure or delay on
the part of Agent or any Lender to demand compensation pursuant to this section
shall not constitute a waiver of such Person’s right to demand such
compensation.

 

3.8.                            Effect of Benchmark Transition Event.

 

(a)                                 Notwithstanding anything to the contrary
herein or in any Other Document, upon the occurrence of a Benchmark Transition
Event or an Early Opt-in Election, as applicable, the Agent and the Borrowing
Agent may amend this Agreement to replace LIBOR Rate with a Benchmark
Replacement.  Any such amendment with respect to a Benchmark Transition Event
will become effective at 5:00 p.m. on the fifth (5th) Business Day after the
Agent has posted such proposed amendment to all Lenders and the Borrowing Agent
so long as the Agent has not received, by such time, written notice of objection
to such amendment from Lenders comprising the Required Lenders.  Any such
amendment with respect to an Early Opt-in Election will become effective on the
date that Lenders comprising the Required Lenders have delivered to the Agent
written notice that such Required Lenders accept such amendment.  No replacement
of LIBOR Rate with a Benchmark Replacement pursuant to this Section titled
“Effect of Benchmark Transition Event” will occur prior to the applicable
Benchmark Transition Start Date.

 

(b)                                 In connection with the implementation of a
Benchmark Replacement, the Agent will have the right to make Benchmark
Replacement Conforming Changes from time to time and, notwithstanding anything
to the contrary herein or in any Other Document, any amendments implementing
such Benchmark Replacement

 

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Conforming Changes will become effective without any further action or consent
of any other party to this Agreement.

 

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

 

(d)                                 Upon the Borrowing Agent’s receipt of notice
of the commencement of a Benchmark Unavailability Period, the applicable
Borrower may revoke any request for a borrowing of Advances in LIBOR Rate,
conversion to or continuation of LIBOR Rate Loans to be made, converted or
continued during any Benchmark Unavailability Period and, failing that, the
Borrower will be deemed to have converted any such request into a request for a
borrowing of or conversion to Alternate Base Rate Loans.  During any Benchmark
Unavailability Period, the component of Alternate Base Rate based upon LIBOR
Rate will not be used in any determination of Alternate Base Rate.

 

(e)                                  As used in this Section titled “Effect of
Benchmark Transition Event”:

 

“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate
(which may include Term SOFR) that has been selected by the Agent and the
Borrowing Agent giving due consideration to (i) any selection or recommendation
of a replacement rate or the mechanism for determining such a rate by the
Relevant Governmental Body or (ii) any evolving or then-prevailing market
convention for determining a rate of interest as a replacement to LIBOR Rate for
U.S. dollar-denominated syndicated credit facilities and (b) the Benchmark
Replacement Adjustment; provided that, if the Benchmark Replacement as so
determined would be less than zero, the Benchmark Replacement will be deemed to
be zero for the purposes of this Agreement.

 

“Benchmark Replacement Adjustment” means, with respect to any replacement of
LIBOR Rate with an Unadjusted Benchmark Replacement for each applicable Interest
Period, the spread adjustment, or method for calculating or determining such
spread adjustment, (which may be a positive or negative value or zero) that has
been selected by the Agent and the Borrowing Agent giving due consideration to
(i) any selection or recommendation of a spread adjustment, or method for
calculating or determining such spread adjustment, for the replacement of LIBOR
Rate with the applicable Unadjusted Benchmark Replacement by the Relevant
Governmental Body or (ii) any evolving or then-prevailing market convention for
determining a spread adjustment, or method for calculating or determining such
spread adjustment, for the replacement of LIBOR Rate with the applicable
Unadjusted Benchmark Replacement for U.S. dollar denominated syndicated credit
facilities at such time.

 

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

 

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“Benchmark Replacement Date” means the earlier to occur of the following events
with respect to LIBOR Rate: (1) in the case of clause (1) or (2) of the
definition of “Benchmark Transition Event,” the later of (a) the date of the
public statement or publication of information referenced therein and (b) the
date on which the administrator of LIBOR Rate permanently or indefinitely ceases
to provide LIBOR Rate; or (2) in the case of clause (3) of the definition of
“Benchmark Transition Event,” the date of the public statement or publication of
information referenced therein.

 

“Benchmark Transition Event” means the occurrence of one or more of the
following events with respect to LIBOR Rate: (1) a public statement or
publication of information by or on behalf of the administrator of LIBOR Rate
announcing that such administrator has ceased or will cease to provide LIBOR
Rate, permanently or indefinitely, provided that, at the time of such statement
or publication, there is no successor administrator that will continue to
provide LIBOR Rate; (2) a public statement or publication of information by the
regulatory supervisor for the administrator of LIBOR Rate, the U.S. Federal
Reserve System, an insolvency official with jurisdiction over the administrator
for LIBOR Rate, a resolution authority with jurisdiction over the administrator
for LIBOR Rate or a court or an entity with similar insolvency or resolution
authority over the administrator for LIBOR Rate, which states that the
administrator of LIBOR Rate has ceased or will cease to provide LIBOR Rate
permanently or indefinitely, provided that, at the time of such statement or
publication, there is no successor administrator that will continue to provide
LIBOR Rate; or (3) a public statement or publication of information by the
regulatory supervisor for the administrator of LIBOR Rate announcing that LIBOR
Rate is no longer representative.

 

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

 

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

 

“Early Opt-in Election” means the occurrence of: (1) (i) a determination by the
Agent or (ii) a notification by the Required Lenders to the Agent (with a copy
to the Borrowing Agent) that the Required Lenders have determined that U.S.
dollar-denominated syndicated credit facilities being executed at such time, or
that include language similar to that contained in this Section titled “Effect
of Benchmark Transition Event,” are being executed or amended, as applicable, to
incorporate or adopt a new benchmark interest rate to replace LIBOR Rate, and
(2) (i) the election by the Agent or (ii) the election by the Required Lenders
to declare that an Early Opt-in Election has occurred and the provision, as
applicable, by the Agent of written notice of such election to the Borrowing
Agent and the Lenders or by the Required Lenders of written notice of such
election to the Agent.

 

“Federal Reserve Bank of New York’s Website” means the website of the Federal
Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.

 

“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal
Reserve Bank of New York, or a committee officially endorsed or convened by the
Federal Reserve Board and/or the Federal Reserve Bank of New York or any
successor thereto.

 

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

 

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

 

“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the
Benchmark Replacement Adjustment.

 

3.9.                            Capital Adequacy.

 

(a)                                 In the event that Agent or any Lender shall
have determined that any Applicable Law or guideline regarding capital adequacy
or liquidity, or any Change in Law or any change in the interpretation or
administration thereof by any Governmental Body, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by Agent or any Lender (for purposes of this Section 3.9, the term “Lender”
shall include Agent or any Lender and any corporation or bank controlling Agent
or any Lender and the office or branch where Agent or any Lender (as so defined)
makes or maintains any LIBOR Rate Loans) with any request or directive regarding
capital adequacy or liquidity (whether or not having the force of law) of any
such authority, central bank or comparable agency, has or would have the effect
of reducing the rate of return on Agent or any Lender’s capital as a consequence
of its obligations hereunder to a level below that which Agent or such Lender
could have achieved but for such adoption, change or compliance (taking into
consideration Agent’s and each Lender’s policies with respect to capital
adequacy and liquidity) by an amount deemed by Agent or any Lender to be
material, then, from time to time, Borrowers shall pay upon demand to Agent or
such Lender such additional amount or amounts as will compensate Agent or such
Lender for such reduction.  In determining such amount or amounts, Agent or such
Lender may use any reasonable averaging or attribution methods.  The protection
of this Section 3.9 shall be available to Agent and each Lender regardless of
any possible contention of invalidity or inapplicability with respect to the
Applicable Law, rule, regulation, guideline or condition.

 

(b)                                 A certificate of Agent or such Lender
setting forth such amount or amounts as shall be necessary to compensate Agent
or such Lender with respect to Section 3.9(a) hereof when delivered to Borrowing
Agent shall be conclusive absent manifest error.

 

(c)                                  If Agent or any Lender requests
compensation under Section 3.7 or Section 3.9 or if Borrowers are required to
pay any additional amount to Agent or any Lender pursuant to Section 3.7 or
Section 3.9, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Advances hereunder or to
assign its rights and obligations hereunder to another of its offices, branches
or affiliates, if, in the reasonable judgment of Agent or such Lender, such
designation or assignment (i) would eliminate or reduce materially amounts
payable pursuant to Section 3.7 or Section 3.9, as the case may be, in the
future, (ii) would not subject Agent or such Lender to any unreimbursed cost or
expense, (iii) would not require Agent or such Lender to take any action
inconsistent with its internal policies or legal or regulatory restrictions, and
(iv) would not otherwise be disadvantageous to Agent or such Lender.

 

3.10.                     Taxes.

 

(a)                                 Any and all payments by or on account of any
Obligations hereunder or under any Other Document shall be made free and clear
of and without reduction or withholding for any Taxes except to the extent
required by Applicable Law; provided that if any Credit Party or any applicable
withholding agent shall be required by Applicable Law to deduct any Taxes from
such payments, then (i) if such Taxes are Indemnified Taxes, the sum payable
shall be increased as necessary so that after making all required deductions for
Indemnified Taxes (including deductions for Indemnified Taxes applicable to
additional sums payable under this Section 3.10) the applicable Recipient
receives an amount equal to the sum it would have received had no

 

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such deductions for Indemnified Taxes been made, (ii) the applicable withholding
agent shall make such deductions and (iii) the applicable withholding agent
shall timely pay the full amount deducted to the relevant Governmental Body in
accordance with Applicable Law.

 

(b)                                 Without limiting the provisions of
Section 3.10(a) above, the Borrowers shall timely pay, or at the option of the
Agent timely reimburse it for the payment of, any Other Taxes to the relevant
Governmental Body in accordance with Applicable Law.

 

(c)                                  The Borrowers shall indemnify each
Recipient, 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 3.10) payable or paid by such Recipient or required to be withheld or
deducted from a payment to such Recipient, 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 Body.  A certificate as to the amount of
such payment or liability delivered to the Borrowers by a Lender (with a copy to
Agent), or by the Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

 

(d)                                 As soon as practicable after any payment of
Taxes by any Credit Party to a Governmental Body, the Borrowers shall deliver to
Agent the original or a certified copy of a receipt issued by such Governmental
Body evidencing such payment, a copy of the return reporting such payment or
other evidence of such payment reasonably satisfactory to Agent.

 

(e)                                  Any Lender that is entitled to an exemption
from or reduction of any withholding Tax with respect to payments hereunder or
under any Other Document shall deliver to the Borrowers (with a copy to Agent),
at the time or times prescribed by Applicable Law or reasonably requested by the
Borrowers or 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 Borrowers or Agent, shall deliver such other documentation
prescribed by Applicable Law or reasonably requested by the Borrowers or Agent
as will enable the Borrowers or Agent to determine whether or not such Lender is
subject to backup withholding or information reporting requirements.

 

Without limiting the generality of the foregoing, each Lender shall deliver to
the Borrowers and Agent (in such number of copies as shall be requested by the
recipient) 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
Borrowers or the Agent), whichever of the following is applicable:

 

(i)                                     in the case of a Foreign Lender claiming
the benefits of an income tax treaty to which the United States is a party, two
(2) duly completed valid originals of IRS Form W-8BEN or IRS Form W-8BEN-E
establishing an exemption from, or reduction of, United States federal
withholding Tax pursuant to the “interest” article of such tax treaty,

 

(ii)                                  two (2) duly completed valid originals of
IRS Form W-8ECI,

 

(iii)                               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 3.10-1 (together
with Exhibits 3.10-2, 3.10-3 and 3.10-4, each a “Non-Bank Tax Certificate”) to
the effect that such Foreign Lender is not (A) a “bank” within the meaning of
section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of any Borrower
within the meaning of section 871(h)(3)(B) of the Code, or (C) a “controlled
foreign corporation” related to any Borrower described in section
881(c)(3)(C) of the Code and (y) two duly completed valid originals of IRS
Form W-8BEN or IRS Form W-8BEN-E,

 

(iv)                              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, IRS Form W-8BEN-E, a

 

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certificate substantially in the form of Exhibit 3.10-2 or Exhibit 3.10-3, 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 certificate substantially
in the form of Exhibit 3.10-4 on behalf of each such direct and indirect
partner,

 

(v)                                 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 Borrowers to determine the
withholding or deduction required to be made; provided that the completion,
execution and submission of such documentation (other than such documentation
set forth in Sections 3.10(e)(i)-(iv), 3.10(e)(vi) and 3.10(f)) 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, or

 

(vi)                              in the case of a Lender that is a United
States person within the meaning of section 7701(a)(30) of the Code, two duly
completed valid (2) originals of an IRS Form W-9 certifying that such Lender is
exempt from United States federal backup withholding tax.

 

Notwithstanding any other provisions of this Section 3.10(e), a Lender shall not
be required to deliver any form or other documentation that such Lender is not
legally eligible to deliver.

 

(f)                                   If a payment made to a Lender under this
Agreement or any Other Document would be subject to U.S. Federal withholding Tax
imposed by FATCA if such Lender were to fail to comply with the applicable
reporting requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the Code, as applicable), such Recipient shall deliver to the Agent
and the Borrowers at the time or times prescribed by Applicable Law or
reasonably requested by the Borrowers or Agent such documentation prescribed by
Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code)
and such other documentation reasonably requested by the Agent or any Borrower
sufficient for Agent and the Borrowers to comply with their obligations under
FATCA and to determine whether such Lender has complied with its obligations
under FATCA or to determine the amount to deduct and withhold from such
payment.  Solely for purposes of this clause (f), “FATCA” shall include any
amendments made to FATCA after the Closing Date.

 

(g)                                  Each Recipient agrees that if any form or
certification it previously delivered pursuant to clauses (e) or (f) above
expires or becomes inaccurate in any respect, it shall update such form or
certification or promptly notify the Borrowing Agent and the Agent in writing of
its legal ineligibility to so.

 

(h)                                 [Reserved].

 

(i)                                     If a Recipient 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 Borrowers or with respect to
which the Borrowers have paid additional amounts pursuant to this Section 3.10,
it shall pay to the Borrowers an amount equal to such refund (but only to the
extent of indemnity payments made, or additional amounts paid, by the Borrowers
under this Section 3.10 with respect to the Indemnified Taxes or Other Taxes
giving rise to such refund); net of all out-of-pocket expenses (including Taxes)
of such Recipient and without interest (other than any interest paid by the
relevant Governmental Body with respect to such refund), provided that the
Borrowers, upon the request of such Recipient, agree to repay the amount paid
over to the Borrowers (plus any penalties, interest or other charges imposed by
the relevant Governmental Body) to such Recipient in the event such Recipient is
required to repay such refund to such Governmental Body.  Notwithstanding
anything to the contrary in this clause (i), in no event will a Recipient be
required to pay any amount to the Borrowers pursuant to this clause (i) the
payment of which would place the Recipient in a less favorable net after-Tax
position than the Recipient would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect

 

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to such Tax had never been paid.  This Section 3.10(i) shall not be construed to
require any Recipient to make available its tax returns (or any other
information relating to its taxes that it deems confidential) to the Borrowers
or any other Person.

 

(j)                                    Each Recipient agrees that, upon the
occurrence of any event giving rise to the operation of Section 3.10(a) or
(c) with respect to such Recipient, it will, if requested by the Borrowers in
writing, use commercially reasonable efforts (subject to legal and regulatory
restrictions) to mitigate the effect of any such event by designating another
lending office for any Commitment or Advance affected by such event if that
would reduce or eliminate any amount of Indemnified Taxes or Other Taxes
required to be deducted or withheld or paid, provided that doing so would not
subject such Recipient to any unreimbursed cost or expense or be otherwise be
prejudicial to such Recipient, in such Recipient’s reasonable discretion.  The
Borrowers hereby agree to pay all reasonable costs and expenses incurred by any
Recipient in connection with any such designation.

 

(k)                                 [Reserved].

 

(l)                                     The agreements in this Section 3.10
shall survive the termination of this Agreement and the Commitments and the
payment of all amounts payable hereunder and under any Other Document.

 

3.11.                     Replacement of Lenders.  If any Lender (an “Affected
Lender”) (a) makes demand upon Borrowers for (or if Borrowers are otherwise
required to pay) amounts pursuant to Section 3.7, 3.9 or 3.10 hereof, (b) is
unable to make or maintain LIBOR Rate Loans as a result of a condition described
in Section 2.2(h) hereof, (c) is a Defaulting Lender, or (d) denies any consent
for a supplemental agreement referred to in the proviso of
Section 16.2(b) hereof and for which the consent of the Required Lenders has
been obtained, the Borrowers may, within ninety (90) days of receipt of such
demand, notice (or the occurrence of such other event causing Borrowers to be
required to pay such compensation or causing Section 2.2(h) hereof to be
applicable), or such Lender becoming a Defaulting Lender or denial of a request
for a consent to a supplemental agreement pursuant to the proviso of
Section 16.2(b) hereof, as the case may be, by notice (a “Replacement Notice”)
in writing to the Agent and such Affected Lender (i) request the Affected Lender
to cooperate with Borrowers in obtaining a replacement Lender satisfactory to
the Agent and Borrowers (the “Replacement Lender”); (ii) request the
non-Affected Lenders to acquire and assume all of the Affected Lender’s Advances
and its Commitment Percentage, as provided herein, but none of such Lenders
shall be under any obligation to do so; or (iii) propose a Replacement Lender
subject to approval by the Agent in its good faith business judgment.  If any
satisfactory Replacement Lender shall be obtained, and/or if any one or more of
the non-Affected Lenders shall agree to acquire and assume all of the Affected
Lender’s Advances and its Commitment Percentage, then such Affected Lender shall
assign, in accordance with Section 16.3 hereof, all of its Advances and its
Commitment Percentage, and other rights and obligations under this Agreement and
the Other Documents to such Replacement Lender or non-Affected Lenders, as the
case may be, in exchange for payment of the principal amount so assigned and all
interest and fees accrued on the amount so assigned, plus all other Obligations
then due and payable to the Affected Lender.  If any Affected Lender does not
execute an assignment in accordance with Section 16.3 within five (5) Business
Days after receipt of notice to do so by Agent or Borrowing Agent, then such
assignment shall become effective for purposes of Section 16.3 and this
Agreement upon execution by Agent and Borrowing Agent.

 

IV.                               COLLATERAL: GENERAL TERMS.

 

4.1.                            Security Interest in the Collateral.  Subject to
Section 2.18, to secure the prompt payment and performance to Agent and each
Secured Party of the Obligations (other than any Obligations under Environmental
Indemnity Agreements which by their terms are unsecured), each Credit Party
hereby assigns, pledges and grants to Agent for its benefit and for the benefit
of each Secured Party a continuing security interest in and to and Lien on all
of its Collateral, whether now owned or existing or hereafter acquired or
arising and wheresoever located.  Each Credit Party shall mark its books and
records as may be necessary or appropriate to evidence, protect and perfect
Agent’s security interest.  Contemporaneously with the delivery of the financial

 

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statements required by Section 9.8(a), each Borrower shall identify all
commercial tort claims with a value in excess of $100,000 in the Compliance
Certificate for such period, and Borrowers shall include the case title together
with the applicable court and a brief description of the claim(s).  Upon
delivery of each such Compliance Certificate, such Credit Party shall be deemed
to hereby grant to Agent a security interest and lien in and to such commercial
tort claims described therein and all proceeds thereof.  The Liens securing the
Obligations shall be first priority perfected Liens subject only to the Prior
Permitted Liens and the Carve-Out, in accordance with Section 2.18.

 

4.2.                            Perfection of Security Interest. 
Notwithstanding the perfection of any security interest granted hereunder
pursuant to the order of the Bankruptcy Court under the applicable Order, each
Credit Party hereby authorizes Agent to file against such Credit Party, and
Agent may file, one or more financing, continuation or amendment statements
pursuant to the Uniform Commercial Code, the PPSA and other Applicable Laws in
form and substance satisfactory to Agent in its Permitted Discretion (which
statements may have a description of collateral which is broader than that set
forth herein, including “all assets now owned or hereafter acquired by the
Credit Party or in which Credit Party otherwise has rights”).  Each Credit Party
hereby further authorizes Agent to file filings with the United States Patent
and Trademark Office or United States Copyright Office (or any successor office
or any similar office in any other country), including this Agreement or other
documents for the purpose of perfecting, confirming, continuing, enforcing or
protecting the security interest granted by such Credit Party hereunder, naming
such Credit Party, as debtor, and Agent, as secured party.

 

4.3.                            Protection of Collateral.  No Credit Party shall
sell, lease, transfer or otherwise dispose of any Collateral, except as
permitted in Section 7.1 hereof.

 

4.4.                            Preservation of Collateral.  Each Credit Party
will safeguard and protect all Collateral for Agent’s and the other Secured
Parties’ general account.  In addition to the rights and remedies set forth in
Section 11.1 hereof, Agent may at any time take such steps as Agent deems
necessary in the exercise of its Permitted Discretion, and as approved by the
Bankruptcy Court, to protect the Secured Parties’ interest in and to preserve
the Collateral.

 

4.5.                            Ownership of Collateral.  With respect to the
Collateral, at the time the Collateral becomes subject to Agent’s security
interest: (i) [reserved] (ii) except for Permitted Encumbrances, the Collateral
shall be free and clear of all Liens; and (iii) each Credit Party’s Equipment
and Inventory shall be located as set forth on Schedule 15 to the Perfection
Certificate and shall not be removed from such location(s) without the prior
written consent of Agent, except (1) as may be moved from one location on such
schedule to another location on such schedule, (2) Inventory in-transit,
(3) Equipment out for repair in the ordinary course of business, (4) the sale,
transfer or disposition of assets permitted under this Agreement to a Person
that is not a Credit Party, (5) as may be located at locations not set forth on
Schedule 15 to the Perfection Certificate to the extent the aggregate value of
Equipment and Inventory at such locations does not exceed $100,000 for any one
location or $250,000 in the aggregate for all such locations or (6) as set forth
in the applicable Order as approved by the Bankruptcy Court.

 

4.6.                            Defense of Agent’s and Lenders’ Interests. 
Until the Termination Date, Agent’s security interests in the Collateral shall
continue in full force and effect.  Each Credit Party shall use all commercially
reasonable efforts to defend Agent’s interests in the Collateral against any and
all Persons whatsoever.  At any time following demand by Agent for payment of
all Obligations upon the occurrence of and during the continuance of an Event of
Default and as set forth in the applicable Order as approved by the Bankruptcy
Court, Agent shall have the right to take possession of the indicia of the
Collateral and the Collateral in whatever physical form contained, including:
labels, stationery, documents, instruments and advertising materials.  If Agent
exercises this right to take possession of the Collateral, upon the occurrence
of and during the continuance of an Event of Default, Credit Parties shall, upon
demand, assemble it in the best manner possible and make it available to Agent
at a place reasonably convenient to Agent.  In addition, with respect to all
Collateral, Agent and each other Secured Parties shall be entitled to all of the
rights and remedies set forth herein and further provided to a secured party on
default by the Uniform Commercial Code, the PPSA or other Applicable Law.  Each
Credit Party shall, and Agent may, at its option upon the occurrence and during
the continuance of an Event

 

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of Default and as set forth in the applicable Order as approved by the
Bankruptcy Court, instruct all suppliers, carriers, forwarders, warehousers or
others receiving or holding cash, checks, Inventory, documents or instruments in
which Agent holds a security interest to deliver same to Agent and/or subject to
Agent’s order and if they shall come into any Credit Party’s possession, they,
and each of them, shall be held by such Credit Party in trust as Agent’s
trustee, and such Credit Party will immediately deliver them to Agent in their
original form together with any necessary endorsement.  For the purpose of
enabling Agent, during the continuance of an Event of Default, to exercise
rights and remedies under this Agreement and each Other Document at such time as
Agent shall be lawfully entitled to exercise such rights and remedies, and for
no other purpose, each Credit Party hereby grants to Agent, to the extent
assignable, an irrevocable, non-exclusive license to use, assign, license or
sublicense any of the Intellectual Property now owned or hereafter acquired by
such Credit Party, wherever the same may be located.  Such license shall include
access to all media in which any of the licensed items may be recorded or stored
and to all computer programs used for the compilation or printout hereof.

 

4.7.                            Books and Records.  Each Credit Party shall keep
proper books of record and account in which full, true and correct entries will
be made of all dealings or transactions of or in relation to its business and
affairs in accordance with GAAP.

 

4.8.                            Compliance with Laws.  Each Credit Party shall
comply with all Applicable Laws with respect to the Collateral or any part
thereof or to the operation of such Credit Party’s business the non-compliance
with which could reasonably be expected to have a Material Adverse Effect.  Each
Credit Party may, however, if applicable, Properly Contest any Lien or
obligation arising under Applicable Law.

 

4.9.                            Access to Premises.  Without limiting Agent’s
rights with respect to appraisals as set forth herein and without limiting
Agent’s rights under Section 4.4, during normal business hours and upon
reasonable notice and mutual agreement (except that, upon the occurrence and
continuance of an Event of Default or during the pendency of the Cases, no
notice shall be required and Agent may exercise such right during any hours),
Agent and its agents may conduct Field Examinations and in connection therewith
(i) enter upon any premises of any Credit Party and access any tangible assets,
(ii) access and make abstracts and copies from each Credit Party’s books,
records, audits, correspondence and all other papers relating to the Collateral,
(iii) discuss the affairs, finances and business of Credit Parties with any
officer, employee or director thereof or with their Accountants or auditors, all
of whom are hereby authorized to disclose to Agent all financial statements and
other information relating to such affairs, finances or business.  The Credit
Parties shall be obligated to reimburse Agent for the expenses of Field
Examinations, audits, appraisals, desktop appraisals, and inspections as
requested by Agent in its reasonable discretion.

 

4.10.                     Insurance.  The assets and properties of each Credit
Party at all times shall be maintained in accordance with the requirements of
all insurance carriers which provide insurance with respect to the assets and
properties of such Credit Party so that such insurance shall remain in full
force and effect.  Each Credit Party shall bear the full risk of any loss of any
nature whatsoever with respect to the Collateral.  At each Credit Party’s own
cost and expense in amounts and with licensed and reputable carriers, each
Credit Party shall (a) keep all its insurable properties and properties in which
such Credit Party has an interest insured against the hazards of fire, flood,
sprinkler leakage, those hazards covered by extended coverage insurance and such
other hazards, and for such amounts, as is customary in the case of companies
engaged in businesses similar to such Credit Party’s including business
interruption insurance for Credit Parties that are operating companies;
(b) maintain public and product liability insurance against claims for personal
injury, death or property damage suffered by others; (c) maintain all such
worker’s compensation or similar insurance as may be required under the laws of
any state or jurisdiction in which such Credit Party is engaged in business; and
(d) furnish Agent with (i) certificates therefor that are reasonably
satisfactory to Agent and evidence of the maintenance of such policies by the
renewal thereof at least thirty (30) days before any expiration date, and
(ii) appropriate lender loss payable endorsements in form and substance
reasonably satisfactory to Agent in its Permitted Discretion, naming Agent as an
additional insured, lender loss payee or mortgagee, as applicable, as its
interests may appear with respect to all insurance coverage referred to in
clauses (a) and (b) above, and providing (A) that all proceeds relating to
Collateral thereunder shall be payable to Agent upon the occurrence and during
the continuation of an Event of Default,

 

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(B) no such insurance shall be affected by any act or neglect of the insured or
owner of the property described in such policy, and (C) that such policy and
loss payable clauses may not be cancelled, amended or terminated unless at least
thirty (30) days’ prior written notice is endeavored to be given to Agent (but
only if the applicable carrier provides such written notice to its customers’
lenders generally, and, to the extent it does not, Credit Parties shall promptly
(but in any event within three (3) Business Days) provide Agent with written
notice of any cancellation, amendment or termination after an Authorized Officer
of the Borrowing Agent obtains knowledge thereof from such carrier).  In the
event of any loss relating to the Collateral upon the occurrence and during the
continuation of an Event of Default, the carriers named therein hereby are
directed by Agent and the applicable Credit Party to make payment for such loss
to Credit Parties and Agent jointly.  If any insurance losses relating to
Collateral are paid by check, draft or other instrument payable to any Credit
Party and Agent jointly, Agent may, upon the occurrence and during the
continuation of an Event of Default, endorse such Credit Party’s name thereon
and do such other things as Agent may deem advisable to reduce the same to
cash.  Upon the occurrence and during the continuance of an Event of Default,
Agent is hereby authorized to adjust and compromise claims under insurance
coverage referred to in clauses (a) and (b) above.  Each Credit Party shall take
all actions required under the Flood Laws and/or requested by Agent to assist in
ensuring that each Lender is in compliance with the Flood Laws applicable to the
Collateral (if any), including, but not limited to, providing Agent with the
address and/or GPS coordinates of each structure on any Real Property that will
be subject to a Mortgage in favor of Agent, for the benefit of the Secured
Parties, and, to the extent required, obtaining flood insurance for such
property, structures and contents prior to such property, structures and
contents becoming Collateral, and thereafter maintaining such flood insurance in
full force and effect for so long as required by the Flood Laws.

 

4.11.                     Failure to Pay Insurance.  If any Credit Party fails
to obtain insurance as hereinabove provided, or to keep the same in force,
Agent, if Agent so elects, may obtain such insurance and pay the premium (but
only after first providing Borrowing Agent with notice and one (1) Business Day
to cure the same) therefor on behalf of such Credit Party, and charge Borrowers’
Account therefor as an Advance of a Domestic Rate Loan and such expenses so paid
shall be part of the Obligations.  Failure or delay on the part of Agent to
provide notice pursuant to this section shall not constitute a waiver of Agent’s
rights and remedies hereunder, other than as qualified in this Section 4.11.

 

4.12.                     Payment of Taxes.  Each Credit Party will pay, when
due and payable, all material federal income tax and all other material Taxes,
including without limitation, federal, state, local and foreign (if applicable)
Taxes and all other material franchise, income, employment, social security
benefits, withholding and sales Taxes, lawfully levied or assessed upon such
Credit Party or any of the Collateral including real and personal property
Taxes, unless the same are being Properly Contested.  If any Taxes are
delinquent, or if any claim shall be made which creates a valid Lien on the
Collateral (other than Permitted Encumbrances), Agent may, but shall not be
required to, pay the Taxes and each Credit Party hereby indemnifies and holds
Agent and each Lender harmless in respect thereof.  Agent will not pay any Taxes
to the extent that any applicable Credit Party has Properly Contested such Taxes
and provided notice of same to Agent.  The amount of any payment by Agent under
this Section 4.12 shall be charged to Borrowers’ Account as an Advance
maintained as a Domestic Rate Loan and added to the Obligations and, until
Credit Parties shall furnish Agent with an indemnity therefor (or supply Agent
with evidence satisfactory to Agent in its Permitted Discretion that due
provision for the payment thereof has been made), Agent may hold without
interest any balance standing to Credit Parties’ credit and Agent shall retain
its security interest in and Lien on any and all Collateral held by Agent. 
Failure or delay on the part of Agent to provide notice pursuant to this section
shall not constitute a waiver of Agent’s rights and remedies hereunder, other
than as qualified in this Section 4.12.

 

4.13.                     Payment of Leasehold Obligations.  Each Borrower shall
at all times pay, when and as due and payable, its rental obligations under all
Leasehold Interests under which it is a tenant, and shall otherwise comply, in
all material respects, with all other terms of such leases and keep all such
leases in full force and effect (unless it would be prudent not to keep such
leases in full force and effect in the exercise of Borrower’s reasonable
business judgment).

 

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4.14.                     Receivables.

 

(a)                                 Nature of Receivables.  Each of the
Receivables at any time reported to Agent (whether pursuant to Section 9.2 or
otherwise) shall, except as noted therein, be a bona fide and valid account
representing a bona fide indebtedness incurred by the Customer therein named,
for a fixed sum (subject to customary discounts or reductions permitted in the
ordinary course of business and in accordance with past practices) as set forth
in the invoice relating thereto (provided immaterial or unintentional invoice
errors shall not be deemed to be a breach hereof) with respect to an absolute
sale or lease and delivery of goods upon stated terms of a Credit Party, or
work, labor or services theretofore rendered by a Credit Party as of the date
each Receivable is created.  Same shall be due and owing in accordance with the
applicable Credit Party’s standard terms of sale without dispute, setoff or
counterclaim except as may be stated on the accounts receivable schedules
delivered by the Credit Parties to Agent.

 

(b)                                 Location of Credit Parties.  Each Credit
Party’s chief executive office address are as set forth  on Schedule 4.14(b) and
Schedule 3 to the Perfection Certificate and each other location of books and
records pertaining to Receivables are as set forth on Schedules 1, 3 or 11 to
the Perfection Certificate.

 

(c)                                  [Reserved].

 

(d)                                 Notification of Assignment of Receivables. 
At any time upon the occurrence and during the continuation of an Event of
Default, Agent shall have the right to send notice of the assignment of, and
Agent’s security interest in and Lien on, the Receivables to any and all
Customers or any third party holding or otherwise concerned with any of the
Collateral.  Thereafter, subject to any applicable order of the Bankruptcy
Court, Agent shall have the sole right to collect the Receivables, take
possession of the Collateral, or both.  Upon the occurrence and during the
continuance of an Event of Default, Agent’s actual collection expenses,
including, but not limited to, stationery and postage, telephone and telegraph,
secretarial and clerical expenses and the salaries of any collection personnel
used for collection, may be charged to the Credit Parties’ account and added to
the Obligations.

 

(e)                                  Power of Agent to Act on Credit Parties’
Behalf.  Upon and during the continuance of an Event of Default, Agent shall
have the right to receive, endorse, assign and/or deliver in the name of Agent
or any Credit Party any and all checks, drafts and other instruments for the
payment of money relating to the Receivables, and each Credit Party hereby
waives notice of presentment, protest and non-payment of any instrument so
endorsed.  Each Credit Party hereby constitutes Agent or Agent’s designee as
such Credit Party’s attorney with power (i) to endorse such Credit Party’s name
upon any notes, acceptances, checks, drafts, money orders or other evidences of
payment or Collateral upon and during the continuance of an Event of Default;
(ii) to sign such Credit Party’s name on any invoice or bill of lading relating
to any of the Receivables, drafts against Customers, and assignments of
Receivables, upon and during the continuance of an Event of Default; (iii) to
send verifications of Receivables to any Customer (provided that, so long as no
Event of Default has occurred and is continuing, Agent shall only conduct
verifications of Receivables over the phone with participation from Credit
Parties or with Credit Parties being present); (iv) to sign such Credit Party’s
name on any documents or instruments deemed necessary or appropriate by Agent to
preserve, protect, or perfect Agent’s interest in the Collateral and to file
same upon and during the continuance of an Event of Default; (v) to demand
payment of the Receivables upon and during the continuance of an Event of
Default; (vi) to enforce payment of the Receivables by legal proceedings or
otherwise upon and during the continuance of an Event of Default; (vii) to
exercise all of such Credit Party’s rights and remedies with respect to the
collection of the Receivables and any other Collateral upon and during the
continuance of an Event of Default; (viii) to settle, adjust, compromise, extend
or renew the Receivables upon and during the continuance of an Event of Default;
(ix) to settle, adjust or compromise any legal proceedings brought to collect
Receivables upon and during the continuance of an Event of Default; (x) to
prepare, file and sign such Credit Party’s name on a proof of claim in
bankruptcy or similar document against any Customer upon and during the
continuance of an Event of Default; (xi) to prepare, file and sign such Credit
Party’s name on any notice of Lien, assignment or satisfaction of Lien or
similar document in connection with the Receivables upon and during the
continuance of an Event of Default; (xii) to receive,

 

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open and dispose of all mail addressed to any Credit Party to the extent such
actions are taken in connection with operation and administration of Credit
Parties’ lockboxes or otherwise in connection with treasury management services;
and (xiii) upon and during the continuance of an Event of Default, to do all
other acts and things necessary to carry out this Agreement.  All acts of said
attorney or designee are hereby ratified and approved, and said attorney or
designee shall not be liable for any acts of omission or commission nor for any
error of judgment or mistake of fact or of law, unless constituting willful
misconduct or gross negligence (as determined by a court of competent
jurisdiction in a final non-appealable judgment); this power being coupled with
an interest is irrevocable while any of the Commitments or Obligations remain
outstanding.  Agent shall have the right at any time following the occurrence
and during the continuation of an Event of Default, to change the address for
delivery of mail addressed to any Credit Party to such address as Agent may
designate and to receive, open and dispose of all mail addressed to any Credit
Party.

 

(f)                                   No Liability.  Neither Agent nor any
Lender shall, under any circumstances or in any event whatsoever, have any
liability for any error or omission or delay of any kind occurring in the
settlement, collection or payment of any of the Receivables or any instrument
received in payment thereof, or for any damage resulting therefrom, except for
the gross negligence or willful misconduct of the Agent as determined by a final
and non-appealable judgment of a court of competent jurisdiction.  Upon the
occurrence and during the continuation of an Event of Default, Agent may,
without notice or consent from any Credit Party, sue upon or otherwise collect,
extend the time of payment of, compromise or settle for cash, credit or upon any
terms any of the Receivables or any other securities, instruments or insurance
applicable thereto and/or release any obligor thereof.  Agent is authorized and
empowered to accept, upon the occurrence and during the continuation of an Event
of Default, the return of the goods represented by any of the Receivables,
without notice to or consent by any Credit Party, all without discharging or in
any way affecting any Credit Party’s liability hereunder.

 

(g)                                  Cash Management.

 

(i)                                     The Interim Order (or the Final Order,
when applicable) shall grant Agent (on behalf of the Secured Parties) a validly
perfected first priority Lien on each Collection Account.  As of the Closing
Date, each Credit Party shall have delivered a Deposit Account Control
Agreement, in form and substance satisfactory to Agent in its Permitted
Discretion with respect to each Collection Account; provided, that the parties
hereto acknowledge and agree that the Deposit Account Control Agreements
executed in connection with the Pre-Petition Credit Agreement shall be
sufficient for purposes of satisfying the obligation described in this
Section 4.14(g)(i).  The Cash Management Order shall direct each Credit Party to
and each Credit Party shall cause all proceeds of Collateral, including without
limitation, Receivables (including all cash, checks, drafts or other similar
items of payment) received by such Credit Party each day to be deposited into a
Collection Account Neither Agent nor any Lender assumes any responsibility for
such collection account arrangement, including any claim of accord and
satisfaction or release with respect to deposits accepted by any bank
maintaining a Collection Account.

 

(ii)                                  Notwithstanding anything to the contrary
herein or in any Other Document, Credit Parties shall ensure that Agent does not
receive, whether by deposit to the Collection Accounts or otherwise, any funds
from any Customer located in a Sanctioned Country.

 

(h)                                 Adjustments.  No Credit Party will, without
Agent’s consent, compromise or adjust any material amount of the Receivables (or
extend the time for payment thereof) or accept any material returns of
merchandise or grant any additional discounts, allowances or credits thereon
except for those compromises, adjustments, returns, discounts, credits and
allowances as have been granted in the ordinary course of business of such
Borrower.

 

4.15.                     Inventory.  To the extent Inventory held for sale or
lease has been produced by any Borrower, it has been and will be produced, in
all material respects, by such Borrower in accordance with the Federal Fair
Labor Standards Act of 1938.

 

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4.16.                     Maintenance of Equipment.  The Equipment useful and
necessary to Credit Parties’ business shall be maintained in good operating
condition and repair (reasonable wear and tear and casualty excepted) and all
necessary replacements of and repairs thereto shall be made so that the value
and operating efficiency of the Equipment shall be maintained and preserved
consistent with industry standards; provided that the same shall not be required
if not necessary for the continued operation of the Credit Parties’ business. 
No Credit Party shall use or operate the Equipment in violation of any
Applicable Law to the extent such use or operation could reasonably be expected
to materially and adversely affect the operation of its business as currently
conducted.

 

4.17.                     Exculpation of Liability.  Nothing herein contained
shall be construed to constitute Agent or any Lender as any Borrower’s agent for
any purpose whatsoever, nor shall Agent or any Lender be responsible or liable
for any shortage, discrepancy, damage, loss or destruction of any part of the
Collateral wherever the same may be located and regardless of the cause thereof,
except for the gross negligence or willful misconduct of the Agent as determined
by a final and non-appealable judgment of a court of competent jurisdiction. 
Neither Agent nor any Lender, whether by anything herein or in any assignment or
otherwise, assume any of any Borrower’s obligations under any contract or
agreement assigned to Agent or such Lender, and neither Agent nor any Lender
shall be responsible in any way for the performance by any Borrower of any of
the terms and conditions thereof.

 

4.18.                     Environmental Matters.

 

(a)                                 Except for any deviations, individually or
in the aggregate, that could not reasonably be expected to have a Material
Adverse Effect:

 

(i)                                     Borrowers shall maintain the Real
Property owned or leased by a Borrower in compliance with all Environmental Laws
and the Borrowers shall not place or permit to be placed any amount of Hazardous
Substances on any Real Property except as permitted by Applicable Law, permits
issued thereunder;

 

(ii)                                  Borrowers shall comply with all applicable
Environmental Laws which shall include periodic reviews of such compliance;

 

(iii)                               Borrowers shall dispose of any and all
Hazardous Waste generated at the Real Property only at facilities and with
carriers that maintain valid permits under RCRA and any other applicable
Environmental Laws; and

 

(iv)                              Borrowers shall use commercially reasonable
efforts to obtain certificates of disposal, such as hazardous waste manifest
receipts, from all treatment, transport, storage or disposal facilities or
operators employed by Borrowers in connection with the transport or disposal of
any Hazardous Waste generated at the Real Property as required by Environmental
Laws.

 

(b)                                 In the event any Credit Party or any of
their respective Subsidiaries obtains, gives or receives written notice of any
Release or threat of Release of a reportable quantity of any Hazardous
Substances at the Real Property (any such event being hereinafter referred to as
a “Hazardous Discharge”) or receives any notice of violation, request for
information or notification that it is potentially responsible for investigation
or cleanup of environmental conditions at the Real Property, demand letter or
complaint, order, citation, or other written notice, in each case, with regard
to any Hazardous Discharge or violation of Environmental Laws affecting the Real
Property or such Borrower’s interest therein that could reasonably be expect to
have a Material Adverse Effect (any of the foregoing received by any Borrower is
referred to herein as an “Environmental Complaint”) from any Person, including
any state agency responsible in whole or in part for environmental matters in
the state in which the Real Property is located or the United States
Environmental Protection Agency (any such person or entity hereinafter the
“Authority”), then such Borrower shall, within one (1) Business Day, give
written notice of same to Agent detailing facts and circumstances of which such
Borrower is aware giving rise to the Hazardous Discharge or Environmental
Complaint.  Such information is to be provided to allow Agent to protect

 

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its security interest in and Lien on the Real Property and the Collateral and is
not intended to create nor shall it create any obligation upon Agent or any
Lender with respect thereto.

 

(c)                                  Borrowers shall respond promptly in
accordance with Environmental Laws to any material Hazardous Discharge or
Environmental Complaint and, with respect to same, shall take all actions
required by applicable Environmental Law to protect the health and safety of
Persons and the environment and to avoid subjecting the Collateral or Real
Property to any Lien other than Permitted Encumbrances.  If any Borrower shall
fail to respond in all material respects promptly to any Hazardous Discharge or
Environmental Complaint or any Borrower shall fail to comply with any of the
material requirements of any Environmental Laws, Agent on behalf of Lenders may,
but without the obligation to do so, for the sole purpose of protecting Agent’s
interest in the Collateral: (i) give such notices as may be required by
Environmental Laws or (ii) enter onto the Real Property (or authorize third
parties to enter onto the Real Property) and take such actions as Agent (or such
third parties as directed by Agent) deems reasonably necessary, to clean up,
remove, mitigate or otherwise deal with any such Hazardous Discharge or
Environmental Complaint; provided however that prior to taking any such action
set forth on subpart (i) or (ii), Agent shall provide one (1) Business Day’s
advance written notice to Borrowing Agent and a reasonable time to cure or
address such Hazardous Discharge or Environmental Complaint.  All reasonable
costs and expenses incurred by Agent and Lenders (or such third parties) in the
exercise of any such rights, including any sums paid in connection with any
judicial or administrative investigation or proceedings, fines and penalties,
together with interest thereon from the date expended at the Default Rate for
Domestic Rate Loans constituting Advances shall be paid upon demand by
Borrowers, and until paid shall be added to and become a part of the Obligations
secured by the Liens created by the terms of this Agreement or any other
agreement between Agent, any Lender and any Borrower.

 

(d)                                 Borrowers shall defend and indemnify Agent
and Lenders and hold Agent, Lenders and their respective employees, agents,
directors and officers harmless from and against all loss, liability, damage and
expense, claims, costs, fines and penalties, including attorney’s fees, actually
suffered or incurred by Agent or Lenders under or on account of any
Environmental Laws, including the assertion of any Lien thereunder, with respect
to any Hazardous Discharge, the presence of any Hazardous Substances affecting
the Real Property, whether or not the same originates or emerges from the Real
Property or any contiguous real estate, including any loss of value of the Real
Property as a result of the foregoing except to the extent such loss, liability,
damage and expense is attributable to (A) any Hazardous Discharge resulting from
actions on the part of Agent or any Lender or (B) any act or inaction of Agent
or any Lender that constitutes gross negligence or willful misconduct. 
Borrowers’ obligations under this Section 4.18(d) shall arise upon the discovery
of the presence of any Hazardous Substances at the Real Property, whether or not
any Governmental Body has taken or threatened any action in connection with the
presence of any Hazardous Substances.  Borrowers’ obligation and the
indemnifications hereunder shall survive the termination of this Agreement.

 

(e)                                  For purposes of Section 4.18 and 5.7, all
references to Real Property shall be deemed to include all of each Borrower’s
right, title and interest in and to its owned and leased premises.

 

4.19.                     [Reserved].

 

4.20.                     Voting Rights in Respect of Subsidiary Stock.  Upon
the occurrence and during the continuance of an Event of Default, subject to any
applicable order of the Bankruptcy Court, and following written notice by Agent
to Borrowing Agent, all rights of a Credit Party to exercise the voting and
other consensual rights which it would otherwise be entitled to exercise shall
cease and all such rights shall thereupon become vested in Agent which shall
then have the sole right to exercise such voting and other consensual rights.

 

4.21.                     Dividend and Distribution Rights in Respect of
Subsidiary Shares.  Upon the occurrence and during the continuation of an Event
of Default, subject to any applicable order of the Bankruptcy Court, and
following written notice by Agent to Borrowing Agent:

 

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(a)                                 all rights of a Credit Party to receive
dividends, distributions and interest payments shall cease and all such rights
shall thereupon be vested in Agent which shall then have the sole right to
receive and hold such dividends, distributions and interest payments; provided,
however that any and all such dividends, distributions and interest payments
consisting of rights or interests in the form of securities shall be forthwith
delivered to Agent to hold as Collateral and shall, if received by any Credit
Party, be received in trust for the benefit of Agent, be segregated from the
other property or funds of such Credit Party and be promptly (but in any event
within five days after receipt thereof) delivered to Agent as Collateral in the
same form as so received (with any necessary endorsement); and

 

(b)                                 all dividends, distributions and interest
payments which are received by a Credit Party contrary to the provisions of
clause (a) shall be received in trust for the benefit of Agent, shall be
segregated from other property or funds of such Credit Party, and shall be
forthwith paid over to Agent as Collateral in the exact form received, to be
held by Agent as Collateral and as further collateral security for the
Obligations.

 

V.                                    REPRESENTATIONS AND WARRANTIES.

 

Each Credit Party represents and warrants as follows:

 

5.1.                            Authority.  Such Credit Party has full power,
authority and legal right to enter into this Agreement and the Other Documents
and to perform all its respective Obligations hereunder and thereunder.  This
Agreement and the Other Documents to which any Credit Party is a party have been
duly executed and delivered by the Credit Parties party thereto, and, upon entry
by the Bankruptcy Court of the applicable Order, this Agreement and the Other
Documents constitute the legal, valid and binding obligation of the Credit
Parties party thereto enforceable in accordance with their terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors’ rights generally.  Upon entry by
the Bankruptcy Court of the applicable Order, the execution, delivery and
performance of this Agreement and of the Other Documents to which any Credit
Party is party (a) are within each Credit Party’s corporate, limited liability
company, limited partnership, partnership or other applicable powers, have been
duly authorized by all necessary corporate, limited liability company, limited
partnership, partnership or other applicable action, are not in contravention of
the terms of each Credit Party’s Organizational Documents or other applicable
documents relating to such Credit Party’s formation or to the conduct of such
Credit Party’s business, (b) will not conflict with or violate (i) any
Applicable Law, or (ii) any Material Contract not subject to the automatic stay
of Section 362 of the Bankruptcy Code, (c) will not require the Consent of any
Governmental Body or any other Person as of the Closing Date (other than those
obtained or made on or prior to the Closing Date, including by the Bankruptcy
Court in connection with the Cases), all of which will have been duly obtained,
made or compiled prior to the Closing Date and which are in full force and
effect and (d) will not result in the creation of any Lien except Permitted
Encumbrances upon any asset of such Credit Party under the provisions of any
Applicable Law, Organizational Document or Material Contract to which such
Credit Party is a party or by which it or its property is a party or by which it
may be bound.

 

5.2.                            Formation and Qualification.

 

(a)                                 On the Closing Date, each Credit Party is
duly incorporated or formed, as applicable and in good standing under the laws
of the state listed on Schedule 5.2(a) and is qualified to do business and is in
good standing in the states listed on Schedule 5.2(a), as applicable.  Each
Credit Party is in good standing and is qualified to do business in the
jurisdictions in which qualification and good standing are necessary for such
Credit Party to conduct its business and own its property and where the failure
to so qualify could reasonably be expected to have a Material Adverse Effect.

 

(b)                                 As of the Closing Date, the Persons
identified on Schedule 5.2(b) are the record and beneficial owners of all of the
shares of Capital Stock of each Credit Party, other than the Parent Guarantor,
as being owned thereby, there are no proxies, irrevocable or otherwise, with
respect to such shares, and no equity securities of any of such Persons are or
may become required to be issued by reason of any options, warrants, scrip,
rights to

 

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subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of any Capital
Stock of any such Person, and there are no contracts, commitments,
understandings or arrangements by which any such Person is or may become bound
to issue additional shares of its Capital Stock or securities convertible into
or exchangeable for such shares.  All of the shares owned by the Credit Parties
are owned free and clear of any Liens other than Permitted Encumbrances.

 

5.3.                            Survival of Representations and Warranties.  All
representations and warranties of the Credit Parties contained in this Agreement
and the Other Documents shall, at the time of such Credit Party’s execution of
this Agreement and the Other Documents, be true and correct in all material
respects (or, if such representation and warranty is, by its terms, limited by
materiality (including a Material Adverse Effect), then such representation and
warranty shall be true in all respects) and shall survive the execution,
delivery and acceptance thereof by the parties thereto and the closing of the
transactions described therein or related thereto.

 

5.4.                            Tax Returns.  The federal taxpayer
identification number of each Credit Party that is a Credit Party as of the
Closing Date is set forth on Schedule 1 to the Perfection Certificate.  The
Credit Parties have filed all federal and state income Tax returns and all other
material federal, state and local Tax returns and other reports they are
required by law to file and have paid all material Taxes that are due and
payable.  The provision for Taxes on the books of the Credit Parties have been
made in accordance with GAAP and the Credit Parties have no knowledge of any
deficiency or additional assessment in connection therewith not provided for on
its books.

 

5.5.                            Financial Statements.

 

(a)                                 Historical Statements.  The Parent Guarantor
and its Subsidiaries have delivered to the Agent copies of (i) [reserved] and
(ii) its unaudited balance sheet, statements of income and stockholders’ equity
and cash flows on a consolidated and consolidating basis as of March 31, 2019
(the “Historical Statements”).  The Historical Statements were compiled from the
books and records maintained by management of the Parent Guarantor and its
Subsidiaries, are correct and complete in all material respects and fairly
represent the consolidated and consolidating financial condition of the Parent
Guarantor and its Subsidiaries as of their dates and their results of operations
and cash flows for the fiscal periods specified and have been prepared in
accordance with GAAP consistently applied, except that the unaudited financial
statements are subject to normal year-end adjustments.

 

(b)                                 Approved Budget.  The Borrowers have
heretofore furnished to the Agent the Approved Budget, such Approved Budget was
prepared in good faith upon assumptions the Borrowers believe to be reasonable
assumptions.  To the knowledge of Borrowers, no facts exist that (individually
or in the aggregate) would result in any material change in the Approved
Budget.  Borrowers shall thereafter deliver to Agent updates to the Approved
Budget in accordance with Section 6.11.

 

(c)                                  No Material Adverse Effect.  Other than
with respect to the Cases, since December 31, 2018, there has been no change,
occurrence or development which could reasonably be expected to have a Material
Adverse Effect.

 

5.6.                            Use of Proceeds.  The Borrowers are using the
proceeds of the Advances in accordance with Section 2.12.

 

5.7.                            O.S.H.A.; Environmental Compliance; Flood Laws. 
Except as could, individually or in the aggregate, not reasonably be expected to
have a Material Adverse Effect:

 

(a)                                 The Credit Parties are and have been in
compliance with, and their facilities, business, assets, property, leaseholds,
Real Property and Equipment are and have been in compliance with, the provisions
of the Federal Occupational Safety and Health Act, RCRA, the Federal
Occupational Safety and Health Act, the Federal Mine Safety and Health Act,
Flood Laws and all other Environmental Laws, including, without

 

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limitation, any provisions relating to financial assurance, reclamation or
decommissioning obligations, and, to the knowledge of the Credit Parties, the
obligations of the Credit Parties to maintain compliance with the Federal
Occupational Safety and Health Act and all Environmental Laws will not have a
Material Adverse Effect.

 

(b)                                 The Credit Parties have been issued or
obtained all required federal, state and local licenses, certificates or permits
relating to all applicable Environmental Laws.

 

(c)                                  (i) There have been no releases, spills,
discharges, leaks or disposal (collectively referred to as “Releases”) of
Hazardous Substances (as defined at the time of the representation) at, upon,
under or within any Real Property, except as authorized by any permit or
certificate issued pursuant to Environmental Law; (ii) there are no underground
storage tanks or polychlorinated biphenyls on the Real Property except those
kept in amounts and under circumstances in compliance with Environmental Laws
(in effect at the time of the representation); (iii) the Real Property has never
been used as a treatment, storage or disposal facility of Hazardous Substances,
except as previously disclosed to Agent; and (iv) no Hazardous Substances (as
defined at the time of the representation) are handled or stored on the Real
Property, excepting such quantities as are handled in accordance with all
applicable governmental regulations and in proper storage containers as required
by Environmental Laws and as are necessary for the operation of the business of
any Credit Party or of its tenants.

 

(d)                                 The Credit Parties have not received any
Environmental Complaint that has not been fully resolved.

 

(e)                                  All Real Property owned by Credit Parties
is insured pursuant to policies and other bonds which are valid and in full
force and effect and which provide adequate coverage from reputable and
financially sound insurers in amounts sufficient to insure the assets and risks
of each such Credit Party in accordance with prudent business practice in the
industry of such Credit Party.

 

5.8.                            [Reserved].

 

5.9.                            Litigation.  No Credit Party has any pending
against, or to the knowledge of the Credit Parties, threatened litigation,
arbitration, actions or proceedings, which (i) purport to affect or pertain to
this Agreement or any Other Document or any of the Transactions or (ii) other
than the filing of the Cases, could reasonably be expected to (x) have a
Material Adverse Effect, (y) materially and adversely affect such Credit Party’s
ability to conduct its business as currently conducted or (z) other than as set
forth on Schedule 5.9(ii)(z), result in material liability to such Credit Party.

 

5.10.                     Compliance with Laws; ERISA.

 

(a)                                 No Credit Party is in violation of any
applicable statute, law, rule, regulation or ordinance in any respect which
could reasonably be expected to have a Material Adverse Effect, nor is any
Credit Party in violation of any order of any court, Governmental Body or
arbitration board or tribunal which could reasonably be expected to have a
Material Adverse Effect, nor is any Credit Party in violation of the applicable
Order.  The Borrowers have implemented and maintained in effect policies and
procedures designed to ensure compliance by the Borrowers, their Subsidiaries
and their respective directors, officers, employees and agents with applicable
Anti-Terrorism Laws.

 

(b)                                 As of the Closing Date and as of the end of
each fiscal quarter thereafter, no Credit Party or any member of the Controlled
Group maintains or is required to contribute to any Plan other than those listed
on Schedule 5.10(b) hereto with respect to which any Credit Party or any member
of the Controlled Group has incurred or may incur any material liability.  Each
Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other Applicable Law.  Except as could not reasonably result
in Material Adverse Effect or an Event of Default or result in material
liability to any Credit Party: (i) each Borrower and each member of the
Controlled Group has met all applicable minimum funding requirements under
Section 302 of ERISA and Section 412 of the Code in respect of each Plan and
each Plan is in compliance

 

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with Sections 412, 430 and 436 of the Code and Sections 206(g), 302 and 303 of
ERISA, without regard to waivers and variances; (ii) each Plan which is intended
to be a qualified plan under Section 401(a) of the Code as currently in effect
has been determined by the IRS to be qualified under Section 401(a) of the Code
and the trust related thereto is exempt from federal income Tax under
Section 501(a) of the Code or an application for such a determination is
currently being processed by the IRS; (iii) neither any Credit Party nor any
member of the Controlled Group has incurred any liability to the PBGC other than
for the payment of premiums, and there are no premium payments which have become
due which are unpaid; (iv) no Plan has been terminated by the plan administrator
thereof nor by the PBGC, and there is no occurrence which would cause the PBGC
to institute proceedings under Title IV of ERISA to terminate any Plan; (v) the
current value of the assets of each Plan exceeds the present value of the
accrued benefits and other liabilities of such Plan and neither any Credit Party
nor any member of the Controlled Group knows of any facts or circumstances which
would change the value of such assets and accrued benefits and other
liabilities; (vi) neither any Credit Party nor any member of the Controlled
Group has breached any of the responsibilities, obligations or duties imposed on
it by ERISA with respect to any Plan; (vii) neither any Credit Party nor any
member of the Controlled Group has incurred any liability for any excise Tax
arising under Section 4971, 4972 or 4980B of the Code, and no fact exists which
could give rise to any such liability; (viii) neither any Credit Party nor any
member of the Controlled Group nor any fiduciary of, nor any trustee to, any
Plan, has engaged in a “prohibited transaction” described in Section 406 of
ERISA or Section 4975 of the Code nor taken any action which would constitute or
result in a Termination Event with respect to any such Plan which is subject to
ERISA; (ix) no Termination Event has occurred or is reasonably expected to
occur; (x) there exists no Reportable Event; (xi) neither any Credit Party nor
any member of the Controlled Group has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA; (xii) neither any Credit Party nor
any member of the Controlled Group maintains or is required to contribute to any
Plan which provides health, accident or life insurance benefits to former
employees, their spouses or dependents, other than in accordance with
Section 4980B of the Code; (xiii) neither any Credit Party nor any member of the
Controlled Group has withdrawn, completely or partially, within the meaning of
Section 4203 or 4205 of ERISA, from any Multiemployer Plan so as to incur
liability under the Multiemployer Pension Plan Amendments Act of 1980 and there
exists no fact which would reasonably be expected to result in any such
liability; and (xiv) no Plan fiduciary (as defined in Section 3(21) of ERISA)
has any liability for breach of fiduciary duty or for any failure in connection
with the administration or investment of the assets of a Plan.

 

5.11.                     Patents, Trademarks, Copyrights and Licenses.  All
registered trademarks, trademark applications, patents, patent applications,
copyright and copyright applications and all licenses for intellectual property
held on the Closing Date by any Credit Party which are material to the conduct
of any Borrower’s business are set forth on Schedule 7 to the Perfection
Certificate.  All of the owned or, to the knowledge of the Credit Parties,
licensed, intellectual property set forth on Schedule 7 to the Perfection
Certificate (a) is valid and enforceable by the Credit Party claiming ownership
thereof, (b) with respect to such owned intellectual property, have been duly
registered or filed with all appropriate Governmental Bodies and (c) constitute
all of the intellectual property rights which are material to the conduct of
each Borrower’s business as presently conducted or anticipated to be conducted. 
To the knowledge of any Authorized Officer of any Credit Party there is no
objection or pending challenge to the validity of any such intellectual property
and there are no grounds for any such challenge, except, in each case, as could
not reasonably be expected to have a Material Adverse Effect or an Event of
Default, result in material liability to such Credit Party or materially and
adversely affect such Credit Party’s ability to conduct its business as
currently conducted.

 

5.12.                     Licenses and Permits.  Except as set forth in Schedule
5.12, each Credit Party (a) is in compliance with and (b) has procured and is
now in possession of, all material licenses or permits required by any
Applicable Law for the operation of its business in each jurisdiction wherein it
is now conducting or proposes to conduct business, except, in the cases of both
(a) and (b) where the failure to procure such licenses or permits would not
reasonably be expected to have a Material Adverse Effect or an Event of Default,
result in material liability to such Credit Party or materially and adversely
affect such Credit Party’s ability to conduct its business as currently
conducted.

 

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5.13.                     No Burdensome Restrictions.  No Credit Party is a
party to any contract or agreement the performance of which could reasonably be
expected to have a Material Adverse Effect or materially and adversely affect
such Credit Party’s ability to comply with the terms of this Agreement.  All
Material Contracts as of the Closing Date are set forth on Schedule 13 to the
Perfection Certificate, and the Credit Parties have heretofore delivered to
Agent true and complete copies of all such Material Contracts to which any of
them are a party or to which any of them or any of their properties is subject. 
Except as set forth on Schedule 5.13 or as otherwise approved by the Bankruptcy
Court, all Material Contracts are in full force and effect and no material
defaults by any Borrower and, to the knowledge of the Borrowers, by any other
party thereto, currently exist thereunder other than as a result of the Cases. 
No Credit Party has agreed or consented to cause or permit in the future (upon
the happening of a contingency or otherwise) any of its property, whether now
owned or hereafter acquired, to be subject to a Lien which is not a Permitted
Encumbrance.

 

5.14.                     No Labor Disputes.  No Credit Party is involved in any
labor dispute; there are no strikes or walkouts or union organization of any
Credit Party’s employees threatened or in existence and no labor contract is
scheduled to expire prior to the Maturity Date other than as set forth on
Schedule 5.14 hereto, which, in each case, could reasonably be expected to
result in a Material Adverse Effect or an Event of Default or materially and
adversely affect such Credit Party’s ability to conduct its business as
currently conducted.

 

5.15.                     Margin Regulations.  No Credit Party is engaged, nor
will it engage, principally or as one of its important activities, in the
business of extending credit for the purpose of “purchasing” or “carrying” any
“margin stock” within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect.  No part of the proceeds of any Advance
will be used for “purchasing” or “carrying” “margin stock” as defined in
Regulation U of such Board of Governors.

 

5.16.                     Investment Company Act.  No Credit Party is an
“investment company” as defined in, and registered or required to be registered
under, the Investment Company Act of 1940, nor is it controlled by such a
company.

 

5.17.                     Disclosure.  No representation or warranty made by any
Credit Party in this Agreement or in any financial statement, report,
certificate or any other document furnished in connection herewith or therewith,
contains any untrue statement of a material fact or omits to state any material
fact necessary to make the statements herein or therein not materially
misleading in light of the circumstances under which the statements were made;
provided, that with respect to projected financial information, and information
of an industry specific or general economic nature, the Credit Parties represent
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time in light of conditions and facts then
known; it being understood that (i) such projections are subject to significant
uncertainties and contingencies, many of which are beyond the Parent Guarantor’s
control, and (ii) actual results may vary from such projections and that such
variances may be material.  There is no fact known to any Credit Party or which
reasonably should be known to such Credit Party which such Credit Party has not
disclosed to Agent in writing with respect to the Transactions which could
reasonably be expected to have a Material Adverse Effect.

 

5.18.                     DIP Credit Financing.  This Agreement constitutes a
“DIP Financing” for the purposes of and as defined in the First Lien/Second Lien
Intercreditor Agreement, and satisfies the DIP Financing Conditions (as defined
in the First Lien/Second Lien Intercreditor Agreement).

 

5.19.                     Swaps.  No Credit Party is a party to, nor will it be
a party to, any swap agreement whereby such Credit Party has agreed or will
agree to swap interest rates or currencies unless same provides that damages
upon termination following an event of default thereunder are payable on an
unlimited “two-way basis” without regard to fault on the part of either party.

 

5.20.                     Application of Certain Laws and Regulations.  Neither
any Credit Party nor any Subsidiary of any Credit Party is subject to any Law
which regulates the incurrence of any Indebtedness, including Laws

 

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relative to common or interstate carriers or to the sale of electricity, gas,
steam, water, telephone, telegraph or other public utility services.

 

5.21.                     No Brokers or Agents.  No Credit Party or Subsidiary
thereof uses any brokers or other agents acting in any capacity for such Credit
Party or Subsidiary in connection with the Obligations.

 

5.22.                     Commercial Tort Claims.  As of the Closing Date and as
of the end of any fiscal quarter thereafter, none of the Credit Parties has any
commercial tort claims in excess of $100,000, except as set forth on Schedule 12
to the Perfection Certificate.

 

5.23.                     Letter of Credit Rights.  As of the Closing Date and
as of the end of any fiscal quarter thereafter, no Credit Party has any letter
of credit rights in excess of $100,000, except as set forth on Schedule 5(b) to
the Perfection Certificate.

 

5.24.                     Deposit Accounts.  All deposit accounts and securities
accounts of the Credit Parties as of the Closing Date are set forth on
Schedule 5(a) to the Perfection Certificate.

 

5.25.                     [Reserved].

 

5.26.                     Second Lien Documents.  As of the Closing Date, the
Borrowing Agent has provided to the Agent true and complete copies of all of the
Second Lien Note Documentation in effect as of such date.

 

5.27.                     Personal Properties.  The Parent Guarantor and each
Restricted Subsidiary has good title to, or valid leasehold interests in, all
such personal property material to its business, except for (i) minor defects in
title that do not, in the aggregate, interfere with its ability to conduct its
business as currently conducted or to utilize such properties for their intended
purposes and (ii) Permitted Encumbrances.

 

5.28.                     No Default.  No Default or Event of Default has
occurred and is continuing or would result from the consummation of the
transactions contemplated by this Agreement.

 

5.29.                     Real Property.  Each Credit Party has good, valid and
marketable fee simple title to all owned Real Property material to its business,
or that constitutes (or is required pursuant to the terms hereof to constitute)
Collateral, and a valid, binding and enforceable leasehold interest in each
Leasehold Interest material to its business, or that constitutes (or is required
pursuant to the terms hereof to constitute) Collateral, except for (i) minor
defects in title that do not, in the aggregate, interfere with its ability to
conduct its business as currently conducted or to utilize such properties for
their intended purposes and (ii) Permitted Encumbrances.  All Real Property and
all other property material to its business, or that constitutes (or is required
pursuant to the terms hereof to constitute) Collateral, is in good operating
condition and repair for the use for which they are currently employed (normal
wear and tear and casualty excepted and except as may be disposed of in
accordance with the terms of this Agreement) and has been maintained in
accordance with industry standards and in conformity in all material respects
with all Applicable Laws, except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect.  No subleases, licenses or other
occupancy agreements exist whereby any person other than any Credit Party uses
or occupies or has a right to use or occupy or to acquire any Real Property (or
interest in Real Property) set forth on Schedule 11 of the Perfection
Certificate, including, but not limited to, rights of first refusal, rights of
first offer or any option.  Each Credit Party has substantially performed all of
their obligations under any Real Property agreement or other occupancy
agreement.  There are no pending or, to the knowledge of any Credit Party,
threatened condemnation or eminent domain proceedings relating to any such Real
Property material to its business, or that constitutes (or is required pursuant
to the terms hereof to constitute) Collateral.  Each Real Property as currently
used, held or occupied, and the conduct of the business thereon, as currently
conducted, complies in all material respects with all deed restrictions and
Applicable Laws including building codes, zoning, subdivision or other land use
or similar Applicable Laws, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

 

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5.30.                     The Cases.

 

(a)                                 The Cases were commenced on the Petition
Date in accordance with applicable law and proper notice thereof and the proper
notice for (i) the motion seeking approval of this Agreement and the Other
Documents and the Interim Order and Final Order, (ii) the hearing for the entry
of the Interim Order, and (iii) the hearing for the entry of the Final Order has
been or will be given.  Credit Parties shall give, on a timely basis as
specified in the Interim Order or the Final Order, as applicable, all notices
required to be given to all parties specified in the Interim Order or Final
Order, as applicable.

 

(b)                                 After the entry of the Interim Order, and
pursuant to and to the extent permitted in the Interim Order and the Final
Order, and subject to the Carve-Out, the Obligations will constitute allowed
administrative expense claims in the Cases having priority over all
administrative expense claims and unsecured claims against the Credit Parties
now existing or hereafter arising, of any kind whatsoever, including all
administrative expense claims of the kind specified in Sections 105, 326, 330,
331, 503(b), 506(c), 507(a), 507(b), 546(c), 726, 1114 or any other provision of
the Bankruptcy Code or otherwise, as provided under Section 364(c)(l) of the
Bankruptcy Code, subject to the priorities set forth in the Interim Order or
Final Order (as applicable).

 

(c)                                  After the entry of the Interim Order and
pursuant to and to the extent provided in the Interim Order and the Final Order,
the Obligations will be secured by a valid and perfected first priority Lien on
all of the Collateral subject, as to priority, only to the Carve-Out and the
Prior Permitted Liens.

 

(d)                                 The Interim Order (with respect to the
period on and after entry of the Interim Order and prior to entry of the Final
Order) or the Final Order (with respect to the period on and after entry of the
Final Order), as the case may be, is in full force and effect and has not been
reversed, stayed (whether by statutory stay or otherwise), modified or amended
without Agent’s consent.

 

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

 

VI.                               AFFIRMATIVE COVENANTS.

 

Credit Parties (or Borrowers if otherwise indicated) shall, and shall cause
their Restricted Subsidiaries (or, if indicated, all of their Subsidiaries) to,
until the Termination Date:

 

6.1.                            Payment of Fees.  Borrowers shall pay to Agent
on demand all usual and customary fees and expenses which Agent incurs in
connection with (a) the forwarding of Advance proceeds and (b) the establishment
and maintenance of any Collection Accounts as provided for in Section 4.14(g). 
Agent may, without making demand, charge Borrowers’ Account for all such
reasonable and documented fees and expenses.

 

6.2.                            Conduct of Business and Maintenance of Existence
and Assets.  Except as occasioned by the Cases, (a) conduct continuously and
operate actively their business according to good business practices and
maintain all of their properties (including each Real Property) useful or
necessary in their business in good working order and condition in accordance
with industry standards (reasonable wear and tear and casualty excepted and
except as may be disposed of in accordance with the terms of this Agreement),
including all material licenses, patents, copyrights, design rights, tradenames,
domain names, trade secrets, trademarks, leases and occupancy agreements, and
take all actions reasonably necessary to enforce and protect the validity of any
material intellectual property right or other material right included in the
Collateral; (b) keep in full force and effect their existence and comply in all
material respects with the Applicable Laws governing the conduct of their
business where the failure to do so could reasonably be expected to have a
Material Adverse Effect, result in an Event of Default, result in material
liability to such Credit Party or materially and adversely affect such

 

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Credit Party’s ability to conduct its business as currently conducted; and
(c) make all such reports and timely pay all such franchise and other Taxes and
license fees and do all such other acts and things as may be lawfully required
to maintain their rights, licenses, leases, powers and franchises under the laws
of the United States or any political subdivision thereof where the failure to
do so could reasonably be expected to have a Material Adverse Effect, result in
an Event of Default or result in material liability to such Credit Party or
Restricted Subsidiary.  Each Credit Party will perform all of their obligations
under any Real Property agreement, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

 

6.3.                            Violations.  Promptly after becoming aware
thereof, notify Agent in writing of any violation of any Applicable Law
applicable to any Credit Party or any of its Restricted Subsidiaries or the
Transactions which could reasonably be expected to have a Material Adverse
Effect.

 

6.4.                            Government Receivables.  At the reasonable
request of Agent, take all steps necessary to protect Agent’s interest in the
Collateral under the Federal Assignment of Claims Act, the Uniform Commercial
Code and all other Applicable Laws with respect to contracts providing for
payments in excess of $500,000 in the aggregate, and deliver to Agent,
appropriately endorsed, all instruments or chattel paper connected with any
Receivable arising out of contracts between any Borrower and the United States,
any state or any department, agency or instrumentality of any of them; provided
that the delivery requirement shall not apply to such instruments and chattel
paper of up to $500,000 in the aggregate.

 

6.5.                            Financial Covenants.

 

(a)                                 Minimum Consolidated EBITDA.  Maintain, when
measured as of the last day of each Test Period, commencing with the fiscal
quarter ending June 30, 2019, Consolidated EBITDA of the Borrowers and their
Restricted Subsidiaries of no less than negative $70,000,000.

 

(b)                                 Minimum Liquidity.  Cause Liquidity to be at
least $5,000,000 at all times.

 

6.6.                            Perfection: Further Assurances.

 

(a)                                 Take all action that may be reasonably
necessary or desirable, or that Agent may reasonably request, so as at all times
to maintain the validity, perfection, enforceability and priority of Agent’s
security interest in and Lien on the Collateral or to enable Agent to protect,
exercise or enforce its rights hereunder and in the Collateral, including, but
not limited to, (i) promptly discharging all Liens other than Permitted
Encumbrances, (ii) subject to any express exclusion or limitations in this
Agreement or any Other Document, promptly (but in any event on the Closing Date
or within 30 days after the receipt thereof if after the Closing Date and notify
Agent of the receipt thereof if after the Closing Date within such 30-day
period) delivering to Agent, endorsed or accompanied by such instruments of
assignment as Agent may specify, and stamping or marking, in such manner as
Agent may specify, any and all certificates, agreements or instruments
representing or evidencing Subsidiary Stock and chattel paper, instruments,
letters of credit and advices thereof and documents evidencing or forming a part
of the Collateral, (iii) entering into lockbox, blocked account or other such
arrangements as required under Section 4.14(g) or any other applicable provision
of this Agreement or any Other Document, (iv) subject to any express exclusion
or limitations in this Agreement or any Other Document, executing and delivering
financing statements, control agreements, instruments of pledge, mortgages,
notices and assignments (including filings with the United States Patent and
Trademark Office and United States Copyright Office), in each case in form and
substance satisfactory to Agent in its Permitted Discretion, relating to the
creation, validity, perfection, maintenance or continuation of Agent’s security
interest in and Lien on assets of the Credit Parties under the Uniform
Commercial Code, the PPSA or other Applicable Law, (v) [reserved]; and
(vi) otherwise providing such other documents and instruments as Agent may
request, in order that the full intent of this Agreement may be carried into
effect; provided, however, perfection of Agent’s Liens on assets of the Credit
Parties shall not be required where the benefits of obtaining such perfection is
outweighed by the costs or burdens of providing the same, as determined by
Agent.  If any Credit Party shall at any time after Closing Date (i) obtain any
rights to any additional Intellectual Property or (ii) become entitled to the
benefit of any

 

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additional Intellectual Property or any renewal or extension thereof, including
any reissue, division, continuation, or continuation-in-part of any Intellectual
Property, or any improvement on any Intellectual Property, or if any intent-to
use trademark application is no longer subject to clause (v) of the definition
of “Excluded Collateral,” the provisions hereof shall automatically apply
thereto and any such item enumerated in the preceding clause (i) or (ii) shall
automatically constitute Intellectual Property and Collateral under this
Agreement and each Other Document as if such would have constituted Intellectual
Property at the time of execution hereof and be subject to the Lien and security
interest created by this Agreement without further action by any party.  Each
Credit Party shall provide to Agent written notice of any of the foregoing since
the delivery of the prior Compliance Certificate (or since the Closing Date)
pursuant to each Compliance Certificate delivered pursuant to Section 9.3 and on
the date of delivery of such Compliance Certificate confirm the attachment of
the Lien and security interest created by this Agreement to any rights described
in clauses (i) and (ii) immediately above by execution of an instrument in form
reasonably acceptable to Agent and the filing of any instruments or statements
as shall be reasonably necessary to create, preserve, protect or perfect Agent’s
security interest in such Intellectual Property.

 

(b)                                 Ensure that at all times on and after the
Closing Date, Agent shall have received Deposit Account Control Agreements, in
form and substance satisfactory to Agent in its Permitted Discretion, with
respect to all accounts, other than Excluded Deposit Accounts.

 

6.7.                            Payment of Obligations.  Subject to any orders
of the Bankruptcy Court, pay, discharge or otherwise satisfy as the same shall
become due and payable or required to be performed (subject, where applicable,
to specified grace periods and, in the case of the trade payables, to normal
payment practices) all their obligations and liabilities of whatever nature that
accrue after the Petition Date and set forth in the Approved Budget (subject to
permitted variances), subject at all times to any applicable subordination
arrangement in favor of Agent and/or the Lenders.

 

6.8.                            Standards of Financial Statements.  Cause all
financial statements referred to in this Agreement as to which GAAP is
applicable to be complete and correct in all material respects (subject, in the
case of interim financial statements, to normal year-end audit adjustments) and
to be prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein (except as concurred in by
such reporting accountants or officer, as the case may be, and disclosed
therein).

 

6.9.                            Credit Parties’ Advisors.  The Credit Parties
shall continue to retain the Restructuring Advisor and the Financial Advisor,
and shall retain such other advisors acceptable to Agent and on terms
satisfactory to Agent.  The Credit Parties and their representatives will fully
cooperate with the Restructuring Advisor, the Financial Advisor and any other
such advisors and consultants and grant them full and complete access to the
books and records of the Credit Parties and provide all such information
reasonably requested.

 

6.10.                     Keepwell.  If it is a Qualified ECP Credit Party, then
jointly and severally, together with each other Qualified ECP Credit Party,
hereby absolutely unconditionally and irrevocably undertakes to provide such
funds or other support as may be needed from time to time by any Non-Qualifying
Party to honor all of such Non-Qualifying Party’s obligations under this
Agreement or any Other Document in respect of Swap Obligations (provided however
that each Qualified ECP Credit Party shall only be liable under this
Section 6.10 for the maximum amount of such liability that can be hereby
incurred without rendering its obligations under this Section 6.10, or otherwise
under this Agreement or any Other Document, voidable under applicable law,
including applicable law relating to fraudulent conveyance or fraudulent
transfer, and not for any greater amount).  The obligations of each Qualified
ECP Credit Party under this Section 6.10 shall remain in full force and effect
until the Termination Date.  Each Qualified ECP Credit Party intends that this
Section 6.10 constitute, and this Section 6.10 shall be deemed to constitute, a
guarantee of the obligations of, and a “keepwell, support, or other agreement”
for the benefit of each other Credit Party for all purposes of
Section 1a(18)(A)(v)(II) of the CEA.

 

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6.11.                     Approved Budget.

 

(a)                                 The use of Advances by the Credit Parties
under this Agreement and the Other Documents shall be limited in accordance with
the Approved Budget.  The initial Approved Budget (the “Initial Approved
Budget”) shall depict, on a weekly basis, Budgeted Disbursement Amounts,
Budgeted Cash Receipts, Budgeted Net Cash Flow and other information reasonably
requested by the Agent for the first eighteen (18) week period from the Closing
Date and such Initial Approved Budget shall be approved by, and in form and
substance satisfactory to the Required Lenders in their sole discretion.  The
Initial Approved Budget shall be updated, modified or supplemented (with the
written consent and/or at the request of Agent) from time to time, but in any
event not less than on a weekly basis (with the delivery to Agent on or before
5:00 p.m. on Tuesday of each calendar week), commencing with the second Tuesday
following the Closing Date, and each such updated, modified or supplemented
budget shall be approved in writing by, and shall be in form and substance
satisfactory to, the Required Lenders in their sole and absolute discretion and
no such updated, modified or supplemented budget shall be effective until so
approved and once so approved shall be deemed an Approved Budget for the period
contemplated therein; provided, however, that in the event that Agent, on the
one hand, and the Credit Parties, on the other hand, cannot agree as to an
updated, modified or supplemented budget, the Approved Budget most recently
approved by the Required Lenders in their sole discretion in accordance with
this clause (a) shall be the budget with which the Credit Parties shall comply
for purposes of using Advances made hereunder and for purposes of
Section 6.11(b) hereunder and provided further that such disagreement shall give
rise to an Event of Default hereunder once the period covered by the most recent
Approved Budget has terminated.  Each Approved Budget delivered to Agent shall
be accompanied by such supporting documentation as reasonably requested by
Agent.  Each Approved Budget shall be prepared in good faith based upon
assumptions which the Credit Parties believe to be reasonable.

 

(b)                                 The Borrowers shall not permit (i) for any
Prior Week, (x) the Actual Disbursement Amount for such Prior Week to exceed
110% of the Budgeted Disbursement Amount for such Prior Week, (y) Actual Net
Cash Flow for such Prior Week to be less than 90% of Budgeted Net Cash Flow for
such Prior Week, (ii) for any Two Week Cumulative Period (x) the Actual
Disbursements for such Two Week Cumulative Period to exceed 110% of the Budgeted
Disbursement Account for such Two Week Cumulative Period or (y) Actual Net Cash
Flow for such Two Week Cumulative Period to be less than 90% of Budgeted Net
Cash Flow for such Two Week Cumulative Period or (iii) for any Four Week
Cumulative Period, (x) the Actual Disbursements for such Four Week Cumulative
Period to exceed 105% of the Budgeted Disbursements for such Four Week
Cumulative Period or (y) Actual Net Cash Flow for such Four Week Cumulative
Period to be less than 95% of Budgeted Net Cash Flow for such Four Week
Cumulative Period.

 

(c)                                  The Borrower Representative shall deliver
to Agent on or before 5:00 p.m. on Tuesday of each week a Budget Certificate,
signed by an Authorized Officer of the Borrowing Agent certifying that (i) the
Credit Parties are in compliance with the covenants contained in this
Section 6.11 and (ii) no Default or Event of Default has occurred or, if such a
Default or Event of Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with respect
thereto, together with an Approved Budget Variance Report.

 

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

 

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6.12.                     Compliance with Laws; Anti-Terrorism Law;
International Trade Law Compliance.

 

(a)                                 Comply with all requirements of all Laws
(including applicable anti-money laundering Laws, anti-corruption Laws and
Sanctions) and all orders, writs, injunctions and decrees of any Governmental
Body applicable to it or to its business or property except if the failure to
comply therewith would not reasonably be expected individually or in the
aggregate to have a Material Adverse Effect.

 

(b)                                 (a) No Covered Entity (i) will become a
Sanctioned Person, either in its own right or through any third party; (ii) will
have any of its assets in a Sanctioned Country or in the possession, custody or
control of a Sanctioned Person or do business in or with, or derive any of its
income from investments in or transactions with, any Sanctioned Country or
Sanctioned Person in violation of any Anti-Terrorism Law; (iii) will engage in
any dealings or transactions prohibited by any Anti-Terrorism Law; (iv) will use
the Advances to fund any operations in, finance any investments or activities
in, or, make any payments to, a Sanctioned Country or Sanctioned Person in any
manner that would cause a violation of any Anti-Terrorism Law by any party to
this Agreement; or (v) has engaged, done business with or derived income from
any Sanctioned Person or Sanctioned Country in violation of any Anti-Terrorism
Laws; (b) the funds and proceeds from the Advances used to repay the Obligations
will not be derived from any unlawful activity; (c) each Covered Entity shall
comply with all Anti-Terrorism Laws and (d) each Credit Party shall immediately
notify the Agent in writing upon the occurrence of a Reportable Compliance
Event.

 

6.13.                     Information Regarding Collateral.

 

(a)                                 Not effect any change (i) in any Credit
Party’s legal name, (ii) in the location of any Credit Party’s chief executive
office, (iii) in any Credit Party’s identity or organizational structure,
(iv) in any Credit Party’s Federal Taxpayer Identification Number or
organizational identification number, if any, or (v) in any Credit Party’s
jurisdiction of organization (in each case, including by merging with or into
any other entity, reorganizing, dissolving, liquidating, reorganizing or
organizing in any other jurisdiction), until (A) it shall have given Agent not
less than 30 days’ prior written notice (in the form of a certificate executed
by any Authorized Officer of the Borrowing Agent), or such lesser notice period
agreed to by Agent, of its intention so to do, and Agent shall have given
written consent to such change, clearly describing such change and providing
such other information in connection therewith as Agent may reasonably request
and (B) it shall have taken all necessary action to maintain the perfection and
priority of the security interest of Agent for the benefit of the Secured
Parties in the Collateral, if applicable.  Each Credit Party agrees to promptly
provide Agent with certified Organizational Documents reflecting any of the
changes described in the preceding sentence.

 

(b)                                 Concurrently with the delivery of the
Compliance Certificate pursuant to Section 9.3, deliver to Agent a supplement to
the Perfection Certificate (or Perfection Certificate Supplement) most recently
delivered in the form of Annex 6.13(b) to the Compliance Certificate.

 

6.14.                     Flood Insurance.  The Credit Parties hereby
acknowledge that if any portion of any Real Property that is subject to a
mortgage is located in an area identified by the Federal Emergency Management
Agency as an area having special flood hazards and in which flood insurance has
been made available under the Flood Laws, then such Credit Party shall maintain,
or cause to be maintained, with a financially sound and reputable insurer, flood
insurance in an amount sufficient to comply with all applicable rules and
regulations promulgated pursuant to such Flood Laws.

 

6.15.                     Restructuring Agreement.  The Credit Parties party to
the Restructuring Agreement shall remain in compliance at all times with the
Restructuring Agreement.

 

6.16.                     Milestones.  Unless otherwise agreed to in writing by
the Agent, in its sole discretion, the Debtors shall comply with and achieve the
following milestones (each, a “Milestone”):

 

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(a)                                 No later than the Petition Date, the Debtors
shall file with the Bankruptcy Court a motion seeking approval of the DIP
Facility, this Agreement, the Loans, and all fees, expenses, indemnification,
and other obligations contemplated thereunder.

 

(b)                                 (i) No later than August 31, 2019, the
Debtors shall have filed the Annual Report on Form 10-K for the fiscal year
ended December 31, 2018, (ii) no later than August 31, 2019, the Debtors shall
have filed the Quarterly Report on Form 10-Q for the quarter ended March 31,
2019 and (iii) no later than September 30, 2019, the Debtors shall have filed
the Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, in each
case, of the Parent Guarantor and its subsidiaries with the Securities and
Exchange Commission.  The Annual Report on Form 10-K for the fiscal year ended
December 31, 2018 will include the audited consolidated financial statements of
the Parent Guarantor and its subsidiaries accompanied by an opinion of its
Accountants.  All such reports shall have been prepared in all material respects
in accordance with all of the rules and regulations applicable to such reports.

 

(c)                                  On or before the date that is 3 Business
Days after the Petition Date, the Bankruptcy Court shall have entered the
Interim Order, in form and substance satisfactory to the Required Lenders in
their sole and absolute discretion.

 

(d)                                 On or before the date that is ten
(10) calendar days after the Petition Date, the Debtors shall have prepared and
filed an Approved Chapter 11 Plan and accompanying disclosure statement and
solicitation procedures motion (the “Plan Filing Deadline”).

 

(e)                                  On or before the date that is 30 days after
the Petition Date, the Bankruptcy Court shall have entered an order approving
the terms of the DIP Facility on a final basis, in form and substance
satisfactory to the Required Lenders in their sole and absolute discretion (the
“Final Order”, and together with the Interim Order, the “Orders”).

 

(f)                                   On or before the date that is 37 days
after the Plan Filing Deadline, the Debtors shall have a hearing to approve the
Disclosure Statement and solicitation procedures (the “Disclosure Statement
Hearing Deadline”).

 

(g)                                  On or before the date that is three
(3) days after the Disclosure Statement Hearing Deadline, the Bankruptcy Court
shall have entered an order approving the Disclosure Statement and the Debtors
shall have commenced solicitation of the Approved Chapter 11 Plan (the
“Disclosure Statement Approval Deadline”).

 

(h)                                 On or before the date that is 60 days after
the Petition Date, the Debtors shall have filed a motion seeking rejection of
any railcar leases designated by the Debtors and with the consent of the
Required Lenders.

 

(i)                                     On or before the date that is 35 days
after the Disclosure Statement Approval Deadline, the Debtors shall have a
hearing in the Bankruptcy Court to seek confirmation of the Approved Chapter 11
Plan, and an order confirming the Approved Chapter 11 Plan, in all respects
acceptable to the Lenders in their sole and absolute discretion, shall have been
entered by the Bankruptcy Court (the “Confirmation Deadline”).

 

(j)                                    On or before the date that is the earlier
of (i) 15 days after the Confirmation Deadline and (ii) 100 days after the
Petition Date, the effective date of an Approved Chapter 11 Plan (the “Approved
Plan Effective Date”) shall have occurred, and the Debtors shall have filed a
notice of effectiveness of such Chapter 11 plan.

 

(k)                                 Parent Guarantor shall make each of the
filings with the Securities and Exchange Commission required by law to maintain
compliance with its current registration and reporting requirements, and shall
not take any action that would cause the Parent Guarantor to cease being a
public reporting company under the rules and regulations of the Securities and
Exchange Commission. All such filings shall have been prepared in all material
respects in accordance with the rules and regulations applicable to such
filings.

 

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6.17.                     San Antonio Notice.  The Borrowing Agent shall
(i) provide prompt written notice to the Agent of any material development with
respect to the San Antonio Shutdown and (ii) no later than one Business Day
following the occurrence thereof, furnish to the Agent written notice of the San
Antonio Operational Date.

 

VII.                          NEGATIVE COVENANTS.

 

Credit Parties (or Borrowers if otherwise indicated) shall not, and shall not
permit their Restricted Subsidiaries (or, if indicated, any of their
Subsidiaries) to, until the Termination Date:

 

7.1.                            Merger, Consolidation, Acquisition and Sale of
Assets.

 

(a)                                 Enter into any merger, consolidation or
other reorganization with or into any other Person or acquire all or a
substantial portion of the assets or Equity Interests of any Person or permit
any other Person to consolidate with or merge with it, or agree to do any of the
foregoing.

 

(b)                                 Sell, lease, sublease, license, transfer,
assign or otherwise dispose (collectively, “Dispositions”) of any of their
properties or assets, or, except with respect to the Parent Guarantor, issue
their own Equity Interests, except (i) Dispositions of Inventory and used,
surplus or obsolete Equipment or reserves in the ordinary course of business,
(ii) Dispositions permitted by the applicable Order and contemplated by the
Approved Budget, (iii) Dispositions to a Credit Party of all (but not less than
all) of the assets of an Inactive Subsidiary in connection with the winding down
or liquidation of such Inactive Subsidiary and (iv) Dispositions permitted under
Section 7.1(a), Section 7.2, Section 7.4, or Section 7.5.  To the extent the
Required Lenders waive the provisions of this Section 7.1 or property is sold,
leased, transferred or otherwise disposed of as permitted by this Section 7.1 to
a Person that is not a Credit Party, such property will be sold free and clear
or any Liens in favor of Agent and Secured Parties, and the Agent shall take all
actions reasonably requested by the Credit Parties to effect the foregoing
subject to Agent’s receipt of certifications as to compliance with this
Section in form and substance reasonably satisfactory to Agent.

 

7.2.                            Creation of Liens.  Create or suffer to exist
any Lien or transfer upon or against any of their property or assets now owned
or hereafter acquired, except Permitted Encumbrances.

 

Notwithstanding the foregoing, Permitted Encumbrances (other than the Prior
Permitted Liens) under this Section 7.2 shall at all times be junior and
subordinate to the Liens under this Agreement and the Other Documents and the
applicable Order securing the Obligations.  The prohibition provided for in this
Section 7.2 specifically includes any effort by any Credit Party, any official
committee in any Case or any other party in interest in the Case to prime or
create pari passu to any Liens or interests of (i) the Agent and the Lenders or
(ii) the Prior Agent and the Prior Lenders any Lien (other than as set forth in
Section 2.18 and in the applicable Order), irrespective of whether such Liens or
interests may be “adequately protected.”

 

7.3.                            Guarantees.  Become liable upon the obligations
or liabilities of any Person by assumption, endorsement or guarantee thereof or
otherwise (other than to Lenders) except (a) guarantees of Indebtedness that is
permitted pursuant to Section 7.6 of another Credit Party or Restricted
Subsidiary, and (b) the endorsement of checks in the ordinary course of
business.

 

7.4.                            Investments.  Make any Investments, except
(a) obligations issued or guaranteed by the United States of America or any
agency thereof that mature within one year of acquisition thereof,
(b) commercial paper with maturities of not more than one hundred eighty (180)
days and a published rating of not less than A-1 or P-1 (or the equivalent
rating), (c) certificates of time deposit and bankers’ acceptances having
maturities of not more than one hundred eighty (180) days and repurchase
agreements backed by United States government securities of a commercial bank if
(i) such bank has a combined capital and surplus of at least $500,000,000, or
(ii) its debt obligations, or those of a holding company of which it is a
Subsidiary, are rated not less than A (or the equivalent rating) by a nationally
recognized investment rating agency, (d) United States money market funds at
least 95% of the assets consists of Investments described in the foregoing
clauses (a) through (c) (each of

 

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clauses (a) through (d), “Cash Equivalents”), (e) [reserved], (f) extensions of
commercial trade credit to Customers in the ordinary course of business,
(g) [reserved], (h) Investments (i) between Credit Parties (including any
existing Restricted Subsidiary that becomes a Credit Party immediately after
giving effect to and as a result of such Investment) and (ii) by any Restricted
Subsidiary that is not a Credit Party in any other existing Restricted
Subsidiary that is not a Credit Party, (i) [reserved], (j) Investments existing
on the Closing Date and identified on Schedule 7.4, (k) [reserved],
(l) [reserved], (m) [reserved], (n) [reserved], (o) (i) Receivables owing to the
Parent Guarantor or any Restricted Subsidiary if created or acquired in the
ordinary course of business, (ii) endorsements for collection or deposit in the
ordinary course of business, (iii) securities, instruments or other obligations
received in compromise or settlement of Receivables created in the ordinary
course of business or loans permitted to be made under Section 7.4, or whether
by reason of a composition or readjustment of debts or bankruptcy or
reorganization of another Person, or in satisfaction claims and judgments and
(iv) any asset received by way of foreclosure by the Parent Guarantor or any of
its Restricted Subsidiaries with respect to any secured investment or other
transfer of title with respect to any secured investment in default,
(p) Investments consisting of deposits permitted under clauses (c), (d) and
(h) of the definition of “Permitted Encumbrances”, (q) [reserved], (r) deposits
received from Customers in the ordinary course of business, (s) [reserved],
(t) guarantees to the extent permitted by Section 7.3, (u) [reserved],
(v) [reserved], and (w) loans made by any Subsidiary that is not a Credit Party
to any Credit Party so long as such loan is subordinated to the Obligations
pursuant to an agreement reasonably satisfactory to Agent; provided, that no
Investment shall be made by a Credit Party unless made in accordance with the
Approved Budget and Section 2.12.

 

7.5.                            Dividends and Distributions.  Declare, pay or
make any dividend or distribution on any of its Equity Interests or apply any of
its funds, property or assets to the purchase, redemption or other retirement of
any of its Equity Interests, or of any options to purchase or acquire any Equity
Interests of any Credit Party or Subsidiary thereof (each a “Restricted
Payment”), except:

 

(a)                                 [reserved];

 

(b)                                 [reserved];

 

(c)                                  Subsidiaries of any Borrower may declare
and pay dividends and distributions to any Borrower;

 

(d)                                 [reserved];

 

(e)                                  Parent Guarantor and its Subsidiaries may,
directly or indirectly, make dividends and distributions to the General Partner
at such times and in such amounts as are necessary to permit the General Partner
to pay (or to make a payment to any Person that owns a direct Equity Interest in
the General Partner to enable it to pay) such entities’ operating expenses
incurred in the ordinary course of business and other corporate overhead costs
and expenses (including, without limitation, administrative, legal, accounting,
payroll and similar expenses provided by third parties), which are reasonable
and customary and incurred in the ordinary course of business, to the extent
such expenses are directly attributable to the ownership or operation of the
Borrowers and their Subsidiaries; provided that, such expenses shall be detailed
on a line-item basis in the Approved Budget ; and.

 

7.6.                            Indebtedness.  Create, incur, assume or suffer
to exist any Indebtedness except in respect of (a) the Obligations;
(b) Capitalized Lease Obligations consisting of the Capital Lease of the wet
sand plant located in Barron County, Wisconsin plus additional Capitalized Lease
Obligations in an aggregate amount at any time outstanding not to exceed
$500,000; (c) Permitted Purchase Money Indebtedness in an aggregate amount at
any time outstanding not to exceed $500,000; (d) Indebtedness to the Prior
Lenders and the Prior Agent arising under the Pre-Petition Credit Agreement and
any other Pre-Petition Loan Documents; (e) Indebtedness owing to any other
Credit Party or Restricted Subsidiary thereof so long as any such Indebtedness
owing to any Restricted Subsidiary that is not a Credit Party is subordinated
pursuant to an agreement reasonably satisfactory to Agent and; (f) guarantees
permitted under Section 7.3; (g) Indebtedness existing on the Closing Date and
set forth on Schedule 7.6; (h) Indebtedness in respect of workers’ compensation
claims, property casualty or liability

 

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insurance, and self-insurance obligations, in each case in the ordinary course
of business; (i) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business, (j) Indebtedness of the
Parent Guarantor or any Restricted Subsidiary consisting of the financing of
insurance premiums in the ordinary course of business, (k) [reserved],
(l) Indebtedness of the Parent Guarantor or any Restricted Subsidiary in
connection with performance bonds, bid bonds, appeal bonds, bankers acceptances,
insurance obligations, workers’ compensation claims, health or other types of
social security benefits, surety bonds, completion guarantees or other similar
bonds and obligations, including self-bonding arrangements, issued by the Parent
Guarantor or a Restricted Subsidiary in the ordinary course of business or
pursuant to self-insurance obligations and in each case not in connection with
the borrowing of money or the obtaining of advances, (m) [reserved], (n) the
Specified Note (including any interest payable-in-kind with respect thereto) in
accordance with the terms of the Specified Note and (o) the Permitted Second
Lien Notes (including any interest payable-in-kind with respect thereto).

 

Notwithstanding the foregoing, and except for the Carve-Out, no Indebtedness
under this Section 7.6 shall be permitted to have an administrative expense
claim status under the Bankruptcy Code senior to or pari passu with the
superpriority administrative expense claims of (i) the Agent and the Lenders and
(ii) the Prior Agent and the Prior Lenders, in each case, as set forth herein
and in the applicable Order.

 

7.7.                            Nature of Business.  Engage in any businesses
other than the businesses engaged by the Credit Parties and their Restricted
Subsidiaries on the Closing Date and businesses that are reasonably related or
ancillary thereto or reasonable extensions of such businesses or any other
business or activity in the energy sector that produces “qualifying income” as
such term is defined in Section 7704(d) of the Code.

 

7.8.                            Transactions with Affiliates.  Directly or
indirectly, purchase, acquire or lease any property from, or sell, transfer or
lease any property to, make any payment (including payments of management or
consulting fees) to, or enter into any transaction or arrangement with, or
otherwise deal with, any Affiliate, except, in each case to the extent not
otherwise prohibited under this Agreement or any Other Document:
(a) transactions which are in the ordinary course of business, on an
arm’s-length basis on terms and conditions no less favorable than terms and
conditions which would have been obtainable from a Person other than an
Affiliate, (b) transactions among Credit Parties not involving any other
Affiliates, (c) dividends or distributions permitted by
Section 7.5, Indebtedness permitted by Section 7.6 and Investments permitted by
Section 7.4(h)(i), (o)(i) and (w), (d) any issuance of Capital Stock (other than
Disqualified Stock) of the Parent Guarantor; (e) [reserved], (f) arrangements
with respect to the procurement of services of directors, officers, independent
contractors, consultants or employees in the ordinary course of business and the
payment of customary compensation (including bonuses) and other benefits
(including retirement, health, stock option and other benefit plans) and
reasonable reimbursement arrangements in connection therewith, (g) the payment
of fees, expenses and indemnities to directors, officers, consultants and
employees of the General Partner, the Parent Guarantor and the Restricted
Subsidiaries in the ordinary course of business; (h) the payment of fees and
expenses relating to the Transactions on the Closing Date as approved by the
Bankruptcy Court; and (i) transactions with any Affiliate in its capacity as a
holder of Indebtedness or Capital Stock of the Parent Guarantor; provided that
such Affiliate is treated the same as other such holders of Indebtedness or
Capital Stock.

 

7.9.                            Subsidiaries.  Form or acquire any Restricted
Subsidiary on or following the Closing Date.  No Restricted Subsidiary that is
an Inactive Subsidiary shall cease to be an Inactive Subsidiary unless, within
ten Business Days (or such longer period as Agent may consent to) after such
Restricted Subsidiary ceases to be an Inactive Subsidiary: (i) if such
Restricted Subsidiary is a Domestic Subsidiary, such Domestic Subsidiary
expressly joins in this Agreement as a “Borrower” and becomes jointly and
severally liable for the Obligations hereunder, under the Notes, and under any
other agreement among any Borrower, Agent or Lenders and takes all other actions
necessary or advisable in the opinion of Agent to grant a first priority
perfected Lien in all of its assets to the extent required by the terms of this
Agreement and each applicable Other Document, (ii) the Equity Interests of such
Restricted Subsidiary are pledged to Agent to the extent constituting
“Subsidiary Stock” and all certificates representing such Equity Interests,
together with undated stock powers executed in blank, are

 

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delivered to Agent and (iii) in the case of clauses (i) and (ii), Agent shall
have received all documents, including, without limitation, legal opinions and
appraisals, it may reasonably require in connection therewith.

 

7.10.                     Fiscal Year and Accounting Changes.  Change its fiscal
year from December 31 or make any significant change (i) in financial accounting
treatment and reporting except as required by GAAP or in the application of GAAP
concurred by the Credit Parties’ Accountants, (ii) in Tax accounting method
except as required by Applicable Law.

 

7.11.                     Pledge of Credit.  Now or hereafter pledge Agent’s or
any Lender’s credit on any purchases or for any purpose whatsoever.

 

7.12.                     Amendment of Certain Documents.

 

(a)                                 Without the express prior written consent of
Agent and, to the extent required, pursuant to an order of the applicable
Bankruptcy Court after notice and hearing, amend, modify or waive any term or
provision of its Organizational Documents (including the Partnership Agreement),
the Midwest Frac Agreement or any Material Contract; provided, however, a Credit
Party may amend its Organizational Documents to change its legal name in
compliance with Section 6.13(a).

 

(b)                                 [reserved].

 

(c)                                  Without the express prior written consent
of Agent and, to the extent required, pursuant to an order of the applicable
Bankruptcy Court after notice and hearing, amend, modify or waive any term or
provision of any Specified Document.

 

(d)                                 Amend, modify or waive any term or provision
of any Second Lien Note Documentation.

 

7.13.                     Compliance with ERISA. (i) (x) Maintain, or permit any
member of the Controlled Group to maintain, or (y) become obligated to
contribute, or permit any member of the Controlled Group to become obligated to
contribute, to any Plan, other than those Plans disclosed on Schedule
5.10(b) for which liabilities in excess of $250,000 could arise, which may be
updated from time to time with the consent of the Agent, (ii) engage, or permit
any member of the Controlled Group to engage, in any non-exempt “prohibited
transaction”, as that term is defined in Section 406 of ERISA or Section 4975 of
the Code, (iii) terminate, or permit any member of the Controlled Group to
terminate, any Plan where such event could result in liabilities in excess of
$250,000 of any Credit Party or any member of the Controlled Group or the
imposition of a lien on the property of any Credit Party or any member of the
Controlled Group pursuant to Section 4068 of ERISA, (iv) incur, or permit any
member of the Controlled Group to incur, any withdrawal liability in excess of
$250,000 to any Multiemployer Plan; (v) fail promptly to notify Agent of the
occurrence of any Termination Event, (vi) fail to comply, or permit a member of
the Controlled Group to fail to comply, with the requirements of ERISA or the
Code or other Applicable Laws in respect of any Plan and such failure to comply
could reasonable result in liabilities in excess of $250,000 to any Credit Party
or any members of the Controlled Group, (vii) fail to meet, permit any member of
the Controlled Group to fail to meet, or permit any Plan to fail to meet all
minimum funding requirements under ERISA and the Code, without regard to any
waivers or variances, or postpone or delay or allow any member of the Controlled
Group to postpone or delay any funding requirement with respect to any Plan, or
(viii) cause, or permit any member of the Controlled Group to cause, a
representation or warranty in Section 5.10(b) to cease to be true and correct.

 

7.14.                     Prepayment of Indebtedness and Certain Other
Obligations.

 

(a)                                 Except pursuant to the Approved Budget,
without the express prior written consent of Agent and pursuant to an order of
applicable Bankruptcy Court after notice and hearing, directly or indirectly,
voluntarily purchase, redeem, defease or prepay any principal of, premium, if
any, interest or other amount

 

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payable in respect of any Indebtedness prior to its scheduled maturity, other
than the Obligations and the Prior Lender Obligations.

 

(b)                                 Without limiting any other provision hereof,
except pursuant to the Approved Budget, without the express prior written
consent of Agent and pursuant to an order of applicable Bankruptcy Court after
notice and hearing, make any payment, repurchase, redemption or transfer with
respect to any Lien or Indebtedness incurred or arising prior to the Petition
Date that is subject to the automatic stay provisions of the Bankruptcy Code
whether by way of “adequate protection” under the Bankruptcy Code or otherwise.

 

(c)                                  [Reserved].

 

(d)                                 [Reserved].

 

(e)                                  At any time make any payments in respect of
the Midwest Frac Agreement, other than payments approved by the Bankruptcy Court
and in accordance with the applicable Order and the Approved Budget.

 

7.15.                     Management Fees.  Pay, or permit any of its respective
Subsidiaries to pay, any management, consulting, service or other such fees to
any Affiliates of any Credit Party.

 

7.16.                     Bank Accounts.  Establish or otherwise acquire any
deposit accounts or securities accounts, other than Excluded Deposit Accounts,
without first providing to Agent an updated Schedule 5(a) to the Perfection
Certificate and a Deposit Account Control Agreement with respect thereto in form
and substance satisfactory to Agent in its Permitted Discretion.

 

7.17.                     Passive Holding Company.  With respect to Parent
Guarantor, notwithstanding anything herein to the contrary, following the
Petition Date, (a) engage in any business or activity other than (i) owning the
Equity Interests of the Borrowers, (ii) activities incidental or related thereto
or the maintenance of the existence of Parent Guarantor or compliance with
Applicable Law and legal, tax and accounting matters related thereto and
activities relating to the General Partner and its employees and (iii) the
making and receipt of Restricted Payments permitted pursuant to Section 7.5,
(b) hold any assets other than the Equity Interests of the Borrowers, (c) have
any material liabilities other than (i) Indebtedness and Guarantees of such
Indebtedness under the Other Documents, the Pre-Petition Credit Agreement, the
Pre-Petition Loan Documents, the Second Lien Note Purchase Agreement and the
“Other Documents” (or related term) under the Second Lien Note Purchase
Agreement, (ii) tax liabilities in the ordinary course of business, (iii) state
and federal securities and tax filings, (iv) guarantees of Indebtedness
permitted by Section 7.3, (v) obligations with respect to its Equity Interests
and (vi) non-consensual obligations imposed by operation of law.

 

7.18.                     Capital Expenditures.  Make, or cause to be made, any
Capital Expenditures and/or capital improvements, other than payments approved
by the Bankruptcy Court and in accordance with the applicable Order and, in each
case, to the extent provided for in the Approved Budget.

 

7.19.                     Bankruptcy Matters.

 

(a)                                 Subject to the Carve-Out, incur, create,
assume, suffer to exist or permit any other superpriority administrative claim
which is pari passu with or senior to the claims of Agent and Lenders against
the Credit Parties, except as set forth in the applicable Order.

 

(b)                                 Seek, consent to, or permit to exist,
without the prior written consent of Agent, any order granting authority to take
any action that is prohibited by the terms of this Agreement or the Other
Documents or refrain from taking any action that is required to be taken by the
terms of this Agreement or any of the Other Documents.

 

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(c)                                  Assume, assume and assign or reject any
lease or executory contract or unexpired leases included in the Collateral,
without the prior written consent of the Agent (such consent not to be
unreasonably withheld).

 

7.20.                     NYSE Listing.  With respect to the Parent Guarantor,
take any action that would materially affect the Parent Guarantor’s ability to
re-list on the New York Stock Exchange.

 

VIII.                     CONDITIONS PRECEDENT.

 

8.1.                            Conditions to Initial Advances.  The
effectiveness of this Agreement and the occurrence of the Closing Date is
subject to the satisfaction, or waiver by Agent of the following conditions
precedent, which satisfaction or waiver shall, in the case of any Advance made
on the Closing Date, be immediately prior to or concurrently with the making of
such Advances on the Closing Date:

 

(a)                                 Documents.  Agent shall have received, in
form and substance reasonably satisfactory to the Agent, copies of (i) this
Agreement and (ii) the Notes, each duly executed and delivered by an Authorized
Officer of each Credit Party party thereto, with the original Notes to be
delivered to the applicable Lender within two (2) Business Days of the Closing
Date;

 

(b)                                 Filings, Registrations and Recordings. 
(i) The  Interim Order entered by the Bankruptcy Court consistently with
subparagraph (v) hereof shall provide that the DIP Liens (as defined therein)
are effective and perfected without the necessity of the execution, recordation
of filings by the Credit Parties of mortgages, security agreements, control
agreements, pledge agreements, financing statements or other similar documents,
any notation of certificates of title for a titled good, or the possession or
control by the Agent of, or over, any Collateral and (ii) each Credit  Party
hereby authorized the Agent to make all filings, registrations and recordations
(including for the avoidance of doubt, UCC financing statements) the Agent deems
necessary in order to create in favor of the Agent, for the benefit of the
Secured Parties, a perfected security interest in or lien upon the Collateral;

 

(c)                                  Closing Certificate.  Agent shall have
received a closing certificate signed by an Authorized Officer of each Credit
Party dated as of the Closing Date stating that each of the conditions specified
in this Section 8.1 and Section 8.2 have been satisfied, including specific
certifications that (i) each of the representations and warranties made by any
Credit Party in or pursuant to this Agreement or the Other Documents are true
and correct in all material respects (or, if such representation and warranty
is, by its terms, limited by materiality (including a Material Adverse Effect),
then such representation and warranty shall be true in all respects) on and as
of such date as if made on and as of such date (except to the extent any such
representation or warranty specifically relates to a certain prior date),
(ii) on such date no Default or Event of Default has occurred or is continuing,
(iii) since the Petition Date there has been no material increase in the
liabilities, liquidated or contingent, of the Borrowers and the other Credit
Parties taken as a whole, or material decrease in the assets of the Borrowers
and the Credit Parties taken as a whole, (iv) other than those resulting from
the commencement of the Cases, since the Petition Date there has been no adverse
change in the ability of the Agent and the Lenders to enforce the Documents and
the Obligations of the Borrowers and the other Credit Parties hereunder and
(v) that the conditions specified in Sections 8.1(l);

 

(d)                                 Proceedings of Credit Parties.  Agent shall
have received a copy of the resolutions in form and substance reasonably
satisfactory to Agent, of the board of directors, management committee, managing
member, manager or general partner, as applicable, of each Credit Party
authorizing (as applicable) (i) the execution, delivery and performance of this
Agreement, the Notes and any Other Documents contemplated to be delivered on the
Closing Date (collectively, the “Documents”) and (ii) the granting by each
Credit Party of the security interests in and liens upon the Collateral in each
case certified by an Authorized Officer of each Credit Party as of the Closing
Date; and, such certificate shall state that the resolutions thereby certified
have not been amended, modified, revoked or rescinded as of the date of such
certificate;

 

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(e)                                  Incumbency Certificates of Credit Parties. 
Agent shall have received a certificate of an Authorized Officer of each Credit
Party, dated the Closing Date, as to the incumbency and signature of the
officers of each Credit Party, as applicable, executing the Documents, any
certificate or other documents to be delivered by it pursuant hereto, together
with evidence of the incumbency of such Authorized Officer;

 

(f)                                   Organizational Documents.  Agent shall
have received a copy of (i) the Organizational Documents of each Credit Party as
in effect on the Closing Date certified, if applicable, by the Secretary of
State or other appropriate official of its jurisdiction of incorporation or
formation, as applicable and (ii) all agreements of each Credit Party’s
shareholders or members, as applicable, and, in the case of clauses (i) and
(ii), certified by an Authorized Officer of such Credit Party as accurate and
complete and having not been amended, modified, revoked or rescinded as of the
Closing Date;

 

(g)                                  Good Standing Certificates.  Agent shall
have received good standing certificates for each Credit Party dated as of a
recent date and in any event not more than thirty (30) days prior to the Closing
Date, issued by the Secretary of State or other appropriate official of each
Credit Party’s jurisdiction of incorporation or formation and each jurisdiction
where the conduct of each Credit Party’s business activities or the ownership of
its properties necessitates qualification;

 

(h)                                 [Reserved];

 

(i)                                     [Reserved];

 

(j)                                    [Reserved];

 

(k)                                 Budget.  Agent shall have received a copy of
the Initial Approved Budget;

 

(l)                                     No Litigation. (i) Other than in
connection with the Cases, no litigation, investigation, arbitration, action or
proceeding shall be continuing, or to the knowledge of the Credit Parties,
threatened against any Credit Party or against the officers or directors of any
Credit Party which would reasonably be expected to have a Material Adverse
Effect, or materially and adversely affect such Credit Party’s ability to
conduct its business as currently conducted or other than as set forth on
Schedule 5.9(ii)(z), result in a material liability to such Credit Party; and
(ii) no injunction, writ, restraining order or other order of any nature
materially adverse to the Credit Parties as a whole or the conduct of their
business or inconsistent with the due consummation of the Transactions shall
have been issued by any Governmental Body;

 

(m)                             [Reserved];

 

(n)                                 Fees and Expenses.  Agent shall have
received all reasonable and documented out-of-pocket fees and expenses (to the
extent invoiced on or prior to the Closing Date) payable to Agent and Lenders,
including those set forth in the Fee Letter, on or prior to the Closing Date
hereunder, including pursuant to Article III hereof;

 

(o)                                 Insurance.  Agent shall have received in
form and substance reasonably satisfactory to Agent, certificates evidencing the
Credit Parties’ casualty insurance policies and any certificates evidencing
flood insurance coverage, together with loss payable endorsements on Agent’s
standard form of lender loss payee endorsement naming Agent as lender loss
payee, and certificates evidencing the Credit Parties’ liability insurance
policies, together with endorsements naming Agent as an additional insured;

 

(p)                                 Payment Instructions.  Agent shall have
received written instructions from Borrowing Agent directing the application of
proceeds of the Advances made on the Closing Date pursuant to this Agreement;

 

(q)                                 Consents.  Agent shall have received any and
all Consents necessary to permit the effectuation of the Transactions;

 

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(r)                                    Know Your Customer.  Agent shall have
received such documentation and information, including but not limited to each
Borrowers’ IRS Form W-9 (or such other applicable tax form), as is reasonably
requested in writing at least five days prior to the Closing Date by the Agent
about the Credit Parties to the extent the Agent and Parent Guarantor in good
faith mutually agree is required by regulatory authorities under applicable
“know your customer” and anti-money laundering rules and regulations, including,
without limitation, the USA PATRIOT Act;

 

(s)                                   Petition Date.  The Petition Date shall
have occurred and each Debtor shall be a “debtor-in-possession” for all purposes
under and with respect to the Cases;

 

(t)                                    First Day Orders.  All “first day orders”
to be entered by the Bankruptcy Court in connection with the commencement of the
Cases, including without limitation the Cash Management Order, shall have been
entered in form and substance reasonably satisfactory to the Agent; it being
understood and agreed that the forms of “first day orders” provided to the Agent
on July 12, 2019 are so satisfactory;

 

(u)                                 First Day Pleadings.  The Agent shall have
received drafts of the “first day” pleadings for the Cases, in each case, in
form and substance reasonably satisfactory to the Agent not later than a
reasonable time in advance of the Petition Date in order for Agent’s counsel to
review and analyze the same;

 

(v)                                 Interim Order.  (i) The Bankruptcy Court
shall have entered an Interim Order in form and substance satisfactory to the
Required Lenders in their sole and absolute discretion and in form and substance
substantially consistent with the form of Interim Order attached hereto as
Exhibit 1.2(c), within three (3) Business Days of the Petition Date, which
Interim Order has not been vacated, reversed, modified, amended or stayed
without consent of the Required Lenders and is in full force and effect,
(ii) all motions and other documents to be filed with and submitted to the
Bankruptcy Court in connection with the DIP Facility and the approval thereof
shall be in form and substance satisfactory to the Required Lenders in their
sole and absolute discretion and (iii) all other orders entered by the
Bankruptcy Court in the Cases related to the DIP Facility or rights of the Agent
and Lenders shall be in form and substance satisfactory to the Required Lenders
in their sole and absolute discretion;

 

(w)                               Cash Management.  The Credit Parties shall
have established or shall maintain the cash management systems described in
Section 4.14(g) and the Debtors shall have taken all steps necessary to comply
with the Cash Management Order, it being acknowledged by the Agent that the cash
management systems as in effect under the Pre-Petition Credit Agreement and the
Second Lien Note Purchase Agreement are acceptable;

 

(x)                                 [Reserved];

 

(y)                                 Chapter 7.  The Cases shall not have been
dismissed or converted to a case filed under Chapter 7 of the Bankruptcy Court;

 

(z)                                  Trustee or Examiner.  No trustee under
Chapter 7 of the Bankruptcy Code or Chapter 11 of the Bankruptcy Code or
examiner with enlarged powers beyond those set forth in Section 1106(3) and
(4) of the Bankruptcy Code shall have been appointed with respect to the Debtors
or their property in the Cases;

 

(aa)                          [Reserved];

 

(bb)                          Restructuring Agreement.  The Restructuring
Agreement shall be in full force and effect, and shall not have been terminated
by the Debtors or the Consenting Creditors (as defined therein); and

 

(cc)                            Other.  All corporate and other proceedings, and
all documents, instruments and other legal matters in connection with the
Transactions shall be satisfactory in form and substance to Agent and its
counsel in the exercise of its Permitted Discretion.

 

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8.2.                            Conditions to Each Advance.  The agreement of
Lenders to make any Advance requested to be made on any date (including the
initial Advance), is subject to the satisfaction of the following conditions
precedent as of the date such Advance is made:

 

(a)                                 Representations and Warranties.  Each of the
representations and warranties made by any Credit Party in or pursuant to this
Agreement or the Other Documents shall be true and correct in all material
respects (or, if such representation and warranty is, by its terms, limited by
materiality (including a Material Adverse Effect), then such representation and
warranty shall be true in all respects) on and as of such date as if made on and
as of such date (except to the extent any such representation or warranty
specifically relates to a certain prior date);

 

(b)                                 No Default.  No Event of Default or Default
shall have occurred and be continuing on such date, or would exist after giving
effect to the Advances requested to be made, on such date; provided however that
Agent, in its sole discretion, may continue to make Advances notwithstanding the
existence of an Event of Default or Default and that any Advances so made shall
not be deemed a waiver of any such Event of Default or Default;

 

(c)                                  Maximum Advances.  In the case of any type
of Advance requested to be made, after giving effect thereto, the aggregate
amount of such type of Advance shall not exceed (i) the maximum amount of such
type of Advance permitted under this Agreement or (ii) the maximum amount then
authorized by the applicable Order or any order modifying (without Agent’s
consent), reversing, staying or vacating such order shall have been entered, or
any appeal of such order shall have been timely filed;

 

(d)                                 Borrowing Notice.  The applicable Borrower
(or the Borrowing Agent on such Borrower’s behalf) shall have delivered a
Borrowing Notice in accordance with Section 2.2 hereof;

 

(e)                                  Violations.  The making of such Advance
shall not violate any Applicable Law and shall not be enjoined, temporarily,
preliminarily or permanently; and

 

(f)                                   Order.  The Interim Order or Final Order,
as the case may be, shall be in full force and effect, shall not have been
reversed, vacated or stayed and shall not have been amended, supplemented or
otherwise modified without the prior written consent of the Required Lenders.

 

Each request for an Advance by Borrowers hereunder shall constitute a
representation and warranty by Borrowers as of the date of such Advance that the
conditions contained in this subsection shall have been satisfied.

 

IX.                               INFORMATION AS TO CREDIT PARTIES.

 

Each Credit Party shall, or (except with respect to Section 9.9) shall cause
Borrowing Agent on its behalf to, until the Termination Date:

 

9.1.                            Disclosure of Material Matters.  Promptly,
following an Authorized Officer of any Borrower obtaining knowledge, report to
Agent all matters materially affecting the value, enforceability or
collectability of any portion of the Collateral, including any Borrower’s
reclamation or repossession of, or the return to any Borrower of, a material
amount of goods or material claims or disputes asserted by any Customer or other
obligor.

 

9.2.                            Schedules.  Deliver to Agent:

 

(a)                                 As soon as available and in any event no
later than 5:00 p.m. on Tuesday of each week as and for the Prior Week as part
of the Approved Budget: (i) accounts receivable ageings inclusive of
reconciliations to the general ledger, (ii) an account roll forward with
supporting detail, (iii) accounts payable schedules

 

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inclusive of reconciliations to the general ledger in electronic format,
(iv) detailed Inventory perpetual in electronic format and (v) a cash collection
report;

 

(b)                                 at such intervals as Agent may require in
its Permitted Discretion: (i) confirmatory assignment schedules, (ii) copies of
Customer’s invoices, (iii) evidence of shipment or delivery, and (iv) such
further schedules, documents and/or information regarding the Collateral as
Agent may require including trial balances and test verifications; and

 

(c)                                  promptly upon Agent’s request therefor
(i) all new Material Contracts, (ii) notice of termination of any Material
Contract, (iii) copies of any customer agreements, sand processing or transport
agreements or fuel transport agreements and (iv) to the extent not otherwise
covered by information delivered by Borrowers to Agent, a report of all
modified, developed or newly acquired material intellectual property.

 

Agent shall have the right to confirm and verify all Receivables.  The items to
be provided under this Section 9.2 are to be in form reasonably satisfactory to
Agent and executed by Borrowers and delivered to Agent from time to time solely
for Agent’s convenience in maintaining records of the Collateral, and Borrowers’
failure to deliver any of such items to Agent shall not affect, terminate,
modify or otherwise limit Agent’s Lien with respect to the Collateral.

 

9.3.                            Compliance Certificate.  Furnish Agent,
concurrently with the delivery of the financial statements referred to in
Section 9.8(a), with a Compliance Certificate.

 

9.4.                            Litigation.  Promptly, following an Authorized
Officer of any Borrower obtaining knowledge, notify Agent in writing of any
claim, litigation, suit or administrative proceeding affecting any Credit Party
after the Petition Date, whether or not the claim is covered by insurance, and
of any litigation, suit or administrative proceeding, which in any such case
affects the Collateral or which could reasonably be expected to have a Material
Adverse Effect, result in an Event of Default, result in material liability to
such Credit Party or materially and adversely affect such Credit Party’s ability
to conduct its business as currently conducted.

 

9.5.                            Material Occurrences.  Promptly, following an
Authorized Officer of any Borrower obtaining knowledge, notify Agent in writing
upon the occurrence of (a) any Event of Default or Default; (b) any event,
development or circumstance whereby any financial statements or other reports
furnished to Agent fail in any material respect to present fairly, in accordance
with GAAP consistently applied, the financial condition or operating results of
Parent Guarantor and its Subsidiaries as of the date of such statements; (c) any
accumulated retirement plan funding deficiency which, if such deficiency
continued for two plan years and was not corrected as provided in Section 4971
of the Code, could subject any Credit Party to a Tax imposed by Section 4971 of
the Code; (d) except as otherwise approved by the Bankruptcy Court, a breach by
a Credit Party of any Material Contract; and (e) any other development in the
business or affairs of any Credit Party, which could reasonably be expected to
have a Material Adverse Effect; in each case describing the nature thereof and
the action such Credit Party proposes to take with respect thereto.

 

9.6.                            [Reserved].

 

9.7.                            Annual Financial Statements.  Furnish Agent (for
distribution to the Lenders) within one hundred twenty (120) days after the end
of each fiscal year of Parent Guarantor (or in the case of the fiscal year ended
December 31, 2018, no later than August 31, 2019), commencing with the fiscal
year ended December 31, 2018, (i) audited consolidated and unaudited
consolidating financial statements of Parent Guarantor and its Subsidiaries
including, but not limited to, statements of income and stockholders’ equity and
cash flow from the beginning of the current fiscal year to the end of such
fiscal year and the balance sheet as at the end of such fiscal year, all
prepared in accordance with GAAP applied on a basis consistent with prior
practices, and in reasonable detail and accompanied by a report and opinion
(which report and opinion shall be prepared in accordance with generally
accepted auditing standards) of the Accountants and (ii) if available and
requested by the Agent, any management letters from the Accountants to Parent
Guarantor or to an officer of Parent Guarantor.

 

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9.8.                            Quarterly and Monthly Reporting.

 

(a)                                 Furnish Agent (for distribution to the
Lenders) within forty-five (45) days after the end of each fiscal quarter of
each fiscal year (or in the case of the fiscal quarter ended (i) March 31, 2019,
no later than August 31, 2019 and (ii) June 30, 2019, no later than
September 30, 2019), commencing with the fiscal quarter ended March 31, 2019, an
unaudited balance sheet of Parent Guarantor and its Subsidiaries on a
consolidated and consolidating basis and unaudited statements of income and
stockholders’ equity and cash flow of Parent Guarantor and its Subsidiaries on a
consolidated and consolidating basis reflecting results of operations from the
beginning of the fiscal year to the end of such quarter and for such quarter,
and a comparison against the balance sheet and the statements of income for
(i) the period from the beginning of prior fiscal year to the end of the
equivalent quarter in such prior fiscal year and for such equivalent quarter in
the prior fiscal year, and (ii) for statements of income only, the equivalent
quarter in the Financial Projections, in each case, prepared internally on a
basis consistent with prior practices and complete and correct in all material
respects, subject to normal and recurring year-end adjustments that are
disclosed to Agent and the Lenders if, in the aggregate, they are material to
Borrowers’ business.

 

(b)                                 Furnish Agent (for distribution to the
Lenders) within thirty (30) days after the end of each month, commencing with
the month ending June 30, 2019, an unaudited balance sheet of Parent Guarantor
and its Subsidiaries on a consolidated and consolidating basis and unaudited
statements of income and stockholders’ equity and cash flow of Parent Guarantor
and its Subsidiaries on a consolidated and consolidating basis reflecting
results of operations from the beginning of the fiscal year to the end of such
month and for such month, and a comparison against the balance sheet and the
statements of income for the period from the beginning of prior fiscal year to
the end of the equivalent month in such prior fiscal year and for such
equivalent month in the prior fiscal year, in each case, prepared internally on
a basis consistent with prior practices and complete and correct in all material
respects, subject to normal and recurring year-end adjustments that are
disclosed to Agent and the Lenders if, in the aggregate, they are material to
Borrowers’ business; it being understood and agreed that the aforementioned
monthly reporting obligation shall be deemed to be satisfied by the filing of a
“Monthly Operating Report” required by the Bankruptcy Court.

 

9.9.                            Additional Information.  Furnish Agent promptly
upon an Authorized Officer of any Credit Party’s obtaining knowledge thereof,
notice of any material labor dispute to which such Credit Party may become a
party, any strikes or walkouts relating to any of its plants or other
facilities, and the expiration of any material labor contract to which any
Credit Party is a party or by which any Credit Party is bound.

 

9.10.                     [Reserved].

 

9.11.                     MD&A.  Furnish Agent, upon its request, with respect
to the financial statements referred to in Section 9.8, a management discussion
and analysis report relating to the Borrowers.

 

9.12.                     Notice of Suits, Adverse Events.  Furnish Agent
written notice, within 2 Business Days of (i) an Authorized Officer of any
Credit Party having knowledge thereof, any lapse or other termination of any
material Consent issued to any Credit Party by any Governmental Body or any
other Person that is material to the operation of such Credit Party’s business,
(ii) an Authorized Officer of any Credit Party having knowledge thereof, any
refusal by any Governmental Body or any other Person to renew or extend any such
material Consent; and (iii) filing by any Credit Party with any Governmental
Body or Person, copies of any material periodic or special reports, if such
reports indicate the occurrence of a Material Adverse Effect and (iv) an
Authorized Officer of any Credit Party having knowledge thereof, copies of any
notices and other communications from any Governmental Body or Person which
specifically relate to any Credit Party and are material and adverse to a Credit
Party.

 

9.13.                     ERISA Notices and Requests.  Furnish Agent with
immediate written notice in the event that (i) any Credit Party or any member of
the Controlled Group knows or has reason to know that a Termination Event has
occurred, together with a written statement describing such Termination Event
and the action, if any,

 

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which such Credit Party or any member of the Controlled Group has taken, is
taking, or proposes to take with respect thereto and, when known, any action
taken or threatened by the IRS, Department of Labor or PBGC with respect
thereto, (ii) any Credit Party or any member of the Controlled Group knows or
has reason to know that a prohibited transaction (as defined in Section 406 of
ERISA or 4975 of the Code) has occurred that is reasonably likely to result in a
material liability to any Credit Party together with a written statement
describing such transaction and the action which such Credit Party or any member
of the Controlled Group has taken, is taking or proposes to take with respect
thereto, (iii) a funding waiver request has been filed with respect to any Plan
together with all communications received by any Credit Party or any member of
the Controlled Group with respect to such request, (iv) any material increase in
the benefits of any existing Plan or the establishment of any new Plan or the
commencement of contributions to any Plan to which any Credit Party or any
member of the Controlled Group was not previously contributing, and for which it
is reasonably likely that any Credit Party may have any material liability,
shall occur, (v) any Credit Party or any member of the Controlled Group shall
receive from the PBGC a notice of intention to terminate a Plan or to have a
trustee appointed to administer a Plan, together with copies of each such
notice, (vi) any Credit Party or any member of the Controlled Group shall
receive any unfavorable determination letter from the IRS regarding the
qualification of a Plan under Section 401(a) of the Code pursuant to which any
Credit Party has material liability, together with copies of each such letter;
(vii) any Credit Party or any member of the Controlled Group shall receive a
notice regarding the imposition of withdrawal liability, together with copies of
each such notice; (viii) any Credit Party or any member of the Controlled Group
shall fail to make a required installment or any other required payment under
the Code or ERISA on or before the due date for such installment or payment; or
(ix) any Credit Party or any member of the Controlled Group knows that (A) a
Multiemployer Plan has been terminated, (B) the administrator or plan sponsor of
a Multiemployer Plan intends to terminate a Multiemployer Plan, (C) the PBGC has
instituted or will institute proceedings under Section 4042 of ERISA to
terminate a Multiemployer Plan or (D) a Multiemployer Plan is subject to
Section 432 of the Code or Section 305 of ERISA.

 

9.14.                     [Reserved].

 

9.15.                     Second Lien Notice.  Furnish Agent (i) notice of any
default or event of default under any of the Second Lien Note Documentation
promptly following the earlier of (x) an Authorized Officer of any Borrower
obtaining knowledge thereof and (y) any Borrower receiving notice thereof by any
agent or lender under the Second Lien Note Documentation and (ii) drafts of any
additional Second Lien Term Documentation to be entered into after the Closing
Date a reasonable time prior to the entry thereof, and copies of such additional
Second Lien Note Documentation, promptly following execution thereof.

 

9.16.                     [Reserved].

 

9.17.                     SEC Filings.  Promptly after the same are publicly
available, copies of all annual, regular, periodic and special reports, proxy
statements and registration statements which Parent Guarantor, any Borrower or
any Subsidiary files with the SEC or with any national securities exchange, as
the case may be (other than amendments to any registration statement (to the
extent such registration statement, in the form it became effective, is
delivered to the Agent), exhibits to any registration statement and, if
applicable, any registration statement on Form S-8), and in any case not
otherwise required to be delivered to the Agent pursuant to any other Section of
this Article IX.

 

9.18.                     Additional Documents.  Execute and deliver to Agent,
upon request, such documents and agreements as Agent may, from time to time,
reasonably request (including, documents relating to the Collateral) to carry
out the purposes, terms or conditions of this Agreement but excluding any “cash
creation day” presentation prepared by the Borrowers.

 

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X.                                    EVENTS OF DEFAULT.

 

Notwithstanding the provisions of Section 362 of the Bankruptcy Code with
respect to the Debtors and without notice, application or motion to, hearing
before, or order of any Bankruptcy Court or any notice to any Credit Party, the
occurrence of any one or more of the following events shall constitute an “Event
of Default”:

 

10.1.                     Nonpayment.

 

(a)                                 Failure by any Borrower to pay when due any
principal on the Obligations (including without limitation pursuant to
Section 2.17) other than Cash Management Liabilities or Hedge Liabilities on the
date due;

 

(b)                                 Failure by any Borrower to pay when due any
interest on the Obligations within three (3) Business Days after such interest
becomes due;

 

(c)                                  Failure by any Borrower to pay when due any
other fee, charge, amount or liability provided for herein (specifically
excluding principal and interest which are addressed in subparagraphs (a) and
(b) above) or in any Other Document, within the time period specified herein or
therein and, if no time period is specified, then within three (3) Business Days
after a demand or notice has been provided to the Borrowing Agent requesting
payment of such amount;

 

10.2.                     Breach of Representation.  Any representation or
warranty made or deemed made by any Credit Party in this Agreement, any Other
Document or any related agreement or any certificate, document or financial or
other statement furnished at any time in connection herewith or therewith shall
prove to have been misleading in any material respect on the date when made or
deemed to have been made;

 

10.3.                     Financial Information.  Failure by any Borrower to
(i) furnish financial, collateral or other information when due under Article IX
hereof, or if no due date is specified herein, within three (3) days after
requested by Agent or (ii) permit the inspection of its books or records in
accordance with this Agreement;

 

10.4.                     Judicial Actions.  Other than in connection with the
Cases, and orders pertaining thereto, the issuance of any Lien, levy,
assessment, injunction or attachment against any Credit Party’s Inventory or
Receivables with an aggregate value in excess of $250,000 (for all such
Inventory or Receivables) or against a portion of any Credit Party’s other
property with a market or book value in excess of $250,000 that is not a
Permitted Encumbrance which is not stayed or lifted within thirty (30) days;

 

10.5.                     Noncompliance.  Except as otherwise provided for in
Sections 10.1, 10.3, 10.9, 10.12 or 10.17: (i) except as set forth in
Section 10.5(iii) below, failure or neglect of any Credit Party to perform, keep
or observe any term, provision, condition, covenant contained in Article IV,
Article VI or Article VII of this Agreement, (ii) failure or neglect of any
Credit Party to perform, keep or observe any term, provision, condition,
covenant contained in any Other Document (other than this Agreement) which is
not cured within five (5) days from the earlier of (A) receipt by Borrowing
Agent of written notice from Agent or the Lenders of such failure or neglect and
(B) the time at which an Authorized Officer had knowledge of such failure or
neglect, or (iii) failure or neglect of (A) any Credit Party to perform, keep or
observe any term, provision, condition or covenant, contained in Sections 4.5,
4.6, 4.7, 4.8, 4.13, 4.14(c), 4.18, 6.3, 6.4, 6.10 or 7.9 hereof or (B) any
other term, provision, condition or covenant of this Agreement to the extent not
addressed in clause (i) hereof, in each case, which is not cured within five
(5) days from the earlier of (X) receipt by Borrowing Agent of written notice
from Agent or the Lenders of such failure or neglect and (Y) the time at which
an Authorized Officer had knowledge of such failure or neglect;

 

10.6.                     Judgments.  Other than in connection with the Cases,
and orders pertaining thereto, any judgment or judgments are rendered against
any Credit Party for an aggregate amount in excess of $250,000 (for all such
judgments), in each case to the extent not fully covered by a third party
insurer and (i) enforcement

 

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proceedings shall have been commenced by a creditor upon such judgment,
(ii) there shall be any period of thirty (30) consecutive days during which a
stay of enforcement of such judgment, by reason of a pending appeal or
otherwise, shall not be in effect, or (iii) any such judgment results in the
creation of a Lien upon any of the Collateral (other than a Permitted
Encumbrance);

 

10.7.                     Cases.  The occurrence of any of the following in the
Cases:

 

(a)                                 The bringing of a motion, taking of any
action or the filing of any plan of reorganization or disclosure statement
attendant thereto by any of the Credit Parties in the Cases: (A) to obtain
additional financing under Section 364(c) or Section 364(d) of the Bankruptcy
Code not otherwise permitted pursuant to this Agreement; (B) to grant any Lien
other than Permitted Encumbrances upon or affecting any Collateral; (C) except
as provided in the Interim Order or Final Order, as the case may be, to use cash
collateral of Agent and the other Secured Parties or Prior Agent and Prior
Lenders under Section 363(c) of the Bankruptcy Code without the prior written
consent of Agent; (D) to sell any of the Collateral except to the extent
expressly permitted by the terms hereof or with the prior written approval of
the Agent, on behalf of the Lenders; (E) to the extent that any action or
actions may be adverse to (x) Agent and Lenders or Prior Agent and Prior Lenders
or their rights and remedies hereunder or their interest in the Collateral or
(y) Prior Agent and Prior Lenders or their rights under the Pre-Petition Credit
Agreement, the Second Lien Note Purchase Agreement or the other Pre-Petition
Loan Documents or their interest in the Collateral (as defined in the
Pre-Petition Credit Agreement and the Second Lien Note Purchase Agreement, as
applicable); or (F) that is otherwise not reasonably satisfactory to the Agent;

 

(b)                                 (A) The filing of any plan of reorganization
that is not an Approved Chapter 11 Plan or disclosure statement attendant
thereto, or any direct or indirect amendment to such Approved Chapter 11 Plan or
disclosure statement, by a Credit Party or any other Person to which Agent does
not consent, (B) the entry of any order terminating or reducing the exclusivity
period with respect to any Credit Party’s exclusive right to file a plan of
reorganization or (C) the expiration of any Credit Party’s exclusive right to
file a plan of reorganization;

 

(c)                                  (i) The entry of an order in any of the
Cases confirming a plan of reorganization that (A) is not an Approved Chapter 11
Plan, (B) does not contain a provision for termination of the Commitments and
repayment in full in cash of all of the Obligations under this Agreement and the
Prior Lender Obligations on or before the effective date of such plan or plans,
(C) that is not consistent with the Amended Restructuring Agreement or (D) does
not provide for release provisions relating to the Agent and the Lenders that
are satisfactory to the Agent in its sole discretion and (ii) the Restructuring
Agreement is terminated by the Debtors or any other party;

 

(d)                                 The entry of an order amending,
supplementing, staying, vacating or otherwise modifying this Agreement, the
Other Documents or the Interim Order, the Final Order or the Cash Management
Order without the written consent of Agent or the filing of a motion for
reconsideration with respect to the Interim Order of the Final Order or the
Interim Order, the Final Order or the Cash Management Order shall otherwise not
be in full force and effect;

 

(e)                                  The Final Order is not entered immediately
following the expiration of the Interim Order, and in any event within thirty
(30) days of the Petition Date;

 

(f)                                   The payment of, or application for
authority to pay, any pre-petition claim without Agent’s prior written consent
unless in accordance with the Approved Budget;

 

(g)                                  The allowance of any claim or claims under
Section 506(c) of the Bankruptcy Code or otherwise against Agent, any Lender or
any of the Collateral or against the Prior Agent, any Prior Lender or any
Collateral (as defined in the Pre-Petition Credit Agreement and the Second Lien
Note Purchase Agreement, as applicable);

 

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(h)                                 (A) The appointment of an interim or
permanent trustee in the Cases or the appointment of a receiver or an examiner
in the Cases with expanded powers to operate or manage the financial affairs,
the business, or reorganization of the Credit Parties; or (B) the sale without
Agent’s and Lenders’ consent, of all or substantially all of the Credit Parties
assets either through a sale under Section 363 of the Bankruptcy Code, through a
confirmed plan of reorganization in the Cases, or otherwise that does not
provide for payment in full in cash all of the Obligations under this Agreement
and the Prior Lender Obligations at the closing of such sale or initial payment
of the purchase price or effectiveness of such plan, as applicable;

 

(i)                                     The dismissal of the Cases, or the
conversion of the Cases from one under Chapter 11 to one under Chapter 7 of the
Bankruptcy Code or any Credit Party shall file a motion or other pleading
seeking the dismissal of the Cases under Section 1112 of the Bankruptcy Code or
otherwise or the conversion of the Cases to Chapter 7 of the Bankruptcy Code;

 

(j)                                    Any Credit Party shall file a motion
seeking, or the Bankruptcy Court shall enter an order granting, relief from or
modifying the automatic stay of Section 362 of the Bankruptcy Code (A) to allow
any creditor (other than Agent) to execute upon or enforce a Lien on any
Collateral, (B) approving any settlement or other stipulation not approved by
Agent with any secured creditor of any Credit Party providing for payments as
adequate protection or otherwise to such secured creditor (unless otherwise
approved by the Required Lenders in their sole discretion), or (C) with respect
to any Lien of or the granting of any Lien on any Collateral to any federal,
state or local environmental or regulatory agency or authority, which in either
case involves a claim of $250,000 or more;

 

(k)                                 The commencement of a suit or action against
either Agent or any Lender or Prior Agent or any Prior Lender and, as to any
suit or action brought by any Person other than a Credit Party or a Subsidiary
for a Credit Party, officer or employee of a Credit Party, the continuation
thereof without dismissal for thirty (30) days after service thereof on either
Agent or such Lender or Prior Agent or any Prior Lender, that asserts or seeks
by or on behalf of a Credit Party, any state of federal environmental protection
or health and safety agency, any official committee in any Case or any other
party in interest in any of the Cases, a claim or any legal or equitable remedy
that would (x) have the effect of subordinating any or all of the Obligations or
Liens of the Agent or any Lender under this Agreement or the Other Documents or
the Prior Lender Obligations or Liens of the Prior Agent or Prior Lenders under
the Pre-Petition Loan Documents to any other claim, or (y) have a material
adverse effect on the rights and remedies of Agent or any Lender or Prior Agent
or any Prior Lender under this Agreement or any Other Document or the Prior
Agent or Prior Lenders under the Pre-Petition Loan Documents or the
collectability of all or any portion of the Obligations or Prior Lender
Obligations;

 

(l)                                     The entry of an order in the Cases
avoiding or permitting recovery of any portion of the payments made on account
of the Obligations owing under this Agreement or the Other Documents or the
Prior Lender Obligations owing under the Pre-Petition Loan Documents;

 

(m)                             The failure of any Credit Party to perform any
of its obligations under the Interim Order, the Final Order, the Cash Management
Order or any other order of the Bankruptcy Court;

 

(n)                                 Subject to the Carve-Out, the entry of an
order in the Cases granting any other super priority administrative claim or
Lien equal or superior to that granted to Agent, on behalf of itself and the
Secured Parties or Prior Agent or Prior Lenders, other than as expressly set
forth in the Interim Order (or the Final Order, when applicable); and/or

 

(o)                                 The entry into any debtor-in-possession
financing arrangement without the prior written consent of the Required Lenders,
in their sole discretion;

 

10.8.                     Collateral; Invalidity of Pre-Petition Loan
Documents.  Any provision of any Pre-Petition Loan Document shall for any reason
cease to be valid and binding on or enforceable against any Credit Party or any
Subsidiary of any Credit Party party thereto or any Credit Party or any
Subsidiary of any Credit Party shall so

 

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state in writing or bring an action to limit its obligations or liabilities
thereunder; or any Security Document (as defined in the Pre-Petition Credit
Agreement and the Second Lien Note Purchase Agreement, as applicable) shall for
any reason (other than pursuant to the terms thereof) cease to create a valid
security interest in any Collateral (as defined in the Pre-Petition Credit
Agreement and the Second Lien Note Purchase Agreement, as applicable), in each
case, purported to be covered thereby or such security interest shall for any
reason cease to be a perfected and first priority security interest subject only
to Permitted Encumbrances and the provisions of the applicable Orders;

 

10.9.                     Cash Management Liabilities and Hedge Liabilities. 
Any default or event of default under any documents or agreements governing Cash
Management Products and Services or Lender-Provided Hedges which results in
monetary liability to any Credit Party (or Credit Parties) in excess of $250,000
in the aggregate;

 

10.10.              Lien Priority.  Any Lien on Collateral ceases to be or is
not a valid and perfected first priority Lien in favor of the Agent for the
benefit of the Secured Parties (subject to only to Permitted Encumbrances);

 

10.11.              Cross Default.  Except for (x) defaults occasioned by the
filing of the Cases, (y) defaults subject to the automatic stay of Section 362
of the Bankruptcy Code and (z) the resulting from obligations with respect to
which the Bankruptcy Code prohibits any Credit Party from complying or permits
any Credit Party not to comply, any payment default or any “event of default”
under (i) the Specified Note or (ii) any Indebtedness (other than the
Obligations) of any Credit Party with a then-outstanding principal balance (or,
in the case of any Indebtedness not so denominated, with a then-outstanding
total obligation amount) of $250,000 or more (in the aggregate for all such
Indebtedness as to which an event or circumstance under this Section 10.11 has
occurred), or any other event or circumstance which would permit the holder of
any such Indebtedness to accelerate such Indebtedness (and/or the obligations of
any Credit Party thereunder) prior to the scheduled maturity or termination
thereof, shall occur (regardless of whether the holder of such Indebtedness
shall actually accelerate, terminate or otherwise exercise any rights or
remedies with respect to such Indebtedness);

 

10.12.              Breach of Security Agreement.  (i) Termination of the
Security Agreement or similar agreement executed and delivered to Agent in
connection with the Obligations of any Borrower, or if any Credit Party attempts
to terminate, challenges in writing the validity of, or its liability under, the
Security Agreement or similar agreement, or (ii) if any breach of the terms of
any such agreement occurs (other than termination in clause (i) above or
termination in accordance with its terms);

 

10.13.              Change of Control.  Any Change of Control shall occur;

 

10.14.              Invalidity.  Any material provision of this Agreement or any
Other Document shall, for any reason, cease to be valid and binding on any
Credit Party or any Credit Party shall so claim in writing to Agent or any
Lender;

 

10.15.              Licenses.  Any Governmental Body shall revoke, terminate,
suspend or adversely modify any material license, permit, patent, trademark or
tradename of any Credit Party or Restricted Subsidiary that is material to a
Borrower’s business and such revocation, termination, suspension or modification
would reasonably be expected to have a Material Adverse Effect or materially and
adversely affect such Credit Party’s ability to conduct its business as
currently conducted;

 

10.16.              Pension Plans.  An event or condition specified in
Section 7.13 or Section 9.13 hereof shall occur or exist with respect to any
Plan and, as a result of such event or condition, together with all other such
events or conditions, any Borrower or any member of the Controlled Group shall
incur liability (including liability of any Borrower in its capacity as a member
of a Controlled Group) to a Plan or the PBGC (or both) which, in the reasonable
judgment of Agent, would have a Material Adverse Effect or result in material
liability to any Credit Party; or

 

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10.17.              Reportable Compliance Event.  The occurrence of any
Reportable Compliance Event, or any Credit Party’s failure to immediately report
a Reportable Compliance Event in accordance with Section 16.18 hereof.

 

10.18.              SEC.  The failure of the Parent Guarantor to maintain its
current registration and reporting status with the Securities and Exchange
Commission, including formal enforcement action by the Securities and Exchange
Commission against the Parent Guarantor or any of its subsidiaries which would
materially impact the Parent Guarantors ability to maintain its current
registration and reporting status.

 

10.19.              Corporate Governance.  During the time from the date of the
Restructuring Agreement until the Termination Date, the (i) the termination of
the amended and restated charter for the special restructuring committee of the
General Partner (the “Special Committee”) or the dissolution of the Special
Committee, (ii) the termination or replacement of the chief restructuring
officer of the General Partner, without the consent of the Special Committee,
(iii) the termination or replacement of Ankura Consulting Group, LLC engaged by
the Special Committee in furtherance of its duties under its charter or (iv) the
failure of the Permitted Holders or the board of directors of the General
Partner to support the Approved Chapter 11 Plan.

 

XI.                               LENDERS’ RIGHTS AND REMEDIES AFTER DEFAULT.

 

11.1.                     Rights and Remedies.

 

(a)                                 Notwithstanding the provisions of
Section 362 of the Bankruptcy Code, without any application, motion or notice
to, hearing before, or order from the Bankruptcy Court, upon the occurrence of:
any Event of Default and at any time thereafter (such default not having
previously been cured), Agent may, and at the option of Required Lenders Agent
shall, (i) declare all Obligations shall be immediately due and payable and
Lenders shall have the right to terminate this Agreement and to terminate the
obligation of Lenders to make Advances, (ii) immediately terminate, reduce or
restrict any right or ability of the Credit Parties to use any cash collateral
(other than as expressly set forth in the Interim Order or the Final Order, as
applicable) and to assume control thereof, (iii) subject to five (5) days’
written notice from the Required Lenders, or the Agent on their behalf, declare
that the automatic stay of Section 362 of the Bankruptcy Code shall be
terminated without further order of the Bankruptcy Court, without the need for
filing any motion for relief from the automatic stay or any other pleading, for
the limited purpose of permitting the Lenders to do any of the following:
(w) foreclose on the Collateral; (x) enforce all of the guaranty rights;
(y) charge the default rate of interest on the Advances; and (z) declare the
principal of and accrued interest, fees and expenses constituting the
obligations under the DIP Facility to be due and payable; or (iii) exercise its
unqualified right to credit bid up to the full amount of the outstanding
Obligations (including any accrued interest) in any sale of the Collateral (or
any part thereof), which credit bid of the Obligations may, with the consent of
the applicable Prior Agents, incorporate a credit bid of the Prior Lender
Obligations (including any accrued interest), and whether such sale is
effectuated through section 363 or 1129 of the Bankruptcy Code, by a Chapter 7
trustee under Section 725 of the Bankruptcy Code, or otherwise and/or
(iv) exercise on behalf of itself and the Lenders all rights and remedies
available to it and the Lenders under this Agreement, the Other Documents or
applicable law.  Agent may enter any of any Credit Party’s premises or other
premises without legal process and without incurring liability to any Credit
Party therefor, and Agent may thereupon, or at any time thereafter, in its
discretion without notice or demand, take the Collateral and remove the same to
such place as Agent may deem advisable and Agent may require Credit Parties to
make the Collateral available to Agent at a convenient place.  In connection
with the exercise of the foregoing remedies, Agent is granted a perpetual
nonrevocable, royalty free, nonexclusive license and Agent is granted permission
to use all of each Credit Party’s (a) trademarks, trade styles, trade names,
trade name applications, domain names, domain name applications, patents, patent
applications, copyrights, service marks, licenses, franchises and other
proprietary rights which are used or useful in connection with Inventory for the
purpose of marketing, advertising for sale and selling or otherwise disposing of
such Inventory and (b) Equipment for the purpose of completing the manufacture
of unfinished goods and, in each case, the Credit Parties shall assist Agent in
obtaining access and the rights to use, at no cost or expense, the property
described in the foregoing clauses (a) and (b).  The cash proceeds realized from
the sale of any Collateral shall be applied to the Obligations

 

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in the order set forth in Section 11.5 hereof unless required otherwise by
Applicable Law.  Noncash proceeds will only be applied to the Obligations as
they are converted into cash.  If any deficiency shall arise, Credit Parties
shall remain liable to Agent and Lenders therefor.

 

(b)                                 Pursuant to the applicable Order, the
automatic stay of Section 362 of the Bankruptcy Code shall be modified and
vacated to permit Agent and Lenders to exercise all rights and remedies under
this Agreement, the Other Documents or applicable law, without further notice,
application or motion to, hearing before, or order from, the Bankruptcy Court.

 

(c)                                  To the extent that Applicable Law imposes
duties on Agent to exercise remedies in a commercially reasonable manner, each
Credit Party acknowledges and agrees that it is not commercially unreasonable
for Agent: (i) to fail to incur expenses reasonably deemed significant by Agent
to prepare Collateral for disposition or otherwise to complete raw material or
work in process into finished goods or other finished products for disposition;
(ii) to fail to obtain third party consents for access to Collateral to be
disposed of, or to obtain or, if not required by other law, to fail to obtain
governmental or third party consents for the collection or disposition of
Collateral to be collected or disposed of; (iii) to fail to exercise collection
remedies against Customers or other Persons obligated on Collateral or to remove
Liens on or any adverse claims against Collateral; (iv) to exercise collection
remedies against Customers and other Persons obligated on Collateral directly or
through the use of collection agencies and other collection specialists; (v) to
advertise dispositions of Collateral through publications or media of general
circulation, whether or not the Collateral is of a specialized nature; (vi) to
contact other Persons, whether or not in the same business as any Credit Party,
for expressions of interest in acquiring all or any portion of such Collateral;
(vii) to hire one or more professional auctioneers to assist in the disposition
of Collateral, whether or not the Collateral is of a specialized nature;
(viii) to dispose of Collateral by utilizing internet sites that provide for the
auction of assets of the types included in the Collateral or that have the
reasonable capacity of doing so, or that match buyers and sellers of assets;
(ix) to dispose of assets in wholesale rather than retail markets; (x) to
disclaim disposition warranties, such as title, possession or quiet enjoyment;
(xi) to purchase insurance or credit enhancements to insure Agent against risks
of loss, collection or disposition of Collateral or to provide to Agent a
guaranteed return from the collection or disposition of Collateral; or (xii) to
the extent deemed appropriate by Agent, to obtain the services of other brokers,
investment bankers, consultants and other professionals to assist Agent in the
collection or disposition of any of the Collateral.  Each Credit Party
acknowledges that the purpose of this Section 11.1(c) is to provide
non-exhaustive indications of what actions or omissions by Agent would not be
commercially unreasonable in Agent’s exercise of remedies against the Collateral
and that other actions or omissions by Agent shall not be deemed commercially
unreasonable solely on account of not being indicated in this Section 11.1(c). 
Without limitation upon the foregoing, nothing contained in this
Section 11.1(c) shall be construed to grant any rights to any Credit Party or to
impose any duties on Agent that would not have been granted or imposed by this
Agreement or by Applicable Law in the absence of this Section 11.1(c).

 

11.2.                     Agent’s Discretion.  Agent shall have the right in its
sole discretion to determine which rights, Liens, security interests or remedies
Agent may at any time pursue, relinquish, subordinate, or modify or to take any
other action with respect thereto and such determination will not in any way
modify or affect any of Agent’s or Lenders’ rights hereunder.

 

11.3.                     Setoff.  Subject to Section 14.12, in addition to any
other rights which Agent or any Lender may have under Applicable Law, upon the
occurrence of an Event of Default hereunder, Agent and such Lender shall have a
right, immediately and without notice of any kind, to apply any Credit Party’s
property held by Agent and such Lender to reduce the Obligations
(notwithstanding the provisions of 362 of the Bankruptcy Code, without any
application, motion or notice to, hearing before, or order from, the Bankruptcy
Court).

 

11.4.                     Rights and Remedies not Exclusive.  The enumeration of
the foregoing rights and remedies is not intended to be exhaustive and the
exercise of any rights or remedy shall not preclude the exercise of any other
right or remedies provided for herein or otherwise provided by law, all of which
shall be cumulative and not alternative.

 

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11.5.                     Allocation of Payments After Event of Default. 
Notwithstanding any other provisions of this Agreement to the contrary, upon the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by Agent on account of the Obligations or any other
amounts outstanding under any of the Other Documents or in respect of the
Collateral shall be paid over or delivered as follows:

 

FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of the Agent (to the extent invoiced) in
connection with enforcing its rights and the rights of the Lenders under this
Agreement and the Other Documents, under or pursuant to the terms of this
Agreement;

 

SECOND, to payment of any fees (to the extent invoiced) owed to Agent;

 

THIRD, to the payment of all reasonable out-of-pocket costs and expenses
(including reasonable attorneys’ fees) of each of the Lenders to the extent
owing to such Lender pursuant to the terms of this Agreement;

 

FOURTH, to the payment of all Obligations arising under this Agreement and the
Other Documents consisting of accrued fees and interest with respect to Advances
and Commitment Percentages;

 

FIFTH, to the payment of Advances not repaid pursuant to clauses “FIRST” through
“FOURTH” above;

 

SIXTH, to all other Obligations which shall have become due and payable and not
repaid pursuant to clauses “FIRST” through “FIFTH”; and

 

SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully
entitled to receive such surplus.

 

In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (ii) each of the Lenders shall receive (so long as it
is not a Defaulting Lender) an amount equal to its Pro Rata Share (based on the
proportion that the then outstanding Advances held by such Lender bears to the
aggregate then outstanding Advances) of amounts available to be applied pursuant
to clauses “THIRD”, “FIFTH” and “SIXTH”.  Monies and proceeds obtained from a
Credit Party shall not be applied to its Excluded Hedge Liabilities, but
appropriate adjustments shall be made with respect to amounts obtained from
other Credit Parties to preserve the allocations specified above.

 

XII.                          WAIVERS AND JUDICIAL PROCEEDINGS.

 

12.1.                     Waiver of Notice.  To the fullest extent permitted by
Applicable Law, each Borrower hereby waives notice of non-payment of any of the
Receivables, demand, presentment, protest and notice thereof with respect to any
and all instruments, notice of acceptance hereof, notice of loans or advances
made, credit extended, Collateral received or delivered, or any other action
taken in reliance hereon, and all other demands and notices of any description,
except such as are expressly provided for herein.

 

12.2.                     Delay.  No delay or omission on Agent’s or any
Lender’s part in exercising any right, remedy or option shall operate as a
waiver of such or any other right, remedy or option or of any Default or Event
of Default.

 

12.3.                     Jury Waiver.  EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN
ANY WAY CONNECTED WITH

 

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OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO
OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

XIII.                     EFFECTIVE DATE AND TERMINATION.

 

13.1.                     Term.  This Agreement, which shall inure to the
benefit of and shall be binding upon the respective successors and permitted
assigns of each Credit Party signatory hereto, Agent and each Lender, shall
become effective on the Closing Date and shall continue in full force and effect
until the Maturity Date unless sooner terminated as herein provided.  Borrowers
may terminate this Agreement at any time upon five (5) days’ irrevocable prior
written notice upon payment in full of the Obligations (other than contingent
indemnity claims not yet asserted or threatened) and termination of the
Commitments.

 

13.2.                     Termination.  The termination of the Agreement shall
not affect any Credit Party’s, Agent’s or any Lender’s rights, or any of the
Obligations having their inception prior to the effective date of such
termination, and the provisions hereof shall continue to be fully operative
until all transactions entered into, rights or interests created or Obligations
(other than contingent indemnity claims not yet asserted or threatened) have
been fully and indefeasibly paid, disposed of, concluded or liquidated and all
Commitments have been terminated.  The security interests, Liens and rights
granted to Agent for the benefit of the Secured Parties hereunder and the
financing statements filed in connection therewith shall continue in full force
and effect, notwithstanding the termination of this Agreement or the fact that
Borrowers’ Account may from time to time be temporarily in a zero or credit
position, until the Termination Date.  Upon the occurrence of the Termination
Date or any release of Collateral or any part thereof in accordance with the
provisions of this Agreement, then the Collateral (or such part of the
Collateral) shall be released from the security interests created by this
Agreement and Agent shall, upon the request and at the sole cost and expense of
the Borrowers and receipt by Agent of a certificate from an Authorized Officer
of the Borrowing Agent confirming that such release (other than in connection
with the occurrence of the Termination Date) is permitted under this Agreement
and each Other Document, assign, transfer and deliver to Credit Parties, without
recourse to or warranty by Agent, such of the Collateral or any part thereof as
may be in possession of and as shall not have been sold or otherwise applied
pursuant to the terms hereof, and, with respect to any other Collateral, proper
documents and instruments (including UCC-3 termination financing statements or
releases) acknowledging the termination of the Liens granted pursuant to this
Agreement.  All representations, warranties, covenants, waivers and agreements
contained herein shall survive termination hereof until all Obligations (other
than contingent indemnity claims not yet asserted or threatened) are
indefeasibly paid and performed in full and all Commitments have been
terminated.

 

XIV.                      REGARDING AGENT.

 

14.1.                     Appointment.  Each Lender hereby designates HPS to act
as Agent for such Lender under this Agreement and the Other Documents.  Each
Lender hereby irrevocably authorizes Agent to (i) enter into the Other Documents
and to take such action on its behalf under the provisions of this Agreement and
the Other Documents and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of Agent
by the terms hereof and thereof and such other powers as are reasonably
incidental thereto and Agent shall hold all Collateral, payments of principal
and interest, fees, charges and collections (without giving effect to any
collection days) received pursuant to this Agreement, for the benefit of Lenders
entitled thereto and (ii) without limiting the foregoing, consent, on behalf of
each Lender, to the Interim

 

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Order and the Final Order, each to be negotiated between the Credit Parties,
Agent, and the statutory committees appointed pursuant to Section 327 and 1103
of the Bankruptcy Code.  Agent may perform any of its duties hereunder by or
through its agents or employees.  As to any matters not expressly provided for
by this Agreement (including collection of the Note) Agent shall not be required
to exercise any discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding; provided however that Agent shall not be required
to take any action which exposes Agent to liability or which is contrary to this
Agreement or the Other Documents or Applicable Law unless Agent is furnished
with an indemnification reasonably satisfactory to Agent with respect thereto.

 

14.2.                     Nature of Duties.  Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
Other Documents.  Neither Agent nor any of its officers, directors, employees or
agents shall be (i) liable for any action taken or omitted by them as such
hereunder or in connection herewith, unless caused by their gross negligence or
willful misconduct (as determined by a court of competent jurisdiction in a
final non-appealable judgment), or (ii) responsible in any manner for any
recitals, statements, representations or warranties made by any Borrower or any
officer thereof contained in this Agreement, or in any of the Other Documents or
in any certificate, report, statement or other document referred to or provided
for in, or received by Agent under or in connection with, this Agreement or any
of the Other Documents or for the value, validity, effectiveness, genuineness,
due execution, enforceability or sufficiency of this Agreement, or any of the
Other Documents or for any failure of any Borrower to perform its obligations
hereunder or for the existence, priority or perfection of the Liens and security
interests granted hereunder or under any Other Documents or in the value of any
of the Collateral.  Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any of the Other
Documents, or to inspect the properties, books or records of any Borrower.  The
duties of Agent as respects the Advances to Borrowers shall be mechanical and
administrative in nature; Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender; and nothing in this Agreement,
expressed or implied, is intended to or shall be so construed as to impose upon
Agent any obligations in respect of this Agreement except as expressly set forth
herein.  Anything herein to the contrary notwithstanding, none of the Lenders
listed on the cover page hereof shall have any powers, duties or
responsibilities under this Agreement or any Other Document, except in its
capacity, as applicable, as Agent, Collateral Agent, Agent or a Lender hereunder
or thereunder.  No Secured Party has any fiduciary relationship with or duty to
any Credit Party arising out of or in connection with this Agreement or any
Other Document, and the relationship between the Credit Parties, on the one
hand, and the Secured Parties, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor.  No joint venture is created
hereby or by any Other Document or otherwise exists by virtue of the
transactions contemplated hereby among the Secured Parties or among the Credit
Parties and the Secured Parties.

 

Without limiting the foregoing, the Agent shall not be required to act hereunder
or to advance its own funds or otherwise incur any financial liability in the
performance of its duties or the exercise of its rights hereunder and under any
Other Document, and shall in all cases be fully justified in failing or refusing
to act hereunder unless it shall receive further assurances to its satisfaction
from the Lenders of their indemnification obligations under and in accordance
with the provisions of Section 14.7 against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take or
refraining from taking any such action.  The Agent shall be fully justified in
requesting direction from the Required Lenders in the event this Agreement or
any Other Document is silent or vague with respect to Agent’s duties, rights or
obligations.  The 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 (ii) in the
absence of its own gross negligence or willful misconduct, as determined by a
court of competent jurisdiction in a final and non-appealable decision.  In no
instance shall the Agent have any liability for special, consequential or
indirect damages or penalties (including lost profits) even if it has been
advised of the likelihood of the same.  Without prejudice to the generality of
the foregoing, the Agent shall not be liable for any damage or loss resulting
from or caused by events or circumstances beyond the Agent’s reasonable control,
including nationalization, expropriation, currency restrictions, the
interruption, disruption or suspension of the normal procedures and practices of
any securities market, power, mechanical, communications or other technological

 

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failures or interruptions, computer viruses or the like, acts of war or
terrorism, riots, revolution, acts of God, work stoppages, strikes, national
disasters of any kind, or other similar events or acts.

 

14.3.                     Lack of Reliance on Agent and Resignation. 
Independently and without reliance upon Agent or any other Lender, each Lender
has made and shall continue to make (i) its own independent investigation of the
financial condition and affairs of each Credit Party in connection with the
making and the continuance of the Advances hereunder and the taking or not
taking of any action in connection herewith, and (ii) its own appraisal of the
creditworthiness of each Credit Party.  Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect thereto, whether coming into
its possession before making of the Advances or at any time or times thereafter
except as shall be provided by any Credit Party pursuant to the terms hereof. 
Agent shall not be responsible to any Lender for any recitals, statements,
information, representations or warranties herein or in any agreement, document,
certificate or a statement delivered in connection with or for the execution,
effectiveness, genuineness, validity, enforceability, collectability,
sufficiency or value of this Agreement or any Other Document or any other
instrument or document furnished pursuant hereto or thereto, or of the financial
condition of any Credit Party, or be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement, the Note, the Other Documents or the financial
condition of any Borrower, or the existence of any Event of Default or any
Default.

 

Agent may resign on sixty (60) days’ written notice to each of Lenders and
Borrowing Agent and upon such resignation, the Required Lenders will promptly
designate a successor Agent reasonably satisfactory to Borrowing Agent.  If a
successor Agent shall not have been so appointed within said sixty (60) Business
Day period, the retiring Agent may appoint a successor Agent reasonably
satisfactory to Borrower who shall serve as an Agent until such time, if any, as
the Required Lenders appoint a successor Agent as provided above.

 

Any such successor Agent shall succeed to the rights, powers and duties of
Agent, and the term “Agent” shall mean such successor agent effective upon its
appointment, and the former Agent’s rights, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent.  After any Agent’s resignation as Agent, the provisions of this
Article XIV shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.

 

If the Person serving as Agent is a Defaulting Lender pursuant to clause (d) of
the definition thereof, the Required Lenders may, to the extent permitted by
Applicable Law, by notice in writing to the Borrowing Agent and such Person
remove such Person as Agent and, in consultation with the Borrowing Agent,
appoint a successor.  If no such successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days (or
such earlier day as shall be agreed by the Required Lenders) (the “Removal
Effective Date”), then such removal shall nonetheless become effective in
accordance with such notice on the Removal Effective Date.

 

14.4.                     Certain Rights of Agent.  The Agent may at any time
request instructions from the Lenders with respect to any actions or approvals
which by the terms of this Agreement or of any of the Other Documents the Agent
is permitted or required to take or to grant.  If Agent shall request any such
instructions, Agent shall be entitled to refrain from such act or taking such
action unless and until Agent shall have received instructions from the Required
Lenders; and Agent shall not incur liability to any Person by reason of so
refraining.  Without limiting the foregoing, Lenders shall not have any right of
action whatsoever against Agent as a result of its acting or refraining from
acting hereunder in accordance with the instructions of the Required Lenders.

 

14.5.                     Reliance.  Agent shall be entitled to rely, and shall
be fully protected in relying, upon any note, writing (including any electronic
message), resolution, notice, statement, certificate, telex, teletype or
telecopier message, cablegram, order or other document or telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person or entity, and, with respect to all legal matters
pertaining to this Agreement and the Other Documents and its duties hereunder,
upon advice of counsel selected by it.  Agent may employ agents and
attorneys-in-fact and shall not be liable for the acts, omissions, negligence or

 

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misconduct of any such agents or attorneys-in-fact selected by Agent with
reasonable care.  In determining compliance with any condition hereunder, the
Agent shall be entitled to receive, and shall not incur any liability for
relying upon, a certificate of an Authorized Officer or an opinion of counsel or
both certifying as to compliance with such condition.  The Agent may consult
with legal counsel (who may be counsel for the Credit Parties or any Lender),
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.

 

14.6.                     Notice of Default.  Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder or under the Other Documents, unless Agent has received written notice
from a Lender or Borrowing Agent referring to this Agreement or the Other
Documents, describing such Default or Event of Default and stating that such
notice is a “notice of default”.  In the event that Agent receives such a
notice, Agent shall give notice thereof to Lenders and Borrowers.  Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that, unless and until
Agent shall have received such directions, Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
Lenders.

 

14.7.                     Indemnification.  To the extent Agent is not
reimbursed and indemnified by Borrowers, each Lender will reimburse and
indemnify Agent in proportion to its respective portion of the Advances (or, if
no Advances are outstanding, according to its Commitment Percentage), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature, including, without limitation, the fees and expenses of its agents and
attorneys, whatsoever which may be imposed on, incurred by or asserted against
Agent in performing its duties hereunder, or in any way relating to or arising
out of this Agreement or any Other Document; provided that, Lenders shall not be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from Agent’s gross negligence or willful misconduct (as determined by a court of
competent jurisdiction in a final non-appealable judgment).

 

14.8.                     Agent in its Individual Capacity.  With respect to the
obligation of Agent to lend under this Agreement, the Advances made by it shall
have the same rights and powers hereunder as any other Lender and as if it were
not performing the duties as Agent specified herein; and the term “Lender” or
any similar term shall, unless the context clearly otherwise indicates, include
Agent in its individual capacity as a Lender.  Agent may engage in business with
any Borrower as if it were not performing the duties specified herein, and may
accept fees and other consideration from any Borrower for services in connection
with this Agreement or otherwise without having to account for the same to
Lenders.

 

14.9.                     Delivery of Documents.  To the extent Agent receives
financial statements required under Sections 9.3, 9.8, 9.10 and 9.11, Agent will
promptly furnish such documents and information to Lenders.

 

14.10.              Borrowers’ Undertaking to Agent.  Without prejudice to their
respective obligations to Lenders under the other provisions of this Agreement,
each Borrower hereby undertakes with Agent to pay to Agent from time to time on
demand all amounts from time to time due and payable by it for the account of
Agent or Lenders or any of them pursuant to this Agreement to the extent not
already paid.  Any payment made pursuant to any such demand shall pro tanto
satisfy the relevant Borrower’s obligations to make payments for the account of
Lenders or the relevant one or more of them pursuant to this Agreement.

 

14.11.              No Reliance on Agent’s Customer Identification Program. 
Each Lender acknowledges and agrees that neither such Lender, nor any of its
Affiliates, participants or assignees, may rely on Agent to carry out such
Lender’s, Affiliate’s, participant’s or assignee’s customer identification
program, or other obligations required or imposed under or pursuant to the USA
PATRIOT Act or the regulations thereunder, including the regulations contained
in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or
any other Anti-Terrorism Law, including any programs involving any of the
following items relating to or in connection with any Borrower, its Affiliates
or its agents, this Agreement, the Other Documents or the

 

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transactions hereunder or contemplated hereby: (1) any identity verification
procedures, (2) any record-keeping, (3) comparisons with government lists,
(4) customer notices or (5) other procedures required under the CIP Regulations
or such other Laws.

 

14.12.              Other Documents.  Each of the Lenders agrees that it shall
not, without the express consent of Agent, and that it shall, to the extent it
is lawfully entitled to do so, upon the request of Agent, set off against the
Obligations, any amounts owing by such Lender to any Borrower or any deposit
accounts of any Borrower now or hereafter maintained with such Lender.  Anything
in this Agreement to the contrary notwithstanding, each of the Lenders further
agrees that it shall not, unless specifically requested to do so by Agent, take
any action to protect or enforce its rights arising out of this Agreement or the
Other Documents, it being the intent of Lenders that any such action to protect
or enforce rights under this Agreement and the Other Documents shall be taken in
concert and at the direction or with the consent of Agent or Required Lenders.

 

14.13.              Withholding Tax.  To the extent required by any Applicable
Law Agent may deduct or withhold from any payment to any Lender an amount
equivalent to any applicable withholding Tax.  If the IRS or any other
Governmental Body asserts a claim that Agent did not properly withhold Tax from
amounts paid to or for the account of any Lender for any reason (including
because the appropriate form was not delivered or was not properly executed or
because such Lender failed to notify Agent of a change in circumstance that
rendered the exemption from, or reduction of, withholding Tax ineffective), such
Lender shall indemnify and hold harmless Agent fully for all amounts paid,
directly or indirectly, by Agent as Tax or otherwise, including any penalties,
additions to Tax or interest and together with all expenses (including legal
expenses, allocated internal costs and out-of-pocket expenses) incurred (to the
extent invoiced), whether or not such Tax was correctly or legally imposed or
asserted by the relevant Governmental Body.  A certificate as to the amount of
such payment or liability delivered to any Lender by Agent shall be conclusive
absent manifest error.  Each Lender hereby authorizes Agent to set off and apply
any and all amounts at any time owing to such Lender under this Agreement or any
Other Document against any amount due Agent under this Section 14.13.  The
agreements in this Section 14.13 shall survive the resignation and/or
replacement of Agent, any assignment of rights by, or the replacement of, a
Lender, the termination of this Agreement and the repayment, satisfaction or
discharge of all other obligations.

 

14.14.              Collateral and Guaranty Matters.  Each of the Lenders
(including in their capacity as counterparties to any Hedge Liabilities or Cash
Management Liabilities) irrevocably authorize the Agent, at its option and in
its discretion, (a) to release any Lien on any property granted to or held by
the Agent under this Agreement and/or any applicable Other Document (i) upon the
occurrence of the Termination Date, (ii) that is sold or to be sold as part of
or in connection with any sale permitted under this Agreement to a Person that
is not a Credit Party, (iii) that constitutes Excluded Collateral, or (iv) if
approved, authorized or ratified in writing in accordance with Section 16.2 and
(b) to release any Guarantor from its obligations under this Agreement and the
Other Documents if such Person ceases to be a Restricted Subsidiary as a result
of a transaction permitted under this Agreement.  Upon request by the Agent at
any time, the Required Lenders will confirm in writing the Agent’s authority to
release its interest in particular types or items of property, or to release any
Guarantor from its obligations under this Agreement and the Other Documents
pursuant to this Section 14.14.

 

XV.                           BORROWING AGENCY.

 

15.1.                     Borrowing Agency Provisions.

 

(a)                                 Each Borrower hereby irrevocably designates
Borrowing Agent to be its attorney and agent and in such capacity to borrow,
sign and endorse notes, and execute and deliver all instruments, documents,
writings and further assurances now or hereafter required hereunder, on behalf
of such Borrower or Borrowers, and hereby authorizes Agent to pay over or credit
all loan proceeds hereunder in accordance with the request of Borrowing Agent.

 

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(b)                                 The handling of this credit facility as a
co-borrowing facility with a borrowing agent in the manner set forth in this
Agreement is solely as an accommodation to Borrowers and at their request. 
Neither Agent nor any Lender shall incur liability to Borrowers as a result
thereof.

 

(c)                                  Each of the Borrowers shall be jointly and
severally liable with respect to their Obligations under the Agreement and the
Other Documents to which it is party (including the Obligations to repay the
Advances and interest and fees thereon, together with each other payment,
reimbursement, indemnification and contribution Obligation under this Agreement
and any Other Document).  Such joint and several liability of each Borrower
shall not be impaired or released by, and each Borrower irrevocably waives any
defense it might have by virtue of: (i) the failure of any Lender or the Agent
or any successor or assign thereof to assert any claim or demand or to exercise
or enforce any right, power or remedy against any Borrower, any other Person,
any collateral under this Agreement or otherwise, (ii) any extension or renewal
for any period (whether or not longer than the original period) or exchange of
any of the obligations under this Agreement or any Other Document or the release
or compromise of any obligation of any nature of any Person with respect
thereto, (iii) the surrender, release or exchange of all or any part of any
property (including any collateral under this Agreement or otherwise) securing
payment, performance and/or observance of any of the obligations under this
Agreement or the Other Documents or the compromise or extension or renewal for
any period (whether or not longer than the original period) of any obligations
of any nature of any Person with respect to any such property, (iv) any action
or inaction on the part of any Lender, the Agent or any other Person, or any
other event or condition with respect to any other Borrower, including any such
action or inaction or other event or condition, which might otherwise constitute
a defense available to, or a discharge of, such other Borrower, or a guarantor
or surety of or for any or all of the Obligations under this Agreement or the
Other Documents, (v) any disability, incapacity or lack of powers, authority or
legal personality of or dissolution or change in the members or status of any
Borrower or any other person, (vi) any unenforceability, illegality or
invalidity of any obligation of any other Person under this Agreement or any
Other Document or any other document, guaranty or security, (vii) any avoidance,
postponement, discharge, reduction, non-provability or other similar
circumstance affecting any obligation of any Credit Party under this Agreement
or an Other Document resulting from any bankruptcy, insolvency, receivership,
liquidation or dissolution proceedings or from any law, regulation or order so
that each such obligation shall for the purposes of such other Borrower’s
obligations hereunder be construed as if there were no such circumstances,
(viii) the release or substitution of any other Borrower in respect of the
Obligations, or (ix) any other act, matter or thing which would or might, in the
absence of this provision, operate to release, discharge or otherwise
prejudicially affect the joint and several nature of the obligations of such or
any other Borrower.  It is understood and agreed that the Lenders and the Agent
shall be entitled to payment from any one or more Borrowers, as determined by
the Lenders and the Agent in their discretion, of any amount due in accordance
with this Agreement and the Other Documents, and no Lender nor the Agent shall
be required to seek prior or simultaneous payment from any other Borrower. 
Until the indefeasible payment in full in cash of all Obligations and the
expiration or termination of the Commitments under this Agreement, each Borrower
hereby agrees that it shall not exercise any right or remedy arising by reason
of any performance by such Borrower of its obligations hereunder, whether by
subrogation, reimbursement, contribution, indemnification or otherwise, against
any other Borrower or any other Person or any Collateral for any of the
Obligations.

 

(d)                                 Notwithstanding anything to the contrary in
Section 15.1(c), the obligations of each Borrower under Section 15.1(c) with
respect to advances made by a Secured Party to one or more other Borrowers shall
be limited to a maximum aggregate amount equal to the largest amount that would
not render such Borrower’s undertakings hereunder subject to avoidance as a
fraudulent transfer or fraudulent conveyance under Section 548 of Title 11 of
the United States Bankruptcy Code or any applicable provisions of comparable
state law (collectively, the “Fraudulent Transfer Laws”), in each case taking
into account the provisions of Section 15.1(e), and after giving effect to all
other liabilities of such Borrower, contingent or otherwise, that are relevant
under the Fraudulent Transfer Laws and after giving effect as assets to the
value (as determined under the applicable provisions of the Fraudulent Transfer
Laws) of any rights to subrogation, contribution, reimbursement, indemnity or
similar rights of such Borrower pursuant to applicable law or any agreement
providing for an equitable allocation among such Borrower and the other
Borrowers and Affiliates of the Borrowers of obligations arising under
co-borrowings or guarantees by such parties.

 

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(e)                                  The Borrowers hereby agree, as between
themselves, that if any Borrower shall become an Excess Funding Borrower (as
defined below) by reason of the payment by such Borrower of any of the
Obligations, each other Borrower shall, on written demand of such Excess Funding
Borrower (but subject to the immediately following sentence), pay to such Excess
Funding Borrower an amount equal to such Borrower’s Pro Rata Borrower Share (as
defined below and determined, for this purpose, without reference to the
properties, debts and liabilities of such Excess Funding Borrower) of the Excess
Borrower Payment (as defined below) in respect of such Obligations.  The payment
obligation of a Borrower to any Excess Funding Borrower under this clause
(e) shall be subordinated and subject in right of payment to the prior payment
in full of the Obligations and such Excess Funding Borrower shall not exercise
any right or remedy with respect to such excess until payment in full of all of
the Obligations.  For purposes of this Section 15.1(e), (i) “Excess Funding
Borrower” means a Borrower that has paid an amount in excess of its Pro Rata
Borrower Share of the Obligations, (ii) “Excess Borrower Payment” means the
amount paid by an Excess Funding Borrower in excess of its Pro Rata Borrower
Share of the Obligations and (iii) “Pro Rata Borrower Share” means, for any
Borrower, the ratio (expressed as a percentage) of (x) the amount by which the
aggregate fair saleable value of all properties of such Borrower (excluding any
shares of stock of any other Borrower) exceeds the amount of all the debts and
liabilities of such Borrower (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Borrower
hereunder and any obligations of any other Borrower that have been guaranteed by
such Borrower) to (y) the amount by which the aggregate fair saleable value of
all properties of all of the Borrowers exceeds the amount of all the debts and
liabilities of all of the Borrowers (including contingent, subordinated,
unmatured and unliquidated liabilities, but excluding the obligations of the
Borrowers under this Agreement and the Other Documents), determined (A) with
respect to any Borrower that is a party hereto on the date hereof, as of the
date hereof, and (B) with respect to any other Borrower, as of the date such
Borrower becomes a Borrower hereunder.

 

15.2.                     Waiver of Subrogation.  Each Borrower expressly waives
any and all rights of subrogation, reimbursement, indemnity, exoneration,
contribution of any other claim which such Borrower may now or hereafter have
against the other Borrowers or other Person directly or contingently liable for
the Obligations hereunder, or against or with respect to the other Borrowers’
property (including, without limitation, any property which is Collateral for
the Obligations), arising from the existence or performance of this Agreement,
until the Termination Date.

 

XVI.                      MISCELLANEOUS.

 

16.1.                     Governing Law.  This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applied to
contracts to be performed wholly within the State of New York and any applicable
laws of the United States of America, including the Bankruptcy Code.  Each
Credit Party hereby consents and agrees that the Bankruptcy Court shall have
exclusive jurisdiction to hear and determine any claims or disputes between the
Credit Parties, Agent and Lenders pertaining to this Agreement or any of the
Other Documents or to any matter arising out of or relating to this Agreement or
any of the Other Documents; provided, that the Agent, Lenders and the Credit
Parties acknowledge that any appeals from the Bankruptcy Court may have to be
heard by a court other than the Bankruptcy Court; provided further, that nothing
in this Agreement shall be deemed or operate to preclude agent from bringing
suit or taking other legal action in any other jurisdiction to realize on the
Collateral or any other security for the Obligations, or to enforce a judgment
or other court order in favor of Agent.  Each Credit Party expressly submits and
consents in advance to such jurisdiction in any action or suit commenced in any
such court, and each Credit Party hereby waives any objection that such Credit
Party may have based upon lack of personal jurisdiction, improper venue or forum
non conveniens and hereby consents to the granting of such legal or equitable
relief as is deemed appropriate by such court.  Each Credit Party hereby waives
personal service of any and all process upon it and consents that all such
service of process may be made by registered mail (return receipt requested)
directed to Borrowing Agent at its address set forth in Section 16.6 and service
so made shall be deemed completed five (5) days after the same shall have been
so deposited in the mails of the United States of America, or, at Agent’s
option, by service upon Borrowing Agent which each Credit Party irrevocably
appoints as such Credit Party’s Agent for the purpose of accepting service
within the State of New York.  Nothing herein shall affect the right to serve

 

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process in any manner permitted by law or shall limit the right of Agent or any
Lender to bring proceedings against any Credit Party in the courts of any other
jurisdiction.  Each Credit Party waives any objection to jurisdiction and venue
of any action instituted hereunder and shall not assert any defense based on
lack of jurisdiction or venue or based upon forum non conveniens with respect to
any action brought in the aforesaid courts.  The provisions of Sections 3.6,
16.20 and 16.21 are included solely out of an abundance of caution and shall not
be construed to mean that any provisions of Texas law are in any way applicable
to this Agreement, the Other Documents or any of the Obligations.

 

16.2.                     Entire Understanding; Amendments; No Waiver by Course
of Conduct.

 

(a)                                 This Agreement and the documents executed
concurrently herewith contain the entire understanding among each Credit Party,
Agent and each Lender and supersedes all prior agreements and understandings, if
any, relating to the subject matter hereof.  Any promises, representations,
warranties or guarantees not herein contained and hereinafter made shall have no
force and effect unless in writing, signed by each Credit Party’s, Agent’s and
each Lender’s respective officers.  Neither this Agreement nor any portion or
provisions hereof may be changed, modified, amended, waived, supplemented,
discharged, cancelled or terminated orally or by any course of dealing, or in
any manner other than by an agreement in writing, signed by the party to be
charged (with a copy of each amendment provided to the Agent).  Each Credit
Party acknowledges that it has been advised by counsel in connection with the
execution of this Agreement and Other Documents and is not relying upon oral
representations or statements inconsistent with the terms and provisions of this
Agreement.  If any provision in this Agreement or any Other Document conflicts
with any provision in the Interim Order or Final Order, the provision in the
Interim Order or Final Order shall govern and control.

 

(b)                                 The Required Lenders, Agent with the consent
in writing of the Required Lenders, and the applicable Credit Parties may,
subject to the provisions of this Section 16.2(b), from time to time enter into
written supplemental agreements to this Agreement or the Other Documents (other
than with respect to Cash Management Products and Services and Lender-Provided
Hedges, other similar agreements or the Fee Letter, which shall require only the
consent of the parties thereto) executed by the applicable Credit Parties, for
the purpose of adding or deleting any provisions or otherwise changing, varying
or waiving in any manner the rights of Lenders, Agent or Credit Parties
thereunder or the conditions, provisions or terms thereof or waiving any Event
of Default thereunder, but only to the extent specified in such written
agreements; provided however that no such supplemental agreement shall:

 

(i)                                     increase the Commitment Percentage, or
the maximum dollar amount of the Commitment Amount of any Lender without the
consent of such Lender directly affected thereby;

 

(ii)                                  whether or not any Advances are
outstanding, extend the Maturity Date or the time for payment of principal or
interest of any Advance (excluding the due date of any mandatory prepayment of
an Advance), or any fee payable to any Lender, or reduce the principal amount of
or the rate of interest borne by any Advances or reduce any fee payable to any
Lender, without the consent of each Lender directly affected thereby (except
that Required Lenders may elect to waive or rescind any imposition of the
Default Rate under Section 3.1 (unless imposed by Agent));

 

(iii)                               except in connection with any increase
pursuant to Section 2.15 hereof, increase the Maximum Advance Amount without the
consent of all Lenders;

 

(iv)                              alter the definition of the term Required
Lenders or alter, amend or modify this Section 16.2(b)  without the consent of
all Lenders;

 

(v)                                 alter, amend or modify the provisions of
Sections 2.10(e), 2.17 or 11.5, or any other provision hereof providing for the
pro rata sharing by the Lenders of payments received on the Advances or the pro
rata reduction of their commitments to make Advances without the consent of all
Lenders;

 

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(vi)                              other than in accordance with the provisions
of this Agreement upon the occurrence of the Termination Date or with respect to
any disposition of Collateral permitted under this Agreement, release all or
substantially all of the Collateral without the consent of all Lenders;

 

(vii)                           change the exculpatory provisions in this
Agreement benefitting Agent without the consent of all Lenders; or

 

(viii)                        release any Guarantor or Borrower (except as
otherwise permitted under this Agreement) without the consent of all Lenders.

 

(c)                                  Any such supplemental agreement shall apply
equally to each Lender and shall be binding upon Borrowers, Lenders and Agent
and all future holders of the Obligations.  In the case of any waiver,
Borrowers, Agent and Lenders shall be restored to their former positions and
rights, and any Event of Default waived shall be deemed to be cured and not
continuing, but no waiver of a specific Event of Default shall extend to any
subsequent Event of Default (whether or not the subsequent Event of Default is
the same as the Event of Default which was waived), or impair any right
consequent thereon.

 

(d)                                 Nothing herein contained, and no act done or
omitted by the Agent pursuant to the powers and rights granted it herein, shall
be deemed to be a waiver by the Agent of its rights and remedies under this
Agreement, any Organizational Document of any Credit Party or any related
document, but this Agreement is made and accepted without prejudice to any of
the rights and remedies possessed by the Agent under the terms hereof or
thereof.  The right of the Agent to collect any amounts due to the Secured
Parties hereunder or any Other Document and to enforce its rights with respect
to Collateral may be exercised by the Agent either prior to, simultaneously with
or subsequent to any action taken by it hereunder or any Other Document.

 

16.3.                     Successors and Assigns; Participations.

 

(a)                                 This Agreement shall be binding upon and
inure to the benefit of each Credit Party, Agent, each Lender, all future
holders of the Obligations and their respective successors and permitted
assigns, except that Credit Parties may not assign or transfer any of their
rights or obligations under this Agreement without the prior written consent of
Agent and each Lender.

 

(b)                                 Each Borrower acknowledges that in the
regular course of commercial banking business one or more Lenders may at any
time and from time to time sell participating interests in the Advances to other
financial institutions (each such transferee or purchaser of a participating
interest, a “Participant”).  Each Participant may exercise all rights of payment
(including rights of set-off to the extent permitted by Applicable Law) with
respect to the portion of such Advances held by it or other Obligations payable
hereunder as fully as if such Participant were the direct holder thereof, and
each Participant shall have the benefits of Section 3.10 hereof (subject to the
rights and limitations therein, provided that any forms required to be provided
by any Participant pursuant to Section 3.10 shall be provided to the
participating Lender) provided that Borrowers shall not be required to pay to
any Participant more than the amount which it would have been required to pay to
Lender which granted an interest in its Advances or other Obligations payable
hereunder to such Participant had such Lender retained such interest in the
Advances hereunder or other Obligations payable hereunder, unless the sale of
the participation is made with the Borrowers’ prior written consent (not to be
unreasonably withheld or delayed) and in no event shall Borrowers be required to
pay any such amount arising from the same circumstances and with respect to the
same Advances or other Obligations payable hereunder to both such Lender and
such Participant.  Each Participant shall have the benefits of Section 3.10
hereof.  Each Borrower hereby grants to any Participant a continuing security
interest in any deposits, moneys or other property actually or constructively
held by such Participant as security for the Participant’s interest in the
Advances.  No Lenders shall transfer, grant or sell any participation under
which the participant shall have the right to approve any amendment or waiver of
this Agreement except to the extent such amendment or waiver would require the
approval of all Lenders pursuant to Section 16.2(b) .  Each Lender that sells a
participation shall, acting solely for this purpose as an agent of the
Borrowers, maintain a register on which it enters the name and address of

 

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each Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Advances or other obligations under this Agreement
and the Other 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 this Agreement or any Other 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 Agent (in its capacity as Agent) shall have no responsibility for
maintaining a Participant Register

 

(c)                                  Any Lender may assign all or any part of
its rights and obligations under or relating to Advances under this Agreement
and the Other Documents to one or more additional banks or financial
institutions (each such assignee, a “Purchasing Lender”), in minimum amounts of
not less than $1,000,000, pursuant to a Commitment Transfer Supplement, executed
by a Purchasing Lender, the transferor Lender, and Agent and delivered to Agent
for recording; provided that any such assignment will require the consent of
Agent.  Upon such execution, delivery, acceptance and recording, from and after
the transfer effective date determined pursuant to such Commitment Transfer
Supplement, (i) Purchasing Lender thereunder shall be a party hereto and, to the
extent provided in such Commitment Transfer Supplement, have the rights and
obligations of a Lender thereunder with a Commitment Percentage as set forth
therein, and (ii) the transferor Lender thereunder shall, to the extent provided
in such Commitment Transfer Supplement, be released from its obligations under
this Agreement, the Commitment Transfer Supplement creating a novation for that
purpose.  Such Commitment Transfer Supplement shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Lender and the resulting adjustment of the
Commitment Percentages arising from the purchase by such Purchasing Lender of
all or a portion of the rights and obligations of such transferor Lender under
this Agreement and the Other Documents.  Each Borrower hereby consents to the
addition of such Purchasing Lender and the resulting adjustment of the
Commitment Percentages arising from the purchase by such Purchasing Lender of
all or a portion of the rights and obligations of such transferor Lender under
this Agreement and the Other Documents.  Borrowers shall execute and deliver
such further documents and do such further acts and things in order to
effectuate the foregoing.

 

(d)                                 Any Lender, with the consent of Agent which
shall not be unreasonably withheld or delayed, may directly or indirectly sell,
assign or transfer all or any portion of its rights and obligations under or
relating to Advances under this Agreement and the Other Documents to an entity,
whether a corporation, partnership, trust, limited liability company or other
entity that (i) is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and (ii) is administered, serviced or managed by the assigning Lender
or an Affiliate of such Lender (a “Purchasing CLO” and together with each
Participant and Purchasing Lender, each a “Transferee” and collectively the
“Transferees”), pursuant to a Commitment Transfer Supplement modified as
appropriate to reflect the interest being assigned (“Modified Commitment
Transfer Supplement”), executed by any intermediate purchaser, the Purchasing
CLO, the transferor Lender, and Agent as appropriate and delivered to Agent for
recording.  Upon such execution and delivery, from and after the transfer
effective date determined pursuant to such Modified Commitment Transfer
Supplement, (i) Purchasing CLO thereunder shall be a party hereto and, to the
extent provided in such Modified Commitment Transfer Supplement, have the rights
and obligations of a Lender thereunder and (ii) the transferor Lender thereunder
shall, to the extent provided in such Modified Commitment Transfer Supplement,
be released from its obligations under this Agreement, the Modified Commitment
Transfer Supplement creating a novation for that purpose.  Such Modified
Commitment Transfer Supplement shall be deemed to amend this Agreement to the
extent, and only to the extent, necessary to reflect the addition of such
Purchasing CLO.  Each Borrower hereby consents to the addition of such
Purchasing CLO.  Borrowers shall execute and deliver such further documents and
do such further acts and things in order to effectuate the foregoing.

 

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(e)                                  Agent shall maintain at one of its offices
a copy of each Commitment Transfer Supplement and Modified Commitment Transfer
Supplement delivered to it and a register (the “Register”) for the recordation
of the names and addresses of each Lender and the outstanding principal, accrued
and unpaid interest and other fees due hereunder.  The entries in the Register
shall be conclusive, in the absence of manifest error, and each Borrower, Agent
and Lenders shall treat each Person whose name is recorded in the Register as
the owner of the Advance recorded therein for the purposes of this Agreement. 
The Register shall be available for inspection by any Borrower or any Lender
(with respect to its own interests) at any reasonable time and from time to time
upon reasonable prior written notice.  Agent shall receive (i) all documentation
and other information required by required by regulatory authorities under
applicable “know your customer” and anti-money laundering rules and regulations,
including, without limitation, the USA PATRIOT Act and (ii) a fee in the amount
of $3,500 payable by the applicable Purchasing Lender and/or Purchasing CLO upon
the effective date of each transfer or assignment (other than to an intermediate
purchaser) to such Purchasing Lender and/or Purchasing CLO.

 

(f)                                   Each Borrower authorizes each Lender to
disclose to any Transferee and any prospective Transferee any and all financial
information in such Lender’s possession concerning such Borrower which has been
delivered to such Lender by or on behalf of such Borrower pursuant to this
Agreement or in connection with such Lender’s credit evaluation of such
Borrower; provided that the Transferee or prospective Transferee agrees to be
bound by a non-disclosure agreement approved by Borrowers pursuant to which
Borrowers are third party beneficiaries.

 

(g)                                  Notwithstanding anything to the contrary in
this Section 16.3: (i) no sale, transfer or assignment of all or any portion of
any Lender’s rights and obligations under or relating to Loans under this
Agreement shall be made to any Credit Party or any of their respective
Affiliates.

 

(h)                                 Notwithstanding anything to the contrary
contained in this Agreement, any Lender may at any time and from time to time
pledge or assign a security interest in all or any portion of its rights under
this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

 

16.4.                     [Reserved].

 

16.5.                     Indemnity.  Each Credit Party shall defend, protect,
indemnify, pay and save harmless Agent each Lender and each of their respective
officers, directors, Affiliates, attorneys, employees and agents (each an
“Indemnified Party”) for and from and against any and all claims, demands,
liabilities, obligations, losses, damages, penalties, fines, actions, judgments,
suits, costs, charges, expenses and disbursements of any kind or nature
whatsoever (including reasonable fees and disbursements of counsel (including
allocated costs of internal counsel)) (collectively, “Claims”) which may be
imposed on, incurred by, or asserted against any Indemnified Party in arising
out of or in any way relating to or as a consequence, direct or indirect, of:
(a) this Agreement, the Other Documents, the Advances and other Obligations
and/or the transactions contemplated hereby including the Transactions, (b) any
action or failure to act or action taken only after delay or the satisfaction of
any conditions by any Indemnified Party in connection with and/or relating to
the negotiation, execution, delivery or administration of the Agreement and the
Other Documents, the credit facilities established hereunder and thereunder
and/or the transactions contemplated hereby including the Transactions, (c) any
Credit Party’s failure to observe, perform or discharge any of its covenants,
obligations, agreements or duties under or breach of any of the representations
or warranties made in this Agreement and the Other Documents, (d) the
enforcement of any of the rights and remedies of Agent or any Lender under the
Agreement and the Other Documents, (e) any threatened or actual imposition of
fines or penalties, or disgorgement of benefits, for violation of any
Anti-Terrorism Law by any Credit Party, any Affiliate or Subsidiary of any
Credit Party, (f) any claim, litigation, proceeding or investigation instituted
or conducted by any Governmental Body or instrumentality or any other Person
with respect to any aspect of, or any transaction contemplated by, or referred
to in, or any matter related to, this Agreement or the Other Documents, whether
or not brought by any Credit Party, any director, equity holder or creditor
thereof, any Indemnified Party or any other Person and whether or not any
Indemnified Party

 

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is a party thereto and (g) arising from or incurred by reason of the handling of
the financing arrangements of Borrowers as provided in Section 15.1, reliance by
Agent or any Lender on any request or instruction from Borrowing Agent or any
other action taken by Agent or any Lender with respect to Section 15.1;
provided, however, notwithstanding anything in this Section 16.5, to the
contrary, no Credit Party shall be required to indemnify any Indemnified Party
for any Claim which, in each case is found in a final non-appealable judgment by
a court of competent jurisdiction to have resulted from (x) such Indemnified
Party’s own gross negligence or willful misconduct or that of its respective
Affiliates or each of their respective officers, directors, employees, advisors
and agents, or (y) any dispute solely among Indemnified Parties and not
involving a Credit Party or any Subsidiary or Affiliate thereof and not arising
out of or in connection with, in each case is found in a final non-appealable
judgment by a court of competent jurisdiction, (i) the Agent’s or its
Affiliates’ respective capacities in connection with this Agreement or in
fulfilling their roles as Agent, arranger or bookrunner or (ii) any action or
inaction of a Credit Party, any of its Subsidiaries or Affiliates.  Without
limiting the generality of any of the foregoing (but subject to clauses (x) and
(y) above), each Credit Party shall defend, protect, indemnify, pay and save
harmless each Indemnified Party from any Claims which may be imposed on,
incurred by, or asserted against any Indemnified Party under any Environmental
Laws with respect to or in connection with the Real Property, any Hazardous
Discharge, the presence of any Hazardous Substances affecting the Real Property
(whether or not the same originates or emerges from the Real Property or any
contiguous or other real estate), including any Claims consisting of or relating
to the imposition or assertion of any Lien on any of the Real Property under any
Environmental Laws and any loss of value of the Real Property as a result of the
foregoing except to the extent such loss, liability, damage and expense is
attributable to any Hazardous Discharge resulting from actions on the part of
Agent or any Lender.  To the extent relating to Hazardous Substances at the Real
Property, the Credit Parties’ obligations under this Section 16.5 shall arise
upon the discovery of the presence of any Hazardous Substances at the Real
Property, whether or not any federal, state, or local environmental agency has
taken or threatened any action in connection with the presence of any Hazardous
Substances, in each such case except to the extent that the presence of any
Hazardous Substances results from the actions on the part of the Indemnified
Party (as determined by a court of competent jurisdiction in a final and
non-appealable judgment).  Without limiting the generality of the foregoing (but
subject to clauses (x)-(z) above), this indemnity shall extend to any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind or nature whatsoever (including
reasonable fees and disbursements of counsel) asserted against or incurred by
any of the Indemnified Parties by any Person under any Environmental Laws or
similar laws by reason of any Credit Party’s or any other Person’s failure to
comply with laws applicable to solid or hazardous waste materials, including
Hazardous Substances and Hazardous Waste, or other Toxic Substances.  No
Indemnified Party shall be liable for any damage arising from the use by others
of information relating to the Credit Parties obtained through electronic,
telecommunications or other information systems, except to the extent such
damages are found by a final, non-appealable judgment of a court of competent
jurisdiction to arise from the gross negligence or willful misconduct of such
Indemnified Person.  This Section 16.5 shall not apply to Taxes, other than any
Taxes that represent claims, demands, liabilities, obligations, losses, damages,
penalties, fines, actions, judgments, suits, costs, charges, expenses or
disbursements arising from any non-Tax claim.

 

16.6.                     Notice.  Any notice or request hereunder to any Credit
Party may be given to Borrowing Agent at its address set forth below or at such
other address as may hereafter be specified in a notice designated as a notice
of change of address under this Section.  Any notice or request hereunder to
Agent or any Lender at their respective addresses set forth below or at such
other address as may hereafter be specified in a notice designated as a notice
of change of address under this Section.  Any notice, request, demand, direction
or other communication (for purposes of this Section 16.6 only, a “Notice”) to
be given to or made upon any party hereto under any provision of this Agreement
shall be given or made by telephone or in writing (which includes by means of
electronic transmission (i.e., “e-mail”) or facsimile transmission or by setting
forth such Notice on a site on the World Wide Web (a “Website Posting”) if
Notice of such Website Posting (including the information necessary to access
such site) has previously been delivered to the applicable parties hereto by
another means set forth in this Section 16.6) in accordance with this
Section 16.6.  Any such Notice must be delivered to the applicable parties
hereto at the addresses and numbers set forth under their respective names in
this Section 16.6 hereof or in accordance with any subsequent unrevoked Notice
from any such party that is given in accordance with this Section 16.6.  Any
Notice shall be effective:

 

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(a)                                 In the case of hand-delivery, when
delivered;

 

(b)                                 If given by mail, four (4) days after such
Notice is deposited with the United States Postal Service, with first-class
postage prepaid, return receipt requested;

 

(c)                                  In the case of a telephonic Notice, when a
party is contacted by telephone, if delivery of such telephonic Notice is
confirmed no later than the next Business Day by hand delivery, a facsimile or
electronic transmission, a Website Posting or an overnight courier delivery of a
confirmatory Notice (received at or before noon on such next Business Day);

 

(d)                                 In the case of a facsimile transmission,
when sent to the applicable party’s facsimile machine’s telephone number, if the
party sending such Notice receives confirmation of the delivery thereof from its
own facsimile machine;

 

(e)                                  In the case of electronic transmission,
when actually received;

 

(f)                                   In the case of a Website Posting, upon
delivery of a Notice of such posting (including the information necessary to
access such site) by another means set forth in this Section 16.6; and

 

(g)                                  If given by any other means (including by
overnight courier), when actually received.

 

Any Lender giving a Notice to Borrowing Agent or any Borrower shall concurrently
send a copy thereof to Agent, and Agent shall promptly notify the other Lenders
of its receipt of such Notice.

 

(A)                               If to Agent or HPS at:

 

HPS Investment Partners, LLC

40 West 57th Street, 33rd Floor

New York, New York 10019

Attention:

Jeffrey Fitts, Brett Pertuz and Piero Russo

Telephone:

(212) 287 4633, (212) 287 4724 and (212) 287 4271

Facsimile:

(646) 344 4271

Email:

jeffrey.fitts@hpspartners.com;

 

brett.pertuz@hpspartners.com;

 

piero.russo@hpspartners.com;

 

deal-execution@hpspartners.com;

 

hpsagency@cortlandglobal.com

 

with a copy of non-routine notices only to (which shall not constitute notice):

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153

Attention:

Damian Ridealgh

Telephone:

(212) 310 8510

Facsimile:

(212) 310 8007

Email:

damian.ridealgh@weil.com

 

(B)                               If to a Lender other than Agent, to the
address for the Lender as set forth in Agent’s records.

 

(C)                               If to Borrowing Agent or any Borrower:

 

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Emerge Energy Services Operating LLC

5600 Clearfork Main Street, Suite 400

Fort Worth, Texas 76109

Attention:

Roy Messing, Chief Restructuring Officer

Telephone:

(203) 241-6082

Facsimile:

(212) 818-1551

Email:

roy.messing@ankura.com

 

with copies to:

 

Insight Equity Management Company LLC

1400 Civic Place, Suite 250

Southlake, Texas 76092

Attention:

Warren Bonham

Telephone:

(817) 488-5917

Facsimile:

(817) 488-7739

Email:

wbonham@insightequity.com

 

Attention:

Robert J. Conner, General Counsel

Telephone:

(817) 865-2534

Facsimile:

(817) 488-7739

Email:

rconner@insightequity.com

 

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

 

Latham & Watkins LLP

811 Main Street, Suite 3700

Houston, Texas 77002

Attention:

M. Catherine Ozdogan

Telephone:

(713) 546-7494

Facsimile:

(713) 546-5401

Email:

catherine.ozdogan@lw.com

 

16.7.                     Survival.  The obligations of Borrowers under Sections
2.2, Article III, 4.18(d), and 16.5 and the obligations of Lenders under
Section 14.7, shall survive termination of this Agreement and the Other
Documents and payment in full of the Obligations.

 

16.8.                     Severability.  If any part of this Agreement is
contrary to, prohibited by, or deemed invalid under Applicable Laws, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given effect so far as possible.

 

16.9.                     Expenses.  Each Borrower shall reimburse Agent (and,
with respect to clauses (c), (d) and (e) below, all Lenders) for all fees, costs
and expenses, including the reasonable fees, costs and expenses of one lead
counsel, one additional local counsel in each applicable jurisdiction or other
advisors (including sales consultants and advisors, environmental and management
consultants and appraisers), incurred in connection with the negotiation,
preparation and administration of this Agreement or the Other Documents, the
Interim Order and the Final Order and incurred in connection with:

 

(a)                                 any Borrower or any other Person on behalf
of any Borrower by Agent of the proceeds of any Advance;

 

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(b)                                 any amendment, modification or waiver of,
consent with respect to, or termination of, any of this Agreement or the Other
Documents or advice in connection with the syndication, if applicable, and
administration of the Loans made pursuant hereto or its rights hereunder or
thereunder;

 

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

 

(d)                                 any attempt to enforce or prosecute any
rights or remedies of Agent against any or all of the Credit Parties or any
other Person that may be obligated to Agent or any Lender by virtue of any of
this Agreement or the Other Documents, including any such attempt to enforce any
such remedies in the course of any work-out or restructuring of the Advances
during the pendency of one or more Events of Default; provided, that in the case
of reimbursement of counsel for Lenders other than Agent, such reimbursement
shall be limited to one counsel for all Lenders;

 

(e)                                  any workout or restructuring of the Loans
during the pendency of one or more Events of Default;

 

(f)                                   the obtaining of approval of this
Agreement and the Other Documents by the Bankruptcy Court;

 

(g)                                  the preparation and review of pleadings,
documents and reports related to the Cases and any Successor Cases, attendance
at meetings, court hearings or conferences related to the Cases and any
Successor Cases, and general monitoring of the Cases and any Successor Cases;

 

(h)                                 efforts to (i) monitor the Advances or any
of the other Obligations, (ii) evaluate, observe or assess any of the Credit
Parties or their respective affairs, and (iii) verify, protect, evaluate,
assess, appraise, collect, sell, liquidate or otherwise dispose of any of the
Collateral;

 

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

 

(j)                                    including, as to each of clauses
(a) through (i) above, all reasonable attorneys’ and other professional and
service providers’ fees arising from such services and other advice, assistance
or other representation, including those in connection with any appellate
proceedings, and all expenses, costs, charges and other fees incurred by such
counsel and others in connection with or relating to any of the events or
actions described in this Section 16.9, all of which shall be payable, on
demand, by Borrowers to Agent and shall be part of the Obligations.

 

Without limiting the generality of the foregoing, such expenses, costs, charges
and fees may include: fees, costs and expenses of accountants, sales
consultants, financial advisors, environmental advisors, appraisers, investment
bankers, management and other consultants and paralegals; court costs and
expenses; photocopying and duplication expenses; court reporter fees, costs and
expenses; long distance telephone charges; air express charges; telegram or
telecopy charges; secretarial overtime charges; and

 

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expenses for travel, lodging and food paid or incurred in connection with the
performance of such legal or other advisory services.

 

Any action taken by any Credit Party under or with respect to this Agreement or
any Other Document, even if required under such document or at the request of
Agent or Required Lenders, shall be at the expense of such Credit Party, and
neither Agent nor any other Secured Party shall be required under this Agreement
or any Other Document to reimburse any Credit Party or any Subsidiary of any
Credit Party therefor except as expressly provided therein.

 

16.10.              Injunctive Relief.  Each Borrower recognizes that, in the
event any Borrower fails to perform, observe or discharge any of its obligations
or liabilities under this Agreement, or threatens to fail to perform, observe or
discharge such obligations or liabilities, any remedy at law may prove to be
inadequate relief to Lenders; therefore, Agent, if Agent so requests, shall be
entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving that actual damages are not an adequate remedy.

 

16.11.              Consequential Damages.  Neither Agent nor any Lender, nor
any agent or attorney for any of them, shall be liable to any Credit Party (or
any Subsidiary of any such Person) for indirect, punitive, exemplary or
consequential damages arising from any breach of contract, tort or other wrong
relating to the establishment, administration or collection of the Obligations
or as a result of any transaction contemplated under this Agreement or any Other
Document.

 

16.12.              Captions.  The captions at various places in this Agreement
are intended for convenience only and do not constitute and shall not be
interpreted as part of this Agreement.

 

16.13.              Counterparts; Facsimile Signatures.  This Agreement may be
executed in any number of and by different parties hereto on separate
counterparts, all of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute one and the same agreement.  Any
signature delivered by a party by facsimile or electronic transmission shall be
deemed to be an original signature hereto.

 

16.14.              Construction.  The parties acknowledge that each party and
its counsel have reviewed this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments, schedules or exhibits thereto.

 

16.15.              Confidentiality; Sharing Information.  Agent, each Lender
and each Transferee shall hold all non-public information of the Borrowers and
their Subsidiaries obtained by Agent, such Lender or such Transferee pursuant to
the requirements of this Agreement in accordance with Agent’s, such Lender’s and
such Transferee’s customary procedures for handling confidential information of
this nature; provided, however, Agent, each Lender and each Transferee may
disclose such confidential information (a) to its examiners, Affiliates, outside
auditors, counsel and other professional advisors, (b) to Agent, any Lender or
to any prospective Transferees (provided that any prospective Transferee has
agreed in writing to hold such information confidential), and (c) as required or
requested by any Governmental Body or representative thereof or pursuant to
legal process; provided further that (i) unless specifically prohibited by
Applicable Law, Agent, each Lender and each Transferee shall use its reasonable
best efforts prior to disclosure thereof, to notify the applicable Borrower of
the applicable request for disclosure of such non-public information (A) by a
Governmental Body or representative thereof (other than any such request in
connection with an examination of the financial condition of a Lender or a
Transferee by such Governmental Body) or (B) pursuant to legal process and
(ii) in no event shall Agent, any Lender or any Transferee be obligated to
return any materials furnished by any Borrower other than those documents and
instruments in possession of Agent or any Lender in order to perfect its Lien on
the Collateral once the Obligations (other than contingent indemnification
Obligations to the extent no claim giving rise thereto has been asserted) have
been paid in full and this Agreement has been terminated.  Each Borrower
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to such Borrower or one or more of its
Subsidiaries (in connection with this

 

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Agreement or otherwise) by any Lender or by one or more Subsidiaries or
Affiliates of such Lender and each Borrower hereby authorizes each Lender to
share any information delivered to such Lender by such Borrower and its
Subsidiaries pursuant to this Agreement, or in connection with the decision of
such Lender to enter into this Agreement, to any such Subsidiary or Affiliate of
such Lender, it being understood that any such Subsidiary or Affiliate of any
Lender receiving such information shall be bound by the provisions of this
Section 16.15 as if it were a Lender hereunder.  Such authorization shall
survive the repayment of the other Obligations and the termination of this
Agreement.

 

16.16.              Publicity.  Each Borrower agrees that any references to
Agent, any Lender or any of their respective affiliates made in connection with
the Transactions are subject to the prior approval of Agent or such Lender, as
applicable, which approval shall not be unreasonably withheld.  Agent and
Lenders shall not be permitted to use information related to the syndication and
arrangement of the Loans in connection with marketing, press releases or other
transactional announcements or updates provided to investor or trade
publications, including, but not limited to, the placement of “tombstone”
advertisements in publications of their choice at their own expense, without the
prior written consent of Parent Guarantor (such consent not to be unreasonably
withheld or delayed); provided that (I), notwithstanding anything to the
contrary herein, Agent and Lenders may include references to the Loans in their
marketing materials without the prior written consent of Borrowers so long as
such references shall be limited to: (i) a description of the Transactions,
including industry type; (ii) a reproduction of any Borrower’s logo; (iii) a
description of Agent’s and/or Lenders’ roles in the Transactions (e.g., Agent,
arranger); (iv) the date and amount of the Loans; and (v) the names of the
Borrowers and the other Credit Parties, and (II) upon the consent by Parent
Guarantor, Agent and Lenders may make and distribute reproductions of such
consented-to marketing, press releases or other transactional announcements or
updates.

 

16.17.              Certifications From Banks and Participants; USA PATRIOT Act.

 

(a)                                 Each Lender or assignee or participant of a
Lender that is not incorporated under the Laws of the United States of America
or a state thereof (and is not excepted from the certification requirement
contained in Section 313 of the USA PATRIOT Act and the applicable regulations
because it is both (i) an affiliate of a depository institution or foreign bank
that maintains a physical presence in the United States or foreign country, and
(ii) subject to supervision by a banking authority regulating such affiliated
depository institution or foreign bank) shall deliver to the Agent the
certification, or, if applicable, recertification, certifying that such Lender
is not a “shell” and certifying to other matters as required by Section 313 of
the USA PATRIOT Act and the applicable regulations: (1) within 10 days after the
Closing Date, and (2) as such other times as are required under the USA PATRIOT
Act.

 

(b)                                 The USA PATRIOT Act requires all financial
institutions to obtain, verify and record certain information that identifies
individuals or business entities which open an “account” with such financial
institution.  Consequently, Lenders may from time to time request, and Borrowers
shall provide to any such Lender, each Borrower’s name, address, tax
identification number and/or such other identifying information as shall be
necessary for such Lender to comply with the USA PATRIOT Act and any other
Anti-Terrorism Law.

 

16.18.              Anti-Terrorism Laws.  Each Credit Party represents and
warrants to the Agent, as of the date of this Agreement, the date of each
Advance, the date of any renewal, extension or modification of this Agreement,
and at all times until the Termination Date, that: (i) no Covered Entity is a
Sanctioned Person and (ii) no Covered Entity, either in its own right or through
any third party, (a) has any of its assets in a Sanctioned Country or in the
possession, custody or control of a Sanctioned Person in violation of any
Anti-Terrorism Law, (b) does business in or with, or derives any of its income
from investments in or transactions with, any Sanctioned Country or Sanctioned
Person in violation of any Anti-Terrorism Law or (c) engages in any dealings or
transactions prohibited by, any Anti-Terrorism Laws.

 

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16.19.     Concerning Joint and Several Liability of Borrowers.

 

(a)           Each of Borrowers is accepting joint and several liability
hereunder in consideration of the financial accommodations to be provided by the
Lenders under this Agreement, for the mutual benefit, directly and indirectly,
of each of Borrowers and in consideration of the undertakings of each of
Borrowers to accept joint and several liability for the obligations of each of
them.

 

(b)           Each of Borrowers jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrowers with respect to the payment and
performance of all of the Obligations, it being the intention of the parties
hereto that all the Obligations shall be the joint and several obligations of
each of Borrowers without preferences or distinction among them.

 

(c)           If and to the extent that any of Borrowers shall fail to make any
payment with respect to any of the Obligations as and when due or to perform any
of the Obligations in accordance with the terms thereof, then in each such
event, the other Borrowers will make such payment with respect to, or perform,
such Obligation.

 

(d)           The obligations of each Borrower under the provisions of this
Section 16.19 constitute full recourse obligations of such Borrower, enforceable
against it to the full extent of its properties and assets, irrespective of the
validity, regularity or enforceability of this Agreement or any other
circumstances whatsoever.

 

(e)           Except as otherwise expressly provided herein, each Borrower
hereby waives notice of acceptance of its joint and several liability, notice of
any Advance made under this Agreement, notice of occurrence of any Event of
Default, or of any demand for any payment under this Agreement (except as
otherwise provided herein), notice of any action at any time taken or omitted by
any Lender under or in respect of any of the Obligations, any requirement of
diligence and, generally, all demands, notices and other formalities of every
kind in connection with this Agreement.  Each Borrower hereby assents to, and
waives notice of, any extension or postponement of the time for the payment of
any of the Obligations, the acceptance of any partial payment thereon, any
waiver, consent or other action or acquiescence by any Lender at any time or
times in respect of any default by any Borrower in the performance or
satisfaction of any term, covenant, condition or provision of this Agreement,
any and all other indulgences whatsoever by any Lender in respect of any of the
Obligations, and the taking, addition, substitution or release, in whole or in
part, at any time or times, of any security for any of the Obligations or in
part, at any time or times, of any security for any of the Obligations or the
addition, substitution or release, in whole or in part, of any Borrower. 
Without limiting the generality of the foregoing, each Borrower assents to any
other action or delay in acting or failure to act on the part of any Lender,
including, without limitation, any failure strictly or diligently to assert any
right or to pursue any remedy or to comply fully with the Applicable Laws or
regulations thereunder which might, but for the provisions of this
Section 16.19, afford grounds for terminating, discharging or relieving such
Borrower, in whole or in part, from any of its obligations under this
Section 16.19, it being the intention of each Borrower that, so long as any of
the Obligations remain unsatisfied, the obligations of such Borrower under this
Section 16.19 shall not be discharged except by performance and then only to the
extent of such performance.  The Obligations of each Borrower under this
Section 16.19 shall not be diminished or rendered unenforceable by any winding
up, reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any Borrower or any Lender.  The joint and several
liability of Borrowers hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of any
Borrower or any Lender.

 

(f)            The provisions of this Section 16.19 are made for the benefit of
the Lenders and their respective successors and assigns, and may be enforced by
any such Person from time to time against any of Borrowers as often as occasion
therefor may arise and without requirement on the part of any Lender first to
marshal any of its claims or to exercise any of its rights against any of the
other Borrowers or to exhaust any remedies available to it against any of the
other Borrowers or to resort to any other source or means of obtaining payment
of any of the Obligations or to elect any other remedy.  The provisions of this
Section 16.19 shall remain in effect until all

 

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the Obligations shall have been paid in full or otherwise fully satisfied.  If
at any time, any payment, or any part thereof, made in respect of any of the
Obligations, is rescinded or must otherwise be restored or returned by any
Lender upon the insolvency, bankruptcy or reorganization of any of Borrowers, or
otherwise, the provisions of this Section 16.19 will forthwith be reinstated in
effect, as though such payment had not been made.

 

(g)           Notwithstanding any provision to the contrary contained herein or
in any other of the Other Documents, to the extent the joint obligations of a
Borrower shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of each
Borrower hereunder shall be limited to the maximum amount that is permissible
under Applicable Law (whether federal or state and including, without
limitation, the federal Bankruptcy Code).

 

(h)           Borrowers hereby agree, as among themselves, that if any Borrower
shall become an Excess Funding Borrower (as defined below), each other Borrower
shall, on demand of such Excess Funding Borrower (but subject to the next
sentence hereof and to subsection (B) below), pay to such Excess Funding
Borrower an amount equal to such Borrower’s Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties, assets,
liabilities and debts of such Excess Funding Borrower) of such Excess Payment
(as defined below).  The payment obligation of any Borrower to any Excess
Funding Borrower under this Section 16.19(h) shall be subordinate and subject in
right of payment to the prior payment in full of the Obligations of such
Borrower under the other provisions of this Agreement, and such Excess Funding
Borrower shall not exercise any right or remedy with respect to such excess
until payment and satisfaction in full of all of such Obligations.   For
purposes hereof, (i) “Excess Funding Borrower” shall mean, in respect of any
Obligations arising under the other provisions of this Agreement (hereafter, the
“Joint Obligations”), a Borrower that has paid an amount in excess of its Pro
Rata Share of the Joint Obligations; (ii) “Excess Payment” shall mean, in
respect of any Joint Obligations, the amount paid by an Excess Funding Borrower
in excess of its Pro Rata Share of such Joint Obligations; and (iii) “Pro Rata
Share,” for the purposes of this Section 16.19(h), shall mean, for any Borrower,
the ratio (expressed as a percentage) of (A) the amount by which the aggregate
present fair salable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Borrower (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Borrower hereunder) to (B) the amount by which the aggregate
present fair salable value of all assets and other properties of such Borrower
and all of the other Borrowers exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of such Borrower and the other
Borrowers hereunder) of such Borrower and all of the other Borrowers, all as of
the Closing Date (if any Borrower becomes a party hereto subsequent to the
Closing Date, then for the purposes of this Section 16.19(h) such subsequent
Borrower shall be deemed to have been a Borrower as of the Closing Date and the
information pertaining to, and only pertaining to, such Borrower as of the date
such Borrower became a Borrower shall be deemed true as of the Closing Date)
notwithstanding the payment obligations imposed on Borrowers in this Section,
the failure of a Borrower to make any payment to an Excess Funding Borrower as
required under this Section shall not constitute an Event of Default.

 

16.20.     Non-Applicability of Chapter 346.  The parties hereto hereby agree
that, except for the opt-out provisions of Section 346.004 thereof, the
provisions of Chapter 346 of the Texas Finance Code (regulating certain
revolving credit loans and revolving tri-party accounts) shall not apply to this
Agreement, any of the Other Documents, or the Obligations.

 

16.21.     BORROWERS’ WAIVER OF RIGHTS UNDER TEXAS DECEPTIVE TRADE PRACTICES
ACT.  EACH BORROWER HEREBY WAIVES ANY RIGHTS UNDER THE DECEPTIVE TRADE
PRACTICES-CONSUMER PROTECTION ACT, SECTION § 17.41 ET SEQ.  TEXAS BUSINESS &
COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS.  AFTER
CONSULTATION WITH AN ATTORNEY OF THE BORROWERS’ OWN SELECTION, EACH BORROWER
VOLUNTARILY CONSENTS TO THIS WAIVER.  EACH BORROWER EXPRESSLY WARRANTS AND
REPRESENTS THAT EACH BORROWER (A) IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING
POSITION RELATIVE TO AGENT, AND (B) HAS BEEN REPRESENTED

 

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BY LEGAL COUNSEL IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT AND THE OTHER DOCUMENTS.

 

16.22.     Parties Including Trustees; Bankruptcy Court Proceedings.  This
Agreement, the Other Documents, and all Liens and other rights and privileges
created hereby or pursuant hereto or to any Other Document shall be binding upon
each Credit Party, the estates of the Credit Parties, and any trustee, other
estate representative or any successor in interest of the Credit Parties in the
Cases or any Successor Cases, and shall not be subject to Section 365 of the
Bankruptcy Code.  This Agreement and the Other Documents shall be binding upon,
and inure to the benefit of, the successors of Agent and Lenders and their
respective assigns, transferees and endorsees.  The Liens created by this
Agreement and the Other Documents shall be and remain valid and perfected in the
event of the substantive consolidation or conversion of the Cases or any other
bankruptcy case of any Credit Party to a Successor Case or in the event of
dismissal of the Cases or the release of any Collateral from the jurisdiction of
the Bankruptcy Court for any reason, without the necessity that Agent files
financing statements or otherwise perfect its Liens under applicable law.  No
Credit Party may assign, transfer, hypothecate or otherwise convey its rights,
benefits, obligations or duties hereunder or under any of the Other Documents
without the prior express written consent of Agent and Lenders.  Any such
purported assignment, transfer, hypothecation or other conveyance by any Credit
Party without the prior express written consent of Agent and Lenders shall be
void.  The terms and provisions of this Agreement are for the purpose of
defining the relative rights and obligations of each Credit Party, Agent and
Lenders with respect to the transactions contemplated hereby and no Person shall
be a third party beneficiary of any of the terms and provisions of this
Agreement or any of the Other Documents.

 

16.23.     Acknowledgment and Consent to Bail-In of EEA Financial Institutions. 
Notwithstanding anything to the contrary in any Other Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any Lender that is an EEA Financial
Institution arising under any Other 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 Lender 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 Other 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.

 

XVII.      LOAN GUARANTY.

 

17.1.       Guaranty.  Each Guarantor hereby agrees that it is jointly and
severally liable for, and, as a primary obligor and not merely as surety,
absolutely, unconditionally and irrevocably guarantees to the Secured Parties,
the prompt payment when due, whether at stated maturity, upon acceleration or
otherwise, and at all times thereafter, of the Obligations and all costs and
expenses, including, without limitation, all court costs and attorneys’ and
paralegals’ fees (including allocated costs of in-house counsel and paralegals)
and expenses paid

 

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or incurred by the Agent and the Lenders in endeavoring to collect all or any
part of the Obligations from, or in prosecuting any action against, the
Borrowers, any Guarantor or any other guarantor of all or any part of the
Obligations (such costs and expenses, together with the Obligations,
collectively the “Guaranteed Obligations”; provided however that, the definition
of “Guaranteed Obligations” shall not create any guarantee by any Guarantor of
(or grant of security interest by any Guarantor to support, as applicable) any
Excluded Hedge Liabilities of such Guarantor for purposes of determining any
obligations of any Guarantor).  Each Guarantor further agrees that the
Guaranteed Obligations may be extended or renewed in whole or in part without
notice to or further assent from it, and that it remains bound upon its
guarantee notwithstanding any such extension or renewal.  All terms of this Loan
Guaranty apply to and may be enforced by or on behalf of any domestic or foreign
branch or Affiliate of any Lender that extended any portion of the Guaranteed
Obligations.

 

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

 

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

 

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

 

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

 

17.4.       Defenses Waived.  To the fullest extent permitted by applicable law,
each Guarantor hereby waives any defense based on or arising out of any defense
of the Borrowers or any Guarantor or the unenforceability of all or any part of
the Guaranteed Obligations from any cause, or the cessation from any cause of
the liability of the Borrowers, any Guarantor or any other Obligated Party,
other than the indefeasible payment in full in cash of the Guaranteed
Obligations.  Without limiting the generality of the foregoing, each Guarantor
irrevocably waives acceptance hereof, presentment, demand, protest and, to the
fullest extent permitted by law,

 

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

 

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

 

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

 

17.7.       Information.  Each Guarantor assumes all responsibility for being
and keeping itself informed of the Borrowers’ financial condition and assets,
and of all other circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations and the nature, scope and extent of the risks that each
Guarantor assumes and incurs under this Loan Guaranty, and agrees that none of
the Agent or any Lender shall have any duty to advise any Guarantor of
information known to it regarding those circumstances or risks.

 

17.8.       Termination.  Each of the Lenders may continue to make loans or
extend credit to the Borrowers based on this Loan Guaranty until five (5) days
after it receives written notice of termination from any Guarantor, in its sole
discretion.  Notwithstanding receipt of any such notice, each Guarantor will
continue to be liable to the Lenders for any Guaranteed Obligations created,
assumed or committed to prior to the fifth day after receipt of the notice, and
all subsequent renewals, extensions, modifications and amendments with respect
to, or substitutions for, all or any part of such Guaranteed Obligations. 
Nothing in this Section 17.8 shall be deemed to constitute a waiver of, or
eliminate, limit, reduce or otherwise impair any rights or remedies the Agent or
any Lender may have in respect of, any Default that shall exist under
Article VII hereof as a result of any such notice of termination.

 

17.9.       Taxes.  Each payment of the Guaranteed Obligations will be made by
each Guarantor in accordance with Section 3.10, as if such Guarantor was a
Credit Party.

 

17.10.     Maximum Liability.  Notwithstanding any other provision of this Loan
Guaranty, the amount guaranteed by each Guarantor hereunder shall be limited to
the extent, if any, required so that its obligations hereunder shall not be
subject to avoidance under Section 548 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law.

 

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In determining the limitations, if any, on the amount of any Guarantor’s
obligations hereunder pursuant to the preceding sentence, it is the intention of
the parties hereto that any rights of subrogation, indemnification or
contribution which such Guarantor may have under this Loan Guaranty, any other
agreement or applicable law shall be taken into account.

 

17.11.     Contribution.

 

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

 

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

 

(c)           This Section 17.11 is intended only to define the relative rights
of the Guarantors, and nothing set forth in this Section 17.11 is intended to or
shall impair the obligations of the Guarantors, jointly and severally, to pay
any amounts as and when the same shall become due and payable in accordance with
the terms of this Loan Guaranty.

 

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

 

(e)           The rights of the indemnifying Guarantors against other Guarantors
under this Section 17.11 shall be exercisable upon the full and indefeasible
payment of the Guaranteed Obligations in cash (other than Unliquidated
Obligations that have not yet arisen) and the termination or expiry, on terms
reasonably acceptable to the Agent, of the Commitments hereunder and the
termination of this Agreement.

 

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

 

[Remainder of page intentionally left blank; signature pages follow.]

 

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

 

 

PARENT GUARANTOR:

 

 

 

EMERGE ENERGY SERVICES LP

 

 

 

 

By: EMERGE ENERGY SERVICES GP LLC, its general partner

 

 

 

By:

/s/ Roy Messing

 

Name:

Roy Messing

 

Title:

Authorized Person

 

 

 

BORROWERS:

 

 

 

EMERGE ENERGY SERVICES OPERATING LLC

 

 

 

By:

/s/ Roy Messing

 

Name:

Roy Messing

 

Title:

Authorized Person

 

 

 

SUPERIOR SILICA SANDS LLC

 

 

 

 

By: EMERGE ENERGY SERVICES OPERATING LLC, its sole member

 

 

 

By:

/s/ Roy Messing

 

Name:

Roy Messing

 

Title:

Authorized Person

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

--------------------------------------------------------------------------------

 

 

GUARANTOR:

 

 

 

EMERGE ENERGY SERVICES FINANCE CORPORATION

 

 

 

By:

/s/ Roy Messing

 

Name:

Roy Messing

 

Title:

Chief Restructuring Officer

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

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AGENT AND COLLATERAL AGENT:

 

 

 

HPS INVESTMENT PARTNERS, LLC

 

 

 

By:

/s/ Brett Pertuz

 

Name:

Brett Pertuz

 

Title:

Managing Director

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

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LENDER:

 

 

 

MP III OFFSHORE MEZZANINE INVESTMENTS, L.P.

 

 

 

By: HPS Mezzanine Management III, LLC, an investment manager

 

By: HPS Investment Partners, LLC, its sole and managing member

 

 

 

By:

/s/ Brent Pertuz

 

Name:

Brent Pertuz

 

Title:

Managing Director

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

--------------------------------------------------------------------------------

 

 

MEZZANINE PARTNERS III, L.P.

 

 

 

By: HPS Mezzanine Management III, LLC, an investment manager

 

By: HPS Investment Partners, LLC, its sole and managing member

 

 

 

By:

/s/ Brent Pertuz

 

Name:

Brent Pertuz

 

Title:

Managing Director

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

--------------------------------------------------------------------------------

 

 

AP MEZZANINE PARTNERS III, L.P.

 

 

 

By: HPS Mezzanine Management III, LLC, an investment manager

 

By: HPS Investment Partners, LLC, its sole and managing member

 

 

 

By:

/s/ Brent Pertuz

 

Name:

Brent Pertuz

 

Title:

Managing Director

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

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OHA-CDP ESCF, L.P.

 

 

 

By: OHA-CDP ESCF GenPar, LLC, its general partner

 

By: OHA Global PE GenPar, LLC, its managing member

 

By: OHA Global PE MGP, LLC, its managing member

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

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OHA BCSS SSD, L.P.

 

 

 

By: OHA BCSS SSD GenPar, LLC, its general partner

 

By: OHA Global PE GenPar, LLC, as managing member

 

By: OHA Global PE MGP, LLC, as managing member

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

--------------------------------------------------------------------------------

 

 

OHA MPS SSD, L.P.

 

 

 

By: OHA MPS SSD GenPar, LLC, its general partner

 

By: OHA Global PE GenPar, LLC, as managing member

 

By: OHA Global PE MGP, LLC, as managing member

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

--------------------------------------------------------------------------------

 

 

THE COCA-COLA COMPANY MASTER RETIREMENT TRUST

 

 

 

By: Oak Hill Advisors, L.P., as Investment Manager

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

--------------------------------------------------------------------------------

 

 

OHA Enhanced Credit Strategies Master Fund, L.P.

 

 

 

By: OHA Enhanced Credit Strategies GenPar, LLC, its general partner

 

By: OHA Global GenPar, LLC, as managing member

 

By: OHA Global MGP, LLC, as managing member

 

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

 

--------------------------------------------------------------------------------

 

 

Future Fund Board of Guardians

 

 

 

By: Oak Hill Advisors, L.P., as its Investment Advisor

 

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

--------------------------------------------------------------------------------

 

 

INDIANA PUBLIC RETIREMENT SYSTEM

 

 

 

By: Oak Hill Advisors, L.P., as Investment Manager

 

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

--------------------------------------------------------------------------------

 

 

Lerner Enterprises, LLC

 

 

 

By: Oak Hill Advisors, L.P., as advisor and attorney-in-fact to Lerner
Enterprises, LLC

 

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

--------------------------------------------------------------------------------

 

 

OCA OHA Credit Fund LLC, an individual series of OCA Investment Partners LLC

 

 

 

By: Oak Hill Advisors, L.P., as Investment Manager

 

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

--------------------------------------------------------------------------------

 

 

OHA Centre Street Partnership, L.P.

 

 

 

By: OHA Centre Street GenPar, LLC, its general partner

 

By: OHA Centre Street MGP, LLC, its managing member

 

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

--------------------------------------------------------------------------------

 

 

Oregon Public Employees Retirement Fund

 

 

 

By: Oak Hill Advisors, L.P., as Investment Manager

 

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

--------------------------------------------------------------------------------

 

 

OHA AD Customized Credit Fund (International), L.P.

 

 

 

By: OHA AD Customized Credit Fund GenPar, LLC, its general partner

 

By: OHA Global PE GenPar, LLC, its managing member

 

By: OHA Global PE MGP, LLC, its managing member

 

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

--------------------------------------------------------------------------------

 

 

Master SIF SICAV-SIF

 

 

 

By: Oak Hill Advisors, L.P., as Investment Manager

 

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

--------------------------------------------------------------------------------

 

 

OHA Finlandia Credit Fund, L.P.

 

 

 

By: OHA Finlandia Credit Fund GenPar, LLC, its general partner

 

By: OHA Global GenPar, LLC, its managing member

 

By: OHA Global MGP, LLC, its managing member

 

 

 

 

By:

/s/ Gregory S. Rubin

 

Name:

Gregory S. Rubin

 

Title:

Authorized Signatory

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

--------------------------------------------------------------------------------

 

 

OC II LVS III LP

 

 

 

 

 

 

 

By:

/s/ Adam L. Gubner

 

Name:

Adam L. Gubner

 

Title:

Authorized Person

 

[SIGNATURE PAGE TO DIP CREDIT AGREEMENT]

 

--------------------------------------------------------------------------------